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Colgate Palmolive Case Study.

1234 words - 5 pages

I. Problem.In 1991 and 1992 Colgate-Palmolive (CP) been a dominant force in the Oral Care industry, mainly in the toothbrush segment. CP has been an successful company since the introduction of Colgate Plus, a toothbrush with a diamond-shaped head, in 1985. CP has consistently continued with research and development since the Colgate Plus breakthrough. However, when Aim entered the market in 1987, they focused on comfort, which made Colgate's market share suffer. CP has a unique toothbrush that is sure to be successful in toothbrush market once it the product launches, Precision. There are several issues that CP must address in order to gain full-potential market penetration for the new Precision. A marketing mix must first be created to ensure full-potential market penetration. Also Precision needs to be communicated and branded, and to the consumer in such a way that it is more desirable than other toothbrushes on the market. Then an advertising and promotions budget must be constructed, in order to penetrate the market. Finally, an acceptable profit-and-loss pro forma must be created enabling Precision to reach its full potential.In order for Precision to be a successful product in the toothbrush market the following two objectives must be met:* Increase market share by 8% within 2 years (3% in year 1 and 5% increase in year 2).* Decrease the risk of cannibalization of the Colgate Plus market.* Expand into new geographic markets.II. SituationColgate Palmolive is a global leader in household and personal care products. The strengths of CP include the following:* Colgate is a well-known brand name in the Oral Care industry.* CP is creating a new and innovative product, Precision.* CP has up-graded 25 of 91 manufacturing plants.* CP acquired Mennen, a men's toiletry company.There are a couple of weaknesses that Colgate Palmolive has. The weaknesses are:* CP has been the laggards in advertising and marketing in the late 1980's.* Colgate has never placed any toothbrushes in the "Super-premium" toothbrush category.Consumers concerns regarding have shifted from "cavity prevention" to "healthier gums." The baby boomers are more concerned with healthier gums rather than the whiteness of their teeth and are willing to pay more for a superior toothbrush that would protect their gums against disease.Initially there were two sectors of the toothbrush market: value and premium. There is now an opportunity for "super-premium" market to be created. Colgate Palmolive is focusing on the new "super-premium" niche market and is determined to meet the baby boomer desire.Oral-B is Colgate Palmolive's major competitor followed by Johnson & Johnson. In the early 1990's two large corporations companies, Proctor & Gamble and Smithkline Beecham entered the Oral Care market. Both new competitors were attempting to enter the "super-premium" toothbrush market.The Marketing Mix below is dependent upon the following external opportunities:* Penetration of foreign...

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