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Colgate- Palmolive Company : The Precision Toothbrush

The Slides were created by Sneh Ankur, Btech Nit Agartala (C.S.E) during a Marketing Internship under Prof. Sameer Mathur, IIM Lucknow. It contains the case study of Harvard Business School .

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Colgate- Palmolive Company : The Precision Toothbrush

  1. 1. A CASE STUDY
  2. 2. HISTORY
  3. 3. Peeping Into The Past The history of Colgate Palmolive goes back to 1806 when William Colgate a manufacturer of soap and candle funded the William Colgate & Company. In the meanwhile B.J. Johnson Company was becoming popular thanks to its Palmolive soap. Another company by the name of Peet brothers merged with the latter company and was named Palmolive-Peet Company. This company took over Colgate Company in 1928 and resulted in the formation of the Colgate-Palmolive-Peet Company. In 1817 the first advertisement of the company was printed in a newspaper in New York. It was in 1953 that the company adopted its present name. In 1857 after the death of William Colgate, the founder of the company, it was renamed as Colgate & Company and was placed under the charge of his son, Samuel Colgate. In 1914 the company founded its first subsidiary outside of the parent country in Canada. In the 1920s Colgate Palmolive spread its businesses in Africa,Latin America, Asia and Europe. In 1930 the company figured for the first time on the New YorkStock Exchange.
  4. 4. CURRENT SCENARIO
  5. 5. SITUATION ANALYSIS
  6. 6. ENVIRONMENT ANALYSIS ● In 1992, Colgate-Palmolive (CP) was the global leader in household and personal care products. It was also the leader in retail toothbrush sales in the United States. Prior to the 1990s, consumers were satisfied with toothbrushes that were aesthetically pleasing. As therapeutic toothbrush sales rose it became apparent that baby boomers were becoming increasingly concerned with their oral health, specifically their gums. As a result, the toothbrush industry experienced a massive influx of worthy competitors and the formation of a niche, super- premium market. I
  7. 7. INDUSTRY ANALYSIS Not only can the industry be broken down by price models (super-premium, professional, and value), it can broken down a second time into niche and mainstream offerings. Consumers of this industry can be sorted into three categories: therapeutic, cosmetic, and uninvolved.
  8. 8. COMPETITIVE ANALYSIS One promising conclusion that can be drawn from the competitive analysis is that every company has been caught off guard by the change in consumer behavior, emergence of new technology, and introduction of new players entering the playing field. For example, in 1988, Johnson & Johnson introduced “new brush technology” only to phase it out by 1992. In order to get an edge, competitors, Johnson & Johnson, Oral-B, Procter & Gamble, and Smithkline Beecham (latter two are new competitors), are offering promotions in the form of coupons, mail-in refunds, and bundles.
  9. 9. SWOT ANALYSIS
  10. 10. STRENGTH ● Colgate-Palmolive’s strong commitment to innovation through investment in R&D is a prominent strength. ● Colgate-Palmolive has a large number of stock keeping units for their toothbrush line ● Innovation for Precision also stands as a strength upon which Colgate-Palmolive can lean for other market differentiating advancements. ● Diversification of product types within the toothbrush market is another strength factor Colgate-Palmolive holds.
  11. 11. WEAKNESS ● Although industry players are manufacturing products to improve oral health, it has been difficult to educated consumers to prevent gum diseases. ● The advantage of thecompetitor, Oral- B, has over the other companies is the ability to say it is recommended by dental professionals ● CP could not only work on educating the public, it would also position itself to steal market share away from its main competitor, Oral-B. ● ● ● ●
  12. 12. OPPORTUNITIES ● Baby boomers very concerned with gum health; willing to spend money ● 55% of testers said Precision was” much different” than brushes they had tried before, needs positive spin ● 77% of testers claimed Precision was more effective; need to repeat that. ● Needs to educate the public; could support educational causes such as nurses of elementary schools ● • Informed customers are more willing to make a purchase; need to educate consumers or gain dentist approval
  13. 13. THREATS ● Positioned well in stores (middle shelf/ displays); needs to be careful not to cannibalize flagship Plus model. ● Promotions are hitting the market hard, Needs to offer matching discounts, as well as fresh ideas ● 82% of consumer toothbrush purchases are unplanned; need to educate public on benefits of brushing ● Variety of products offered; needs to be careful not to Children’s Plus model by going mainstream too early
  14. 14. OBJECTIVE
  15. 15. OBJECTIVE ● Ques1)What changes are occurring in the toothbrush category? Assess Colgate-Palmolive’s competitive position ( Market shares: Exhibit 6, Channels of Distribution: Exhibit 7, Media expenditures: Exhibit 8) ● Ques2)Who has the biggest market share? OralB ● Ques3)Which channels sell the most (volume and dollar) for Colgate ? Colgate: Plus ● Ques4)Which brand spent the most $ in advertising by the end of 1992? Reach ● Ques5)What are three segments for the toothbrush market? 1)Therapeutic 2)Cosmetic 3)health
  16. 16. SUBJECTIVE ● Ques1)What is the overall marketing objective? ● Ans)Provide consumers with an abundance of oral hygiene products that meets their desired benefits in each market segmentation in order to obtain brand perception in the market. ● o The marketing objectives may be different from the communications objectives. ● o Remember that the communications objectives are derived from the marketing objectives. Ques2)What is the role of marketing communications in the overall marketing mix? o Focus on information in the marketing plan that is relevant to the promotional strategy. ● · Focus on the competitive analysis and assess environmental influences. ● o Find the most important factors that really describe the marketing problem, and then explain how the factors relate to the communications task at hand.
  17. 17. EXIBIT
  18. 18. STRATEGIC ALTERNATIVES
  19. 19. The first option that CP has would be to enter the Precision into the market as a niche, super-premium product. As a niche product, compared to the other CP models, the Precision would expect earn roughly 35% volume share and 46% value share. A positive factor of introducing the Precision as a niche product is not only would it give Colgate enough time to build up a stock of the product, CP would also be able to avoid taking the Children’s Plus model off store shelves. With the Precision toothbrush, CP could finally introduce a super-premium product into the mix and give the therapeutic consumer segment some much needed attention. One key feature of the Precision toothbrush is that it is incredibly successful at removing significant amounts of plaque from teeth, especially when compared to competitor brushes.
  20. 20. COMPETITION & COMPETITORS
  21. 21. COMPETITOR STUDY ● Although Darlie has gained a large market share in the toothpaste market in Malaysia, it still faced the competition from other toothpaste companies in this industry. The two of the main competitors of Darlie in the market are Sensodyne and Colgate. As the world largest producer and manufacturer of toothpaste, Colgate becomes the greatest competitor of Darlie. Colgate has survived in this industry for such a long time and has established its influence among the customers. It has successfully making the customers to have brand loyalty toward Colgate. Besides that, Colgate has different types of toothpaste, which can satisfy different needs of the customers. This has fulfilled the needs and wants of the customers and directly competes with Darlie as the product range of Colgate and Darlie are quite similar. Nowadays, a lot of people are facing different types of teeth problems, such as sensitive teeth, gum disease and tooth decay. Therefore, they tend to buy the toothpaste which can help them to solve their teeth problems. Sensodyne is focusing on solving sensitive teeth problem and is recommended by dentist to be used. It has shaped the brand image of Sensodyne to become professional and high class toothpaste. Therefore, although Darlie also has their own sensitive teeth toothpaste, people still prefer Sensodyne as the look for the brand image. Therefore, Colgate and Sensodyne become two of the main competitors for Darlie in Malaysia toothpaste market.
  22. 22. COMPARING STOCK
  23. 23. MARKETING RESEARCH
  24. 24. SEGMENTATION & TARGETING
  25. 25. FOUR MARKETING P'S
  26. 26. PRICE ● Of the four pricing theories offered by today’s market, rapid skimming is by far the most appropriate for Precision. ● First, as a niche market product, Precision will be offered at a cost equivalent to that of the highest priced toothbrush currently available, $2.13 per unit. ● Secondly, Precision’s unique and innovative design has created its own category of toothbrush within the super-premium segment, as it is distinctly different from the other currently available toothbrushes
  27. 27. PRODUCTS ● Precision has patented the design and features of the triple action bristles that work with one another so that the short, long, and angled bristles remove 35% more plaque then a standard toothbrush. ● Precision should offer a warranty on its products so that customers who are unhappy with the product can return it. ● Colgate-Palmolive could have also considered utilizing the line extension tactic of “introducing additional items in the same product category under the same brand name, thereby marketing the toothbrush as “Colgate Precision.”
  28. 28. PROMOTION ● Colgate-Palmolive target both involved oral health consumer groups. ● Further research also indicates that today’s younger generations are even more concerned about their oral care routines than previous generations. ● The next step to developing effective communications for the Colgate Precision promotion is designing the message. ● Two appropriate approaches to communicate Precision’s core values would be messages appealing to either the rational or emotional side of consumers.
  29. 29. PLACES ● Choosing the appropriate place to sell Precision is, relatively, the least complicated matter which Colgate- Palmolive will undertake in the process of launching the new product. After all of the painstaking research, in-depth analysis, evaluations, and endless financial and production planning, one statement rings true throughout – it’s a toothbrush. No one will ever, specifically go out of their way to purchase a toothbrush as it ultimately holds no inherent moral, financial or social value.olgate- Palmolive should not try to create an exclusive clique of Precision toothbrush owners (such a Ferrari does with its super-premium race cars) by choosing an exclusive or selective distribution channel.
  30. 30. ADVERTISEMENTS
  31. 31. CONCLUSION
  32. 32. In summation, I recommend that Colgate-Palmolive position the Precision toothbrush as a niche market product during its introductory and growth life cycle stages. Thereafter, during the products’ maturity, Precision should be repositioned to the mainstream market. Our analysis has conclusivly explained that the attributes, benefits and values of the product are best suited for niche consumers and would therefore enjoy the greatest success in such a market. To ensure the success of Precision, Colgate-Palmolive should: · Ensure the product does, and continues to, address the specific needs of the stated consumer segments. Price Precision at competitive levels within the super-premium segment so as to offer more value than competitors, for an equivalent cost. Leverage their existing intensive distribution channel relationships to ensure that Precision receives the most effective placement. And, invest industry-standard amounts of capital into the promotion of the new toothbrush.
  33. 33. SUMMARY
  34. 34. SUMMARY-SITUATION ● The Colgate-Palmolive case involves the Precision toothbrush, which was entered into the market in 1993 by Colgate-Palmolive. This marketing plan summarizes the company’s situation at the time the Precision toothbrush was introduced, and the different marketing strategies that we believe would be best for Colgate-Palmolive and their new toothbrush
  35. 35. SUMMARY-MARKETING ● The marketing strategies include proposed strategies involving product, price, place, and promotion . ●  C olgate toothbrush is the leader within the product category holding 36.2% of the market or $1,114,137,768 in sales. ●  Colgate has a vast product line of toothbrush and many are less than a decade old. While others date back over thirty years and the original is over one hundred years old. Therefore, it is imperative to keep Colgate’s brands fresh but maintain a rich history of quality products. ●  The target market for Colgate toothbrush is Black and Hispanic individuals age 18-35, with several children aged 7 and younger.  Colgate commits millions of dollars to community programs and the ADA’s “Give A Kid A Smile” Program.  Colgate has established Colgate Smile a social network, an interactive iPhone application, Facebook page, Twitter account and MySpace page. ●  Colgate is committed to Reducing Environmental Impacts (REI) around the world.  Colgate is not the leader with regard to technological advancement within category.

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The Slides were created by Sneh Ankur, Btech Nit Agartala (C.S.E) during a Marketing Internship under Prof. Sameer Mathur, IIM Lucknow. It contains the case study of Harvard Business School .

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