Download to read offline
Uploaded bySharanya Ray
Colgate Palmolive - The Precision Toothbrush - Case Study Analysis
Colgate Palmolive is analyzing the launch of its new Precision toothbrush. The Precision toothbrush provides triple brushing action and is more effective at plaque removal than rivals. It is positioned in the super-premium market segment at a higher price point. While the toothbrush market has grown steadily, Colgate aims to target the niche segment of therapeutic brushers with the Precision. Colgate's recommendations include providing free samples to dentists to promote the Precision as the professional's choice and offering refund guarantees to build customer loyalty for the new product.
More Related Content
Similar to Colgate Palmolive - The Precision Toothbrush - Case Study Analysis
Colgate Palmolive - The Precision Toothbrush - Case Study Analysis
- 1. Colgate Palmolive The PrecisionToothbrush Harvard business school case Analysis
- 2. Problem - as newproduct – Colgate Precision
- 3. Demand Shift in demandedbenefits from a century old Tooth brush market. Customer-readiness of premium price for superior toothbrush. Value and premium range to a “Super Premium” range – Enhanced Oral Care.
- 4. Precision Toothbrush Triple-action brushing effect Better effectiveness at plaqueremoval healthier gum protection Cavity Prevention
- 5. Extend of Demand -volume growth due to emerge of Super Premium Toothbrush CP’s share Market growth 9.3% per annum since 1987 ($ sale) Year 1992 – Market growth – 18% by volume, 21 % Present U.S. Toothbrush market US $ 330 Million US $ 77 Million
- 6. Environmental Climate -new productsin late 1980’s & early 1990’s Economic Positioned in the super- premium segment Technological Innovative designof handle and head of the tooth brush Uniqueaction of the bristles Social Cartoon characters glow-in-dark handles for children's market
- 7. Product Offerings Infrared motionanalysis 35% more plaque removing efficiency Bristle with 3 different length Marketed as more effective than rivals namely Reach & Oral-b more technical innovation
- 8. Product Segmentation VALUE PROFESSIONAL SUPER-PREMIUM • Moreeconomic • Average price : $1.29 • Better quality • Average Price : $1.59 to $2.09 • Improved designs • Average Price : $2.29 to $2.89
- 9. Consumer Analysis - eachconsumer group having different demand Awareness Level : Very Low Uninvolved brushers Awareness Level : Moderate Cosmetic brushers Awareness Level : Very high Therapeutic brushers
- 10. Promotion niche market Aggressive advertisingcampaign – focus on technical superiority mass market Through financial incentives 1. Coupon , buy one get one free 2. free 5 oz. Tube of Colgate toothpaste with a Precision brush 3. a 50%-off offer on Colgate toothpaste professional channels Dentists
- 11.
- 12. Mainstream Positioning - attention tomass production, distribution, promotion Harms Benefits
- 13. Strategic Positioning - key elementsof CP’s Oral Care Marketing Plan Target market (Therapeutic, baby boomers) Marketing mix( product + price + place + promotion ) Marketing strategy + time-related details A complete marketing plan (launch + positioning + branding + communication)
- 14. SWOT Analysis Strength Sales Leadin oral hygiene Innovative designs Extensive global reach Weakness Limited media expenditure contrary to counterparts 33% uninvolved brushers – difficult to educate about hygiene Product endorsement as dentist’s choice by CP’s rival Oral-B Concepts tests – 77% found Precision more effective Lack of association with dental practitioners
- 15. SWOT Analysis Opportunities Readiness ofconsumers to try new products Willingness to pay higher price 46% concerned consumers about dental hygiene Threats Eye-catching incentives given by rivals, thus, aggressive expansion Growing bargaining power of buyer & suppliers Since 1991, explosion of new entrants – threat
- 16. Scope -future & prediction Contrarily,emphasis on using Colgate name would help build Brand equity More appeal to therapeutic consumers with other oral care products Emphasis on Colgate name might cause cannibalization of approx. 20% existing products Indication of profit over a two year time frame for both market positions.
- 17. Scope -future & prediction Inthe niche position In the mainstream position 35% of sales prediction form other products decreasing Colgate’s overall toothbrush net profit. 60% of sales prediction from exiting products decreasing Colgate’s overall toothbrush net profit.
- 18. Statistics -promotion & communication Concept tests •conducted among 400 adult professional brushers. In-home usage test • 77% claimed that Precision was much more effective than current toothbrush.
- 19. Statistics -Manufacturing and Financialdata $243 million spent to upgrade 25 of its 91 manufacturing plants. 43 % of the global toothpaste market share and 16% of the global toothbrush market share. Sales growth of12% to $1.3 billion, accounting for 22% of CP’s total sales Toothbrush sales amounted to $77 million with operating profit of $9.8 million. Several strategic acquisitions in China and Eastern Europe.
- 20. Recommendations Sampling Campaignproviding free samples to engage dentists’ onboard Tie-ups with dental clinics as distribution points Thus, strong positioning as professional’s choice Guarantee of satisfaction If unsatisfactory experience, full refund of product-purchase Thus, establishment of customer loyalty
- 21. Recommendation Channels –long term Mass merchandiser – 21% market share. Hence, more in-store promotion needed Club stores – small in market proportion, high chances to grow Food stores – biggest market share. Hence, more focus on home users Channels – short term Drug store – to build high-end image to relieve for gum diseases Food stores – 43% market share in 1992, non- negligible Dentist & professional – tie-ups for direct competition with counterparts
- 22. Created as anassignment during Marketing Management Internship, under Professor Sameer Mathur IIM Lucknow Ph.D.: Carnegie Mellon University By Sharanya Ray West Bengal University of Technology Thank You!