Colgate- Palmolive case study during an internship under Prof Sameer Mathur, IIM Lucknow

4.  A Global leader in household and Personal care Products
with sales of $6.06 billion and gross profit of $2.76 billion
in 1991
 In 1991, CP held 43% of the world toothpaste market
and 16% of the world toothbrush market.
 $243 million was spent to upgrade 25 of CP’s
91 manufacturing plants; 275 new products introduced
worldwide; several strategic acquisitions made and
manufacturing began in China and Eastern Europe.

7.  Saw many innovations from Dr. West’s Tuft Toothbrush to
Broxodent’s Electric toothbrush.
 In 1991, the U.S. Oral Care market was $2.9 billion in retail
sales
 Toothpaste accounted for 46% of this market, mouth rinses
24%, toothbrushes 15.5% ($453 million in retail sales),
with dental floss and other products making up the
remainder.
 Dollar sales of toothbrushes had grown at an average rate
of 9.3% per annum since 1987, but, in 1992 they increased
by 21% in value and 18% in volume.

8. Value
Av. Cost
$1.29
Professional
Av. Cost
$1.59-2.09
Super-
Premium
Av. Cost
$2.29-2.89

9. Extra Soft
Soft
Medium
Firm

11.  Baby Boomers were concerned more about Gums rather than
cavity protection and were willing to pay more for this issue.
 Most people believed that primary role of toothbrush was to
remove food particles; plaque removal and gum simulation was
secondary.
 Consumers were relatively unfamiliar with toothbrush prices.
 In 1991,they replaced their brushes on average only once
every 7.5 months.

12. Therapeutic
Brushers
Cosmetic
Brushers
Uninvolved
Brushers

16.  Oral B relied heavily on professional endorsements for its
“Indicator Brush” a.k.a. “the dentist’s toothbrush”. Promotions
included $1 off coupons and buy-1-get-1 free offers.
 J&J with its “Reach” brand included ultra modern features like
tapered heads, angled neck and a promise to capture even
hard-to-reach places.
 P&G’s “Crest” had long rippled bristles to reach between
the teeth.
 Smithkline Beecham’s “Aquafresh Flex” had flexible handles
for gentle brushing.

18.  Unique brush with 3 different lengths and orientations
 Cleans gum line, teeth surface and space between teeth
 35% more plaque removal

19. Mainstream
Niche

20.  Specific Target of gum
concerned people
 Command 15% price
Premium over Oral B
 Can later be expanded
to gain mainstream
positioning
 Only 3% market share in
the 1st year
 Limited customer groups
covered
 Less profit contribution

21.  Wider Market reach
 10% market share
Capture in 1st year
 Possibility of greater
returns
 Possible cannibalism of
Colgate Plus
 May result in shortage
Of supply
 Some SKU’s may have
to be dropped

23. Precision should be stressed instead of Colgate to limit
the cannibalization of Colgate Plus
The cannibalization figure would increase by 20% if
Colgate were to be stressed

25.  Use of Dentists to sample consumers because professional
endorsement can increase credibility
 Emphasis laid on the working of toothbrush in ads because
it is able to enhance customer enthusiasm
 Free 5 oz tube of Colgate toothpaste with Precision brush;
50 % OFF on toothpaste in conjunction with Precision brush
are some considered promotional tactics.

27.  Should spend more on Media Advertising as currently it is
very less as compared to Oral B and Reach
 Initially it should target niche positioning for Precision so as
to avoid cannibalization of Colgate Plus.
 After some time it should be expanded to mainstream
market to gain more customers.
 Should focus more on sampling as it is a key to successful
introduction of any product.
 May include more professional testimonials and
demonstrations in advertising.

28. Created During a Marketing internship under the
Supervision of
Prof. Sameer Mathur, IIM Lucknow
By
Vivek Kumar, GBPEC, Pauri