This is a case analysis of Harvard Business School case, Colgate-Palmolive Company: The Precision Toothbrush prepared under the guidance of Prof. Sameer Mathur

1. Colgate Palmolive:
The Precision Toothbrush

2. COLGATE-PALMOLIVE?
AND
KEY PLAYERS

3. • Colgate Palmolive founded in 1806,currently
a world leader in household and personal care
products.
• Company revenue touched 16 billion in 2015.
• Company brought changes in manufacturing
units, product line and in geographical coverage
over the time.
• Colgate operates in 75 countries and sells its
products in over 200 countries.
• Company’s more than 75% sales come from
outside local market(USA).

4. KEY PLAYERS?
Colgate Precision Product Manager
• Susan Steinberg
Division General Manager
• Nigel Burton
CEO of CP
• Reuben Mark
Colgate Plus product manager
• John Phillips

5. SITUATION?
Company launches a new toothbrush named
Colgate precision and claims a best plaque
remover.
New product faced a tough competition from
established brand like Oral-B.
CP conducted extensive research, surveys and
sales promotion to know current needs.

6. Product manager has to recommend
positioning, branding and communication
strategies.
Company faces different internal budget
allocation advice for products.
Company faces internal product competition
between plus and precision

7. CONSUMER
RESEARCH

8. • People of age 40-60 are
more concerned about
their gum health.
• Both replacement and
purchasing duration
decreases result in more
sale.
• In adults 46% of them
prefer toothbrush which
can reduce their gum
problems ,
cosmetic(21%),while
surprisingly 33% not
concern about health
problems while choosing.

9. This inferences shows company should focus on better
design with right softness of bristles.

10. PRODUCT
SEGMENTATION

11. Around 1980s executives
divide toothbrush into two
categories based on retail
prices:
• Value
Average price $1.29
with 24% unit volume.
• Professional
Price between $1.59 to
$2.09 with 41% unit
volume.
• Super
premium(New
segment)
Priced above $2 with
35% unit volume.

12. • Colgate-Palmolive placed its plus in
professional segment and precision in super
premium segment.
• Colgate precision tougher competitor in this
segment is Oral-B indicator.
• P&G and Smithklien beecham also launch super-
premium toothbrushes.

13. Advertising
And
Promotion

15. • Advertising and promotions helps to enhance
product visibility.
• In media P&G spend $15 million, Oral-B spend $10
million, Johnson & Johnson spend $8 million.
• Colgate-Palmolive total expenditure:

16. Investment vs Visibility

17. • In 1992 about 8%
customers get their
toothbrush through
coupons.
• These coupons include
free toothbrush with
paste ,buy one get one
offers, mail in coupons.
• Toothbrush coupon
value increase from
$0.25 to $0.75.
• CP invest around 69% in
promoting their
products while
remaining in media
segment.

18. Positioning
with “precision”

19. Two
options??
Niche
Positioning Mainstream
Positioning

20. NICHE POSITIONING STRATEGY
• This strategy helps to target more
effectively segment that suffer
from gum disease.
• From this it can capture 3% of
USA market itself in first year.
• This strategy can act as a
consumer test helps to position
mainstream strategy.
• Company can achieve 15%
premium price over Oral-B.
• Strategy can induce slower
growth in sales.
• Retarded figure in making
Precision a global brand.
• More volume and dollar growth is
achievable.

21. Mainstream Positioning Strategy
• Mainstream stimulates
faster volume and dollar
sales growth in the very first
year.
• Brand can easily adopt a
“mantra” helps in more
wide coverage.
• Consumer research for
further future changes can
bring more insight.
• Raise concern about
“cannibalization” of other
brands like Colgate plus.
• Large amount of initial
investment is necessary.
• May not specific about a
targeted customer segment

22. Whether the brush should
named as “Colgate-Precision” or
“Precision by Colgate”???

23. • Company executives stressed on using “Precision “ as
a brand name.
• Using “Precision” can prevent company from
cannibalization of Colgate plus.
• According to research brand dilution can be increase
by 20% in both niche positioning and mainstream
positioning if “Colgate” will be used as a brand name.
• Avoiding cannibalization can lead to extended
product line hence more part of market share.

24. Communication
Strategy
What proper communication
require to make “Precision”
best out of all?

25. • Colgate conduct consumer research extensively through four concept
tests.
• Toothbrush gum problem solving motivated greatest purchase among all
reasons.
• 55% consider precision very different and 77% consider it better than
other toothbrush.
• But to make it global they need to communicate wider benefits of brush to
cover larger segment

26. In 1992 CP invested $24.1 million in advertising
and promotion.
– Some suggested equal distribution according to
sale percentage.
– Some suggested increase spending by $11.2
million and totally allocate to “precision”.
– Steinberg suggest 75% allocation to precision and
rest to plus.
– John Phillips argued that this aggressive allocation
lead to loose its mainstream product “Colgate-
plus”.

27. • Company spend $4
million in consumer
promotion to support
the launch of Colgate
precision.
• CP also decided to
channelize its 3 million
toothbrush through
professional dentists in
the first year of launch.

28. • CP should position “precision” as a
niche product, this would help
precision to setup as a leading tooth
brush at competitive prices.
• Once it become an established
brand then it should open to wider
audiences through proper
communication like gaining favor
from dentist for recommendation.
Opposite cycle may not be
productive.

29. • Company should analyze 4
P’s in a regulated manner
when product reach its
saturation in market: Price,
Product, Place and
Promotion.

30. DISCLAIMER
Created by Navdeep Jain during a marketing internship by Prof.
Sameer Mathur,IIM Lucknow.