Objective

Arenas
Gender
Profession
Age Groups
Behavioral

Vehicle

Competition

Differentiation

Economic Logic

Staging

Increased Market Share in

Heavier User

Segmentation
Generally 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 gives better product as it does not cause sensitivity of teeth. H
Whitening
Gel
- Rembrandt
technology
products
1) Higher price for whitestrips due to better product features - given they are better appreciated by customers who a
2) Reducing packsize from 42 to 34 will reduce pack price by 20% and make it reachable for price sensitive custome
3) Leftover 4-6 strips in the pack may be a reason for repurchase
4) Proprietary technology of Rembrandt - will allow pricing of aroung $14.80
IRR = 30%

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

1) File complaint with NAD for wrong information on colgate

2) 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 highlig
4) Acquire proprietary technology of tooth whitening gel from smaller player to sustain market share d
advertising budget of $60m

Increased Market Share in oral healthcare industry

Lighter Users

Segmentation
Generally 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, mout
Unilever's Mentadent
Convenience, price

uct as it does not cause sensitivity of teeth. Hence, peroxide can be used in slightly higher quantity to give bett

ven they are better appreciated by customers who are moving in from dentists, trays
% and make it reachable for price sensitive customers and stop the loss of market share immediately
e
ung $14.80
NPV = $35.81 million

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

ate
us reducing the printed price by 20%)
e benefits of product over Colgate and highlight total cost in long run
from smaller player to sustain market share during enormous growth specially near 2010. Launch 'Crestgel' wit

ate

ith an

Market Size($ mn)

Overall Tooth Whitening market

2002
2003
2004
2005
$ 300.00 $ 356.76 $ 424.26 $ 504.54

Rembrandt share (assumed

targeted at 5%)
Profits (with a 30% margin)
NPV

$ 17.84

$ 21.21

$ 25.23

5.35

6.36

24.15

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

technology

7.57

Acquiring proprietary technology from Rembra

2006
$ 600.00

Market share assumed

$ 30.00

Price of Rembrandt

Price of Gel assumed to be 50% of the cost of the pack

Margins assumed

9.00

Cost of Product per unit

Fixed cost pu (60% for Rembrandt)
Variable cost pu (40%)

echnology from Rembrandt Current cost structure P&G's cost structure

5%
25%
$

45.00

22.50 $
30%

14.89
45%

$
$
$

15.75 $
9.45 $
6.30 $

8.19
1.89
6.30

Sales from August 2000 - April 2001 (9 months) in millions of strips

Estimated yearly sales in millions of strips
$ Sales in first 12 months in millions
Packs sold in first 12 months in millions (@ $44)
Pack size

Overall Tooth Whitening market

Market Size($ mn)
Expected Market Share
Creststrip
Colgate Gel
Crest Gel
Others

Incremental increase in share from Crest Gel Project (assuming a 40% market sh
(in millions)
Incremental growth in revenue
Incremental 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 Flow
NPV @ 10%
IRR

140
186.7
200
4.55
41.1

hitening market
$

2002
2003
2004
2005
2006
300.00 $ 356.76 $ 424.26 $ 504.54 $ 600.00
40%
55%
0%
5%

40%
55%
0%
5%

39%
42%
15%
5%

37%
39%
20%
5%

34%
36%
25%
5%

ming 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
35.81
30%

-85.00

33.51

48.70

66.69

Migration from
Whitening
toothpaste Non
Home
users
users
remedies Dentists Trays
30%
5%
10%
15%
40%

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.