Case study on Colgate Palmolive- The Precision Toothbrush

This is a case study on Colgate-Palmolive: The Precision Toothbrush done under the guidance of Professor Sameer Mathur, IIM Lucknow for Marketing Management internship.

1. Case Study ON

2. History of “The Precision” Found in 1806 by William Colgate, an English manufacturer. It began as a starch, soap and candle store in New York City and as the soaps, made out of olives and olive oils gained fame, the company’s name became, Colgate-Palmolive. The brand began developing products for grooming and beauty. It was in August of 1992, they were poised to launch a toothbrush in the U.S. tentatively named “The Precision” toothbrush.

3. Marketplace Baby boom generation became more concerned about health issues pertaining to their gums. They started looking for products based on features and recommendations. That is where Colgate made its entry into the tooth and gum market.

4. Consumer Segmentation

5. Battles by Colgate (apart from cavities) Oral-B was endorsed as “the dentist’s toothbrush” with heavy advertising and remains one of the biggest competitions to Colgate-Palmolive. P&G’s Crest claims to reach the nooks and corners 37% better than leading brands. J&J’s Reach was an innovation excellence as it helped the consumer to brush at 45 degrees due to its beveled handle. This was a major threat to Colgate Precision as the launch dates were only a few months apart. Smithkline Beechman’s AquaFresh Flex had flexible handles and offered gentle brushing which was well advertised.

6. Product Segmentation Value Professional Super -Premium

7. Segment Advantage Average Pricing (in $) Value Economic 1.29 Professional Premium quality 1.59-2.09 Super-Premium Innovative design 2.29-2.89

8. Brand Positioning There were two options: Niche Mainstream

9. Niche Positioning Pros Target market: Consumers concerned about gum diseases. No SKUs needed to be dropped Expected to capture 3% of the U.S. market in one year with 15% price advantage over Oral-B. Pros Larger market share and volume share at the end of one year, about 10% market share and 10% volume share. Mainstream P ositioning

10. Niche Positioning Cons Occupies lesser market and volume share as opposed to mainstream positioning. Example: Volume share for Niche is 5% while for Mainstream is 10%. Cons “Cannibalization” of Colgate plus. Increased pressure on Production capacity and schedules. (May) Require dropping of one or more SKUs. Mainstream Positioning

11. Colgate Precision or Precision by Colgate?

12. The brand decided to launch it under a new line named “The Precision” in order to avoid the cannibalization of Colgate Plus, as it was at least 20% in both- niche and mainstream positioning. The name gave out the purpose of the product line, thus the name marketed the product for itself. Branding insights: Results: Prevention of Gum diseases was the Unique Selling Point (USP). 55% consumers found Precision different from their present toothbrushes. As the awareness about the product increased so did the enthusiasm amongst the consumers to use it.

13. Advertising

14. Co-Branding- When Precision combined with Colgate toothpaste, sales shoot up to 170%. Sponsoring events- Colgate sponsors events such as various fashion shows, award functions. Word of Mouth Marketing- Famous celebrities endorse the products. Interesting traditional advertising: The print advertisements and the ones on television and social media are interesting to see/ watch. They often associate with brands like One Direction, the Superman series and produce brand-oriented products that attract the younger generations.

15. Future for “The Precision”

16. Branding, Positioning and Marketing They should experiment with packaging of product line with keeping the initial idea intact. They should follow mainstream positioning as it amasses a larger market as compared to niche positioning. The marketing and advertising can be increased by sponsoring more events, giving out free samples and associating with more celebrities- including child celebrities to endorse for children’s range and old celebrities for aged range. This will make the product more relatable.

17. Conclusion

18. High brand visibility due to extensive, excellent advertising. Strong and loyal consumer base. Variety in oral and personal products. Geographic expansion is highly successful. The market is saturated offering little or no growth. The brand has limited product categories with limited products under each segment, thus a need for innovation. Rural market is till unexplored as consumers still use nature’s products. The product line can be stretched both ways. The awareness need to be increased by advertising, professional recommendation so that consumers utilize the products as forecasted by the brand. The number of companies producing the same product is very high and therefore to survive, they need to follow discounting and co-branding effectively. They must innovate to get an edge above other competitors. Ethical issues have been raised time and again for animal testing.

19. Disclaimer This case study has been done under the guidance of Professor Sameer Mathur , IIM Lucknow as a part of the Marketing Management internship under him. Presented by: Ishita Pandey, Manipal Institute of Technology.