Vous êtes sur la page 1sur 3

Case Analysis

Colgate Palmolive Company: The Precision Toothbrush




Marketing Management - I





Problem: -
Colgate-Palmolive Company wants to launch a new toothbrush in United States market. It is trying to decide
how to position its new product as a niche or a mainstream product in the super-premium segment.

Analysis:-
The U.S toothbrush market has evolved since 100 years and has reached a maturity stage of the life-cycle.
Customer involvement has increased and customers have become more sensitive to their oral hygiene and
attributes of the tooth-brush they purchase. There were initially two segments carved by marketers namely
Value segment and Professional segment. With increasing consumer involvement since 10 years a new
segment Super-premium segment has been carved which comprises of consumers who highly value their
toothbrush purchase. Also the value segment is eroding due to offers like free toothbrush with toothpaste,
two for one scheme increasing sales of private labels. Super-premium segment on the other hand is seeing
more competition resulting into greater increase in dollar-sales than volume-sales.

Major players and market share:-
Market-Segment Types of consumers Products
Value-Segment Customers are least involved in
the segment. There is no brand
loyalty. Makers and survivors of
VALS network can form this
segment
Colgate Classic, Pepsodent Regular,
Private labels
Professional-Segment Consumers are more involved and
are ready to pay more if they get
value for money. They may have
shifting brand-loyalty based on the
value of toothbrush. Strivers,
Believers and Achievers of VALS
network can form this segment
Colgate Plus, Reach Regular,
Pepsodent Prof.
Super-Premium Segment High-premium category with
extremely conscious consumers
who are willing to pay high
premium and are brand loyal.
Thinkers, Innovators and Achievers
can form this segment
Oral-B Indicator, Reach Advanced,
Aquafresh Flex


Attributes valued by consumers:-
1. Value for money
2. Ease of brushing
3. The toughness of bristles
4. Gum sensitivity
5. Dentist suggestions


The Precision toothbrush:-

Point of Differentiation:- Three different length bristles providing optimal plaque cleaning compared to
other tooth-brushes which makes it best product in the market

Strategy: - Currently Colgate Palmolive is already present in value and Professional segment with its
products Colgate Classic and Colgate Plus. They want to capture Super-Premium segment with this
product. They have two alternatives to decide how to position the product in this segment.

SWOT Analysis:
Option 1: Main Stream Product
Strength
Already present in this segment so it has
established distribution channel
Market share by volume is 41% and in
terms of $ sale is 42%
Manufacturing price is less
Weakness
Increase in capacity required 10 months
lead time
High investment in machine
Have to reduce one or more SKUs of
present line.
Opportunity
Volume share would be 10% in year 1 and
14.7% in year 2
Threats
Cannibalization of Colgate plus
Could result in inadequate supply of
product


Option 2: positioning as niche product
Strength
Higher profit margin about 30%
Major distribution channels are food &
drug store, which have highest share in
retail toothbrush sales
No need to reduce any SKU from present
product line
Weakness
Less revenue generation
Manufacturing cost per unit is high
Less market share
Opportunity
Retail share would represent 3% volume
share of toothbrush market in year 1 and
5% in year 2
Entry in new segment
Threats
Strong competition from rivals like Oral-B
indicator, Aquafresh Flex, Crest Complete

Recommendation:
Looking at the initial profit margin, Precision should be position as niche product. In a long term, main
stream product strategy will be more beneficial. But due to constant technological advancement,
product life of toothbrush not exceed more than 5 years. For product life less than 5 year, niche
positioning is more profitable.