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Case Analysis: Colgate-Palmolive Precision Toothbrush

Monique Priestley

Winter 2011: MCDM COM588 Digital Media Marketing & Branding

Rick McPherson/Brian Marr

Monique Priestley

Winter 2011: MCDM COM588 Digital Media Marketing & Branding

Table of Contents
Analysis & Strategy
Executive Summary
Situation Analysis
Strategic Alternatives
Proposed Strategy

1 1 1 2 3 4 4 5 5 6 6 6 7 7 7 8 8 9 9 9
i

Appendix A: Competitive Strategy
Porter’s Generic Strategies Applied

Appendix B: Environmental Assessment
SWOT Matrix

Appendix C: Alternatives Assessment
Alternatives: Introduction of the Precision
Alternatives: Naming Convention Matrix

Appendix D: Segmentation & Targeting
Segmentation of Toothbrush Users
Consumers Educated on Precision’s Effectiveness

Appendix E: Positioning
Positioning of Precision in the Industry

Appendix F: Positioning Map
Positioning of Niche, Super-Premium Toothbrush Models
Positioning of Mainstream, Professional Toothbrush Models

Case Study: Colgate-Palmolive Precision Toothbrush

Monique Priestley

Winter 2011: MCDM COM588 Digital Media Marketing & Branding

Analysis & Strategy
Executive Summary
In July 1992, CP senior management announced a new toothbrush model, the Precision, that was set to launch in early 1993. In order to meet consumer demand CP could introduce the toothbrush as a niche, super-premium or a mainstream, professional product. It could also introduce the product using standard naming conventions or introduce a new labeling system by calling it the “Precision by Colgate.” CP could leverage existing industry relationships and make an effort to form new ones in order to gain a competitive edge. At launch, CP could plan to offer competitive promotions, a popular offering that was slowly becoming standard practice in the oral care industry. The company could also increase its advertising budget to include educating the public on the dangers of gum disease. Depending on how it chooses to introduce the Precision toothbrush to the market, 1992 could serve as an important year for CP to establish itself as the definitive oral health care company.

Situation Analysis
Environmental Analysis In 1992, Colgate-Palmolive (CP) was the global leader in household and personal care products. It was also the leader in retail toothbrush sales in the United States. Prior to the 1990s, consumers were satisfied with toothbrushes that were aesthetically pleasing. As therapeutic toothbrush sales rose it became apparent that baby boomers were becoming increasingly concerned with their oral health, specifically their gums. As a result, the toothbrush industry experienced a massive influx of worthy competitors and the formation of a niche, super-premium market. In order to gain an edge each competitor worked on developing new toothbrush technology, forming alliances with dental professionals, expanding advertising budgets and offering promotions that would grab consumer attention. Industry Analysis Not only can the industry be broken down by price models (super-premium, professional, and value), it can broken down a second time into niche and mainstream offerings. Consumers of this industry can be sorted into three categories: therapeutic, cosmetic, and uninvolved. Competitive Analysis One promising conclusion that can be drawn from the competitive analysis is that every company has been caught off guard by the change in consumer behavior, emergence of new technology, and introduction of new players entering the playing field. For example, in 1988, Johnson & Johnson introduced “new brush technology” only to phase it out by 1992. In order to get an edge, competitors, Johnson & Johnson, Oral-B, Procter & Gamble, and Smithkline Beecham (latter two are new competitors), are offering promotions in the form of coupons, mail-in refunds, and bundles.

Environmental Analysis
Strengths With 43% of the global toothpaste market and 16% of the global...
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