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COLGATE PALMOLIVE CASE STUDY- PRECISION
TOOTHBRUSH
BACKGROUND
• August 1992-Colgate Palmolive poised to launch new
TOOTHBRUSH in U.S.A
• Called as Colgate Precision
• Technologically superior but faces tough competition
• Recent transformation of CP due to
1) Continued new product launches
2) Core consumer products
STEINBERG IN BRUSH-LAND
• Lost in the world of tooth brushes is Susan Steinberg,
Precision Product Manager
• Needs to recommend Positioning, Branding and
Communication strategies
• Has no option but to reach the HATTER for advice as
to how to proceed with the analysis
• The HATTER told her to be patient and go through
the analysis he did for her
RESEARCH
• 1991-CP held 43% of world tooth paste market and
16% of tooth brush market
• CP’s U.S. toothbrush sales in 1991 reached $77million
• Tooth brushes represented 19% of CP’s U.S. Oral care
division sales ad profits
• CP held no 1 position in U.S. retail toothbrush market
(23.3% volume share)
4 P’S OF MARKETING
• The target in front of Steinberg was to establish the
4P’s: Product, Place, Price and Promotion
• The right marketing mix had to highlight the
technological advancement of the brush
• With the right audience to be targeted
• Cautious with in-house cannibalization
PRICING
• Placed in the “Super Premium segment
• New category, above of existing two segments: value
and professional
• Priced above $2.00
• Above Colgate Plus and Classic as well as at parity
with Oral-B Indicator
HOW IT STOOD OUT IN THE
CROWD
Niche or Mainstream ?
The merits of niche-
a) No cannibalization of Colgate Plus
b)Better competition with Oral-B
c) Branding in Super Premium Segment
d)The consumer behaviour more favourable towards
premium segment
e) Can later extend itself under mainstream product
line
The Demerits were-
a) Less profit compared to mainstream branding
b)Less volume share
c) If the brand is unable to resonate with the consumer
it could fail easily
d)The value and professional segments occupy huge
chunk of market share
PRODUCT
• Marketed as Niche product
• Highlight is innovative BRISTLES
• Super Premium Toothbrush at above $2
• Steinberg believed launch of Precision will
compliment trade advertising features and special
displays toothpaste category
IT ALL COMES DOWN TO BRISTLES
• Soft-Bristle brushes held 48% market share, growing
at 7% per year
• Oral-B unique branding with Indicator bristles
• Their ability to remove plaque
• Their reach in the hidden areas of teeth
• Precision had triple action brushing effect due to its
uniquely made bristles
• Reached all areas of teeth
PROMOTION-GUMS& PLAQUE
• R&D stated the product was superior to both Oral-B
and Reach in accessing front and back teeth
• Needs to concentrate on their “Triple Action
Brushing Effect”
• Needs to highlight its effectiveness in removing
plaque and stronger gums
• Promote it as Dentist’s recommendation
CONSUMER BEHAVIOR
• Changing rapidly
• Investing more on oral hygiene
• Preference towards professional & Super Premium
toothbrush
• Concerned more about plaque and gums than other
factors
• Pay great attention to BRISTLES
CONSUMER-PROMOTION
• 1+1 tooth brush offers
• (Toothpaste + toothbrush) bundle
• Cash Refund
• Free samples
• (Mouth Wash + Toothpaste) bundle promoting
plaque removal
• (Adult + Child) toothbrush combo(higher purchase
rate)
DISTRIBUTION
• In 1992, 22% of all toothbrushes were distributed by
dentists, the segment was dominated by Oral-B
• Precision would be carried primarily by food and
drug stores
• By mass merchandisers later on in the product cycle
to cope with the competition in retail stores
• Need a push through Dentist’s recommendation
ADVERTISING
Heavily marketed as technologically advanced product
that features unique bristles
• Claim to remove significantly more plaque than other
toothbrushes and lead to healthier gums
• The “Feel Good” factor is advertised prompting
buyers to experience the change
• Free samples to promote good word of mouth
Colgate Palmolive- Sumeet Duggal
COMPETITION
• In-house as well as out-house
• In-house it could compete with cheaper options like
Colgate Plus and Classic due to changing consumer
preferences
• Out-house it competed directly with Oral-B’s
Indicator toothbrush
• Other new entrants also posed great threat due to
impulsive buying habits of consumers
ORAL-B
• Innovative products like Indicator brush
• The bristles turned pale when it was time to replace it
• The strategy worked well, in terms of sales and
promotions
• Consumer’s always like something new and gimmicky
• The distribution channel comprised relied heavily on
Dentist’s recommendation
FINANCIAL FORECAST
• Predicts rate of success under niche or mainstream
branding
• Niche branding require less marketing
expenditure(1/3 of mainstream)
• The profits earned less than that under mainstream
branding
• Niche branding would not eat up Colgate Plus’s
market share
PROFIT-AND-LOSS PRO FORMA
• Company would face huge losses if marketed as
mainstream product
• Profit will come from the premium segment
targeting
• Less investment in marketing
• Could be extended to mainstream as capacity
increases further increasing profits
• Unit Volume share(Retail, Sampling and through
Professionals) less than that of mainstream
SUGGESTIONS
• Steinberg should market the Precision toothbrush as
a niche product only and not a mainstream product
• Positioning-niche
• Branding-Use the Colgate brand and not just
Precision as it will uplift
• Communication-Technological advance(Use of
Dentist’s recommendation and Samplings)
• Promotion-Removes Plaque and healthier gums
• Advertising- Dentist’s recommendation
• Marketing mix- Product-Concentrate on Bristles
Marketing
Place- Baby Boomers segment
Price- Super Premium segment
Promotion- Healthier Gum, removal of plaque
• Profit- More in Super Premium segment as numbers
suggest it will require less budget for marketing and
advertising(1/3 required for Mainstream branding)
• SKU-Less shop keeping unit compared to
mainstream, less other sku lines to be dropped
SUMMARY
• Background
• Problem at hand
• Analysis-Research
• Marketing Mix
• Brand Positioning, Consumer Behaviour and
Distribution
• Competition
• Financial Forecast
• Profit-and-loss Pro Forma
• Suggestions
DISCLAIMER
Created by Sumeet Duggal, Manipal
University Jaipur, during a Marketing
Management Internship under
Prof. Sameer Mathur, IIM Lucknow

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Colgate Palmolive- Sumeet Duggal

  • 1. COLGATE PALMOLIVE CASE STUDY- PRECISION TOOTHBRUSH
  • 2. BACKGROUND • August 1992-Colgate Palmolive poised to launch new TOOTHBRUSH in U.S.A • Called as Colgate Precision • Technologically superior but faces tough competition • Recent transformation of CP due to 1) Continued new product launches 2) Core consumer products
  • 3. STEINBERG IN BRUSH-LAND • Lost in the world of tooth brushes is Susan Steinberg, Precision Product Manager • Needs to recommend Positioning, Branding and Communication strategies • Has no option but to reach the HATTER for advice as to how to proceed with the analysis • The HATTER told her to be patient and go through the analysis he did for her
  • 4. RESEARCH • 1991-CP held 43% of world tooth paste market and 16% of tooth brush market • CP’s U.S. toothbrush sales in 1991 reached $77million • Tooth brushes represented 19% of CP’s U.S. Oral care division sales ad profits • CP held no 1 position in U.S. retail toothbrush market (23.3% volume share)
  • 5. 4 P’S OF MARKETING • The target in front of Steinberg was to establish the 4P’s: Product, Place, Price and Promotion • The right marketing mix had to highlight the technological advancement of the brush • With the right audience to be targeted • Cautious with in-house cannibalization
  • 6. PRICING • Placed in the “Super Premium segment • New category, above of existing two segments: value and professional • Priced above $2.00 • Above Colgate Plus and Classic as well as at parity with Oral-B Indicator
  • 7. HOW IT STOOD OUT IN THE CROWD Niche or Mainstream ? The merits of niche- a) No cannibalization of Colgate Plus b)Better competition with Oral-B c) Branding in Super Premium Segment d)The consumer behaviour more favourable towards premium segment e) Can later extend itself under mainstream product line
  • 8. The Demerits were- a) Less profit compared to mainstream branding b)Less volume share c) If the brand is unable to resonate with the consumer it could fail easily d)The value and professional segments occupy huge chunk of market share
  • 9. PRODUCT • Marketed as Niche product • Highlight is innovative BRISTLES • Super Premium Toothbrush at above $2 • Steinberg believed launch of Precision will compliment trade advertising features and special displays toothpaste category
  • 10. IT ALL COMES DOWN TO BRISTLES • Soft-Bristle brushes held 48% market share, growing at 7% per year • Oral-B unique branding with Indicator bristles • Their ability to remove plaque • Their reach in the hidden areas of teeth • Precision had triple action brushing effect due to its uniquely made bristles • Reached all areas of teeth
  • 11. PROMOTION-GUMS& PLAQUE • R&D stated the product was superior to both Oral-B and Reach in accessing front and back teeth • Needs to concentrate on their “Triple Action Brushing Effect” • Needs to highlight its effectiveness in removing plaque and stronger gums • Promote it as Dentist’s recommendation
  • 12. CONSUMER BEHAVIOR • Changing rapidly • Investing more on oral hygiene • Preference towards professional & Super Premium toothbrush • Concerned more about plaque and gums than other factors • Pay great attention to BRISTLES
  • 13. CONSUMER-PROMOTION • 1+1 tooth brush offers • (Toothpaste + toothbrush) bundle • Cash Refund • Free samples • (Mouth Wash + Toothpaste) bundle promoting plaque removal • (Adult + Child) toothbrush combo(higher purchase rate)
  • 14. DISTRIBUTION • In 1992, 22% of all toothbrushes were distributed by dentists, the segment was dominated by Oral-B • Precision would be carried primarily by food and drug stores • By mass merchandisers later on in the product cycle to cope with the competition in retail stores • Need a push through Dentist’s recommendation
  • 15. ADVERTISING Heavily marketed as technologically advanced product that features unique bristles • Claim to remove significantly more plaque than other toothbrushes and lead to healthier gums • The “Feel Good” factor is advertised prompting buyers to experience the change • Free samples to promote good word of mouth
  • 17. COMPETITION • In-house as well as out-house • In-house it could compete with cheaper options like Colgate Plus and Classic due to changing consumer preferences • Out-house it competed directly with Oral-B’s Indicator toothbrush • Other new entrants also posed great threat due to impulsive buying habits of consumers
  • 18. ORAL-B • Innovative products like Indicator brush • The bristles turned pale when it was time to replace it • The strategy worked well, in terms of sales and promotions • Consumer’s always like something new and gimmicky • The distribution channel comprised relied heavily on Dentist’s recommendation
  • 19. FINANCIAL FORECAST • Predicts rate of success under niche or mainstream branding • Niche branding require less marketing expenditure(1/3 of mainstream) • The profits earned less than that under mainstream branding • Niche branding would not eat up Colgate Plus’s market share
  • 20. PROFIT-AND-LOSS PRO FORMA • Company would face huge losses if marketed as mainstream product • Profit will come from the premium segment targeting • Less investment in marketing • Could be extended to mainstream as capacity increases further increasing profits • Unit Volume share(Retail, Sampling and through Professionals) less than that of mainstream
  • 21. SUGGESTIONS • Steinberg should market the Precision toothbrush as a niche product only and not a mainstream product • Positioning-niche • Branding-Use the Colgate brand and not just Precision as it will uplift • Communication-Technological advance(Use of Dentist’s recommendation and Samplings) • Promotion-Removes Plaque and healthier gums
  • 22. • Advertising- Dentist’s recommendation • Marketing mix- Product-Concentrate on Bristles Marketing Place- Baby Boomers segment Price- Super Premium segment Promotion- Healthier Gum, removal of plaque • Profit- More in Super Premium segment as numbers suggest it will require less budget for marketing and advertising(1/3 required for Mainstream branding) • SKU-Less shop keeping unit compared to mainstream, less other sku lines to be dropped
  • 23. SUMMARY • Background • Problem at hand • Analysis-Research • Marketing Mix • Brand Positioning, Consumer Behaviour and Distribution • Competition • Financial Forecast • Profit-and-loss Pro Forma • Suggestions
  • 24. DISCLAIMER Created by Sumeet Duggal, Manipal University Jaipur, during a Marketing Management Internship under Prof. Sameer Mathur, IIM Lucknow