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Colgate palmolive


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ppt on Harvard Business School case study Colgate=Palmolive Company: The Precision Toothrush

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Colgate palmolive

  2. 2. PROBLEM STATEMENT Define the marketing strategy (Positioning, Branding and Communication Strategies) for the new toothbrush- Colgate Precision.
  3. 3. Nature of Demand Shift in Demanded Benefits • Cavity Prevention • Healthier Gums
  4. 4. Nature of Demand Shift in Demanded Benefits • Cavity Prevention • Healthier Gums Emergence of a super premium range
  5. 5. Nature of Demand Shift in Demanded Benefits • Cavity Prevention • Healthier Gums Emergence of a super premium range Customers willing to pay more
  6. 6. Extend of Demand  Current Us toothbrush market- US $ 30MN  CP’s share- US $ 77MN  Market Growth- 9.3%per annum since 1987  1992- Market Growth- 18% by volume, 21% by $ sale.  $ growth exceeded volume growth due to emergence of Super Premium Toothbrush.
  7. 7. Colgate Precision • Presently in introduction stage. • Planned promotion for entry into Super Premium segment. • Expected Return of Investment (ROI) in few years
  8. 8. COLGATE PRECISION Technical Innovation 35% more efficient in plaque removal More effective in reducing gum diseases
  9. 9. PRODUCT
  10. 10. PRICE Retail Price Trade Price Manufacture Price Main Stream Strategy $ 2.49 $ 1.85 $ 1.76 Niche market Strategy $ 2.89 $ 2.13 $ 2.02
  11. 11. Promotion Niche Market • Aggressive advertising campaign- demonstrating technical superiority. • Sampling of Precision toothbrush across different markets. • Excessive promotion through professional endorsements.
  12. 12. MAINSTREAM MARKET • Through financial incentives like coupons and buy 1 get 1 free schemes. • Diverting marketing funds from other CP products into marketing of Precision. * Bad initial approach for Precision in terms of sales and cannibalisation.
  14. 14. 1st Year Estimates Niche Category (13MN Units) Production cost- US$ 12.14 MN Marketing cost- US$ 11.2 MN Sales- US$ 26.26 MN Profit- US$ 2.86MN Mainstream Category (42MN Units) Production cost- US$ 36.86MN Marketing cost- US$ 32.8MN Sales- US$ 73.92MN Profit- US$ 4.242MN
  15. 15. BRANDING • Emphasizing the Colgate name on Precision would cause up to 20% cannibalisation for Colgate Plus. • Using Colgate’s name would be congruent to with its strategy to build Brand Equity.
  16. 16. Pros and Cons of Positioning MAINSTREAM STRATEGY PROS CONS • Unsatisfied demand could create the perception of “hot product’ which may increase the sales. • Possible increase in sales. • Greater erosion of Colgate Plus. • May require dropping one of the slow moving children’s brush. • Pressure on production schedules resulting in inadequate supply of products. • More competition
  17. 17. NICHE STRATEGY PROS CONS • Niche could later be broadened to a mainstream position • Less cannibalisation of Plus brand. • Entry into new Super Premium category where CP currently holds no value. • CP would face less competition. • Less contribution to net profit in future years.
  18. 18. RECOMMENDATION • New product development specifically focused on gum care and plaque removal. Make customers aware of this. • Target the Super Premium segment • Position the Precision toothbrush in the more consistent niche market at least for one year. • Extensive sampling and professional endorsements to establish the brand.
  19. 19. THANK YOU