Analysis of Colgate Palmolive Precision Toothbrush

ANALYSIS OF COLGATE PALMOLIVE PRECISION TOOTHBRUSH BY GROUP 4

SYNOPSIS

Introduction

1. The paper discusses the state of oral health care market in US in early 90s and analysis of various market factors affecting positioning, branding and communication strategy of a new product to be launched by Colgate Palmolive.

2. The US oral health care market was worth $2.9 Billion in retail sales and had been growing at rate of 6.1% since 1986. The product mix consisted of toothpaste (46%), mouthwash (24%), toothbrush (15.5%) and dental floss and other products taking up the remainder. The other leading companies operating at that time were Gillette (Oral B), Johnson & Johnson and P & G. Other new entrants were Lever, Pfizer and Sunstar.

3. Colgate Palmolive held No-1 position in the US retail toothbrush market with 23.3% volume share. CP offered two lines of toothbrushes in 1991- Colgate Classic and Colgate Plus, which were positioned in the value segment and professional (higher quality) segment respectively.

Changing Market Trends and Consumer Behavior

4. In late 80s a new category of brushes evolved and was labeled super-premium (priced above $2.0). By 1992 these brushes accounted for 35% of unit volume and 46% of Dollar sales. Professional brushes accounted for 41-42% and value brushes ranged from 12-24%.

5. The psyche of the customer was undergoing a change wherein the characteristics of the product were becoming the overbearing factor in their decision for choice of product. There was a marked shift in the preference of consumers from value to professional segment and from firm to soft bristles with concern being health of the gums as opposed to cavity prevention. Consumers were willing to pay a premium for products addressing these issues. Brand choice of the consumer was based on features, comfort and dentist's recommendations. The handles, bristles and head-shapes were perceived to be the most important features of the toothbrush. Toothbrush users could be classified into therapeutic users, cosmetic brushers and un-involved consumers.

The Competition

6. There was stiff competition in the market from players like Oral-B (in super-premium category with 23.1% volume share), Johnson & Johnson (Reach Brand with 19.4 % volume share), Proctor & Gamble (with Crest Compete with 13% volume share), Smithkline Beecham, Lever, Pfizer and Sunstar. All the companies had individual USPs.

7. In-store display was considered to increase toothbrush sales. When Colgate toothbrushes were combined with Colgate Toothpaste in a single display, the toothbrush sales increased significantly. CP had four "point-of-purchase" display system viz. Counter top, Floor stand, Sidekicks and Waterfall Display. The