Case: Colgate-Palmolive

Company-
The Precision Toothbrush
Dr. Prafulla Agnihotri
Professor - Marketing Group,
IIM Calcutta

Case Analysis: CP-Precision 1

 A Deeper Analysis of the Toothbrush
Category reveals that…
• Major Competitors and Brands-
– Gillette (Oral B)
– J and J (Reach)
– C. P.
• New Entrants-
–P&G
– SKB

Case Analysis: CP-Precision 2

 A Deeper Analysis of the Toothbrush
Category reveals that…

• 47 New products and line extensions were

introduced in the toothbrush category in
1991-92.
• The introductions of early 1990s are more
grounded in technical performance benefits.
• Therefore, higher priced, super premium
toothbrushes for therapeutic efficacy.

Case Analysis: CP-Precision 3

What are its consequences?
 Consequences…..

• An increase in overall marketing expenditure

• Higher level of competitive intensity in the
category
• Shake out of weaker brands
• More demand for SKUs higher cost of
entry for new category entrants
• More competition for retail shelf space, and
• Greater use of sampling and S.P offers
Case Analysis: CP-Precision 5
 Consequences at the consumer
level…..
• More brand switching- trading up to super-
premium toothbrushes
• A shortening of the inter-purchase interval
(from 12.4 months to 9.7 months) to try
new products
• A shortening of the average usage period
per toothbrush (from 8.6 months to 7.5
months)
Case Analysis: CP-Precision 6
 How is the toothbrush market
segmented?

Market

Involved Uninvolved
Customers Customers

Therapeutic Cosmetic Both No interbrand

Differentiation
Benefits Benefits Benefits (Price-conscious)
Case Analysis: CP-Precision 7
Which segment appears to be
growing more sharply?

The therapeutic
segment

Why?

Case Analysis: CP-Precision 8

Case Analysis: CP-Precision 9
 What characteristics are displayed by
the more involved toothbrush
purchasers?
• Brush their teeth more often
• Visit dentists more often and ask for product
recommendations
• Replace their brushes sooner and buy
toothbrushes more often
• Brand loyal but likely to switch to any new
product proven or perceived to be superior
• Are aware of new products
• Less price sensitive, and
• Equally interested in other oral care products
Case Analysis: CP-Precision 10
 Does the market need another
toothbrush?

• If so, is Precision the appropriate product?

Case Analysis: CP-Precision 11

 Where will Precision sales come
from?

As in any new product launch, the only

three sources are:
1. An increase in overall toothbrush
category demand
2. Canibalisation of Plus and Classic, and
3. Consumers switching from competitors
brands

Case Analysis: CP-Precision 12

 Should CP’s new toothbrush be
launched as a niche or a mainstream
entry?

A Role Play:
Steinberg (Precision brand manager)
and
Philips (Colgate Plus brand manager)

to present their cases to the Board:

Where the sales of Precision, if launched,
to come from to minimise canibalisation?
Case Analysis: CP-Precision 13
 Precision as a Niche Brand
• Appeals only to minority customers for
whom gum disease is a salient concern
• Complex technical features to
communicate need high involvement
in the category.
• Can increase the size of therapeutic,
superpremium segment.
• If successful, the positioning could later be
broadened to appeal the mainstream. Test and
Invest
Strategy
Case Analysis: CP-Precision 14
• Colgate plus is a strong mainstream brand;
it could be aided rather than canibalisation
by the launch of a super-premium niche
product under Colgate umbrella.
• Planned manufacturing capacity only
allows for the niche approach.

Case Analysis: CP-Precision 15

 Precision as a Mainstream Brand
• Precision represents an important technical
innovation that can reestablish Colgate’s
category leadership.
• Its potential could be underexploited as a
niche product.
• Colgate plus represents an old technology
and is vulnerable to a better innovation by a
competitor.
• Increased consumer and retailer
involvement in the category
Case Analysis: CP-Precision 16
• Precision’s key benefits can be communicate
to all customers
• Increasing use of non-traditional channels
which prefer to stock only selected fast-
moving items
• The entry into the category of P & G’s Crest
Complete is a threat as it is positioned as a
mainstream brand
• No alternative big new product idea is in the
pipeline.
Case Analysis: CP-Precision 17
 What Marketing Recommendations
would you Make to Steinberg?
Mainstream Niche
Unit Price Lower ($ 1.76) Premium ($ 2.02)
Product line Broad Narrow
Pack sizes More multipacks Few multipacks
Distribution Broader (incl. mass Narrower (food & drug
merchandisers) stores)
Advertising Most effective Most effective against
copy toothbrush (in gen.) gum disease
Promotion- Consumer and trade Sampling thru dentists
mix promo, dentists
sampling
Brand name Colgate Precision Precision by Colgate
Thank You

Case Analysis: CP-Precision 19