Presentation on HBS Case Colgate-Palmolive Company: The Precision Toothbrush. It thoroughly analyzes the various details provided in the case while carefully evaluating the final decision of positioning, branding, and communication of the Colgate Precision Toothbrush to the consumers.

1. Colgate-Palmolive Company :
The Precision Toothbrush
HBS Case by Prof. John Quelch

2. Good Morning !

3. Time to Brush Teeth

4. Which one to Choose ?

6. Contents of the Presentation
1. Introductory Slides
2. Company and the
People
3. The Situation
4. Insights
5. Consumer Survey
6. Analysis
6. Issues to Address
7. Questions ?
8. The Strategy
9. The Conclusion
10. Summary

7. Company and
the People

8. Global Leader in household and
personal care products

9. The People (1/2)
Susan Steinberg
Precision Product Manager
Task to recommend positioning, branding and
communication strategies to division general
manager

10. The People (2/2)
Reuben Mark
CEO (1986-2008)
Transformation of CP as a “sleepy and
inefficient” company into a lean and
profitable one under his leadership

11. The 5 Year Plan
1991-1995
•New product launches
•Entry into new geographic markets
•Improved efficiency in manufacturing
•Continued focus on core products

12. Aim of the Case
• Introduction of New Precision Toothbrush
• Deciding the Product Segment
• Developing Strategy to tackle Competitors
• Product Positioning & Branding
• Communicating and Promoting the Product

13. The Situation

14. CP’s Oral Care Business
Colgate Classic & Colgate Plus
Steady increase in Profits
since Past 3 years

15. The U.S.Toothbrush Market
Introduction of
“Super-premium”
Toothbrush
sub-category by
all companies
Why ?
Increase in concern
over health of
gums and plaque
removal

16. Product Segments
Value
Toothbrush
Professional
Toothbrush
Super-premium
Toothbrush
average at $1.29
between $1.59
and $2.09
above $2.09

18. Market leader with 23.1% market share

19. “The close competitor with heavy
marketing worth $17.1 mn”

20. “ The newbie
with excellent
Market
Experience “

21. Other Competitors…

22. Insights

23. Brand Decision Factors
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Already Achieved
by Colgate
More SKUs
Need to focus more on
Dentist recommendation
Not a single product by CP lied
in upcoming Super-premium segment.
Desperate need for Precision toothbrush

24. Steady increase
in sales
}Brand Loyalty
Sales of already
existing brands
hadn’t changed
considerably
4 other brands were introducing toothbrushes in
Super-Premium, therefore Colgate Precision would
face a stiff competition

25. CP already had a strong hold in Food
and Mass Trades. It needed to focus on
Marketing through Dentists better to
capture the sales through Drug Stores
The amount spent on Media
advertising by CP was not at
par with its current Market Share

26. Consumer Survey
Analysis

27. Baby Boomers getting more
concerned with their health.

28. Toothbrush replacement cycle was nearly
7.5 months in 1991 as against the
recommended 3 months
Spreading Awareness regarding Oral Health
Care would increase the Demand for
Toothbrushes in the Market, creating a bigger
market to capture

29. BRAND CHOICE was based on
feature, comfort and professional
recommendation

30. 35% consumers take recommendation
of a dentist before buying a Toothbrush
CP needed to focus on Marketing the Precision
Toothbrush to Dentists and explain them the benefits
of the using this technologically advanced product

31. Issues to Address

32. Positioning
Segment to Target
Colgate Classic and Colgate Plus already
existed in Value and Professional segment
respectively.
Introducing Precision in any of these
would lead to cannibalization of existing
product lines.

33. Positioning
Niche Positioning :
Targeted at consumers concerned about gum diseases
Expected to capture 3% of market share
Mainstream Positioning :
Broad appeal to all consumers as most effective toothbrush
Expected to capture 10% of market share

34. Capacity & Investment Cost
Production Capacity was clearly not
ready for a Mainstream Launch
Production Schedule had been developed
for a niche positioning

35. vs
Launch of Precision as a Mainstream
product directly posed a threat and a
competitor to “Plus” product line of the
same brand
Cannibalization of “Plus” product line

36. Shelf Location
If placed near existing product lines of CP,
7 SKUs would have to be dropped
If placed in Super-Premium among
Competitors, No need for existing SKUs
to be dropped

37. Branding
or
Not using the Colgate Brand
Name would limit the extent of
Cannibalization of the Colgate Plus

38. The Analysis of the Case
was discussed till now,
Now the Evaluation of the
Case Starts.

39. Questions ?

40. Is Super-Premium the
Perfect Segment ?
Yes, the level of Innovation deserves a
higher price. A higher price will exhibit the
quality of the product. Consumers also ready
to spend more on Oral Care

41. Should it be a Niche or
Mainstream Product ?
Niche – The current production levels
cannot sustain Precision as a Mainstream
product at least in the Year 1992.

42. Will unsatisfied demand of
Precision create a perception
of “hot” product ?
No, because Toothbrush is a daily use
commodity and nobody will wait for any
particular brand and will quickly move on
to the next best brand.

43. What should be the Ideal
Shelf Location ?
Precision product line should be located
separately from other Colgate lines, close to
other competitive Super- premium
toothbrushes.

44. Is any change required in
Media Advertising
expenditure ?
Yes, It has to be increased drastically from
19% volume share upto nearly 40%.This
may seem extravagant but only increased
advertising can increase the market share.

45. How and Where should it
be spent ?
Colgate already leads by Volume share in
Food and Mass merchandise Classes of Trade.
Heavy marketing is required for selling
Precision through Drug Stores.

46. How much to spend on
Dentists ?
Dentists are the ones who will thoroughly
appreciate the technological excellence of
the Precision toothbrushes and recommend
the same to patients to directly increase the
sales in Drug Stores.

47. What should be the
Tag Line ?
“Triple action for Best Protection”
This tagline will reflect the uniqueness of 3
different bristles for better cleansing of
teeth and mouth.

48. The Strategy

50. Current situation is a bit
complex and the decision has
to be a bit Diplomatic.
Starting with NICHE positioning is
necessary, but moving to Mainstream
Positioning eventually is Inevitable

51. FINAL POSITIONING
STRATEGY
Year 1 : Niche Positioning
Year 2 : Mainstream Positioning
Marketing equivalent to
Mainstream for both Years

52. Capacity of Production
Starting with Niche positioning, Precision
toothbrush manufacturing must move to
Mainstream by the required 10 months
before Year 2 starts.

53. Cannibalization of
Colgate Plus
Positioning as a Super-Premium product will
not severely affect Colgate Plus sales. Also,
with more consumers moving from Plus to
Precision will get more profits for the
company.

54. Marketing

55. Branding
Colgate has to take a tough decision to go
against the corporate strategy to build on
Colgate brand equity and instad promote the
Precision brand name.

56. Oral Health Awareness
While in Year 1, Colgate should equally focus
on Oral health awareness advertising to
directly reduce the toothbrush replacement
cycle and pump up the overall sales which
will be directed towards Precision.

57. Dentists
The Company should spend a bit
extravagantly to gain the trust of Dentists
regarding the quality of Precision
toothbrushes, while advertising the product
for gum diseases initially.

58. Promotions
 5 oz. tube of Colgate toothpaste free
 50 cent coupon on Precision on buying
Colgate toothpaste
 $4 million to be spent on promotion

59. New Competitors in
Super-premium segment
Colgate should use its brand name to lure
the Mainstream consumers by Colgate Plus,
while attracting Health Oriented Baby
Boomers by Precision Toothbrushes to tackle
the competitors with similar products.

60. The Conclusion

61. CP should start with
marketing the Precision
toothbrush in the Niche
positioning segment while
spending on Advertising
equivalent to that of
Mainstream Positioning.

62. DuringYear 1, Company
should target the marketing
for Precision as a toothbrush
for Gum Diseases, while
spreading awareness about
Oral Health equally.

63. This will create the
deserved appreciation for
the product line among the
consumers.This will as well
prevent the consumers from
migrating to the new Super-
premium toothbrushes.

64. ByYear 2, the company will
be ready for Mainstream
positioning by production
capacity and there will be a
wide appraisal for the
Product Line.

65. At this very Moment,
Discounts and other
Promotions should be given
on the Precision toothbrush
and completely capture the
Super-Premium Segment.

66. FINAL PRICE ?

67. Retail Prices
Year 1 : $2.89 (Niche)
Year 2 : $2.49 (Mainstream)
(with Discount/Promotion)

68. Summary

69. Susan Steinberg faced a challenge for
positioning, branding and communicating the
Precision toothbrush to the consumers
Complete analysis of the existing market
situation as well as the competitors was done.The
consumer behaviour was also taken into account.
Crucial issues were identified in the Decisions to
be made
Appropriate Questions were answered which
clarified the situation
Finally a conclusion was drawn regarding the
pricing, positioning, branding and
communication strategy for the Colgate Precision
toothbrush by CP

70. Disclaimer
Created by Ishan Darwhekar,VNIT Nagpur,
during MAKRETING INTERNSHIP by
Prof. Sameer Mathur
IIM Lucknow