CASE STUDY ANALYSIS

Colgate Palmolive :the precision toothbrush

IntroductionThe American

company focused on the production, distribution and provision of household, health care and personal products, such as soaps, detergents, and oral hygiene products

The company's corporate offices are on Park Avenue in Midtown Manhattan, New York City.

In August 1992, Colgate-Palmolive was poised to launch a new toothbrush in the United States, named COLGATE PRESICION.

Now, it faced a highly Competitive Market with substantial new product activity.

Susan Steinberg, the product manager had to recommendPositioning,Branding and Communications strategies for “The Precision”.

Situation

SWOT ANALYSIS

1. Market leaders globally with excellent R&D2. Excellent advertising and brand visibility

1. Market share is limited

2. Fake brands are supplied under their brand names

1. Tap rural markets and increase penetration in urban areas2.Increasing purchasing power of people thereby increasing demand

1. Intense and increasing competition

2. Competition from unbranded and local products

In the 1980’s,Industry executives divided the Toothbrush category into three segments

Value Professional

&Super Premium

PRODUCT SEGMENTS

Continued…

BRISTLE TYPE (FIRM, MED, SOFT,

EXTRA SOFT)

HEAD SIZE (FULL, COMPACT,

CHILD)

Consumer BehaviorConsumers were more concerned

about the health of their gums and willing to pay a premium price for the new products

Purchasers were unplanned and unfamiliar with prices

48% consumers claimed to change their brushes at least every 3 months

Consumers chose their brand based on features, comforts and professional recommendations

The table gives a broader view on the priority of choice of Brand

based on their effectiveness and functionality

Continued…

Market leaderProfessional endorsement

Known as “the dentist’s toothbrush”

Brush with beveled handleIncrease efficiency of brushing

New products scheduled to arrive which is going to clash with the release of precision

Had long, rippled bristles of different length

Have the ability to reach between the teeth up to 37% farther than leading brands

Had flexible handles that allow for gentle brushing

Promotional offer “Buy-two-get-one free”

It was hard to increase primary demand, so new products tended to steal sales from existing products. In the case of

toothbrushes, increased advertising and promotion enhanced the category’s visibility which fuelled consumer demand.

Advertising and Promotion

Points to consider !• Growing competition increased the featured and value of

consumer promotion event

• Retail advertising features and in store displays increased toothbrush sales

• When Colgate toothbrush were combined with Colgate

toothpaste, the toothbrush sales increased by 170% • The CP toothbrush line held 25% to 40% of the category

shelf space in most stores• 22% of all toothbrushes were expected to be distributed

to consumers by dentist-with dedicated sales force Oral-B dominated this Market

• SsProduct design

The long inner bristles cleaned between the teeth

The longer outer bristles cleaned

around the gum line

The shorter bristles cleaned the teeth surface

35% increase in Plaque removal

compared to other leading toothbrushes

A superior, technical,

plaque removing device

Goals of task force

A. Understanding the various techniques used by consumers while brushing their teeth

B. Testing the between-teeth access of different toothbrush designs

C. Establishing an index to score clinical plaque-removal efficacy at the gum line and between

D. Creating a bristle configuration and handle design offering maximum plaque- removing efficacy

E. Determining the efficacy and acceptance of the new toothbrush design.

Conclusion given by task force

• Brushing was often ineffective at removing plaque from the gum line and between the teeth

• CP’s new design was superior to both Oral-B and reach in accessing front and back teeth, using either horizontal or vertical brushing

• the new product removed an average 35% more plaque than other leading brushes

Positioning

Precision was developed with the objective of creating the best brush possible and as such, becoming a top-of-the range, super-premium product.

In what ways it can be positioned ?

MAINST

REAM

POSITIO

NING

STRATEG

Y

NICHE

POSITIO

NING

STRATEGY

Niche Positioning strategy

Clear cut strategy

Target group more open to paying higher prices

Less erosion of existing products

Less profit in future

Reach limited to a specific section

MAINSTREAM POSITIONING

Accessible to larger market size

A Simple and direct campaigning

Possibility of higher profit

Higher price can turn people off

Uninvolved consumers can’t be included in target market

Greater cannibalism of Colgate Plus and Colgate Classic’s market share

Executives debated whether the brush should be known as

“Colgate Precision” or

“Precision by Colgate”

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.

“You can really feel it working !”

When TEST were conducted among consumers the following feedbacks were obtained-

• The toothbrush’s feature of preventing Gum disease motivated the consumers to purchase

• 55% of test consumers found Precision to be very different from their current toothbrushes

• The more the consumers were told about Precision and how it worked, the greater the enthusiasm for the product.

Recommendation

POSITIONING: 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 once it enters the mainstream.

Broadening into the mainstream positioning would enhance greater proportion of sales which would now also occur through mass merchandisers and club stores apart from the food and drug stores.

BRANDING: “Precision By Colgate “ would be more prominent as it would reduce

cannibalization of Colgate Plus-which is the bread and butter of CP’s toothbrush line and secure its market position

Placing the Precision at the centre of the Brushes in the storage shelves would ensure easy acceptance due to the prevalence of the Brand at the same time- give it a unique stand.

Recommendation

COMMUNICATION STRATEGY: 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 be several Consumer promotions to back the launch for the mainstream positioning as this w attract a lot more potential buyers.

Surveys and Sampling:

Since sampling would be critical to Precision’s success, it would be better to use Dentists to sample consumers since professional endorsements were more credible.

QUICK RECAP !!

CREATED BY, SUMIT MEHER, NIT CALICUT, DURING A MARKETING INTERNSHIP UNDER PROF. SAMEER MATHUR, IIM LUCKNOW