COLGATE-PALMOLIVE:

The Precision
Toothbrush

Section A Group 1

Stuti Relan
Tanushree Sarkar
Siddhartha Kanoi
Piyush Vats

Akshata Dixit
Abhiram
Ramchandran
Bhuvan Thakur
Kundan Kumar

Problem Statement

Defining a marketing strategy (Positioning,

Branding and Communication strategies) for a
new product: The Precision Toothbrush

Market Situation
US Toothbrush market(In 1991) US $ 453 MN
CPs share US $ 77 MN
Market growth 9.3% per annum since 1987 ($ sale)
Year 1992 Market growth 18% by volume, 21 % by $
sale(value).
Introduction of 47 new products.
$ growth exceeded volume growth due to emergence of
Super Premium Toothbrush category.

Consumer Behaviour
Tooth

brush market is close to a century old, but last few

decades have witnessed many changes .
Demanded benefits

Cavity Prevention
Healthier Gums
Young generation ready to pay for superior toothbrush .

Market is emerging from value and premium range to a third

category of Super Premium range Enhanced Oral Care.

Competitors
Super Premium

Professional

Value

Oral B

Oral B Indicator, Oral

B regular

Jonhson & Johnson

Reach Advanced

Reach Regular

P&G

Crest Complete

Smithkline
Beecham

Aquafresh flex

Colgate

Colgate Precision

Colgate Plus

Colgate Classic

Pepsodent

Pepsodent
Professional

Pepsodent
Regular

Colgate doesnt have a Super Premium category entry.

Colgate precision can be a new entry in that category.

The Product: Precision Toothbrush

The Precision toothbrush is a technical innovation.
Using infrared motion analysis, CP developed a unique brush

with bristles of 3 different lengths and orientations.

Three brush designs evolved with 35% more plaque
removing efficiency.
The brush is also shown to be more effective in reducing
gum disease than the leading brushes, specifically Reach
and Oral-B.
Retail Price for Mainstream market: $2.49
Retail Price for Niche market: $2.89

Branding
Naming
Suggestions
Colgate
Precision
Colgate
system III
Colgate
advantage
Colgate 1.2.3
Colgate
Contour
Colgate
sensation
Colgate Probe

Recommendatio
n

Colgate
Precision

In order to maintain relative prominence

of Colgate and Precision.
Precision should be emphasised to limit
the cannibalism.

Promotion
Under the niche market

Aggressive advertising campaign - demonstrate technical superiority

of the toothbrush

Under the mainstream position

Through financial incentives like Coupons , buy one get one free

afree 5 oz. Tube of Colgate toothpaste with a Precision brush

Through professional channels Dentists

Consumer promotions in strong CP market
a 50%-off offer on Colgate toothpaste
a 50 cent. coupon

Positioning Strategy : Pros and Cons

Main Stream Strategy

Pros

Cons

Unsatisfied demand could create

the perception of a Hot product,
which may increase sale

Greater erosion of Colgate Plus

Possible increase in sales

May require dropping one of the

slow moving Childrens brush from
the Plus line

Possible pressure on production

schedules resulting in inadequate
supply of product

More competition

Niche Market Strategy

Pros

Cons

Niche could later be broadened to a

mainstream position as additional
capacity came on line. This would be an Less contribution to net profit in
easy transition in the product life cycle. future years
Less erosion of Colgate Plus.The
products are more isolated
Entry into new superior toothbrush
market which CP currently holds no
position
CP would face less competition

Cost Analysis

Niche Segment

Mainstream Segment

Expected Demand In two years in units

28000000

85900000

Particulars

Expense

Investment Cost

4.55

13

Manufacturing Cost

18.48

54.976

Advertising and promotions

22.9

61.8

Depreciation

0.767

2.157

Total Expenses in million dollar

46.697

131.933

Selling Price per unit

2.02

1.76

Total income in million dollar

56.56

151.184

Total Expenses in million dollar

105.277

284.877

Profit in million

9.863

19.251

Profit as percentage of cost

21.12%

14.59%

Recommendation
Target the therapeutic and cosmetic brushers .
Enter the Super-premium niche market in short term.
Why?

Higher percentage of profit (21.12%),early breakeven.

10 Month lead time for mainstream. Entering niche will save cost of shortage
of inventory.

Move to Mainstream market in long term

Why?

Niche strategy cannot hold long due to potential competitors with similar
product/technology.

Relative easier move from high end to low end since market of Precision will be
broader

Profit numbers from Cannibalization calculation since when total sales are
higher enough, profit from Precision will exceed loss sue to cannibalization

Thank You!