Colgate Palmolive Company: The Precision Toothbrush Case (Hbs)

831 words - 3 pages

Colgate-Palmolive (CP), a global leader in household and personal care products, is poised to launch its new toothbrush in the United States, Colgate Precision. To enter the super-premium segment of a highly competitive US toothbrush market with its technologically innovative product, the company should decide on positioning, branding and communication strategies. According to clinical tests, Precision offers core advantages compared with other leading toothbrushes. The brush achieved an average 35% increase in plaque removal and is more effective at the gum and between the teeth. Focusing on prevention of gum disease CP should differentiate Precision by positioning it first as a niche product. Target customers are Therapeutic Brushers who account for 46% of the US adult population. Becoming more concerned about the health issue this baby boom generation is willing to pay premium for innovative products. Precision's superiority over its competitors will allow CP to charge higher prices (15% price premium over Oral-B). The reasons against mainstream positioning in a short-run period are a cannibalization effect (Exhibit 2), cost of shortage of inventory and possible displacement of existing SKUs from shelves. However, in the long-run after solving problem with production capacity the company should switch to mainstream positioning as niche strategy can not last long, profits from mainstream positioning are higher in the long-run period (Exhibit 2) and due to higher sales the company can increase its recognition.Marketing recommendations: 1. The name - Precision by Colgate in order to emphasize Precision. 2. Product claims should emphasize gum prevention disease. (Exhibit 17 in the case) 3. Advertising budget should be increased by 80% to 43.38 with 75% going to Precision and 25% to Colgate Plus. 4. Consumer promotion includes free sampling provided by dentists, a free 5.oz tube of Colgate toothpaste with a purchase of a Precision brush and a 50c coupon on the Precision brush. Trade promotion - demonstration and in-store display racks. Advertising programs are TV commercials, magazines, billboards, ads (especially in dental clinics). The company should stress more on drugstores as distribution channels in short-run and on food stores and mass merchandisers in the long-run period.Exhibit 1 OPTIONS GRIDOption 1Option 2Option 3Description ofOptionPosition Precision as a niche product Position Precision as a mainstream productIn the short-run period position Precision as a niche product and then in the long-run period switch to mainstream.OverallAssessmentDo not recommend because niche strategy can not last long due to increased competition, operating profit is lower in the long-runDo not recommend because potential cannibalization, high production capacities time requirements, costs of shortage of inventory, potential SKUs' dropping Recommend because it offers optimal combination between niche and mainstream positioning strategy in terms of operating...

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