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Colgate Palmolive Company: The Precision Toothbrush

Autor:   •  January 1, 2018  •  Case Study  •  932 Words (4 Pages)  •  860 Views

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Arshia Nizamuddin Mulla

2017PGP210

Ashutosh Yadav

2017PGP080

Reuel Daniel Lungleng

2017PGP297

Rayachoty Sabharish Kumar

2017PGP295


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COLGATE PALMOLIVE COMPANY: THE PRECISION TOOTHBRUSH

What problem is Colgate Palmolive currently facing?

Colgate Palmolive is in a dilemma about defining the strategy for the new toothbrush – it needs to finalize its positioning, branding and communication strategies as well as the breakdown of its advertising and promotion budget. The branding of the new product needs consideration.

Causes of the Problem:

Positioning of a product is quintessential for marketing purposes. It defines who the customers are, which of their needs is being fulfilled and why the offered product is the best choice to fulfil this need. Development of the marketing mix is dependent on positioning. CP has been the market leader in oral care in the US but now faces greater competition from Oral-B, Proctor&Gamble, Smithkline Beecham, Johnson&Johnson etc. Secondly, the consumers are becoming more conscious of their oral health and are ready to pay premium prices for products addressing issues related to oral care. This is evident from the fact that the professional toothbrush segment enjoys a 41% volume share and the emergence of the super-premium segment which holds a 35% volume share.

CP’s corporate strategy has focused on building brand equity. The company has the option of either branding the new toothbrush as Colgate Precision or Precision by Colgate. The choice of emphasising on the Precision rather than Colgate has arisen because the new product launch stands capable of cannibalizing the Colgate Plus sales, a product category that generates 80% of their revenue is regarded as the bread and butter of CP currently.

 Product Analysis:

The precision toothbrush is a highly innovative product that has been designed to address both the primary and secondary needs of the consumer of not just removing food particles but also helps in plaque removal and gum stimulation. Clinical tests have revealed that the toothbrush leads to a 35% increase in plaque removal overall when compared to the competitors. One other unique feature of the brush is that it is twice as effective at removing plaque from the gum line and between the teeth and has achieved double the plaque removal scores of competitor brushes.

The Alternatives:

Niche Positioning Strategy:

Pros

Cons

  • The USP of the product directly addresses the needs of the target segment which is the Therapeutic Brushers.
  • Introduces 4 SKUs without dropping any current SKU.
  • Marks an entry into the super-premium segment in which CP currently has no offering.
  • 35% volume share but 46% dollar sale share.
  • Overall market share acquired will be lower comparatively, at a projected value of 5% in year 2 after launch.
  • The target segment is just 46% of the total market.

Mainstream Positioning Strategy:

Pros

Cons

  • Appeal of being the best toothbrush in the category.
  • Caters to the Therapeutic Brushers as well as Cosmetic Brushers segments which together account for 67% of the market.
  • Potential to acquire 41% of the volume sale and 42% of the dollar sales.
  • Projected market share of 14.7% in year 2
  • Greater market share and hence larger overall revenues.
  • Competes directly with Colgate Plus and hence can cannibalize its sales.
  • While it introduces 7 SKUs it involves dropping off of the children’s line of Colgate Plus.
  • No offering in the super-premium segment by CP.

There were two alternatives on the branding front as well. The product could be marketed as either ‘Colgate Precision’ or ‘Precision by Colgate’. It was believed that stressing on the name Colgate both under the mainstream as well as niche categories would increase cannibalization by 20% while it would remain unchanged if the name Precision was stressed. The big problem here was that the CP’s corporate strategy was to build on the Colgate brand equity.

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