- Colgate-Palmolive was poised to launch a new Precision toothbrush in the US market. - The Precision toothbrush uses a unique three-bristled design that has been shown to remove 35% more plaque and be more effective at reducing gum disease than competitors. - Susan Steinberg had to determine the positioning, branding, and communication strategies for the Precision toothbrush launch. This included deciding whether to position it as a niche or mainstream product.

6. Company’s BaCkground
Colgate Precision- A niche product or simple line extension and
that the proven benefits to consumers represented a technological
breakthrough.
• Launched in August,1992.
• A global leader in households and personal care products.
• Faced a highly competitive market with substantial new product
activity.
• Total worldwide research and development expenditures for 1991
were $114 million, and media advertising expenditures totaled $428
million.

8. The Situation
• Colgate-Palmolive (CP) was poised to launch a new toothbrush in the
United States, tentatively named Colgate Precision.
• Susan Steinberg had to recommend positioning, branding, and
communication strategies to division general manager Nigel Burton.
Situation analysis
CP launched a precision toothbrush as a line extension. Faced a
highly competitive market with a substantial new product
activity. Struggling to manage the entire new product
development process. Developing strategies for
positioning,branding and communication .

10. Objectives of this Case is to Understand the entry of
Precision toothbrush into new geographic markets and How it transformed from
a “Sleepy & inefficient ” company into a lean and profitable one.
Analysis of Product Segmentation
Consumer Segmentation
• Value and Profession
• Age
• Replacement frequency
• Personal brushing style
Competition
• Number & type of Stock keeping Units(SKUs)
• Market shares in terms of volume and value in US retail markets.
Evaluate the impact of Precision marketing mix on sales.

12. How Precision should be positioned, branded and communicated
to consumers?
What the advertising and promotion budget should be and how it
should be broken down? Three Issues
How to develop a profit and loss pro forma that would enable
Precision toothbrush to reach its full potential?

13. The Situation
Consumers
• Consumers were willing to pay a premium for the
new products addressing issues regarding the
health of their gums.
• 48% consumers claimed to change their brushes
at least every three months.
• Consumers choose their brand based on
features, comforts and professional
recommendations.

17. Product
• The Precision toothbrush is a technical innovation.
• Using infrared motion analysis developed a unique brush with
bristles of 3 different lengths and orientations.
• Three brush design evolved with 35% more plaque removing
efficiency
• The brush is also shown to be more effective in reducing gum
disease than the leading brushes, specifically Reach and Oral B

19. Colgate pricing
is done based on the production costs including the
warehousing and transport costs. One main concern
about the Colgate Precision was if it was treated as
mainstream toothbrush then it would lead to
cannibalization of the Colgate Plus

21. Colgate pricing is done based on the production costs
including the warehousing and transport costs. One
main concern about the Colgate Precision was if it was
treated as mainstream toothbrush then it would lead
to cannibalization of the Colgate Plus

23. Advertising through T.V Media and Newspaper Media.
FM Radios and other Radios.
Hoardings on the Highways and National Highways.
Use Dentists to sample consumers and make them
buy Colgate Products.

26. It has high brand recall & visibility, excellent advertising and brand visibility
of products with a strong customer loyalty.
It offers a wide variety of oral care and personal care products.
It is operating in more than 200 countries and has a strong financial
performance.
It has achieved to penetrate into the market and hold its shares.

27. With large number of companies fighting in personal
& oral care segment, the market has become
saturated & there is little scope for growth. The
majority of its properties are on rent basis hence
high operation costs and hence low profits. Colgate
have limited brands under a particular product
category and they have limited offerings under
different segments.

28. Stretching their product line can create offerings and hence
increase their values. Tapping the rural market in developing
countries can reap profits for the company. Strengthening the
company by mergers or acquisitions. People need to be made
aware about the optimum usage rate for these products so that
the market utilizes the product as forecasted by the company.
This can happen only through advertising /word of mouth /doctor
prescription.

29. Since there is high competition the margins are
dropping and companies have to give more
discount on the products to sustain the market.
Increase in the price of raw material in one
factor that would increase the price of the
product. Colgate had to face Ethical issues as an
Organisation stated that Colgate was using
animal testing which affected the market.

32. The Main Question that had to be answered before the positioning of the
Precision Toothbrush in the market was whether to consider the product as
Niche OR Mainstream ??
Positioning decision would impact distribution and percentage of sales by
class of trade. Steinberg hoped to develop a pro-forma income statement
to compare the profit implications of the niche versus mainstream
positioning strategies.
Precision, positioned as a niche product, would be carried by food and
drug stores. Under a mainstream launch scenario, a relatively greater
proportion of sales would occur through mass merchandisers and club
stores.

34. Branding Alternative names tested included Colgate Precision, Colgate System III,
Colgate Advantage, Colgate 1.2.3, Colgate Contour, Colgate Sensation, and Colgate
Probe. Debated whether the brush should be known as “Colgate Precision” or as
“Precision by Colgate.” It was estimated, both under the mainstream and niche
positioning scenarios, that cannibalization figures for Colgate Plus would increase
by 20% if the Colgate brand name was stressed but remain unchanged if the
Precision brand name was stressed. CP’s stated corporate strategy was to build on
the Colgate brand equity

43. Breakeven
Analysis
Breakeven Point (units)= Fixed Costs/(S.P- Variable Costs) Breakeven analysis
for 1992E,
Fixed costs= $11,423 Selling Price of toothbrushes= $44,846
. Variable Costs= Total Advertising Costs Total Advertising Costs = Media +
Consumer Promotions + Trade Promotions Total Advertising Costs = $(9,623 +
6,978 + 7,457) Total Advertising Costs = $ 24,058