A case study of the marketing methods employed by Colgate-Palmolive Company in Positioning and Branding their Precision toothbrush and the Communication methods involved.

1. COLGATE-PALMOLIVE
COMPANY
THE PRECISION TOOTHBRUSH
A HARVARD BUSINESS CASE STUDY

2. ‘ treat your password like your
toothbrush. Don’t let anybody else use
it, and get a new one every six
months.’
- Clifford Stoll

3. WHAT IS
COLGATE-
PALMOLIVE?

4. A Global Leader
in
Household and Personal Care products . . .
Sales of
$6.06 billion
Gross Profit
of
$2.76 billion

5. COLGATE-PALMOLIVE GROWTH TRENDS

6. . . . but the company faces extreme
competition in international markets.

7. so then,
WHAT IS THE
COMPANY’S
PLAN OF ACTION?

8. • NEW PRODUCT LAUNCHES
• ENTRY INTO NEW GEOGRAPHIC MARKETS
• IMPROVED MANUFACTURING EFFICIENCIES and DISTRIBUTION
• CONTINUING FOCUS on CORE CONSUMER PRODUCTS
. . . and this is where the PRECISION comes in!
THE 5 YEAR PLAN

9. and the
PRECISION
TOOTHBRUSH is . . . ?

10. a
TECHNICAL
INNOVATION!

11. In response to increasing competition, the Precision was built by a task force put together by Colgate-Palmolive,
consisting of executives from R&D and Marketing, Dental Professionals and outside consultants. Managed by
Susan Steinberg, its mission was to develop a superior, technical, plaque-removing device.
Five goals had to be met:
• Understanding the varying brushing techniques used by consumers
• Testing the between-the-teeth access of various toothbrush designs
• Establishing an index to track plaque-removal efficacy at the gum line and between the teeth
• Creating a bristle and handle design offering max. plaque-removal efficacy with multiple clinical
trials.
• Determining the efficacy and acceptance of the new toothbrush through consumer research.
NECCESSITY IS THE MOTHER OF INNOVATION

12. A unique brush with bristles of three different
lengths and orientations.
The longer outer bristles clean around the
gum line.
The long inner bristles clean between the
teeth.
The shorter bristles clean the teeth surface.

13. Owing to its unique design,
PRECISION can remove
39% plaque!!!

14. now,
HOW TO GO ABOUT
MARKETING
THE PRECISION
TOOTHBRUSH?

16. the 3 Bristles to
marketing
Precision
positioning
communication
strategies
branding

17. 1. POSITIONING

18. The toothbrush is suitable for NICHE POSITIONING.
It should target the therapeutic and cosmetic brushers.
THERAPEUTIC BRUSHERS COSMETIC BRUSHERS
• Aimed to avoid oral
care problems.
• Primary role of
toothbrush: Food
particles removal,
plaque removal, gum
stimulation.
• Emphasized preventing
bad breath.
• Emphasized white
teeth; oral health was
secondary.
How should PRECISION be positioned?

19. Why Niche Positioning?

20. The first two consumer classes, comprising of 46% and 21% (of adults) go for functionally effective or cosmetically
delivering products. PRECISION fits both these choices.
Limited production capacity associated with Niche positioned products suits the infrequency of re-purchases:
• 48% consumers replaced their toothbrushes every three months.
• 11% consumers replaced after seeing their dentists.
• 3% purchase on an impulse.
Brand choice was based on features, comfort and professional recommendations.
Thus, majority of the consumers don’t actively involve with the decision of choosing the brand of the toothbrush.
PRECISION is a product that might be effective, but may not have a broad appeal in the initial stages of its life.
Why Niche Positioning?

21. Why Niche Positioning?
Niche positioning implies a high retail price for PRECISION, placing it at par with Oral-B and other
Super-Premium brands.
For Niche Positioning, Susan Steinberg decided upon $2.13, a premium over Oral-B Regular and on par with
Oral-B Indicator.
This means a new venture for Colgate-Palmolive (entering into the Super-Premium toothbrush market as it is)
and competing with established brands in that sector with a strong candidate of its own – PRECISION was proven
more effective, especially with plaque-removal (35%), almost twice that of other brands. Given their high retail
prices, Super-Premium products are usually bought by the therapeutic and cosmetic brushers, the target market
of PRECISION.
Niche Positioning will reduce Brand Cannibalization of Colgate Plus and Colgate Classic brands, both established
in the Value and Professional segments of the toothbrush market. This would also be affected by Branding
(explained in the next section) of the product.

22. Production schedule, which had been developed for niche positioning, would come under pressure – mainstream
positioning can result in inadequate product capacity.
Mainstream positioning can cause dropping of one or more existing SKUs (Stock Keeping Units). With Niche
Positioning, it was impossible for any SKU to be dropped and replaced.
As a Niche product, PRECISION would primarily be carried by Food stores and Drug stores; as a mainstream
product, it will be sold majorly by the mass merchandising and club stores. Retail sales are highest in the former
two.
Why Niche Positioning?

23. Why Niche Positioning?

24. Once tried and tested in this manner, after the first year the product can shift to mainstream positioning.
Consumer intent will increase owing to increase in popularity.
(Susan Steinberg estimated volume shares to increase from Year 1 to Year 2, irrespective of whether it is niche
positioned or mainstream positioned.)
Can PRECISION become mainstream?
VOLUME SHARE YEAR 1 YEAR 2
NICHE
POSITIONING
3% 5%
MAINSTREAM
POSITIONING
10% 14.7%

25. Can PRECISION increase sales?
Colgate is well regarded by dentists. With PRECISION clinically proven to be the most effective toothbrush, more dentists will be
willing to endorse it.

26. As seen in Exhibit 14, Oral-B lead the dental market for toothbrushes. Correspondingly, it has also been leading in
the overall brand unit and dollar market shares.
Can PRECISION increase sales?

27. After getting established as a
Niche product and then moving
on to Mainstream market,
PRECISION has high chances to be
bought as performance benefits
have increasingly become
important purchase criteria for
more and more people.
To meet with these demands,
innovation and new products
have erupted in the market.
Can PRECISION increase sales?

28. Criteria for Consumer Choices

29. Positioning Scenarios

30. 2. BRANDING

31. • To differentiate the product from the competition.
• To attract consumers.
• To inform the consumers about the product in the shortest possible way.
• To represent the product core values and convey those to the consumers.
Role of the Brand

32. Concept tests were carried out among test
consumers to know what image of the
PRECISION appealed more to the
consumers. Out of all the factors,
prevention of gum disease increased
consumer intent the most.
Concept Tests

33. Name tests were carried alongside the concept
tests. Alternate brand names were Colgate
Precision, Colgate System III, Colgate Advantage,
Colgate 1,2,3, Colgate Contour, Colgate Sensation
and Colgate Probe.
Colgate PRECISION was consistently met more
favorably – deemed appropriate by 49% of the
acceptors and appealing by 31% of the acceptors.
Name Tests

34. Relative prominence of “Colgate” and “Precision” had to be balanced to maintain all the following conditions:
• The product should be able to stand alone as a brand, as it was an entrant into the Super-Premium market
segment.
• The product should, at the same time, be linked to Colgate-Palmolive to boost the brand equity once sales
started.
• The product should not be confused with other brand lines of Colgate-Palmolive, those being the Colgate
Classic and Colgate Plus lines, both of which were prominent in their market segments.
• The product mustn’t cannibalize these existing brands. (However, it is estimated that whether the product is
Niche or Mainstream, cannibalization figures of Colgate Plus will increase by 20%. Even initial estimates of
market shares were derived from estimating 35% - 50% impingement upon the shares of these brands.)
Brand Prominence

35. It can be estimated that if PRECISION brand name is stressed rather than the Colgate brand name,
cannibalization can be reduced and even prevented. PRECISION by Colgate or Colgate Precision can be
considered as viable options.
The name ‘Precision’ also resonates the function and performance of the product, which might explain its
appeal with the test consumers.
Brand Prominence

36. 3. COMMUNICATION
STRATEGIES

37. Colgate-Palmolive is facing fierce competition in all market segments. With the launch of Oral-B’s Indicator,
Johnson & Johnson’s Reach and Procter and Gamble’s Crest Complete, Colgate-Palmolive’s market shares were
impinged upon. As seen here, despite mounting profits in the late 80s, the operating profit was 12% in 1992 as
compared to the 13% in the previous year, before all the other brands upgraded their own inventories.
Competition

38. Most of the major brands
introduced a new innovated
product in 1991.
All the new products entered the
Super-Premium category. The
prices are accordingly high and the
SKUs, accordingly low.
While they all featured changes,
none came up to the uniqueness of
the PRECISION.
Despite all this, so far, in 1992,
Colgate held the lead in having the
highest SKUs.
Competition

39. Competition

40. Competition

41. With increasing competition in the toothbrush markets, oncoming of new products and relentless
advertising and promotions, Colgate-Palmolive was in a good position to compete with
PRECISION, but it still needed a concrete communications strategy to increase brand awareness.
These were bifurcated between Media Expenditures and Consumer Promotions.
Advertises and commercials come under Media Expenditures; consumer promotions include
strategies to attract the customers – such as “buy-one-get-one-free” offers, Mail-In refunds,
dollar-off coupons, etc.
Expenditures and profits as percentage of sales and factory sales of individual competitors is
given next:
Competition

42. Competition
Brand Name Consumer
Promotions
Expenditure as
% of Sales
Media
Expenditures as
% of Sales
Operating Profit
of Factory Sales
Oral-B 5% 12.7% 20%
Johnson & Johnson 8.6% 31.7% 8.4%
Flex 25% 50% Loss

43. Increased advertising and promotions enhance the product’s visibility and fuel consumer demand.
As new product launches grew, advertising media expenditures went through the roof.
Advertising

44. Advertising

45. Advertising

46. PRECISION must be advertised uniquely and creatively without using any of Colgate-Palmolive’s previous
characters (“Odd-Looking” character, “Armed to the teeth” where bristles are the soldiers) to prevent brand
cannibalization of Colgate Plus which too focuses on plaque removal as a major driver of its sales.
Focus must be initially given to the factor of 35% more plaque removal, prevention of gum disease and the
relation between the two and how PRECISION fits in. Concept Tests showed that 80% of the people were
enthusiastic about the product when this information was revealed.
Further showing its technical advancements, through ads and commercials with the clear core idea of ‘The best
and most effective toothbrush’, along with computer graphics and testimonials serving as evidence for the brand’s
claims, and by approaching dentists for professional endorsements that can further encourage people to buy
PRECISION.
How Should PRECISION be Advertised?

47. Sampling would be critical for PRECISION’S success as people’s first impressions about it were mixed; once used,
the people were overwhelmingly enthusiastic with 80% saying they would probably buy the product.
A free Colgate toothpaste with a PRECISION can help push the purchase of PRECISION in competitive markets.
A half-priced toothpaste with a coupon on the PRECISION brush can work promote the brush in strong Colgate
markets.
Overall, the budget to launch a whole new product that must succeed at all costs will be large. This begs the rise
in the company’s net advertising and promotions budgets so that PRECISION gets the required amount for its
successful launch, while the other two lines – Plus and Classic – too benefit from an increase advertising and
promotions budget.
Shelf space too must be appropriately allocated for PRECISION. Instead of Side-Kicks, top shelves or floor stands
would be better suited for food and drug stores.
Promotions

48. RECAP

49. THANK YOU!

50. D I S C L A I M E R
This presentation is created by Om Vaghasia, MIT
Manipal, during a Marketing Internship by Professor
Sameer Mathur, IIM Lucknow.