Study of this Harvard case help us to know about the background of the company,its current scenario and various analysis which was done during this entire process.

1. Colgate-Palmolive
Company: The Precision
Toothbrush

2. "World of Care"

3. COMPANY’S BACKGROUND
Operates in….

4. FOUNDER: William Colgate
PLACE: New York City
YEAR : 1806
PRODUCTS: Soaps, detergents, and oral hygiene
REVENUE: $16.03 billion
PRECISION PRODUCT MANAGER: Susan Steinberg
COLGATE PALMOLIVE’S CEO: Reuben Mark
DIVISION GENERAL MANAGER: Nigel Burton
COLGATE PLUS MANAGER : John Phillips
LAUNCHING OF COLGATE PRECISION: Aug, 1992

5. Evaluate the impact of Precision marketing mix on sales
by defining 4 P’s.
Defining the marketing situation, actions and alternatives for a
new product: The Precision Toothbrush.
To analyze the consumer behavior and summarize it.

7. 1992- Colgate Palmolive was poised to
launch a new toothbrush in US named
Colgate Precision
The product has been under development
for 3 years
Faced highly competitive market with substantial
new product activity
Susan recommended Positioning, Branding and
communication Strategies for “The Precision”.

8. U.S. MARKET SITUATION :
1991- Toothbrushes accounted for 15.5% of total oral care market
growth rate at an average of 9.3% per annum
1992- Growth rate was 21% in value and 18% in volume due to
introduction of new brands

9. S W
T
Strengths
•Strong commitment to innovation
through investment in R&D
•Diversification of product type
•Colgate-Palmolive is a global leader in
personal care and household products
Opportunities
•According to research, 46%
of adult consumers are concerned about
the health of their gums and are willing
to pay premium for new products
addressing the issue.
•Also consumers are willing to
experiment with new toothbrushes.
Threats
•Competitors are offering incentives
•Promotions are hitting the market hard,
discounts, and schemes are needed to be
implemented.
O
Weaknesses
• Not yet into the super-premium
toothbrush category
• Difficult to educate consumers to
prevent gum diseases.
•Oral-B has professional endorsements as
dentist’s toothbrush.

10. BRAND DECISION FACTORS FOR CONSUMERS ( in %)

11. REPRODUCTION OF THE COLGATE PRECISION TOOTHBRUSH

13. I. How Precision should be positioned, branded and communicated to
consumers?
II. What should be the advertising and promotion budget and how it should be
broken down?
III. How to analyze profit and loss that would enable Precision toothbrush to
reach its full potential?

15. PRICE (Product Segmentation)

16. PRODUCT (Demographic Segmentation)
•1980s- Marketed on the basis of adult and child aesthetic.
• The children segment had variety of new products like brushes
with sparkling handles, bugs and bunny etc.
•Later, new products mainly focused on technical performance
improvements.

17. PLACE
Increase its penetration and number of
wholesalers in rural areas.

18. PROMOTION

19. CONSUMER SEGMENTATION OF TOOTHBRUSH
USERS (Psychographic Segmentation)

20. •Johnson & Johnson
•Oral-B
• Procter& Gamble
• Smithkline Beecham

21. WHY COMPETITION?
Offered promotions in the form of
•Coupons
•Mail-in refunds
•Discounts
HOW TO ANALYSE?
On the basis of
•stock keeping units (SKUs)
•price segments

23. ARGUMENTS FOR LAUNCHING
PRECISION (Brand Positioning)
• Niche product
• Mainstream brand

24. NICHE STRATEGY
•Target group paying higher price
•Less erosion of existing products.
•Less cannibalisation & less competition.
MAINSTREAM STRATEGY
•Accessible to larger market size with
simple campaigning.
•Possible increase in sales.
NICHE STRATEGY
Less profit in future.
MAINSTREAM STRATEGY
•Greater erosion.
•More competition

25. ALTERNATIVE POSITIONING SCENARIO FOR PRECISION

26. How Unit Volumes Reach Consumer
INCOME STATEMENTS

28. Breakeven Point (units)=
Fixed Costs/(S.P-Variable Costs)
1992E
According to income statements,
Fixed costs= $11,423
Selling Price of toothbrushes= $44,846
Total Advertising Costs = Media + Consumer Promotions + Trade Promotions
Total Advertising Costs = $(9,623 + 6,978 + 7,457) = $24,058= Variable Costs
Breakeven Point (units)= $11,423/ $(44,846-24,058) = 0.549 (PROFIT)

29. TECHNIQUES USED FOR BRANDING,ADVERTISING &
PROMOTION

30. CONSUMER CONCEPT TEST RESULTS
(69+68+66)/3=67.67%
(15+15+10)/3=11.67%
(80+71+74+68)/4=73.5%
(19+19+18+14)/4=17.5%
(63+72+62+66)/4=65.75%
(13+16+11+14)/4=13.5%
(87+61)/2=74%
(19+48)/2=24%

31. • Background
• Situation and SWOT analysis
• Decision Factors
• Competitors
• Alternative Positioning Scenario
• Issues and Segmentation Hypothesis
• Actions and Calculations

32. Created by PALAK BANSAL,ZHCET (ALIGARH MUSLIM
UNIVERSITY) during a marketing internship under Prof.Sameer
Mathur (IIML) from 3rd July-29th July,2017.