Colgate-Palmolive Company: The Precision Toothbrush
Colgate-Palmolive (Colgate), the leading retail toothbrush manufacturer in the United-States is looking to expand its market share by entering into the competitive high-end toothbrush market segment with the introduction of its technologically innovative Precision. Though the product's introduction promised highly profitable returns, it also presented Colgate with a number of challenges including a significant financial investment, fierce competition, manufacturing limitations, and potential cannibalization. After assessing the company's positioning in the market, Colgate is faced with the decision of how to position, brand, and communicate the Precision advantage to the market.
1. What are the changes that are occurring in the toothbrush category at the time of the case? Why are they happening? Why does Colgate need another Toothbrush?
At the time of the case toothbrush market has become very competitive. Toothbrush manufacturers have poured millions of dollars to increase product innovations and performance benefits, which have become important purchase criteria for customers. Along the way, companies have built the U.S. oral care market into a $2.9 billion industry and changed the brushing habits of millions. Customers became more concerned about their oral health and increasingly interested in high-end toothbrushes.
To address the customers' need, manufacturers launched new products with technical performance improvements, including both functional and aesthetic changes. These toothbrushes were higher priced with higher margin, which stimulated marketing and promotion input from both the manufacturers and distributors. These promotion efforts further drove up demand of toothbrushes.
The toothbrush market was divided into three segments: super-premium, professional, and value brushes. By 1992, super-premium brushes accounted for 35% of unit volume and 46% of dollar sales. Professional brushes...