Colgate-Palmolive Company: the Precision Toothbrush
Fall 2011 - October 6th 2011
MGTC05 Case Analysis
Colgate-Palmolive Company: The Precision Toothbrush
Problem Definition
Colgate-Precision (CP) held the number one position in the US retail toothbrush with 23.3% volume share in 1991; they are a global leader in household and personal care products. They currently have 2 toothbrush products in the market, but have been working on a three-year project in developing a technologically superior toothbrush into the market. This product, tentatively named Colgate Precision will be ready to be released into the market in late 1992. However, the toothbrush market has been evolving quickly and Precision product manager Susan Steinberg needed to establish the appropriate positioning, branding and communication strategy in light of all internal and external factors that will potentially affect the business. One of the big questions Susan had to answer was: Should Precision be positioned as a niche product or mainstream product? (See Exhibit 1 for a comparison between launching the product in the niche /mainstream market)
Alternative A – Precision in Niche Market
With the recent introduction of the new “super-premium” sub-category, CP has the option of revealing Precision as a niche product. Serving to the ‘therapeutic brushers’ who are in search of functionally effective products and are generally the most concerned group of consumers in regards to their oral health. This alternative poses a few strengths if chosen. First of all, there are fewer competitors in the “super-premium” market. Second, since existing CP toothbrushes participate in the “professional” and “value” market, introducing the Precision into the “super-premium” market will cause less erosion of Colgate Plus. Third, CP can take this chance to submerge itself into the “super-premium” market since none of its existing products are in this segment. Lastly, no existing SKUs will need to be dropped if CP chooses this alternative. Despite all this, there
MGTC05 Case Analysis
Colgate-Palmolive Company: The Precision Toothbrush
Problem Definition
Colgate-Precision (CP) held the number one position in the US retail toothbrush with 23.3% volume share in 1991; they are a global leader in household and personal care products. They currently have 2 toothbrush products in the market, but have been working on a three-year project in developing a technologically superior toothbrush into the market. This product, tentatively named Colgate Precision will be ready to be released into the market in late 1992. However, the toothbrush market has been evolving quickly and Precision product manager Susan Steinberg needed to establish the appropriate positioning, branding and communication strategy in light of all internal and external factors that will potentially affect the business. One of the big questions Susan had to answer was: Should Precision be positioned as a niche product or mainstream product? (See Exhibit 1 for a comparison between launching the product in the niche /mainstream market)
Alternative A – Precision in Niche Market
With the recent introduction of the new “super-premium” sub-category, CP has the option of revealing Precision as a niche product. Serving to the ‘therapeutic brushers’ who are in search of functionally effective products and are generally the most concerned group of consumers in regards to their oral health. This alternative poses a few strengths if chosen. First of all, there are fewer competitors in the “super-premium” market. Second, since existing CP toothbrushes participate in the “professional” and “value” market, introducing the Precision into the “super-premium” market will cause less erosion of Colgate Plus. Third, CP can take this chance to submerge itself into the “super-premium” market since none of its existing products are in this segment. Lastly, no existing SKUs will need to be dropped if CP chooses this alternative. Despite all this, there