Colgate-Palmolive (Colgate) needs to determine how Precision should be positioned in the tooth brush market. Colgate must decide what segment of the market to target and how Precision should be marketed to its target market.
II. Solution Possibilities
Colgate's objective is to position and market Precision to fully utilize the products potential. To accomplish this objective, Colgate must determine what segment Precision should target, the super premium niche or the broader professional brush market, and the marketing mix that would be most effective for that position.
Colgate can position Precision as a niche product. Colgate does not have a tooth brush currently positioned in the super premium niche. Oral B, Johnson & Johnson, Procter & Gamble and Smithkline Beecham currently compete in this product segment. Due to the number of quality competitors in the tooth brush market, product innovation is an important factor to be able to differentiate the product and to succeed. Precision was developed to compete in the super premium segment focused at consumers who are concerned about gum disease. As a niche product, Precision is expected to extract a 15% price premium above Oral-B and to gain a 3% market share in its first year and 5% in year two. Precision's factory list price would be priced at $2.13.
The super premium niche is growing. It accounts for 35% of unit volume and 46% of dollar sales. Baby boomers are more concerned about the health of their gums as compared to cavity prevention. Baby boomers are also willing to pay a premium for toothbrushes that address this issue. The target customer segment for Precision in the super premium niche is therapeutic brushers, who make up 46% of adults. (Table B) Therapeutic brushers are high involvement users and differentiate among products to search out functionally effective oral health products.
Precision can be marketed to these consumers using a niche positioning