Substantial competitive rivalry, low barriers to entry for existing and new manufacturers, low switching costs and apathy towards Precision’s differentiating feature on part of the average consumer makes short-term mainstream positioning unattractive. Given Precision toothbrush’s primary benefit towards superior plaque removal, it will be more successful in targeting at a sub-segment within the involved oral health consumers [Table B] that cares about preventing gum disease and buys super-premium toothbrushes. A niche positioning draws on CP’s strengths in R&D and technical innovation while offsetting company’s lack of offering to the involved oral health consumers. This strategy should also allow pricing to be commensurate with benefits offered and allow CP to leverage the Colgate brand name without cannibalizing CP’s Plus product (as they compete in different price segments)
Since increased advertising and promotions enhanced the category’s visibility, a niche positioning strategy would benefit from increased category spending of $ 43.38 M with 75-25 Precision-Plus split that would be consistent with allocating more dollars to the faster growing super-premium segment. Accordingly, precision needs to be distributed through food and drug stores and through dentists which would better address consumer research indicating importance of sampling towards consumer retention.
A move towards mainstream positioning would be more practical in the long term when Precision’s once superior plaque removing feature has become a table stake in the more mature super premium segment and revenues are generated through retention. Such long term positioning would also need to be accompanied by reevaluation of CP’s plus and Classic brands.
In summary, CP’s niche strategy will aim... [continues]
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