The document discusses Colgate-Palmolive's launch of a new toothbrush called Precision in the United States. It provides background on Colgate-Palmolive and analyzes the oral care market and consumer behavior. Research found the Precision toothbrush was more effective at plaque removal than competitors' brushes. The case examines different positioning and branding strategies for Precision and reviews test marketing and concept testing to refine the product and messaging.
This presentation has been created by Akriti Sarswat, IIT Kanpur, during a marketing internship under the guidance of Prof. Sameer Mathur, IIM Lucknow.
Case Analysis:Colgate-PalmolivePrecision ToothbrushVivek Kumar Gupta
In July 1992, CP senior management announced a new toothbrush model, the Precision, that was set to launch in early 1993. In order to meet consumer demand CP could introduce the toothbrush as a niche, super-premium or a mainstream, professional product. It could also introduce the product using standard naming conventions or introduce a new labeling system by calling it the “Precision by Colgate.” CP could leverage existing industry relationships and make an effort to form new ones in order to gain a competitive edge. At launch, CP could plan to offer competitive promotions, a popular offering that was slowly becoming standard practice in the oral care industry. The company could also increase its advertising budget to include educating the public on the dangers of gum disease. Depending on how it chooses to introduce the Precision toothbrush to the market, 1992 could serve as an important year for CP to establish itself as the definitive oral health care company.
Guided By: Prof Sameer Mathur
(Marketing PROFESSOR, IIM Lucknow)
A project on Brand Management of colgate by abdul qadir and sarafrazkhan. this project deals with blind taste test and other aspects of brand management.
This presentation has been created by Akriti Sarswat, IIT Kanpur, during a marketing internship under the guidance of Prof. Sameer Mathur, IIM Lucknow.
Case Analysis:Colgate-PalmolivePrecision ToothbrushVivek Kumar Gupta
In July 1992, CP senior management announced a new toothbrush model, the Precision, that was set to launch in early 1993. In order to meet consumer demand CP could introduce the toothbrush as a niche, super-premium or a mainstream, professional product. It could also introduce the product using standard naming conventions or introduce a new labeling system by calling it the “Precision by Colgate.” CP could leverage existing industry relationships and make an effort to form new ones in order to gain a competitive edge. At launch, CP could plan to offer competitive promotions, a popular offering that was slowly becoming standard practice in the oral care industry. The company could also increase its advertising budget to include educating the public on the dangers of gum disease. Depending on how it chooses to introduce the Precision toothbrush to the market, 1992 could serve as an important year for CP to establish itself as the definitive oral health care company.
Guided By: Prof Sameer Mathur
(Marketing PROFESSOR, IIM Lucknow)
A project on Brand Management of colgate by abdul qadir and sarafrazkhan. this project deals with blind taste test and other aspects of brand management.
Case file : Colgate Palmolive Company : The Precision ToothbrushNitish Mehta
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Colgate- Palmolive:The Precision Toothbrush case analysisNavdeep Jain
This is a case analysis of Harvard Business School case, Colgate-Palmolive Company: The Precision Toothbrush prepared under the guidance of Prof. Sameer Mathur
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2. INTRODUCTION
The Colgate-Palmolive Company is an American worldwide
consumer products company focused on the production,
distribution and provision of household, health care and
personal products.
In August 1992 it was poised to launch a new toothbrush in
United States tentatively naming “Colgate Precision”.
The Colgate-Palmolive Company: The Precision Toothbrush Marketing
3. ABOUT
INFORMATION
COMPANY BACKGROUND
INFORMATION
Industry: Personal Products
Founded: 1806
Head quarters: New York, US.
CEO: lan M. Cook (FY 2009)
Employees: 36002
Revenue: US $15.3 Billion
Website: www.colgate.com
The Colgate-Palmolive Company: The Precision Toothbrush Marketing
4. ABOUT
BACKGROUND
In 1991 the company witnessed sales of $6.06 billion with a gross profit of $2.76
billion.
CP’s five year plan 1991-1995 is to focus on core consumer products with
improved efficiencies in manufacturing and distribution. It also entered into new
geographic markets mainly emphasizing in new product launches.
With the development in Oral care division, Precision product manager Susan
Steinberg had recommended positioning, branding and communication strategies
to GM Nigel Burton.
The Colgate-Palmolive Company: The Precision Toothbrush Marketing
8. • In 1991, the U.S. Oral Care market was $2.9 billion
in retail sales with an annual growth rate of 6.1%
since 1986.
• Toothpaste accounted for 46% of this market, with
mouth rinses 24%, toothbrushes 15.5%, remaining
with dental floss and other products.
• Dollar sales had grown at a rate of 9.3% per annum
since 1987 but in 1992, they increased 21% in
value and 18% in volume. This is accounted due to
introduction of 47 new products and line
extensions during 1991-1992.
The U.S
Oral Care
Market
The Colgate-Palmolive Company: The Precision Toothbrush Marketing
11. • In the 1980s, the toothbrush category
was divided into two segments:
• Value
• Professional
• In the late 1980s, many new
toothbrushes were introduced on the
basis of aesthetics.
• A new segment of brushes emerged with
the name of “super-premium” which
were priced between $2.29 and $2.89
and accounted for 46% of dollar sales in
1992.
Product
Segments
The Colgate-Palmolive Company: The Precision Toothbrush Marketing
14. • consumers of the baby boom generation were becoming
more concerned about the health of their gums.
• CP estimated that 82% of toothbrush purchases were
unplanned.
• consumers were unfamiliar with toothbrush prices and
they replaced their brushes on average only once every 7.5
months in 1991.
• Brand choice was based on features, comfort and
professional recommendations.
CP’s
Consumer
Research
The Colgate-Palmolive Company: The Precision Toothbrush Marketing
15. • 45% of consumers brushed before breakfast, 57%
after breakfast, 28% after lunch, 24% after dinner
and 71% before bed.
• the trigger to purchase a new brush was when
their toothbrush-bristles became visibly worn.
• Consumers differed in the intensity of their
involvement in oral hygiene.
CP’s
Consumer
Research
The Colgate-Palmolive Company: The Precision Toothbrush Marketing
16.
17. • Oral-B (owned by Gillette) had been the market leader since the 1960s.
With heavy endorsements it was known as “dentist’s toothbrush”.
• Johnson & Johnson (J&J) entered the U.S. toothbrush market in the
1970s with the Reach brand, which in 1991, comprised 18 SKUs.
• Procter & Gamble (P&G) had captured a 13% value share in test markets
with an extension of the company’s toothpaste brand name, Crest.
• Smithkline Beecham entered the U.S. toothbrush market in August 1991
allowing gentle brushing with its flexile handles.
• Other competitors included Lever, Pfizer, and Sunstar.
The Colgate-Palmolive Company: The Precision Toothbrush Marketing
20. • As it was hard to increase primary demand,
new products steal sales from existing
products.
• Johnson & Johnson spent $8 million, Oral-B
spent $10 million and Procter & Gamble
spent $15 million in media support to
introduce its new product.
• A typical CP toothbrush display increased
sales by 90% over a normal shelf facing.
• For maximum retail sales, CP tried to locate
the Colgate line in the middle of the
category shelf space.
Advertising
&
Sales
The Colgate-Palmolive Company: The Precision Toothbrush Marketing
23. • In 1987, traditional food stores sold 75% of
oral care products.
• By 1992 they accounted for only 43% of
toothbrush sales and 47% of toothpaste
sales.
• Food stores began to expand shelf space
devoted to oral care products.
• Toothbrushes provided retailers with a
margin of 25-30%.
• With a dedicated sales force, Oral-B
dominated the toothbrush segment by
distributing to consumers by dentists.
Distribution
The Colgate-Palmolive Company: The Precision Toothbrush Marketing
24. THE COLGATE PRICISION MARKETING MIX
4P’s of Marketing
Positioning
Branding
Communication
The Colgate-Palmolive Company: The Precision Toothbrush Marketing
25.
26. 1. Product
Goals
• Understanding the varying techniques consumers
used when brushing their teeth.
• Testing the superiority of CP over Oral-B and Reach
in accessing the teeth.
• Establishing an index to score clinical plaque-
removal efficacy.
• Creating a bristle configuration and handle design
offering maximum plaque- removing efficacy.
• Determining the efficacy and acceptance of the
new toothbrush design through research.
The Colgate-Palmolive Company: The Precision Toothbrush Marketing
27. 2. Price
• Colgate pricing depends on the
production costs including ware
housing costs and transport costs.
• Concerns about mainstream
toothbrush is the possibility of
cannibalization of Colgate plus.
The Colgate-Palmolive Company: The Precision Toothbrush Marketing
28. 3. Place
• Targeting different geographic
locations leads to profits by
emphasizing on cultural norms.
• By targeting rural consumers and
increasing wholesale dealers.
The Colgate-Palmolive Company: The Precision Toothbrush Marketing
29. 4. Promotion
• Advertising through all means of
media like TV, News paper, radio
broadcasting and social media.
• Through Billboards and
Hoardings at busy junctions in
cities and on Highways.
• Conducting camps by hiring
Dentists.
The Colgate-Palmolive Company: The Precision Toothbrush Marketing
30.
31. • Precision was developed ad best super premium toothbrush of top
range.
• It can be Positioned as
a) Niche Product
b) Mainstream Product
• Both have their own advantages and disadvantages.
• with a niche positioning retail sales would represent 3% volume share
of the toothbrush market in year 1 and 5% in year 2.
• With a mainstream positioning, these volume shares would be 10% in
year 1 and 14.7% in year 2.
The Colgate-Palmolive Company: The Precision Toothbrush Marketing
34. • The Colgate Precision name was consistently
viewed and deemed appropriate by 49% of
concept acceptors and 31% of them appealed.
• Stressing Precision as opposed to Colgate would
to limit the cannibalization of Colgate Plus.
• Colgate brand name was stressed but remain
unchanged if the Precision brand name was
stressed.
• corporate strategy was to build on the Colgate
brand equity.
The Colgate-Palmolive Company: The Precision Toothbrush Marketing
35.
36. • After establishing the basic product design, Cp
conducted four concept tests 400 adults between
18-54 years old who were professional brush users
of Colgate Plus, Reach, and Oral-B.
The Colgate-Palmolive Company: The Precision Toothbrush Marketing
39. • Steinberg viewed Precision was more than a
simple line extension.
• Determined how precision should be positioned
following the path of development, testing,
pricing and communication.
• The case briefly outlined about U.S Oral Care
Market.
The Colgate-Palmolive Company: The Precision Toothbrush Marketing
40.
41.
42.
43. DISCLAIMER
Created by Vicharapu Sai Nikesh, NIFFT Ranchi, during a
marketing internship by Prof. Sameer Mathur, IIM
Lucknow.