This presentation is prepared by Shivang Thakkar, under guidance of Sameer Mathur, IIM-Lucknow. SOURCE:- The Colgate-Palmolive Company : The Precision Toothbrush (Harvard Case)

1. Colgate Palmolive
The Precision Toothbrush

2. About the Company
• Industry : Consumer goods
• Founded : In 1806 by William Colgate
• Headquarters : New York City, New York, U.S.
• Employees : 37,900
• Website : www.colgate.com

3. Company Background
• The company had sales of $6.06 billion and a gross
profit of $2.76 billion in 1991 making it a global leader
in household and personal care products.
• CP’s five-year plan (1991-95) emphasized new
product launches and entry into new geographic
markets, along with improved efficiencies in
manufacturing and distribution and a continuing focus
on consumer products.

4. Brands
• Colgate now markets a broadly diversified mix
of products in the United States and other
countries.
• They produce and distributes ‘Cibaca
Vedshakti’ in India , ‘Cuddly’ in Australia ,
‘Dentagard’ in Germany , etc.

5. Corporate Governance
• Current members of the B.O.D.s of Colgate
Palmolive are :
Ellen Hancock
Richard Kogan
Delano Lewis
Pedro Reinhard
Stephen Sadove
Helene Gayle
Nikesh Arora
Joseph Jimenez
• Ian M. Cook , Chairman, President and CEO

6. Achievements
• Colgate Palmolive received the 2012 Safe-in-
Sound Excellence in Hearing Loss Prevention
Award.
• CP was named one of the “100 Best
Companies for Working Mothers” by Working
Mother Magazine.
• The 2012 Human Rights Campaign “report
card” on American business gave Colgate an A
for its support of diversity in the workplace.

7. Income Statements of CP: 1989-92

8. “The Precision Toothbrush”

9. About the Toothbrush
• In August 1992, CP was about to launch a
technologically superior Toothbrush in U.S.,
named Colgate Precision.
• CP’s Oral Care division had been developing
this toothbrush for over 3 years.
• Susan Steinberg, Precision product manager,
had managed the entire new product
development process.

10. The Key People
i. Susan Steinberg (Precision Product Manager)
ii. Reuben Mark (Colgate Palmolive’s CEO)
iii. John Philips (Colgate Plus Manager)
iv. Nigel Burton (Division General Manager)

11. Situation Analysis
• CP is poised to launch “Precision Toothbrush”
as a line extension after significant research.
• Feared competition from competitors in
premium akin to the value segment.
• Conducting Market Surveys to fulfil Consumer
Needs.
• Contemplating on the process of brand’s
Segmentation, Targeting and Positioning.

12. Toothbrush Innovations

14. Segments
Value Professional
Super
Premium
Priced at $1.29
Priced between $1.59
and $2.09
Priced above $2

15. Competitors in Super-Premium Segment

16. Toothbrush Brand Prices: 1992

18. Trends
• Consumers replaced their brushes on average
only once in every 7.5 months.(Dentists
recommend to change it every 3 months)
• 82% of toothbrush purchases were
unplanned.
• 11% decided to switch to a new brush after
consulting their dentists.

19. • CP’s Consumer Research indicate that
consumers of the baby boom generation were
more concerned about the health of their
gums.
• Consumers agreed that toothbrushes were as
crucial as toothpaste to remove Plaque, food
particles and gum stimulation.
• Consumer were willing to experiment with
new toothbrushes.

20. Reasons for Purchase

22. I.
• Market leader since the 1960’s.
• Relied professionals endorsements.
• Also known by the name of “The dentist’s
toothbrush”
• Promoted it’s product with coupons, buy-one-
get-one-free and mail-in refund offers.

23. • Entered the market in 1970’s with “Reach”.
• Second product in 1988 – P which had handle
bevelled at 45%.
• In 1991, J&J ranked third in the U.S. Retail
toothbrush market.
• Relied mainly on T.V. Commercials.
II.

24. III.
• Most recent entrant into the market of
toothbrush with its Crest Complete.
• Planned to launch Crest Complete nationally in
the U.S. Toothbrush market in Sept. 1992.
• Claimed the ability to reach between the teeth up
to 37% farther than leading flat brushes.
• Promotions already included 55 cent coupons
and $1.99 refunds on toothbrushes bought from
floor stands.

25. IV.
• Entered the U.S. toothbrush market in Aug.
1991 with Aquafresh Flex.
• It had flexible handles for gentle brushing.
• Aquafresh stood for gentleness and flexibility.
• Promoted their toothbrush by attractive offers
like buy-two-get-one-free, toothbrush free
with toothpaste.
• The company was expected to make an
operational loss on toothbrushes in 1992.

26. Toothbrush Brand Product Lines: August 1992

28. Product Design and Testing

29. • CP’s Researchers implemented infrared motion
analysis to know the consumers’ brushing
movements.
• With computer aided design, CP introduced a
unique brush with bristles of three different
lengths – Longer outer, Long inner and Shorter
bristles, which gave triple-action brushing effect.
• Mission : “develop a superior, technical, plaque
removing device.”

30. Positioning

31. Modes of Positioning
• Precision was developed with the objective
of creating the best brush possible and as such
becoming a super premium product.
• Company had two choices :
(i) Niche Product
•Targeting consumers concerned about gum disease.
•Could capture only 3% of US market by the end of first year.
(ii) Mainstream Product
•Positioning it as the most effective toothbrush available in the market.
•Could capture only 10% of the US market by the end of the first year.

33. Strategies adopted by CP
Retail
Advertising
Media
Consumer
Promotion
Point of
Purchase
Displays
Relocation of
shelf space

34. Television and Advertising Copy Strategies
and Executions for Competitor Toothbrush
Brands: 1991

35. Distribution

36. Distribution Data

38. Strengths
• Strong Brand Image.
• A dedicated R&D team to introduce a
significant product.
• Technical Innovation.
• Financially strong.

39. Weaknesses
• Cut-throat competitors like Oral-B, J&J,
SmithKline Beecham.
• Recent entrant in super premium segment.

40. Opportunities
• Dominate the super premium segment.
• Increase in customer base.
• Augmentation of brand equity.

41. Threats
• Brand cannibalization.
• Not being widely accepted in the market.
• Expenses on communication and promotion.

42. Conclusion
• Susan believed that the Precision was more than
a niche product or merely a line extension with
proven advantages to consumers representing a
technological breakthrough.
• So she positioned the product for niche segment
where the competition was incredible and CP’s
product performed well.
• This helped CP, reducing the impact of brand
cannibalisation.

43. Recommendations
• Initially placing it as a niche product and then
expanding it to mainstream segment, because
it would have been fetched higher return.
• Expansion of production capacity with the
required lead time.

44. Disclaimer!
Created by Shivang Thakkar, SEMCOM, SPU,
during a marketing internship under Prof.
Sameer Mathur, IIM-Lucknow.
Prof. Sameer Mathur
IIM-Lucknow
Shivang Thakkar
SEMCOM