Harvard Business Review of Colgate-Palmolive

1. COLGATE PALMOLIVE
A CASE STUDY
HARVARD BUSINESS REVIEW

2. In August 1992, Colgate Palmolive was poised
to launce a new toothbrush in the US. This
technologically superior toothbrush faced
highly competitive market. Susan Steinberg,
Precision Product Manager, now had to
recommend positioning, branding and
communication strategies to division general
manager Nigel Burton.

3. Define Positioning, Branding and
communication strategies for the
new Toothbrush- Colgate
Precision

4. Who are the players
• Susan Steinberg- Product Manager
• Nigel Burton- Division General
Manager
• Ruben Mark- CEO of Colgate Palmolive

5. WHY STUDY THIS CASE
• To figure out major competitors
and respective POP and POD.
• Analyze and understand then
prevalent consumer behavior.
• Looking into the market strategy
and profits earned.

6. Before we look into the
problems we must know the
background of the oral care
market and strengths and
weaknesses of Colgate Palmolive.

7. US Oral care Market
• A total of $2.9 billion in retail
sail.
• Growth rate of 6.1% per year
An average of 9.3% per annum growth has
been registered in toothbrush market since
1987.

8. Strength
 Is a global leader in household and personal care
products hence having strong consumer base
 Has expanded and diversified by releasing around
275 new products worldwide.
 With a total volume share of 23.3%, it held the
number one position in US retail market.

9. Weaknesses
• Didn’t achieve proper credibility from Dental
association on its products when compared to its
competitor Oral-B.
• Introduction of new products may lead to
cannibalization of market share of its own products
such as Colgate plus.

10. CONSUMER BEHAVIOR
• Consumers were willing to pay a
premium for the new products
addressing issues regarding the
health of their gums.
• 48% consumers claimed changing
their brushes once every three
months.
• Features, professional
recommendation and comfort are
major factors affecting brand
choices
• 82% of purchases are unplanned

11. Brand Decision Factor
Changing Toothbrush
Purchase Frequency
Habits

12. Major Competitors
ORAL-B
P&G’s Crest
Smithkline
Johnson and Johnson –
Reach Brand

13. Points to Ponder
• Oral-B was presented as “The dentist’s
toothbrush” hence had better endorsement.
Also its indicator bristles helped in identifying
when to replace the tooth brush.
• JOHNSON&JOHNSON presented toothbrush
with tapered head and angled neck that
cleaned even hard to reach areas in the
mouth.

14. • Crest complete by P&G had rippled end and
rounded bristles which reached between tooth
like a dental tool .
• Aquafresh Flex marketed its toothbrush as a
gentle dental care product.

15.  Retail advertising feature and in store displays
increased toothbrush sales.
 Colgate toothbrush and toothpaste when sold
together soared the sales by 170%.
 The CP toothbrush line held 25%-40% of the
category shelf space in many stores.
 22% of toothbrushes reached consumers
through dentists and Oral-B dominated this
share.

16. THE PRODUCT
PRECISION by COLGATE

19. Pre-forma Income statement-cannibalization
analysis

20. Positioning
• Under the Niche Market
• Under Mainstream position
• Through professional channels-
Dentists
• Consumer promotion in CP market

22. • Helps target consumers concerned
about gum diseases.
• It could win over a 15% price premium
over Oral-B and would be expected to
capture a 3% of the US toothbrush
market after an year of its launching.
• No SKU's to be dropped.

23. Market share and
volume share
captured by end of
first year is very
less as compared
to when marketed
as mainstream
product.

25. • Would hold larger market
and volume share by the
end of the year.
• Club stores and mass
merchandisers would help
increase sales proportion

26. Drawbacks
• Cannibalization of Colgate
plus, their soul product, may
occur.
• Increase in production
capacity requires 10 months
lead resulting in inadequate
product supply.
• Precision as main stream
product may require droping
of one or more SKU's.

27. Stressing
'Precision' would
limit the extent of
cannibalization of
product.
Emphasizing
'Colgate'
would built
brand
equity.

28. Precision from Colgate was technologically
advanced than any other of its competitors
but it was necessary to replicate this
message into simpler form so that consumers
could relate to it easily.

29. BUY 1 GET 1 free
A free 5 oz tube of Colgate
toothpaste or travel size dental
floss with a purchase of
Precision toothbrush.
Have less undesired effect on
repeat purchase frequency than
“two-for-one” toothbrush
offers.

30. Special Coupons
60 cent discount on
precision provided
when purchased
Colgate toothpaste
and other oral
products.

31. SAMPLING
Free sample provided to
dental professional
offices for 6 months to
enhance position as a
professional's choice
SATISFACTIONGUARANTEE
If an unsatisfactory
checkup has occured,
customer can send in a
certificate for full refund.

33. SHORT TERM-NICHE
LONG TERM- MAINSTREAM
Initially Precision should be relaeased as a Niche
Product and then expanded into mainstream
market hence avoiding cannibalization and adding
additional capacity once it enters the mainstream.

34. • “Precision by Colgate” would be more
prominent as it would reduce
cannibalization of Colgate Plus.
• Precision's placing at the center of the
brushes in storage shelves would
ensure easy acceptance due to the
prevalence of the Brand at the same
time, give it a unique stand.

35. • Increase overall toothbrush ads and
promotion budget bt $19.2 million.
• Devote $32.5M to Precision, $10.8M
to Plus.
• Advertisments focussing on
prevention of gum diseases and
toothbrush effectiveness.

36. Created by Sagar Sengar, IIT Kharagpur during a marketing internship under Prof.
Sameer Mathur, IIM Lucknow.