These slides present an analysis of Harvard business case on Colgate Palmolive's Precision Toothbrush

1. A BRIEF CASE STUDY ANALYSIS
The Precision Toothbrush

2. BACKGROUND
Colgate Palmolive was aglobal leader in household and
personal care products with a total salesof $6.06 billion and a
gross profit of $2.76 billion as of 1991. International sales
remained company’s strong suit with 64% share of global sales.
The company’s Oral care business held 43% of the world
toothpaste market and 16% of the toothbrush market making it
a global leader.

3. Oral Care Market andProductSegmentation
(U.S Market)
The U.S. Oral Care market was $2.9
billion in retail sales and had grown
at an annual rate of 6.1% since 1986.
The different products accounted
the following segments – Toothpaste
(46%), Mouth Rinses(24%),
Toothbrushes(15.5%) and remainder
by floss and other products.

4. Segmentation of Toothbrush Market
 The toothbrush category was broadly divided into two segments –
Value and Professional.
 Late 1980’s saw the emergence of a new category- The super
premium category
 Sales were as follows-
Super Premium Brushes -35%
Professional Brushes -41%
Value Brushes -24%
 The market was also segmented based on the type of bristles (firm,
medium, soft or extra soft) out of which the soft and extra soft range
were increasing at a high rate.
 The main market leaders were – Colgate Palmolive, Johnson &
Johnson, P&G and Smithkline Beecham.

5. COMPETITION& MARKET SHARE
Major competitor in the super premium segment included
Oral-B, Crest Complete by P&G and Aquafresh flex by
Smithkline Beecham.
Other competitors included Lever, Pfizer and Sunstar.

6. Colgate’s Market Share

7. In August 1992,Colgate-
Palmolive(CP)was poised to launcha new
toothbrush inthe United States,
tentatively named COLGATE PRECISION.
Susan Steinberg, Precision Product
Manager has to recommend Positioning,
Branding andCommunication Strategies
to division general manager ‘Nigel Burton’

8. Despite being the global leader, the company
was weak at the following parts –
Was unable to achieve proper credibility from the dental association on
its products when compared to its competitor ORAL-B.
 Introduction ofnewproducts like precision toothbrush may result in
cannibalization of other products like Colgate plus which constituted a big
market.

9. ANALYZING CONSUMER
BEHAVIOUR
Consumers werewilling to pay a premium for the new
products addressing issues regardingthe health of their
gums
48% consumers claimed to change their brushes at
least everythree months .
Consumers chosetheir brand based onfeatures,
comforts and professional recommendations

11. The products were promoted at company sponsored events and
through hoardings as well.
Retail advertising features and in-store displays increased the
toothbrush sale. It was observed that when Colgate toothbrush were
combined with toothpaste in a single display, the toothbrush sale went
up by 170%.

12. To design a great product, the company focused on
some key points from competitors-
Oral-Bhas heavyprofessionalendorsementandis known
as“Thedentist’stoothbrush”thusgiving atoughmatchin the
competition.
J&J’s Reach-hasexcellent innovationslike-abeveled
handletohelp consumerbrushat45 % angle.TheBrandhas
scheduled the Launchof‘ReachBetween’ on September
P&G ‘sProductclaimsto have theabilitytoreachbetween
the teethup to37%fartherthanleading brands.
SmithklineBeecham’sAquaFresh Flex hadflexible
handlesandallowedgentle brushing. The Brandhasgood
promotionalplanstocomeup

14. Product Design
The precision toothbrush was a technical
innovation.
In laboratory, researchers used infrared
motion analysis to track consumers brushing
movements and consequent levels of plaque
removal.
It had brush with 3 bristles- The longer outer
bristles cleaned the gum line, the inner one
cleaned between teeth and the shorter
bristles cleaned the teeth surface.
In initial tests the brush achieved an average
35% increase in plaque removal.

15. POSITIONING
Precision wasdeveloped with the objective of creating best brush possible
and as such, becoming a top-of-the-range super premium product.
The Company had two choices, either to position in niche market or in the
mainstream market.

16. NICHE POSITION STRATEGY
 When positioned as Niche
product ,it would target at
consumers concerned about
gum diseases.
 As such it could command a
15% price premium over ORAL-B
and would be expected to
capture 3% of the U.S
toothbrush market by the end of
1st year following its launch.
 No SKU’s Needed to be
dropped!
 If Precision is positioned as a
Mainstream brush, Precision would
capture 10% of the market share at
the end of 1st year following its
launch.(Very high when compared
with Niche positioning)
 The volume shares when positioned
as mainstream would be 10% in 1 year
when comparedto5% when positioned
as Niche product!

17. MAINSTREAM POSITION STRATEGY
 Raised concerns about
‘CANNIBALIZATION’ of Colgate plus
and about pressure on Production
Schedules that had been developed
for Niche positioning.
 Production capacity increases
required 10 months lead-resulting in
inadequate supply of product.
 Positioning Precision as a
mainstream product with 7 SKU’s
would probably require dropping one
or more existing SKUs.
 Mainstream was more appealing as
it proclaimed larger market share &
volume share at the end of first year
after launch.
 Greater proportion of sales would
occur through mass merchandisers
and club stores.

19. The main debate was
whether the product
to be named as
“Colgate Precision” or
“Precision by
Colgate”??

20. • Executives believed that Product should stand alone and the PRECISION brand
name should be emphasized.
• Stressing Precision as opposed to Colgate would-limit the extent of
Cannibalization of Colgate plus.
• It was estimated ,both under mainstream and niche positioning scenarios, the
cannibalization figures for Colgate plus would increase by 20% if the Colgate
brand name was stressed.

21. • The toothbrush’s feature of preventing Gum disease motivated
the greatest purchase intent among test consumers.
• Additional consumer research revealed that 55% of test
consumers found Precision to be very different from their current
toothbrushes.
• The research also revealed that the more the consumers were
told about Precision and how it worked, the greater the
enthusiasm for the product.
• However , the clichéd look of the brush put the consumers in
dilemma. It was difficult to translate the message of greater
plaque removal with a broad consumer appeal, since few
consumers acknowledged that they might have gum disease.

23.  Initially Positioning Precision as Niche Toothbrush and later
broadening to mainstream positioning would help the product gain
sufficient recognition by avoiding cannibalization and would ensure
additional capacity onceit enters the mainstream.
 Placing The Precision at the center of the Brushes in the storage
shelves would ensure easy acceptance dueto the prevalence of the
Brand at the same time- give it a unique stand.
 Investing a little more on Advertising and Promotion would not do
much harm as it shall give a head start to this potential product There
must beseveral Consumer promotions to back the launch for the
mainstream positioning as this would attract a lot more potential
buyers.

24. Created by AAYUSH SHARMA (BIT, DURG)
During a Marketing internship under
Professor SAMEER MATHUR, IIM LUCKNOW