This document discusses strategies for launching Colgate's new Precision toothbrush. It recommends initially targeting niche "therapeutic and cosmetic brushers" and entering the super-premium market. An advertising campaign would promote the brush's effectiveness at preventing gum disease. In the long term, it recommends moving to the mainstream market to broaden availability and profits, as niche positioning cannot be maintained and competitors may emerge. The niche approach mitigates downsides like cannibalizing existing brush sales.

1. The PRECISION toothbrush

2. Define positioning, branding and
communication strategies for the new
Toothbrush-Colgate Precision.
OBJECTIVE:-

3. Nature Of Demand
Shift in demanded benefits:
• Cavity prevention
• Healthier gums
• Ready to pay for superior toothbrush
Market is emerging from value and premium
to Super premium-Enhanced Oral Care

4. US Oral care market:
-$2.9 billion in retail sales
-growing at a rate of 6.1% annually
Toothbrush Market growth:
average 9.3% per annum since 1987

5. CP’s toothbrush
sales in 1991
- $77 million
Number one
in US retail
toothbrush
market with
23.3% volume
share

6. Consumer perception map
High effective bristles
Low effective bristles
Less
comfort
High
comfort
Crest complete
Colgate Precision
Oral-B
Indicator
J & J Reach
Advance
Aquafresh flex

7. Consumer facts
Purchase frequency
Year Duration
1990 Every 12.4 months
1991 Every 11.6 months
1992 Every 9.7 months
Brushing Habits
Customer % Habits
45 Before Breakfast
57 After Breakfast
28 After lunch
24 After Dinner
71 Before Bed
Change in toothbrush
Customer % Habits
48 Every 3 months
70 Bristles visibly worn
11 After seeing dentist
3 Purchase on impulse
Brand decision factors
Reasons for using brand Customer %
Fits comfortably in mouth 63
Best for getting hard to reach places 52
Bristles are of right softness 46
Bristles are of right firmness 36
Dentist recommends 35
Part of oral care regime 30

8. Consumer choices based on:
• Features
• Comfort
• Professional Recommendation
• Concerns about health of gums more than cavity
prevention
As a consequence:
• Relatively unfamiliar with toothbrush prices.
• Willing to pay premium for addressing these concerns
• 82% of purchases are unplanned.

9. Consumer segmentation
Type of consumer % of
adults
Habits Major brands
Therapeutic brushers 46 Brush twice a day-85%
Use professional brush-85%
Floss regularly-54%
Oral-B regular
Oral-B Angle
Colgate Plus
Cosmetic brushers 21 Brush twice a day-85%
Use mouth wash-81%
Use professional brush-54%
Use breath fresheners-54%
Floss regularly-69%
Colgate classic
Oral-B regular
Colgate Plus
Uninvolved
Consumers
33 Brush once a day or less-20%
Use mouthwash-66%
Use regular brush-28%
Floss regualrly-54%
Colgate classic
Oral-B regular
Colgate Plus

10. Competitors
CP appears to have a considerate share of the market
Number of Stock keeping Units
Brand Adult Children
Colgate 28 8
Oral-B 16 5
Reach 14 4
Crest complete 10 0
Aquafresh flex 6 1
Lever 7 2
Plax 2 1
Total 83 21

11. Channels
Principal brand unit market shares-
FOOD
j&j
Oral-B
Colgate
others
aquafresh
P&G
Principal brand unit market shares-
MASS
oral-B
J&J
colgate
Lever
Aquafresh

12. colgate
J&J
Oral-B
Others
P&G
Aquafresh
Lever
CP must increase its focus in drug store channel
Principal toothbrush brand unit market share-DRUG

13. Product
Precision is a technological innovation
CP developed brush with 3 different lengths
and orientations
35% more plaque removing efficiency
More effective in reducing gum diseases
than leading brushes

15. Pricing:
Manufacturer cost per unit $0.66 $0.64
Manu. Listed price $2.02 $1.76

16. Pre-forma Income statement-cannibalization analysis

17. Promotion
• Under the niche market
-Aggressive advertising campaign
-Demonstrate technical superiority of the toothbrush
• Under mainstream position
-through financial incentives
- Coupon, buy one get one free
• Through professional channels- Dentists
• Consumer promotions in CP market
-a free 5 oz. tube of Colgate toothpaste with a Precision brush
-a 50% off offer on Colgate toothpaste
-a 50 cent coupon

18. Branding
Stressing “Precision” would limit the extent of
Cannibalization of Colgate Plus.
Emphasizing “Colgate” would build Brand Equity
Colgate
Precision

19. Communication and promotion
Special Coupons-Strong Colgate market
60 cents discount on Precision provided when purchased
Colgate toothpaste and Other oral products
Maximizes benefit from being dominant player in
toothpaste market
Buy 1 Get 1 Bundling- Competitive market
A free 5 oz tube of Colgate toothpaste or travel size dental
floss with a purchase of a precision toothbrush.
Have less undesired effect on repeat purchase frequency
than “two-for-one” toothbrush offer

20. Sampling
6 months campaign providing free samples for
dental professional offices in order to establish and
strengthen our position as a professional’s choice
Satisfaction Guarantee
If an unsatisfactory check up has occurred, the
consumer can send in the certificate for a full refund
of the cost of the toothbrush

21. Pros and cons of positioning
Niche Market Strategy
Pros
1. Entry into new superior toothbrush market which CP
currently holds no position.
2. CP would face less competition.
3. Niche could later be broadened to a mainstream position
as additional capacity came on line. This would be an easy
transition in product life cycle.
4. Less erosion of Colgate Plus. The products are more isolated.
Cons
1. Less contribution to net profit in future years.

22. Mainstream Market Strategy
Pros
1. Unsatisfied demand could create the perception
of a hot product, which may increase sale.
2. Possible increase in sales.
Cons
1. Greater erosion of Colgate Plus.
2. May require dropping one of the slow moving
children’s brush from the Plus line.
3. Possible pressure on production schedules resulting
in inadequate supply of product.
4. More competition

23. Recommendations
Launching Strategy:
• Target therapeutic and cosmetic brushers
• Enter the Super-premium niche market
• Move to Mainstream market
• Distribute to Dentists and Drug stores
Advertising campaign:
• 1993 Budget: Increase overall toothbrush Ads &
Promotion Budget by $19.2M
• Devote $32.5 to Precision, $10.8 to Plus
• Ads focused on Prevention of gum diseases,
toothbrush effectiveness(need to develop
superiority claim)

24. Positioning
Short term—Niche , Long term—Mainstream
Why?
• 10 month lead time for mainstream
Cost of shortage of inventory
• Niche strategy cannot hold long
Potential competitors with similar product/technology
• Relatively easier to move from high end to low end
Market of Precision will be broader
• Profit numbers from cannibalization calculation
When total sales are higher enough, profit from
Precision will exceed cannibalization