Colgate-Palmolive Company: The Precision Toothbrush_Elizabeth abraham

Colgate-Palmolive Company:

The Precision Toothbrush

AGENDA:• Problem statement• Background information• Environment of competition• SWOT• Consumer • Primary Strategic Target• Advertising Targets• Special coupons• Communication and Promotion• Products• Future?• Conclusion

PROBLEM STATEMENT

PROBLEM STATEMENT• Defining the market strategy –positioning, branding

and communication strategies for the new brush-COLGATE PRECISION

BACKGROUND

BACKGROUND• 1991:Global leader in care products• Plan to start new products between 1991-1995• In 1991, 16% of toothbrush market• Number 1 in tooth brush market• 2 lines of brushes• Colgate classic –positioned in “value” segment• Colgate plus positioned in “professional “segment

COMPETITION

ENVIRONMENT OF COMPETITION• Colgate-Palmolive’s three major competitors, Oral-B ,

Johnson & Johnson, Proctor & Gamble• have already launched new and improved products

designed to appeal to consumers in the emerging super-premium market segment

ENVIRONMENT OF COMPETITION• Oral-B: market leader, indicator bristles, 15% higher

price for brush, 20% of sales money for advertisement• Johnson & Johnson: third rank, cleans everywhere,

8,4% of sales for promotion• Procter & Gamble: reach between teeth, super-

premium segment

SWOTSTRENGTH:1. Recognized as the world’s leader in personal care sales2. In 1991,its sales topped at $6 billion and profits at $2.76

billion as its cornered 43% of the world’s toothpaste market.3. 16% of the world’s toothbrush market.4.  holds the number one spot in toothbrush sales with a

market share of 23%. 5. world market leader in oral care products.6. Colgate-Palmolive's strong commitment to innovation

through investment in R&D is a prominent strength.

• Weaknesses1. Colgate-Palmolive’s media expenditure layout is very

small compared to its rivals.2. spent only $7 million dollars on its Colgate-Palmolive

Plus marketing efforts and has only 19% of the share voice

3. faces is its lack of professional dental endorsements, with less than half that in market share and dollar sales than that of their largest competitor, Oral-B.

• Opportunities1. since 82% of toothbrush purchases are unplanned

and many consumers are unaware of the technological and cost variation among toothbrush brands

2.  One of Colgate-Palmolive’s competitors, Johnson & Johnson, ranked third in toothbrush sales, was phasing out one of its toothbrush lines at the time of the Precision introduction

3. provides an opportunity to convert consumers away from less advanced toothbrushes

• THREAT1. highly competitive, hosting many brands and private label

toothbrushes.  If any of these rivals creates a toothbrush which tops or even equals the technology of Precision, specifically if done at a lower production cost, Colgate-Palmolive may lose market share.

2. In 1991, the toothbrush market exploded with a dramatic increase in new entrants.

3.  Colgate-Palmolive needs to maintain a healthy relationship with Anchor toothbrush to reduce the risk of a costly supplier switching process.

CONSUMER

CONSUMER

CONSUMER• CHOICE BASED ON1. Features2. Comfort3. Professional Recommendation4. Concerns about health of gums more than cavity prevention AS A CONSEQUENCE:• Relatively unfamiliar with toothbrush prices • The old-style brushes were fine for keeping teeth clean•  Willing to pay premium for products addressing these concerns -

82% of toothbrush purchases are unplanned Customers Findings

CONSUMER• SEGMENTATION

PRIMARY STRATEGIC TARGET

SEGMENTATION

• Therapeutic brushers

• 46% of adults (biggest segment)

• Search out functionally

effective products

DEMOGRAPHICAL• Baby boomers

(30-50)• Approximately 76 million people

in U.S. (29%)• Growth in health

conscious according to

ages.

GEOGRAPHICAL• North America• 23.3% volume

share in U.S. retail market

ADVERTISING STRATEGIES1993 BUDGET

Increase overall CP toothbrush

Ads& promotion budget by $19.3 M to

$43.4 M(80% over

estimated $24.1 M)

ADVERTISING BUDGET:1. $14.6 million for

Advertising (45%)2. Estimated $17.1MM

from reach and $11.2 from Oral-B

ADVERTISING STRATEGIES

ADVERTISING STRATEGIES• 70-80% of consumers would buy Precision• 77% of in-home usage claimed Precision was much more

effective

SPECIAL COUPONS• 60 cents discount on Precision provided when

purchase Colgate toothpaste and other oral products• Maximizes benefit from being dominant player in tooth

paste market• Therapeutic consumer group might already use those

bundling products• Have less undesired effect on repeat purchase

frequency than “two-for-one “toothbrush offer.

COMMUNICATION AND PROMOTION

COMMUNICATION AND PROMOTION

FUTURE• still increasing sales

- problem of decreasing value segment - long-term: lowest products disappear, higher product fills gap, in the end always pressure to create new super premium product- to avoid this: new strategy with focus of high level products, but here hard competition and hardto get dentists & Co. for long-term relation

CONCLUSION•Colgate Precision is an innovative product, but in long-term just one of a many, that will be developed and looses its value with the next better brush that will be created!

DONE BY :Elizabeth Abraham, BIT MESRA