A case study of the topic Colgate-Palmolive under Prof Sameer Mathur.

1. Colgate –Palmolive Company
The Precision Toothbrush

2. Lets do the case study…
Are you ready?
Lets Begin!!!

3. Who were key players?
&
Who made it successful?

4. •Susan Steinberg, Precision Product Manager
•Nigel Burton, Divisional General Manager
•Reuben Mark, CP’s CEO

5. Company’s
Background

6. •A US based company;
•Founded in 1806 in by William Colgate;
•Headquarter- New York;
•Global leader in household and personal care products;
•In 1992, launched Colgate- Precision toothbrush;
•Website- www.colgatepalmolive.com .

8. US
Toothbrush
Market
What was the scenario???

9. In 1991, new product launches in the U.S. market
included Colgate Baking Soda toothpaste and the
Colgate Angle and Wide Ones toothbrushes.
A major design advancement occurred in 1938 with
the launch of Dr. West’s Miracle Tuft Toothbrush, the
first nylon-bristle brush.

10. In 1992, three players dominated the U.S. toothbrush
market:
 Colgate-Palmolive and Johnson & Johnson for
professional toothbrushes
 Oral-B for super-premium toothbrushes.

14. Product
Segmentation

15. In the 1980s, industry executives divided the toothbrush
category into two segments: value and professional.
The late 1980s saw the emergence of super premium
brushes.

16. In 1992, three players dominated the U.S. market
toothbrush market overall: Colgate-Palmolive and
Johnson & Johnson, whose brushes were positioned in
the professional segment;
and Oral-B, whose brushes were positioned in suoer-
premium segment.
Procter & Gamble and Smithkline Beecham; both had
positioned their new product launches in the super-
premium segment.

17. Competition
FASTER!!!

18. Oral-B (owned by Gillette) had been the market leader
since the 1960s. It relied heavily on professional
endorsements and was known as “the dentist’s
toothbrush”.
It comprised of 27 SKUs.

19. Johnson & Johnson entered the U.S. market in the 1970s
with Reach brand.
In 1988, they introduced a second product line under the
brand name Prevent.
It comprised of 18 SKUs.

20. Procter & Gamble (P&G) was the most recent entrant in
the toothbrush market with Crest Complete, an
extension of the company’s toothpaste brand name,
Crest.
Their advertising strategy “Teeth aren’t flat, so why is
your brush.”

21. Smithkline Beecham entered the U.S. toothbrush
market in August 1991 with Aquafresh Flex, an
extension of the company’s toothpaste brand.
It comprised of 6 SKUs.

22. Other Competitors included
 Lever
 Pfizer
 Sunstar

27. Advertising
&
Promotion

28. Colgate has increased its sales through coupons for
toothbrushes, free toothbrush with toothpaste, point-
of-purchase displays, variety of items, bristle qualities,
and handle colours.

33. Product
Distribution

34. Between October 1991 to February 1992, the average
number of toothbrush SKUs had increased from 31 to
35 for mass merchandisers, from 27 to 34 for food
outlets. In 1992, 22% of all toothbrushes were expected
to be distributed to consumers by dentists.

36. The
4Ps
Of
Marketing

37. Product

38.  The Precision toothbrush is a product innovation
 Using infrared motion analysis developed a unique
brush with bristles of 3 different lengths and
orientations.
 Three brush design evolved with 35% more plagye
removing efficiency.
 The brush is also show to be more effective in reducing
gum disease than the leading brushes, specifically
Reach and Oral-B.

40. Positioning

41. It could be positioned as the niche product to be
targeted at consumers concerned about gum disease.
Alternatively, Precision could be positioned as a
mainstream brush, with the broader appeal of being
most effective brush available on the market.

43. Pricing

44. Pricing is done on the production costs including the
warehousing and transport costs. One main concern
about the Colgate Precision was if it was treated as
mainstream toothbrush then it would lead to
cannibalization of the Colgate Plus.

45. Promotion

46. Advertising through T.V Media and Newspaper Media,
FM Radios and other Radios.
Hoardings on the Highways and National Highways.
Use Dentists to sample consumers and make them buy
Colgate Products.

49. Lets do the
SWOT
Analysis

50. Strengths

51.  It has excellent advertising and brand visibility of
products with a strong customer loyalty.
 It offers a wide variety of oral care and personal care
products.
 It is operating in more than 200 countries an and has a
strong financial performance.
 It has achieved to penetrate into the market and hold
of the shares.

52. Weakness

53. With a large number of companies fighting in personal
& oral care segment, the market has become saturated
and there is little scope for growth. The majority of its
properties are on rent basis hence high operation costs
and hence low profits. Colgate have limited brands
under a particular product category and they have
limited offerings under different segments.

54. Opportunity

55.  Stretching their product line can create offerings and
hence increase their values
 Tapping the rural market in developing countries can
reap profits for the company
 Strengthening the company by mergers and
acquistitions
 People need to be made aware of the optimum usage
rate for these products so that the market utilizes the
product as forecasted by the company.

56. Threats

57. Since there is high competition the margins are
dropping and companies have to give more discount
on the products to sustain the market. Increase in the
price of raw materials in one factor that would increase
the price of the product. Colgate had to face ethical
issues as an Organisation stated that Colgate was using
animal testing which affected the market.

58. Conclusion

59.  Steinberg believed that Precision was more than a
niche or simple line.
 She wondered how Precision should be positioned,
branded, and commercial to consumers.
 Steinberg has to develop a marketing mix and profit-
and-loss pro forma that would enable Precision to
reach its full potential.

60. Disclaimer
Created by Shubham Gautam, IIT(ISM) Dhanbad,
during a marketing internship under Prof. Sameer
Mathur, IIM Lucknow.