Colgate has always been recognized as one of the world’s leaders in oral hygiene products such as toothbrushes and toothpastes. In 1991, they peaked with sales at $6 billion dollars and profits at $2.76b billion. Just a year later, they were faced with the issue of marketing their newest product, the Colgate Precision toothbrush. Decisions such as positioning, branding, and communication had to be made to find a perfect marketing mix to maximize profit for Colgate. One of the toughest choices has to do with positioning. The two options for Colgate are to either promote the product as a high quality niche product targeted towards specific groups of people concerned about oral health or to promote it as a mainstream toothbrush targeted towards anyone who wants the best toothbrush on the market. Both options have their benefits and detriments. If marketed as a niche product, the market segment may be smaller, but would have fewer competitors as well have the ability to be sold at a premium price. If marketing as a mainstream product, the revenues would come from larger sales volumes, but would have more competition and would be sold at a lower price.
To find the best solution, it is first necessary to evaluate the alternatives separately and then comparably with each other. Segmenting the market is of high importance because it is vital to know who your customers are. When it comes to the niche market segment, Colgate has the ability to set the price slightly higher, which was previously stated. Colgate also doesn’t have to be concerned about the issue of cannibalization, which comes into play when dealing with the mainstream market. Within the market, Colgate can focus primarily on those clients who are extremely sensitive about oral hygiene and are more concerned with the therapeutic factors to prevent gum disease and other consequences of poor oral health. On the other hand, there are fewer market shares available. Colgate may also struggle to face the entry...