COLGATE PALMOLIVE THE PRECISION TOOTHBRUSH CASE ANALYSIS

1. C O L G A T E P A L M O L I V E
C O .
T H E P R E C I S I O N
T O O T H B R U S H
C A S E S T U D Y A N A L Y S I S
HARVARD BUSINESS SCHOOL

2. A B O U T T H E C O M P A N Y
Colgate-Palmolive(CP) Company stands as a global leader in household and
personal care products.
It emphasises on new product launches, and entry into new geographic
markets, along with a continuing focus on core consumer products.

3. W H A T I S T H E
P R E C I S I O N
T O O T H B R U S H
This technologically superior toothbrush was poised to launch in August
1992.
This super premium segment toothbrush to give a high competitive
edge to other divisions.

4. W H A T I S T H E
P R E S E N T
S I T U A T I O N ?
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5. Susan Steinberg, Precision Product Manager had
managed the entire product development process
and now had to recommend
Branding, Positioning, and Communication
Strategies.
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6. R E B R A N D I N G
A C T I O N P L A N
Logo redesign
Emphasis on new
products/updates
Service and product
names/tiers recalibration
Press releases on
company revamp
M A R K E T I N G
M I X O F
C O L G A T E -
P A L M O L I V E
Branding
Positioning
Market Segments
Communication
Strategies

7. L E T U S N O W A N A L Y S E
E A C H O F T H E
M A R K E T I N G M I X O F
T H E B R A N D

8. I N S I G H T S F R O M
D I F F E R E N T
P R O D U C T
S E G M E N T S

9. I N S I G H T S F R O
D I F F E R E N T P R O D
S E G M E N T S

10. I N S I G H T S
F R O M C O N S U M E R
B E H A V I O U R

12. CP's consumer research were becoming more
concerned about the health of their gums as
opposed to cavity prevention and were willing to
pay a premium for new products addressing the
issue.

13. Most consumers agreed that toothbrushes were as
important as toothpaste to effective oral hygiene and
that the primary role of toothbrush was to remove
food particles; plaque removal and gum stimulation
was considered secondary.

15. I N S I G H T S
F R O M
C O M P E T I T I O N

20. C O M P E T I T I O N
Oral-B
Johnson & Johnson
Procter & Gamble
Smithkline Beecham
Lever
Pfizer
Sunstar

21. I N S I G H T S F R O M
A D V E R T I S I N G A N D
P R O M O T I O N

27. Growing competition increased the value of
consumer promotion events.
In 1992, 8% of all brushes reached free to the
consumers.
Coupon events increased to 33 in 1992.
The CP toothbrush held 40% shelf space in most
stores.

28. Retail advertising features and in-store displays
increased toothbrush sales.
Toothbrush display increased sales by 90%.
Point-of-Purchase displays played an impact.
Middle shelf-space maximised retail sales.

29. I N S I G H T S
F R O M
D I S T R I B U T I O N

30. In 1987, 75% of Oral care products was sold by
traditional food stores
By 1992, it came down to 45%
Toothbrushes provided retailers margin of about
29%.
22% toothbrushes were distributed by dentists.
Retail sales remained fragmented

33. M A R K E T I N G M I X F O R
T H E P R E C I S I O N
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34. NICHE
MARKETING
STRATEGY
A niche product is to be targeted at
consumers concerned about gum disease. It
could command a 15% price premium over
Oral-B and would be expected to capture 3%
of the U.S. toothbrush market by the end of
the first year following its launch. With a
niche positioning, Precision retail sales would
represent 3% volume share of the toothbrush
market in year 1 and 5% in year 2.
MAINSTREAM
POSITIONING
STRATEGY
Precision could be positioned as a
mainstream brush, with the broader appeal
of being the most effective brush available
on the market. It was estimated that, as a
mainstream product, Precision could capture
10% of the market by the end of the first
year. With a mainstream positioning, these
volume shares would be 10% in year 1 and
14.7% in year 2

35. B R A N D I N G O F
P R E C I S I O N
The Debate whether the brush should be known as
"Colgate Precision" or "Precision by Colgate".

36. Executives believed that the product must stand
alone and the PRECISION brand name should be
emphasised.
Stressing Precision as opposed to Colgate would
limit the extent of Cannibalisation of Colgate Plus.
It was estimated under both Niche and
Mainstream marketing scenarios, the
cannibalisation figures of Colgate Plus would
increase by 20% if the Colgate brand name was
stressed.
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37. THE RESULTS WERE AS FOLLOWS
The toothbrush's feature of preventing Gum disease motivated
the greatest purchase intent among test consumers.
Addition consumer research indicated that 55% of test
consumers found Precision to be very different from other
toothbrushes.
The research also revealed that more the consumers were told
about Precision and how it worked, the greater the enthusiasm
for the product.

39. SO, IF YOU
WERE SUSAN
STEINBERG,-
WHAT WOULD
YOU
RECOMMEND?

40. RECOMMENDATION
POSITIONING
BRANDING
COMMUNICATION
STRATEGIES
SAMPLING

41. P O S I T I O N I N G
Initially positioning Precision as Niche toothbrush and
later broadening to mainstream positioning would
help the product gain sufficient recognition by
avoiding cannibalisation 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 drug and food stores.
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42. B R A N D I N G
"Precision by Colgate" would be more prominent as it
would reduce the cannibalisation 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 prevalance of the brand at the same time-
Give it a unique stand.
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43. C O M M U N I C A T I O N
S T R A T E G Y
Investing a little more in 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 launc for the mainstream positioning as this
would attract a lot more potential buyers.
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44. S A M P L I N G
As Sampling would be critical to Precision;s success, it
would be better to use Dentists to sample consumers
since professional endorsements were more credible.
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45. Spending 75% of advertising dollars of CP's category
spending for Precision was essential because it ensured
Precision was able to reach its potential consumers
through extensive advertising.
This would not be a threat for CP's Colgate-Plus as it has its
market share secured by the Colgate's brand name, which
is not the case with Precision.

46. T H A N K Y O U
By Sheli Lunawat,
Jain College, Bangalore
During the internship under Prof
Sameer Mathur,
IIM, Lucknow.