Colgate Precision

FACTORSBranding: Should the name of the product on the package and in advertising be "Colgate Precision" or as "Precision by Colgate"Communication and promotion: This is an effective way to pull a market share because it is hard to increase primary demand unless stealing sales from existing productsMajor competitors in the super-premium segment: Oral-B, Reach Advance Design, Crest Complete, and Aquafresh FlexDifferential pricing structure: Niche market vs. Mainstream marketDifferent advantages/ disadvantages: Niche market vs. Mainstream marketDramatically change in technology advances: new toothbrushes come out very quickly and frequentlyCannibalization: New Precision toothbrush might taken away positioning of Colgate Plus and Colgate ClassicConsumer purchasing power: Personal preferences, behavior, product evaluation, and reasons in buying toothbrushesFactors impact consumers' decision: Great influence from dental professional for people who concern about gum diseaseDesigning a pro-forma income statement to compare the profit implications of the niche vs. mainstream positioning strategiesCENTRAL ISSUEHow can Colgate-Palmolive manage its new Precision toothbrush's position, brand, and communication strategies and achieve the market leader position in the toothbrush market.
BACKGROUND________________________________________COMPANY BACKGROUNDAs a global leader with 1991 sales of $6.06 billion and a gross profit of $2.76 billion, Colgate had spent about five hundred millions in its R&D and advertising.
CP's five-year plan had three strategies which are:1.Launch new product (275 worldwide new products) and entry into new geographic markets (acquisition of Mennen men's toiletries company, manufacturing in China and Eastern Europe);2.Improve efficiencies in manufacturing and distribution (upgrade 25 CP's manufacturing plant;3.Focus on core consumer products continuously.
Colgate-Palmolive's Oral Care Business and The U.S. Toothbrush Market:In 1991, CP held 43% of the