The Precision Toothbrush

Company BackgroundIn the year 1991 :Sales: - $ 6.06 billionGross Profit:- $ 2.76 billion

Source:- Harvard Case Study

The U.S oral care market-1991

46%

24%

16%

14%

SalesToothpaste Mouth Rinses Toothbrushes Others

Source:- Harvard Case Study

Major Companies in the market

Major three players in the U.S toothbrush market:-

Colgate-Palmolive Johnson & Johnson Oral –B

New entrants:- P&G Smithkline Beecham

Product Segment-1

40%

50%

1% 8%

SalesMedium-bristle Soft-bristleExtra-soft bristle Firm-bristle

Pie-chart showing sales of different brushes of the U.S Market

Pie-chart showing sales of different brush types in the U.S Market(based on bristle strength)

Product Segment-2

70%

17%

13%

SalesFull-sized Compact- sized Youth-sized

Pie chart showing sales of different brush types in the U.S Market(based on head size)

Consumer Behavior(General)

CP’s consumer research revealed consumers of baby boom generation became more and more concerned of their oral health.

Most consumers believed primary purpose of toothbrush was removing food particles; plaque removal was secondary.

Handle, bristles and head shapes were perceived as most important physical features of a toothbrush.

Consumer Behavior(Specific)Therapeutic brushers:- Main aim is to avoid

oral care problems, differentiate among products and search functionally effective products.

Cosmetic brushers:- Main aim is to prevent bad breath and ensure white sparkling teeth.

Uninvolved Oral Health brushers:- Not affected much by product type unless faced by some oral care issues.

Statistics of various consumer types

46%

21%

33%

SalesTherapeutic Cosmetic Uninvolved

Competitors to CPOral-BJohnson&Johnson(J&J)Procter & Gamble(P&G)Smithkline BeechamLeverPfizerSunstar

Oral-BMarket leader since 1960s.In 1991, held 23.1% volume market share and a 30.7% value share of the marketRelies heavily on professional endorsements Well known for its advanced and innovative products ex:- The “indicator” toothbrush.Perhaps the biggest competitor for CP due to the dominant presence in the market sector and a strong brand image.

Johnson & JohnsonEntered the U.S market in the 1970’s with its Reach brand.In 1991, it was ranked third in the U.S market with a 19.4% volume share and a 21.8% value share.Relies heavily on television commercials.New products were launched in the 1990 and 1991.“Reach Between” is scheduled to be launched in September’92.

Procter & GambleMost recent entrant in the toothbrush market with “Crest Complete”.After performing sample tests, P&G is expected to launch its “Crest Complete” in September ,92.Relies on media for marketing.Expected to capture 13% value share in the market.CP needs to critically look for “Crest Complete” as both the companies are launching their products during the same time.

Smithkline BeechamEntered the U.S toothbrush market in 1991 with “Aquafresh Flex”.By the end of 1991, Aquafresh Flex had a 0.9% share by volume and 1.1% by value of U.S retail market.In September 1992, the company expects to expand its product line.Smithkline is expected to make an operating loss in 1992.

Advertising and Promotion(1992)

05

101520253035

Series 1Series 2

Bar Graph showing Media Advertising Expenditures for various companies(1992)

Advertising and Promotion Expenditure for CP(1992)

40%

29%

31%

ExpenditureMedia Consumer PromotionsTrade Promotions

Distribution(1992E)

01020304050

Volume SalesValue Sales

Bar graph showing retail toothbrush sales through different channels

The Precision Marketing Mix

Perceived POD’s for PrecisionThe Precision toothbrush was a technical

innovation.Through infrared motion analysis the

company tracked plaque removal from different parts of the mouth.

Based on this study, the toothbrush was designed.

As a result the brush was able to remove 35% more plaque compared to its competing brands such as Reach and Oral-B.

Its design was far more superior compared to Oral-B and Reach.

Positioning comparison:Niche Vs Mainstream

Retail Promotion Samples Professional Samples

82 3

26.8

71.8

Unit Volumes reaching customersNiche Mainstream

Positioning comparison:Niche Vs Mainstream

The company had two options to launch Precision either as a Niche product or as a Mainstream product.

I feel launching the product as a Mainstream product is a better option as with help the product in having a wider connect with the customers.

The company should effectively communicate about the technical advancement of the product in a rational manner.

The drawback of this is cannibalization of its other products.

Pricing for Precision•The company needs to work carefully on its pricing strategy.•The company first needs to stand firm as to whether it wishes to sell Precision as a Niche or a Mainstream product.•This will play a critical role in deciding its price.•The company should base its pricing having calculated all its all expenses.•The company should price its Precision product at a relatively lower price compared to Oral-B. This will help the company to gain dominance in the market.•Even though the product is technically superior, too high prices will not help the product in the long run.

BrandingThe question was whether to brand the

Precision as an “independent product” or under the “Colgate brand name” only.

Continuing under the Colgate brand would be helpful for it, owing to the brand image of Colgate, but at the same time it will pose a risk of cannibalizing the other products.

On the other hand branding it as an independent product reduces the risk of cannibalization but additional resources will be required to build the brand name.

Communication and PrecisionAs the market study revealed that prevention

of gum diseases was perhaps the greatest motivation to purchase a toothbrush.

Therefore the company while promoting Precision should not only advertise its 35% higher plaque removal capability but also link this with brush’s ability to prevent gum diseases. Continued…

•Precision should be marketed as a product which will not only help its customers preventing gum disease but also help in combating gum problems.•The company should portray Precision as a “superior toothbrush” which is far more efficient than other similar products in the market.•As far as the advertising budget is concerned the company should focus equally on all its products(Precision,Classic & Plus).•Spending on a single product can prove out to be extremely risky for the company in case of product failure.•The company should keep Classic and Plus as a backup.