Colgate Palmolive

1. Colgate Palmolive Company:
The Precision Toothbrush

3. How should Colgate-Palmolive
‘position’ the new precision
toothbrush brand in its target
market?
1/5

4. How should Colgate-Palmolive
‘place’ the precision toothbrushes
in the retail outlets for
maximum sales?
2/5

5. What should be Colgate-
Palmolive’s optimum pricing
strategy for the precision
toothbrush brand?
3/5

6. How should Colgate-Palmolive
‘brand’ the precision
toothbrushes?
4/5

7. What should be the marketing
and promotion strategy for
maximising the product’s
market reach?
5/5

8. Background

9. Colgate Palmolive Company:
A Background

10. Global leader in
household and personal
care products.

11. $6.06 Billion sales and
$2.76 Billion gross
profit (1991)

12. Strong international
sales: Accounting for
CP’s 64% sales and 67%
profits.

13. Held 43% of world
toothpaste market and
16% of world
toothbrush market.

14. Colgate-Palmolive Income Statement

15. The U.S. Toothbrush Market

16. U.S. Oral Care market
was at $2.9 Billion in
retail sales (1991) and
had grown by 6.1%
annually.

17. Toothbrush accounts for
15.5% or $453 million
in retail sales(1991)

18. 47 new products or line
extensions during
1991-92

19. Product Introductions

20. Product Segments

21. Based on Cost
Value ProfessionalToothbrush

22. Value:
Priced on an average $1.29,
Accounted for 24% unit volume and
12% dollar sales.

23. Professional:
Priced between $1.59 and $2.09
Accounted for 41% unit volume and
42% dollar sales.

24. Super-Premium:
Emerged out of the professional segment
Priced between $2.29 and $2.89
Accounted for 35% unit volume and
46% dollar sales.

25. Products in the super premium segment

26. • Bristle Type: Firm, Medium,
Soft, Extra Soft
• Head Size: Full/Adult, Compact,
Child/Youth
Other Segments

27. Consumer Behaviour

28. • Before Breakfast: 45%
• After Breakfast: 57%
• After Lunch: 28%
• After Dinner: 24%
• Before Bed: 71%
Brushing Behaviour

29. • Toothbrush visibly worn: 70%
• After seeing the dentist: 11%
• On Impulse: 3%
Trigger to purchase

30. Basis of brand choice

31. Involvement in oral hygiene

33. Positioning and Pricing
There are two possible options:
1. Positioning as a niche product,
targeted at consumers concerned
about gum disease

34. Positioning and Pricing
2. Positioning as mainstream
brush, with the broader appeal of
being the most effective one in
the market

35. Positioning scenario for both the cases

36. The products are however composed as:
Wouldn’t be a source of revenue !

37. Pricing Of Professional Sale Units
Units which are targeted for sale
through professionals have been
priced at $0.79/unit and sold at
$0.95/unit.

38. Anticipated Profit for year 1
Niche:
Profit per unit (retail): $1.36 x Units: 8 MM = $10.88 M
Profit per unit (professional): $0.16 x Units: 3 MM = $0.48 M
Total = $11.36 M
Normalised = $11.36 M/ 11 M = $1.03 Mainstream:
Profit per unit (retail): $1.12 x Units: 26.8 MM = $30.02 M
Profit per unit (professional): $0.16 x Units: 8 MM = $1.28 M
Total = $31.3 M
Normalised = $31.3 M/ 34.8 M = $0.89
Niche performs better on an average, disregarding the fixed expenses

39. Further supporting the argument
The percentage of consumers
involved in oral health is 46%
(Therapeutic Brushers) + 21%
(Cosmetic Brushers)= 67%
These essentially form the target market

40. Further supporting the argument
This shows that the customers are willing
to pay more for the sake of their oral health

41. Further supporting the argument
This shows that the customers are willing
to pay more for the sake of their oral health

43. Positioning

44. • The product should be
positioned in the
‘niche market’
• This market will
attract less
competitors being a
highly sophisticated
segment
• There would be no risk
of cannibalisation of
the Colgate plus
brand
• There would be lesser
pressure on the
production schedule
owing to limited
demand in the
segment

45. Pricing

46. • The product’s
recommended retail
price of $2.89 is
relevant given that it
would be positioned in
the super premium
category, else it would
lose the brand value
associated with the
segment.
• The budget and units
allocation for
promotion samples
should be reduced and
should be
compensated by the
sales through
professionals, this
would give a higher
profit margin

47. Placing

48. • Colgate precision
should be placed on a
separate shelf, away
from the existing
product lines of
Colgate-Palmolive ,
but close to other super
premium toothbrushes
• This would not divert
the attention of
middle and lower
economic class
customers from the
classic product line,
and on the other
hand, would increase
the brand value being
places with other super
premium brands

49. Branding

50. • The product should be
branded as ‘Precision’
by Colgate, rather
than ‘Colgate
Precision’
• Stressing ‘Precision’
reduces
cannibalisation risks.
• Building a separate
brand would also
reduce the bias of
premium customers
towards the value
brand image of
Colgate

51. Promotions

52. • There could be a
comprehensive dental
care policy
collaborated with the
‘precision’ brand, to
convey the oral health
benefits to the
customers
• There can be celebrity
endorsements related
to the cosmetic
advantages of the
product, to build the
brand image