CASE STUDY

COLGATE-PALMOLIVE COMPANY:

THE PRECISION TOOTHBRUSH

COLGATE-PALMOLIVE A GLOBAL LEADER IN THE

HOUSE HOLD AND PERSONAL CARE

PRODUCTS .

SITUATION!In August 1992,Colgate-Palmolive(CP)was poised to launch a new toothbrush in the United States, tentatively named COLGATE PRECISION.Susan Steinberg, Precision Product Manager has to recommend Positioning, Branding and communication Strategies for “The Precision”.

Prior to finding solutions to the problem, an extensive analysis on the Company’s strength and weakness must be done. This helps us to know the potential areas of improvement and the inner strengths.

• Was a global leader in the house hold and personal care products

• Introduced 275 new products world wide

• Held the number one position in the U.S retail toothbrush market with a 23.3% volume share.

*Data w.r.t 1991 sales statistics

• Was unable to achieve proper credibility from the dental association on its products when compared to its competitor ORAL-B

• Introduction of new products may result in cannibalization of other products like colgate plus.

PRODUCT SEGMENTATIONIn the 1980’s,Industry executives divided the Toothbrush category into two segments• Value• ProfessionalThe late 1980’s saw the emergence of another category called super premium brushes

ANALYZING CONSUMER BEHAVIOUR• Consumers were

willing to pay a premium for the new products addressing issues regarding the health of their gums• 48% consumers

claimed to change their brushes at least every three months• Consumers chose their

brand based on features, comforts and professional recommendations

MAIN REASON %

Fits comfortably 63

Getting at hard to Reach places

52

Bristles of Rightsoftness

46

Bristles of right firmness

36%

The table gives a broader view on the priority of choice of Brand based on their effectiveness and functionality

Continued…

ORAL-B

JOHNSON & JOHNSON –

REACH BRAND

P&G’S CREST

AQUAFRESH FLEX

TAKING NOTES OF CHALLENGES FROM COMPETITORS• Oral-B has heavy professional

endorsement and is known as “The dentist’s toothbrush” thus giving a tough match in the competition.

• J&K’s Reach-has excellent innovations like-a beveled handle to help consumer brush at 45 % angle.

The Brand has scheduled the Launch of ‘Reach Between’ on September 1992.This has to be kept in mind-after few months- Precision has to launched• P&G ‘s Product claims to have the

ability to reach between the teeth up to 37% farther than leading brands.

• Smithkline Beechman’s AquaFresh Flex had flexible handles and allowed gentle brushing. The Brand has good promotional plans to come up

ADVERTISING AND PROMOTION

Points to Ponder! Growing competition

increased the featured and value of consumer promotion event.

Retail advertising features and in store displays increased toothbrush sales

When Colgate toothbrush were combined with Colgate toothpaste, the toothbrush sales increased by 170%

The CP toothbrush line held 25% to 40% of the category shelf space in most stores.

22% of all toothbrushes were expected to be distributed to consumers by dentist-with dedicated sales force-Oral B dominated this Market.

PRODUCT DESIGNThe longer outer bristles cleaned around the gum line.

The long inner bristles cleaned between the teeth

The shorter bristles cleaned the teeth surface

The Brush achieved 35% increase in Plaque removal compared to other leading toothbrushes

A superior ,technical, plaque removing device.

POSITIONING!

Precision was developed with the

objective of creating best brush possible

and as such becoming a top-of-the –range

product. Now how do we position it?

We had two choices!

NICHE POSITIONING

STRATEGY

MAINSTREAM POSITIONING STRATEGY

NICHE POSITIONING STRATEGY

• When positioned as Niche product ,it would target at consumers concerned about gum diseases.

• As such,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 1st year following its launch.

• No SKU’s Needed to be dropped!

• If Precision is positioned as a Mainstream brush, Precision would capture 10% of the market share at the end of 1st year following its launch.(Very high when compared with Niche positioning)

• The volume shares when positioned as mainstream would be 10% in 1 year when compared to 5% when positioned as Niche product!

MAINSTREAM POSITIONING STRATEGY

• Raised concerns about ‘CANNIBALIZATION’ of Colgate plus and about pressure on Production Schedules that had been developed for Niche positioning.

• Production capacity increases required 10months lead-resulting in inadequate supply of product.

• Positioning Precision as a mainstream product with 7 SKU’s would probably require dropping one or more existing SKUs.

• Mainstream was more appealing as it proclaimed larger market share & volume share at the end of 1 year after launch.

• Greater proportion of sales would occur through mass merchandisers and club stores.

BRANDING!The Debate whether the brush should be known as “Colgate Precision” or “Precision By Colgate”????

• Executives believed that Product should stand alone and the PRECISION brand name should be emphasized.

• Stressing Precision as opposed to Colgate would-limit the extent of Cannibalization of Colgate plus.

• It was estimated ,both under mainstream and niche positioning scenarios, the cannibalization figures For Colgate plus would increase by 20% if the Colgate brand name was stressed.

TEST REULTS WERE AS FOLLOWS• The toothbrush’s feature

of preventing Gum disease motivated the greatest purchase intent among test consumers.

• Additional consumer research revealed that 55% of test consumers found Precision to be very different from their current toothbrushes.

• The research also revealed that the more the consumers were told about Precision and how it worked, the greater the enthusiasm for the product.

•However, the clichéd look of the brush put the consumers in dilemma.

• Also it was difficult to translate the message of greater plaque removal with a broad consumer appeal, since few consumers acknowledged that they might have gum disease.

So If You were Susan

Steinberg-Precision Product

Manager-What would

You Recommend!?

POSITIONING:• Initially Positioning Precision as

Niche Toothbrush and later broadening to mainstream positioning would help the product gain sufficient recognition by avoiding cannibalization 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 food and drug stores.

BRANDING:• “Precision By Colgate "would be

more prominent as it would reduce cannibalization of Colgate Plus-which is the bread and butter of CP’s toothbrush line and secure its market position.

• Placing The Precision at the center of the Brushes in the storage shelves would ensure easy acceptance due to the prevalence of the Brand at the same time-give it a unique stand.

COMMUNICATION STRATEGY:

.Investing a little more on 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 launch for the mainstream positioning as this w attract a lot more potential buyers.

Since sampling would be critical to Precision’s success, it would be better to use Dentists to sample consumers since professional endorsements were more credible.

Spending 75%of all advertising dollors 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.

BY MALAVIKA PRASADVCE,HYDERBAD

DURING THE INTERNSHIP PROGRAM BY PROF.SAMEER

MATHUR-IIM LUCKNOW