Colgate-Palmolive

Company:
The Precision
Toothbrush
About Colgate-Palmolive… (In 1991) 1/4

Total sales: $6.06 billion

Gross profit: $2.76 billion
Operating profit: 13% of net sales (Exhibit 1)
Total worldwide R&D expenditures: $114 million
Media advertising expenditures: $428 million
About Colgate-Palmolive… (In 1991) 2/4
• $243 million was spent to upgrade 25 of
CP’s 91 manufacturing plants
• 275 new products were introduced
worldwide

Emphasized new product launches and entry into

new geographic markets, along with improved
efficiencies in manufacturing and distribution and a
continuing focus on core consumer products.
About Colgate-Palmolive… (In 1991) 3/4

CP held :
1. 43% of the world toothpaste market
2. 16% of the world toothbrush market.
3. The number one position in the U.S. retail
toothbrush market with a 23.3% volume share.
About Colgate-Palmolive… (In 1991) 4/4

CP offered two lines of toothbrushes –

 Colgate Classic, positioned in the “value” segment

 Colgate Plus, positioned in the “professional”
segment
PRODUCT SEGMENTS
Mainly
VALUE

PROFESSIONAL
SALES SHARE 1/3
UNIT VOLUME DOLLAR
PRODUCT SEGMENT PRICE SALES SALES
Super premium brushes $2.29-$2.89 35% 46%
Professional brushes $1.59-$2.09 41% 42%

Value brushes around $1.29 24% 12%

SALES SHARE 2/3
UNIT VOLUME
PRODUCT NATURE SALES
GROWTH RATE
Firm bristle brushes 8% -13%
Medium bristle brushes 39% -4%
Soft bristle brushes 48% 7%
Extra-soft bristle brushes 5% fairly rapidly
SALES SHARE 3/3
PRODUCT SIZE UNIT VOLUME SALES
Full-sized heads 69%
Compact heads 17%
Child/youth sized heads 13%
PRECISION was scheduled to
be launched early in 1993…

It faced a major challenge of positioning

itself as better than those whose had
been launched recently….
The goal of a great brand
image could be achieved
by understanding the
needs and wants of
consumers properly
BRUSHING HABITS
Before
breakfast 45%
After
breakfast 57%
After
lunch 28%
After
dinner 24%
Before
bed 71%
REASON FOR PURCHASE
48% consumers
changed brush
VISIBLY WORN
OUT BRUSH 70%
once on every 3
months. AFTER SEEING
Out of those… THEIR
DENTISTS
11%
ON IMPULSE 3%
65% had more than one tooth
brush
24% kept a tooth brush at work
54% had a special toothbrush for
travelling
MAIN REASONS FOR
USING A BRAND COMFORTABLE FIT IN
MOUTH 63%
(EXHIBIT 3)

BEST FOR GETTING AT

HARD TO REACH PLACES 52%
RIGHT SOFTNESS OF THE
BRISTLES 46%
RIGHT FIRMNESS OF THE
BRISTLES 36%
DENTIST’S
RECOMENDATION 35%
PART OF ORAL CARE
REGIMEN 30%
*Respondents could check multiple items
THERAPEUTIC COSMETIC UNINVOLVED
BRUSHERS BRUSHERS CONSUMERS
46% of adults 21% of adults 33% of adults
Search for View products as
Search out products that the same
functionally deliver cosmetic
effective products benefits
20% brush once a
85% brush twice a day day or less
85% brush twice a 81%use mouth wash
28% use regular
day 54% use breath toothbrushes only
fresheners
62% use a 54% floss
professional brush 69% use floss
54% use a professional 66% use mouth
54% floss regularly brush wash
 MAJOR
COMPETITORS
 Professional
Colgate Plus
Super-premium Reach Regular
Oral-B Indicator Pepsodent Prof.
Oral-B Regular
Crest Complete
Reach Advanced
Value
Aquafresh Flex Colgate Classic
Pepsodent Regular
The year 1991 saw the introduction of several new
products….

PRODUCT NAME MAIN FEATURE

Colgate Plus Angle Handle Diamond-shaped & angled handle
Colgate Plus Wild Ones Cosmetic feature
J&J Advanced Reach Design Rubber-ridged, non-slip handle
Oral-B Indicator Bristles change colour
Aquafresh Flex Flexible handle neck
Pfizer Plax Groove for thumb
In the year 1991, Colgate had
spent a total of $20,334,000 for
advertising and promotion
ADVERTISING 1/4

When Colgate
toothbrushes were
combined with Colgate
toothpaste in a single
display, toothbrush sales
increased by 170%.
 ADVERTISING 2/4
CP had four display systems
Counter Tops Floor Stands Sidekicks Waterfall Display

24-36 brushes 72 brushes 144-288 brushes 288-576 brushes

ADVERTISING 3/4
The CP toothbrush line held
25% to 40% of the category
shelf space in most stores.
To maximize retail sales, CP
sales people tried to locate the
Colgate line in the middle of
the category shelf space,
between the Reach and the
Oral-B product lines.
ADVERTISING 4/4

The number of coupon events for

toothbrushes increased from 10 in 1990 to
33 in 1992. In the same period, the average
toothbrush coupon value increased from
$0.25 to $0.75.
DISTRIBUTION
Partly in response and
partly because of the
increasing number of
SKUs, food stores began
to expand shelf space
devoted to oral care
products.
RETAIL TOOTHBRUSH SALES… (IN 1991)

UNITS MM $MM
Food Stores 110 (42%) 192 (42%)
Drug Stores 77 (29%) 148 (33%)
Mass Merchandisers 54 (21%) 89 (20%)
Military 5 (2%) 5 (1%)
Club Stores 12 (5%) 15 (3%)
Other 3 (1%) 4 (1%)
The Precision Marketing Mix
 Product Design and Testing

Researchers used
infrared motion
analysis to track
consumers’ brushing
movements and
consequent levels of
plaque removal.
 Product Design and Testing
CP developed a unique brush with bristles of three
different lengths and orientations . The longer outer
bristles cleaned around the gum line, the long inner
bristles cleaned between teeth, and the shorter
bristles cleaned the teeth surface.
 Product Design and Testing

The brush achieved an average 35% increase in plaque

removal, compared with other leading toothbrushes,
specifically Reach and Oral-B.
At the gum line and between the teeth, the brush was even
more effective, achieving double the plaque removal scores
of competitor brushes.
The problem
highlighted in this
case is defining the
market strategy for
the toothbrush
(positioning, branding
and communication
strategy)
POSITIONING
 NICHE
POSITIONING

or
MAINSTREAM
POSITIONING
Capacity and Investment Costs
Investment Cost Annual Capacity Depreciation time
Tufters $500,000 3 MM units 15 years
Handle Molds $300,000 7 MM units 5 years
Packaging $150,000 40 MM units 5 years
 How unit NICHE MAINSTREAM
POSITIONING POSITIONING
volumes reach
STRATEGY STRATEGY
consumer
# units retail Year 1 = 8 MM Year 1 = 26.8 MM
Year 2 = 15 MM Year 2 = 44.1 MM

# units consumer Year 1 = 2 MM Year 1 = 7 MM

Year 2 = 2 MM Year 2 = 7 MM
promotional
sampling
# units through Year 1 = 3 MM Year 1 = 8 MM
Year 2 = 3 MM Year 2 = 8 MM
professionals
 NICHE MAINSTREAM
POSITIONING POSITIONING

RETAIL PRICE $ 2.89 $ 2.49

TRADE PRICE $ 2.13 $ 1.85

MANUFACTURE
$ 2.02 $ 1.76
PRICE
A financial analysis indicates a
profit for both market positions

Niche : estimated net profit

over two years is $12,527,333

Mainstream : estimated net

profit is $9,515,333
Alternative names which
were considered for the
toothbrush included Colgate
Precision, Colgate System III,
Colgate Advantage, Colgate
1.2.3, Colgate Contour,
Colgate Sensation, and
Colgate Probe. The Colgate
Precision name was
consistently viewed more
favourably—it was deemed
appropriate by 49% of
concept acceptors and
appealing by 31%
The relative prominence of
the Precision and Colgate
names on the package and in
advertising also had to be
decided

Colgate Precision
Precision
or by Colgate
Colgate Precision

CP’s stated corporate

strategy was to build on the
Colgate brand equity
Precision by Colgate

Stressing Precision as opposed to Colgate would limit the

extent of cannibalization of Colgate Plus. It was
estimated that cannibalization figures for Colgate Plus
would increase by 20% if the Colgate brand name was
stressed but remain unchanged if the Precision brand
name was stressed
Since, cannibalization is
large, higher emphasis on
Precision than Colgate is
recommended

Colgate Precision
Precision by Colgate
COMMUNICATION
AND PROMOTION
 The results of some tests on consumers indicated that
a claim that the toothbrush would prevent gum disease
motivated the greatest purchase intent among test
consumers.

Additional consumer research,

including in-home usage tests,
revealed that 55% of test
consumers found Precision to
be very different from their
current brushes, and 77%
claimed that Precision was
much more effective than
their current brush.
Once tried, consumer
intent to purchase rose
dramatically… Therefore sampling
would be critical to
Precision’s success.
Another important
tactic was to use
dentists to sample
consumers since
professional
endorsements are
important in
establishing the
credibility of a new
toothbrush.
1.The brush looked unusual and test participants
sometimes had mixed first impressions.
2.The benefit of reduced gum disease from extra
plaque removal was difficult to translate into a
message with broad consumer appeal, since few
consumers acknowledged that they might have
gum disease.
This presentation has been
created by Akriti Sarswat, IIT
Kanpur, during a marketing
internship under the
guidance of Prof. Sameer
Mathur, IIM Lucknow.