Objective

Arenas

SegmentationGender

Profession

Age Groups

Behavioral

Vehicle

Competition

Differentiation

Economic Logic

Staging

Increased Market Share in oral healthcare industry

Heavier User

SegmentationGenerally women

Celebrities and corporate executives

26-60

Users of braces, those who visit the dentist regularly

Crest Whitestrips and Rejuvenating Effects, Professional instant bleaching kit.

Colgate's Simply White, Rembrandt's bleaching kit

Effectiveness, support from oral healthcare professionals.

Crestwhite is 5x more effective than Colgate's products

Long lasting solution to stained teeth

1) Higher price for whitestrips due to better product features - given they are better appreciated by customers who are moving in from dentists, trays2) Reducing packsize from 42 to 34 will reduce pack price by 20% and make it reachable for price sensitive customers and stop the loss of market share immediately3) Leftover 4-6 strips in the pack may be a reason for repurchase4) Proprietary technology of Rembrandt - will allow pricing of aroung $14.80

IRR = 30%

1) File complaint with NAD for wrong information on colgate2) Reduce packsize of Crest whitstrips from 42 to 34 (thus reducing the printed price by 20%)3) Improve communication campaign - Communicate the benefits of product over Colgate and highlight total cost in long run

Whitening Gel - Rembrandt technology gives better product as it does not cause sensitivity of teeth. Hence, peroxide can be used in slightly higher quantity to give better cleaning than the Colgate products

Marketing campaign will aim to inform and educate the consumer of the benefits of oral hygiene and appearance. The mentioned products will be made available at dental clinics, beauty salons, online and over the phone. Professional kit will be available only through dentistal clinics.Greater focus will be on this category, as it is expected to grow more than the other category, despite recession, due to increase in consumer awareness

4) Acquire proprietary technology of tooth whitening gel from smaller player to sustain market share during enormous growth specially near 2010. Launch 'Crestgel' within 1 year (March 2004) with an advertising budget of $60m

Increased Market Share in oral healthcare industry

Lighter Users

SegmentationGenerally men

Middle and lower income groups

<25

Heavy consumers of alcohol, tobacco, coffee

Introduce Crest Gel to compete directly with Colgate Simply White series

Strategic alliances such as Orbit White, can develop new product which is cheaper and less effective such as toothbrush, mouthwash, toothpaste, floss.

Unilever's Mentadent

Convenience, price

Crestwhite is 5x more effective than Colgate's products

Long lasting solution to stained teeth

1) Higher price for whitestrips due to better product features - given they are better appreciated by customers who are moving in from dentists, trays2) Reducing packsize from 42 to 34 will reduce pack price by 20% and make it reachable for price sensitive customers and stop the loss of market share immediately3) Leftover 4-6 strips in the pack may be a reason for repurchase4) Proprietary technology of Rembrandt - will allow pricing of aroung $14.80

NPV = $35.81 million

1) File complaint with NAD for wrong information on colgate2) Reduce packsize of Crest whitstrips from 42 to 34 (thus reducing the printed price by 20%)3) Improve communication campaign - Communicate the benefits of product over Colgate and highlight total cost in long run

Whitening Gel - Rembrandt technology gives better product as it does not cause sensitivity of teeth. Hence, peroxide can be used in slightly higher quantity to give better cleaning than the Colgate

It is estimated that light users will be most affected by the slowdown of the growth of the industry, and hence demand will be more price elastic. The mentioned products should come under the 'Crest' brand name wherever there is greater brand association with Crest (eg. toothpaste) and under the partner's brand name otherwise (eg. chewing gum)

4) Acquire proprietary technology of tooth whitening gel from smaller player to sustain market share during enormous growth specially near 2010. Launch 'Crestgel' within 1 year (March 2004) with an

Long lasting solution to stained teeth

1) File complaint with NAD for wrong information on colgate2) Reduce packsize of Crest whitstrips from 42 to 34 (thus reducing the printed price by 20%)3) Improve communication campaign - Communicate the benefits of product over Colgate and highlight total cost in long run

Whitening Gel - Rembrandt technology gives better product as it does not cause sensitivity of teeth. Hence, peroxide can be used in slightly higher quantity to give better cleaning than the Colgate

4) Acquire proprietary technology of tooth whitening gel from smaller player to sustain market share during enormous growth specially near 2010. Launch 'Crestgel' within 1 year (March 2004) with an

Overall Tooth Whitening market2002 2003 2004 2005

Market Size($ mn) $ 300.00 $ 356.76 $ 424.26 $ 504.54

$ 17.84 $ 21.21 $ 25.23

Profits (with a 30% margin) $ 5.35 $ 6.36 $ 7.57 NPV ₹ 24.15

Rembrandt share (assumed targeted at 5%)

Here, the NPV is the fair value for Rembrandt's proprietary technology

Overall Tooth Whitening market Acquiring proprietary technology from Rembrandt -2006

$ 600.00 Market share assumed

$ 30.00 Price of Rembrandt

$ 9.00 Price of Gel assumed to be 50% of the cost of the packMargins assumed

Cost of Product per unitFixed cost pu (60% for Rembrandt)Variable cost pu (40%)

Acquiring proprietary technology from Rembrandt -Current cost structure P&G's cost structure

5% 25%

$ 45.00

$ 22.50 $ 14.89 30% 45%

$ 15.75 $ 8.19 $ 9.45 $ 1.89 $ 6.30 $ 6.30

Sales from August 2000 - April 2001 (9 months) in millions of stripsEstimated yearly sales in millions of strips$ Sales in first 12 months in millionsPacks sold in first 12 months in millions (@ $44)Pack size

Overall Tooth Whitening market

Market Size($ mn)Expected Market ShareCreststripColgate GelCrest GelOthers

Incremental increase in share from Crest Gel Project (assuming a 40% market share at status quo)(in millions)Incremental growth in revenueIncremental growth in profits(45% margin)Adding back amortized advert expense ( 30% is P&G's average)Investment in year 1$60m advertising expense + $25m for purchase of technology)Free Cash FlowNPV @ 10%IRR

140186.7

2004.5541.1

Overall Tooth Whitening market2002 2003 2004 2005 2006

$ 300.00 $ 356.76 $ 424.26 $ 504.54 $ 600.00

40% 40% 39% 37% 34%55% 55% 42% 39% 36%

0% 0% 15% 20% 25%5% 5% 5% 5% 5%

Incremental increase in share from Crest Gel Project (assuming a 40% market share at status quo)0% 0% 14% 17% 19%

$ - $ - $ 57.28 $ 83.25 $ 114.00 $ - $ - $ 25.77 $ 37.46 $ 51.30 $ - $ - $ 33.51 $ 48.70 $ 66.69

$ -85.00

0.00 -85.00 33.51 48.70 66.69 $ 35.81

30%

Migration from

Dentists Trays30% 5% 10% 15% 40%

Whitening toothpaste users

Non users

Home remedies

Assumption: but the introduction of the Crest gel will

challenge this. In crest gel, P&G provides a similar priced product will provide better whitening effectiveness due to Citroxin

countering the tooth sensitizing effect of peroxide.

Since Crest gel and Crest strip are targetting different segments, it is assumed that only 10% of Crest Gel sales will come from cannibalizing

Crest Strip.