Description
Colgate is an oral hygiene product line of toothpastes, toothbrushes, mouthwashes and dental floss. Colgate toothpaste was first sold by the company in 1873, sixteen years after the death of its founder, William Colgate.
Meg Carey
Max Jayapaul
Julie Longmuir
Kate Lynch
Rani Marom
Liz Sansone
Marketing 9703
r! Chattalas
Colgate"#almoli$e Case %nalysis
%pril &0' (00(
C)L*%+,"#%LM)L-., C)M#%/01
+2, #R,C-S-)/ +))+23R4S2
S5)+
Strengths
Colgate-Palmolive is recognized as the world’s leader in personal care sales
which included oral hygiene products like toothbrushes and toothpastes. In 1991 its
sales topped at !" billion and pro#its at !$.%" billion as it cornered &'( o# the world’s
toothpaste market and 1"( o# the world’s toothbrush market. In the )nited *tates
the world’s largest market Colgate-Palmolive holds the number one spot in
toothbrush sales with a market share o# $'(. +rom these statistics one o# Colgate-
Palmolive’s main strengths is being the market leader in oral care products.
Colgate-Palmolive’s e,tensive overseas reach is another main strength. -ased
on the data in the case study Colgate-Palmolive introduced $%. new products
worldwide and setup manu#acturing #acilities in China and /astern /urope breaching
the emerging economies o# the $1
st
century. 0n top o# that international sales
accounted #or "&( o# total sales and "%( o# the total pro#its #or Colgate-Palmolive.
Colgate-Palmolive has an e,tensive 1esearch and 2evelopment department
boasting 1%3 employees worldwide. 4hough having a large 152 department does
not directly contribute to increased pro#its Colgate-Palmolive’s history o# innovation
1
in the toothbrush market is linked to its current position as the market leader in the
toothbrush industry. 4here#ore Colgate-Palmolive’s strong commitment to innovation
through investment in 152 is a prominent strength.
6ith an energetic and visionary leader like 1euben 7ark at the helm o#
Colgate-Palmolive the company has trans#ormed itsel# into a lean and pro#itable
machine leading to increased pro#it margins and volume growth.
$
Clearly having a
visionary C/0 is a strength.
$
Colgate-Palmolive’s positioning strategy #or its toothbrush line in #ood stores
has aided in capturing their current dominant market share. Its in-store displays
combining toothbrushes with toothpaste packs and locating the Colgate-Palmolive
line o# toothbrushes in the middle o# the stores’ shelves have contributed to this
dominance. 4his strategy has been success#ul as sales through #ood stores drug
stores and mass merchandising channels have produced the greatest volume and
dollar sales historically.
'
Colgate-Palmolive has a large number o# stock keeping units #or their
toothbrush line.
&
7ultitudes o# *8)s indicate that Colgate-Palmolive is targeting a
broad spectrum o# market segments in the toothbrush market which spreads the risk
inherent to carrying any product. 2iversi#ication o# product types within the
toothbrush market is another strength #actor Colgate-Palmolive holds.
Colgate-Palmolive’s secret weapon in the war #or supremacy in the super-
premium market Colgate Precision is proven to be very e##ective in removing pla9ue
: '.( more e##ective than e,isting brands : and in preventing gum disease. 4his
advantage can be attributed to the innovative design high-tech research using C;2
and in#rared scanning consumer research and e,tensive product testing. ;lthough
this technology is a strong argument #or positioning Precision in the .
4otal revenue
generated
!1%3&3333 !'19.3333 !&99.3333 !>1&33333
0bviously the niche market revenue is signi#icantly less than the mainstream market
revenue despite the 1'( higher price.
Conclusion
2eveloping and communicating a positioning strategy #or a product is
necessary and critical. 2i##erentiating a product and the degree to which that product
is di##erentiated can be guided by 9uanti#ying the #ollowing criteriaH
• Importance
1'
• 2istinctiveness
• *uperiority
• Preemptiveness
• ;##ordability
• Pro#itability
)sing these parameters a company can provide the public with a reason to buy their
product.
'.
;nother tool used in solving the marketing mi, problem companies #ace when
launching a new product is a perceptual map.
'"
4his is a graphic representation o# two
or more #eatures against which similar products can be ranked. 6hen graphed the
resulting map displays areas to which the product types cater revealing both areas o#
over population and areas o# potential opportunity. Clusters o# products e,ist when
similar products appeal to the same consumer market participants. In these areas
competition is intense there#ore they are not as attractive when positioning a new
product. ;n optimal plan is to create a space within the product market that is
relatively #ree o# rivals and can enable a new product to develop and dominate.
; perceptual map #or Precision was created #rom the #ollowing dataH
+ooth7rush #rice 3ene8its Class
Colgate Precision 3.> 3.9 *uper Premium
0ral-- Indicator 3.> 3.> *uper Premium
0ral-- 1egular 3.% 3." *uper Premium
Crest Complete 3.. 3." *uper Premium
1each ;dvanced 3." 3.. *uper Premium
;9ua#resh +le, 3.% 3.% *uper Premium
Colgate Plus 3.& 3.& Pro#essional
1each 1egular 3.' 3.& Pro#essional
Pepsodent Pro#essional 3.$ 3.& Pro#essional
Colgate Classic -3.& -3.1 Jalue
Pepsodent 1egular -3.' -3.1 Jalue
-utter C)7 7icrotip 3.' -3.1 Jalue
-utter C)7 *upertip 3.& 3.1 Jalue
7enedent Pro-Core 3.% 3.% Pro#essional
0ral-- cross action 1 3.> *uper Premium
1&
Ceneric /ckerd Interdental -3.. -3.$ Jalue
Ceneric /ckerd ;ngle -3.% -3.$ Jalue
Crest ;dvantage 1 3.> *uper Premium
Perceptual map of Toothbrush Market
-0.4
-0.2
0
0.2
0.4
0.6
0.8
1
-0.8 -0.6 -0.4 -0.2 0 0.2 0.4 0.6 0.8 1 1.2
COST
B
E
N
E
F
I
T
S
P
R
O
V
I
D
E
D
Precision
Recommendation
)sing these evaluative criteria in relation to the advantages and disadvantages
o# niche and mainstream marketing we believe that Colgate-Palmolive should
position the Precision toothbrush as a niche product. 4his would establish Precision
as the leading toothbrush on the market at a competitive price. It would be a superior
and distinctive oral care product.
Eowever we believe this product would also work in the mainstream market
and we envision it moving towards the mass market in the #uture. 0nce the
toothbrush has established itsel# as a high 9uality product with specialty #eatures we
believe that Colgate-Palmolive could transition the product to a wider audience. 4his
1.
will also allow time #or Colgate to reconcile the position that the Colgate Plus product
will hold relative to the Precision line.
+urther we anticipate no signi#icantly negative issues will be encountered by
initially marketing Precision as a niche product and then moving it into the
mainstream market. 6e do not believe the opposite would be true as a niche market
will most likely not accept a product that has been o##ered to the masses as the best
value and then marketed as a specialty item.
4he anticipated cyclical nature o# the product on the market is well illustrated
by the -oston Consulting Croup’s Crowth-*hare matri,.
'%
4he Precision toothbrush
will begin as a
Colgate is an oral hygiene product line of toothpastes, toothbrushes, mouthwashes and dental floss. Colgate toothpaste was first sold by the company in 1873, sixteen years after the death of its founder, William Colgate.
Meg Carey
Max Jayapaul
Julie Longmuir
Kate Lynch
Rani Marom
Liz Sansone
Marketing 9703
r! Chattalas
Colgate"#almoli$e Case %nalysis
%pril &0' (00(
C)L*%+,"#%LM)L-., C)M#%/01
+2, #R,C-S-)/ +))+23R4S2
S5)+
Strengths
Colgate-Palmolive is recognized as the world’s leader in personal care sales
which included oral hygiene products like toothbrushes and toothpastes. In 1991 its
sales topped at !" billion and pro#its at !$.%" billion as it cornered &'( o# the world’s
toothpaste market and 1"( o# the world’s toothbrush market. In the )nited *tates
the world’s largest market Colgate-Palmolive holds the number one spot in
toothbrush sales with a market share o# $'(. +rom these statistics one o# Colgate-
Palmolive’s main strengths is being the market leader in oral care products.
Colgate-Palmolive’s e,tensive overseas reach is another main strength. -ased
on the data in the case study Colgate-Palmolive introduced $%. new products
worldwide and setup manu#acturing #acilities in China and /astern /urope breaching
the emerging economies o# the $1
st
century. 0n top o# that international sales
accounted #or "&( o# total sales and "%( o# the total pro#its #or Colgate-Palmolive.
Colgate-Palmolive has an e,tensive 1esearch and 2evelopment department
boasting 1%3 employees worldwide. 4hough having a large 152 department does
not directly contribute to increased pro#its Colgate-Palmolive’s history o# innovation
1
in the toothbrush market is linked to its current position as the market leader in the
toothbrush industry. 4here#ore Colgate-Palmolive’s strong commitment to innovation
through investment in 152 is a prominent strength.
6ith an energetic and visionary leader like 1euben 7ark at the helm o#
Colgate-Palmolive the company has trans#ormed itsel# into a lean and pro#itable
machine leading to increased pro#it margins and volume growth.
$
Clearly having a
visionary C/0 is a strength.
$
Colgate-Palmolive’s positioning strategy #or its toothbrush line in #ood stores
has aided in capturing their current dominant market share. Its in-store displays
combining toothbrushes with toothpaste packs and locating the Colgate-Palmolive
line o# toothbrushes in the middle o# the stores’ shelves have contributed to this
dominance. 4his strategy has been success#ul as sales through #ood stores drug
stores and mass merchandising channels have produced the greatest volume and
dollar sales historically.
'
Colgate-Palmolive has a large number o# stock keeping units #or their
toothbrush line.
&
7ultitudes o# *8)s indicate that Colgate-Palmolive is targeting a
broad spectrum o# market segments in the toothbrush market which spreads the risk
inherent to carrying any product. 2iversi#ication o# product types within the
toothbrush market is another strength #actor Colgate-Palmolive holds.
Colgate-Palmolive’s secret weapon in the war #or supremacy in the super-
premium market Colgate Precision is proven to be very e##ective in removing pla9ue
: '.( more e##ective than e,isting brands : and in preventing gum disease. 4his
advantage can be attributed to the innovative design high-tech research using C;2
and in#rared scanning consumer research and e,tensive product testing. ;lthough
this technology is a strong argument #or positioning Precision in the .
4otal revenue
generated
!1%3&3333 !'19.3333 !&99.3333 !>1&33333
0bviously the niche market revenue is signi#icantly less than the mainstream market
revenue despite the 1'( higher price.
Conclusion
2eveloping and communicating a positioning strategy #or a product is
necessary and critical. 2i##erentiating a product and the degree to which that product
is di##erentiated can be guided by 9uanti#ying the #ollowing criteriaH
• Importance
1'
• 2istinctiveness
• *uperiority
• Preemptiveness
• ;##ordability
• Pro#itability
)sing these parameters a company can provide the public with a reason to buy their
product.
'.
;nother tool used in solving the marketing mi, problem companies #ace when
launching a new product is a perceptual map.
'"
4his is a graphic representation o# two
or more #eatures against which similar products can be ranked. 6hen graphed the
resulting map displays areas to which the product types cater revealing both areas o#
over population and areas o# potential opportunity. Clusters o# products e,ist when
similar products appeal to the same consumer market participants. In these areas
competition is intense there#ore they are not as attractive when positioning a new
product. ;n optimal plan is to create a space within the product market that is
relatively #ree o# rivals and can enable a new product to develop and dominate.
; perceptual map #or Precision was created #rom the #ollowing dataH
+ooth7rush #rice 3ene8its Class
Colgate Precision 3.> 3.9 *uper Premium
0ral-- Indicator 3.> 3.> *uper Premium
0ral-- 1egular 3.% 3." *uper Premium
Crest Complete 3.. 3." *uper Premium
1each ;dvanced 3." 3.. *uper Premium
;9ua#resh +le, 3.% 3.% *uper Premium
Colgate Plus 3.& 3.& Pro#essional
1each 1egular 3.' 3.& Pro#essional
Pepsodent Pro#essional 3.$ 3.& Pro#essional
Colgate Classic -3.& -3.1 Jalue
Pepsodent 1egular -3.' -3.1 Jalue
-utter C)7 7icrotip 3.' -3.1 Jalue
-utter C)7 *upertip 3.& 3.1 Jalue
7enedent Pro-Core 3.% 3.% Pro#essional
0ral-- cross action 1 3.> *uper Premium
1&
Ceneric /ckerd Interdental -3.. -3.$ Jalue
Ceneric /ckerd ;ngle -3.% -3.$ Jalue
Crest ;dvantage 1 3.> *uper Premium
Perceptual map of Toothbrush Market
-0.4
-0.2
0
0.2
0.4
0.6
0.8
1
-0.8 -0.6 -0.4 -0.2 0 0.2 0.4 0.6 0.8 1 1.2
COST
B
E
N
E
F
I
T
S
P
R
O
V
I
D
E
D
Precision
Recommendation
)sing these evaluative criteria in relation to the advantages and disadvantages
o# niche and mainstream marketing we believe that Colgate-Palmolive should
position the Precision toothbrush as a niche product. 4his would establish Precision
as the leading toothbrush on the market at a competitive price. It would be a superior
and distinctive oral care product.
Eowever we believe this product would also work in the mainstream market
and we envision it moving towards the mass market in the #uture. 0nce the
toothbrush has established itsel# as a high 9uality product with specialty #eatures we
believe that Colgate-Palmolive could transition the product to a wider audience. 4his
1.
will also allow time #or Colgate to reconcile the position that the Colgate Plus product
will hold relative to the Precision line.
+urther we anticipate no signi#icantly negative issues will be encountered by
initially marketing Precision as a niche product and then moving it into the
mainstream market. 6e do not believe the opposite would be true as a niche market
will most likely not accept a product that has been o##ered to the masses as the best
value and then marketed as a specialty item.
4he anticipated cyclical nature o# the product on the market is well illustrated
by the -oston Consulting Croup’s Crowth-*hare matri,.
'%
4he Precision toothbrush
will begin as a