Colgate-Palmolive Company:The Precision Toothbrush
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The document outlines the launch strategy for Colgate's Precision toothbrush, aiming to position it as a super-premium product that effectively removes plaque and addresses gum issues. It discusses the challenges of branding, consumer positioning, and advertising budgets, as well as competitive market analysis and consumer perceptions. The Precision toothbrush is designed as a technical innovation with unique bristle features, targeting consumers concerned about gum health with strategies for both niche and mainstream market approaches.
Colgate-Palmolive Company:The Precision Toothbrush
- 1. Colgate-Palmolive Company: The Precision Toothbrush Harvard Business School Case
- 3. Objectives of the Case • To design the best brush possible and as such, becoming a top of-the range, super-premium product that removes maximum plaque and solves gum problems. • To position the toothbrush among the most established brands which have acing in their sales in toothbrushes. • To set it’s own brand value, advertise and market the product at an affordable price for the customer and profitable for the company.
- 4. Two Issues • How Precision should be positioned, branded and communicated to consumers? • What the advertising and promotion budget should be and how it should be broken down?
- 5. Chronology of Toothbrush Innovation in U.S.
- 6. Company background • Colgate Precision- A niche product or simple line extension and that the proven benefits to consumers represented a technological breakthrough. • Launched in August,1992. • A global leader in households and personal care products. • Faced a highly competitive market with substantial new product activity. • • Total worldwide research and development expenditures for 1991 were $114 million, and media advertising expenditures totaled $428 million.
- 8. Key People • Susan Steinberg Precision Product Manager • Reuben Mark Colgate – Palmolive(CP) CEP • Nigel Burton Division General Manager • John Phillip Colgate Plus Product Manager
- 9. Situation Analysis • In 1992, Colgate Palmolive was poised to launch a new toothbrush – Colgate Precision • Precision Product Manager managed entire new product development process • Positioning, Branding and Communication strategies were developed
- 10. Brand Decision Factor For Consumers Main Reason for Using a Brand % of Consumers Fits most comfortably in my mouth 63% Best for getting at hard-to-reach places 52% The bristles are the right softness 46% The bristles are the right firmness 36% Toothbrush my dentist recommends 35% Important part of my oral care regimen 30%
- 12. COMPETITION
- 13. Competitors
- 16. Consumer Perception Less Comfort More Comfort High Effective Bristles Less Effective Bristles Crest Complete J & J Oral B Indicator Colgate Precision Aquafresh Flex
- 17. THE PRECISION MARKETING MIX
- 18. Product Design and Testing • The Precision toothbrush is a technical innovation. • Using infrared motion analysis developed a unique brush with bristles of 3 different lengths and orientations. • Three brush design 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
- 20. Positioning • As a Niche Product 1. Targeted at consumers concerned about Gum Disease. 2. 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 the first year following its launch.
- 21. Positioning • As Mainstream Product 1. Broader appeal of being the most effective brush available on the market. 2. It was estimated that, as a mainstream product, Precision could capture 10% of the market by the end of the first year.
- 22. Why Niche product better over Mainstream product?
- 23. • If Precision was positioned as a Niche product, with 4 SKUs, it was unlikely that any existing SKUs would be dropped. • However, positioning Precision as a Mainstream product, with 7 SKUs, would probably require dropping one or more existing SKUs such as a slow-moving children’s brush from the Plus line.
- 24. Production Cost and Pricing Type of Strategy Retail Price Trade Price Manufacture Price Niche Market Strategy $2.89 $2.13 $2.02 Mainstream Strategy $2.49 $1.85 $1.76
- 25. Branding • Emphasizing the Colgate name on the new Precision toothbrush would cause additional cannibalization of the existing Colgate toothbrushes - estimated at 20% • Using the Colgate name would be congruent with Colgate’s strategy to build the Colgate brand equity
- 26. Colgate Plus TV Advertising
- 27. Advertising and Promotion Cost 1989-92
- 29. Print Ad
- 30. Disclaimer Sameer Mathur IIM Lucknow, Marketing Professor 2013 – McGill University Marketing Professor 2009 – 2013 Saurabh D. Deosarkar IIT Kharagpur Marketing Management Intern