2. 1- Positioning, Branding and communicating to consumers
2- Advertising and promotion Colgate Precision.
3.
4. Total Sales = $6.06 billion
Gross profit = $2.76 billion
R&D Expenditure = $114 million
Media Advertising expenditure = $428 million
5. $243 million was spent in upgrading CP’s 25 manufacturing plant.
275 new products were introduced worldwide.
Strategic acquisition were made.
Gross margin climbed from 39% - 45%
Average Annual volume growth - 5%
Since 1985
Like:-
Colgate Baking Soda toothpaste
Colgate Angle and
Wild Ones toothbrushes
6. Procter & Gamble
Unilever
Nestle’s L’Oreal Division
Henkel of Germany
Kao of Japan
CP held 43% of world’s toothpaste market
And 16% of world’s toothbrush market
7.
8. PRODUCT % Of market acquisition
Toothpaste 46
Mouth resins 24
Toothbrush 15.5
Dental flaws and others 14.5
In 1991 US oral market was $ 2.9 billion with growth of 6.1% annually.
Due to introduction of 47 new brushes and line extension
there was 21% increase in value and 18 % in volume
9. • Buildup of household inventories due to free samples given by dentists
• “Two-for-one” offers of companies doing promotion
11. Type Market share Market response
Firm-bristles brushes 8% Declining by 13%
Medium bristles brushes 39% Declining by 4%
Soft bristles brushes 48% Growing by 7%
Extra-Soft bristles brushes 5% Growing more than 7%
Market response
On basis of Toothbrush head
adult, full-sized heads 69%
compact heads 17%
child/youth-sized heads 13%
We can see that people are moving towards more sophisticated and softer toothbrush.
They are moving towards more costly toothbrushes.
So, we can say that people are becoming more quality conscious.
12. • Baby boom generation (adults born in the 1940s, 1950s and early 1960s)
were becoming more concerned about the health of their gums.
Willing to pay for
Premium
Main Reasons for Using a Brand Percent 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%
Here we can see that
most of the consumer
prefer comfort, soft
bristles and efficient
plague removal.
13. Competitors Volume share (%) Value share (%)
Oral B 23.1 30.7
Johnson & Johnson 19.4 21.8
Procter & Gamble 2 2.6
Aqua fresh Flex 0.9 1.1
Lever 7.2 6.6
Most tougher competitor is Oral B. It has highest value share and volume share.
14. Growing competition also increased the frequency and value of
consumer promotion events.
1- The number of coupon events for toothbrushes increased from 10 in 1990 to 33 in 1992
2- The average toothbrush coupon value increased from $0.25 to $0.75
3- Total media spending for the category, primarily on television advertising, was
estimated to total $55 million in 1992 and $70 million in 1993
CP had four display systems:
• Counter Tops- 24 to 36brushes
• Floor Stands- 72 brushes
• Sidekicks -144 to 288 brushes
• Waterfall displays- 288 to 576 brushes.
15. CP developed a unique brush with bristles of three different lengths
and orientations
• longer outer bristles cleaned around the gum line
• long inner bristles cleaned between teeth
• shorter bristles cleaned the teeth surface
16. • CP precision toothbrush had achieved a 35% increase in
plague removal than other competitors
• Innovative product design
• Can capture oversea market
• Can reduce gum disease
17. • Introduction of precision can cannibalize the market of Colgate plus
and Colgate classic
• Can cause harm to Colgate plus
20. Total profit obtained in niche market = $16.66 million
Total profit obtained in mainstream market = $36.16 million
Calculated by
Profit= (Selling price* no. of units sold) – (investment
+ depreciation + manufacturing cost + advertising
and promotional costs)
NOTE: The above data
include combined
profit of both years
21. Benefits Losses
• Unsatisfied demand could increase
the sell.
• More profit can be generated.
• Can harm market of Colgate plus
• Can cannibalize children’s toothbrush
from production line.
• Inadequate supply can occur due
extreme pressure on production line.
• May face tough competition from the
rivals.
Mainstream Strategy
Benefits Losses
• Unsatisfied demand could increase
the sell.
• More profit can be generated.
• Can harm market of Colgate plus
• Can cannibalize children’s toothbrush
from production line.
• Inadequate supply can occur due
extreme pressure on production line.
• May face tough competition from the
rivals.
Mainstream Strategy
22. Benefits Losses
• Less harm to Colgate plus
• Niche can be expanded to mainstream
with additional capacity on line.
• Very less competition
• Less profit.
• Can reach less consumers.
Niche Strategy
23. • Position the brush in super-premium category and specifically
tailored to therapeutic consumers
• Niche market is more consistent than mainstream market. CP should
position premium in niche market and then expand it to mainstream
market when it achieve more capacity support.
• It should take professional endorsement from dentists.
• Should do a rigorous advertising campaign.
• Should match price with other premium brands.
• Can replace Oral-B as leading brand of super premium range.
• Can expand in other oral care products for therapeutic consumers.
24.
25. Created by Nirmal Padgelwar,
VIT University, during a marketing
Internship by Prof. Sameer Mathur, IIM Lucknow