In August 1992, Colgate-Palmolive was set to launch its Precision toothbrush in a competitive U.S. market. Product manager Susan Steinberg needed to recommend strategies for positioning, branding, and communication as the company faced challenges from competitors like Henkel and Kao. Market analysis indicated significant consumer concern for gum health and highlighted both niche and mainstream strategies for product launch that could yield short- and long-term profits.

1. Colgate-Palmolive Company:
The Precision Toothbrush
Harward Business School Case

2. What is the Case regarding?
In August 1992, Colgate Palmolive(CP),was poised to
launch a new toothbrush in the U.S. market, Colgate
Precision,developing for over 3 years.
But the market had become highly competitive with
substantial new product activity.
Susan Steinberg, product manager for the Precision
toothbrush had to recommend positioning, branding
and communication strategies to division general
manager, Nigel Burton.

3. Company Background and an Insight to
the Situation
In 1991 with a sale of $6.06 billion and gross profit of
$2.76 billion, Colgate Palmolive became a global
leader in household and personal care products.
275 new products were launched.
Manufacturing began in China an Europe.
Tough competition from International market such
as Henkel of Germany and Kao of Japan.

4. In 1991,Colgate held 43%of the world toothpaste
market and 16%of the world toothbrush market.
CP’s U.S. toothbrush sales in 1991 reached $77 million,
with operating profits of $9.8 million.
Toothbrushes represented 19%of CP’s U.S. Oral Care
Division sales and profits, and CP held the number one
position in the U.S. retail toothbrush market with a
23.3% volume share.

5. Operating Statement of CP's toothbrush
business

6. The U.S. Oral Care Market
In 1991, it was $2.9 billion in retail sales and annual growth
rate was 6.1% since 1986.
Toothpaste and toothbrush occupied 46%and 15.5% of the
market respectively.
Dollar sales had increased at an average rate of 9.3%since
1986 but had grown by 21%in value and 18%in volume in
1992.
Dollar sales had been greater than volume sales.

7. New Product Introductions by All Competing Brands

8. Product Segmentation
Two main categories-professional segment and value
based segment.
Late in 1980s the super-premium brushes
emerged,priced above $2.00 .
Three prominent players dominated the market;
Colgate-Palmolive and Johnson and Johnson in the
professional brushes market and Oral-B for the super
premium segment.

9. Competitors in the Super-premium segment

10. Few Prominent Competitors
By Gillete
By Procter and Gamble
By Johnson&Johnson
By Smithkline Beecham

11. Pricing by Different Brands

12. Stock Keeping Units of Competing Companies

13. Market Shares

14. Market Shares

15. Consumer Behaviour
Consumers from the baby boom generation were more
concerned about the health of their gums.
In 1991,consumers replaced their toothbrushes in an
average of once every 7.5 months (in 1990 the rate was
once every 8.6 months)
Purchase frequency lagged replacement frequency.

16. According to CP research, 45%of consumers brushed
before breakfast, 57%after breakfast, 28%after lunch,
24%after dinner and 71%before bed.

17. Advertising and Promotion
Increased advertising and promotion enhanced the
category's visibility and fueled customer demands.
Media expenditures increased.
Increased frequency and value of customer promotion
events.
Retail advertising features and in store displays
increased the overall toothbrush sales.

18. Media Expenditures and Central Messages of Brands

19. A typical CP toothbrush display increased sales by
90%over a normal shelf facing. When Colgate
toothbrushes were combined with Colgate
toothpaste in a single display, toothbrush sales
increased by 170%.

20. Advertising strategies and expenditures for Colgate
toothbrushes

21. Distribution
Traditional food store sold 75%of oral care products in
1987 but by 1992 it had reduced to 43%of toothbrush and
475 of toothpaste sales.
Mass merchandisers gained share due to increased in
store promotional support.
Toothbrushes provided with a profit of 25%-35%, twice of
what provided by toothpastes;so retailers more receptive
towards new toothbrush products.
22%of all toothbrushes were distributed by the dentists.
But this sevtor was mainly dominated by Oral-B.

22. Retail Distribution and Shares

24. The Precision toothbrush was a technical innovation. In
laboratories, infrared motion analysis was used to track
consumer's movements and levels of plaque removal.
Product Design and Testing

25. Positioning
For the Niche market-best possible brush for those
concerned about their gums.
For the Mainstream market -Broader appeal as the
most effective toothbrush.

26. Niche:Pros and Cons
Pros:
3%and 5%volume share in the first and second
year respectively.
Less cannibalization of Colgate Plus and
Classic. Entry into the super -premium
segment.
Promotion of brand equity.
Not discarding any existing SKUs.
Cons:
Less profit incurred.
More potential competitors in the segment.

27. Mainstream:Pros and Cons
Pros:
10%and 14%volume shares in the market in the first
and the second year respectively.
Increased profit.
No need of specialized marketing.
Cons:
Inadequate supply due to huge demand.
Cannibalization of Colgate Plus and Classic.
Need of dropping existing slow moving SKUs.

28. Branding
Concept test were carried out among customers and
name tests were carried out among positively disposed
ones.

29. Communication
Four concept tests were conducted among 400 adult
customers ,aged between 18-35.
Consumers were exposed to various product claims in
prototype print advertisements and then asked about the
likelihood that they would purchase the product.

30. Analysis from tests and surveys

31. Analysis from Surveys
55%of test consumers found Precision to be
very different from their current toothbrushes.
77%claimed that Precision was much more effective
than their current toothbrush.
Greater demand for toothbrushes removing
gum diseases.
Customers had mixed first impressions.
As customers came to know more of the
product,their enthusiasm increased.

32. Conclusions
Introducing Precision as a niche product would
be profitable in the short run and as a
mainstream product would bring long term
profits.
The toothbrush should be given a unique identity
and should stand out on its own.
Brand name can be promoted by living up to
the promises so made and achieving a loyal cult.

33. Created by Naveen Yakkundi,PES University, during a marketing internship
under the guidance of Prof. Sameer Mathur, IIM Lucknow.