Agenda

1. Back ground
1. Back ground
2. Competitors
3. Consumer
1. Back ground
3. Consumer
1. Back ground information
2. Environment of competition
3. Consumer targets
4. Marketing Plan and actions
5. Future?
6. Conclusion
- 1991: global leader in care products
- plan do launche new products between 1991-1995
- in 1991 43% of toothpaste market and 16% of toothbrush market
- increasing sales of oral care products
with 12% in 1991
- number one in toothbrush market
- 25-40% of shelf space
- 2 lines of toothbrushes
- Colgate Classic
- positioned in "value" segment
- Colgate Plus
- positioned in "professional"
segment
- growing marketing in oral care sector
- media, coupons, bundlings, two-for-one..
- brands show consumer benefits of
products
- increasing sales projected to be slower
through this actions
- emerging sales of super premium brushes and decreasing sales of value
segment in early 90th
- baby boom generation that concerns about health and willing to pay more
- 82% of purchases are unplanned
- people are unfamiliar with prices
- 65% of consumers have more than one brush f.e. for traveling or work
- reason to use new brush very
different
- choice based on:
-features
- comfort
- recommendation
- prevention for health care
- Oral-B, Procter and Gamble and
Smithkline Beecham in super

premium segment
- J&J in professional segment
- different bristle types and
head sizes
- 3 groups:
-therapeutic brushers (46%)
- cosmetic brushers (21%)
- uninvolved brushers (33%)
4. Marketing Plan&actions
- SWOT Analysis
- S: known brand, qualified, strong financial backup, increasing sales
- W: no experience in premium segment, strong competitors, to many products
- O: new customers, better image, more profit
- T: loosing money with campaign, no
distribution channels, old image cant
be moved, not accepted in segment
2. Competitors
- Oral-B: market leader, indicator bristles, 15% higher price for brush, 20% of
sales money for advertisement
- J&J: third rank, cleans everywhere, 8,4% of sales for promotion
- Procter&Gamble: reach between teeth, super- premium segment
- Smithkline Beecham: gentle,
50% of sales for promotion
not very successful
1. Back ground
Toothbrush market channels (92):
- mass: 35%
- drug stores: 34%
- food outlets: 35%
- 22% of brush distribution by
dentists Oral-B dominates
- Entrance strategy: first niche product, when sales high enough in main market
- cannibalization is avoided
- easier to start high and go low than opposite, hard competition
- new innovated brush can take place of precision brush in top segment
- costs for promotion wouldn't be
that high compared to entrance
in mainmarket
- involved brushers will
find product
- Segment: therapeutic and cosmetic brushers, because big and interested in
offered products + willing to pay price
- baby boomers in age between 30-50 years, about 76 million people with a
growth of 29%
- Price: super premium price category between 2,29-2,89$, show up higher

quality to enter new segment

4. Marketing Plan&actions
4. Marketing Plan&actions
4. Marketing Plan&actions
- Distribution channels short- term:
- farmacies and dentist to focus on interested target group, higher image
- food stores with POS- displays to show up that something "big" happend, check
acceptance of new product
- Channel long-term:
- mass-market: too much competition in high segment, new own products, sales
- food stores: big market for profit
4. Marketing Plan&actions
- Communication strategy:
- Visual promotion: as short as possible advantage of brush (35% more plaque
removal and prevention of gum disease)
- show advantage to competitors
- discount for dentists to get chance to enter segment and get new customer
base
- give-aways in farmacies like travel-pack
- long-term: TV spots, magazine advertisement, coupons with discount, pack
of brush&paste, guarantees
5.Future?
- still increasing sales
- problem of decreasing value segment
- long-term: lowest products disappear, higher product fills gap, in the end
always pressure to create new super premium product
- to avoid this: new strategy with
focus of high level products, but
here hard competition and hard
to get dentists & Co. for longterm relation
6. Conclusion
Colgate Precision is an innovative product, but in long-term just one of a many,
that will be developed and looses its value with the next better brush that will be
created.

Defining the Marketing Strategy (Positioning, Branding and Communication

Strategies) for the new toothbrush - Colgate Precision
PEST Analysis
PEST continued
Technological
New products were introduced in the late 1980's and early 1990's
design of the handles and head of the toothbrush
action of bristles
super premium toothbrush- greater plaque removal and gum care
PEST
Social
Aesthetic appeal in the late 1980s
The children's market:
glow in the dark handles
cartoon characters
New product- technological improvements
An additional social development- concern for gum health- baby boom
population
Cavity prevention was a serious concern- willing to pay more for products that
served this need.
Economic New entrants appeared in early 90s
Proctor & Gamble, and SmithKline Beecham
Positioned in the super premium segment.
Environmental Analysis- Current status and future trend
Latest technology is bristle action
Growing concern for gum health is demonstrated by the population
New product offerings to include aesthetic and technological improvements
Colgate Precision
Currently in Introduction stage
Planned promotion for entry into super premium segment
Expected ROI in a few years
Product
Highly innovative product
Colgate Palmolive used infra-red analysis to develop a unique brush with bristles
of 3 different lengths and orientations
35% more plaque removing efficiency
more effective in reducing gum disease than Reach and Oral-B
Price
Promotion
Niche Market
Aggressive advertising campaign

Emphasize technological superiority of the toothbrush

Mainstream Market
Financial Incentives
Coupons
Buy one get one free
Promotion
Through professional channels- Dentists
Induce trials by leveraging Colgate Palmolive's star products
a free 5 oz. Tube of Colgate toothpaste with a Precision brush
a 50%-off offer on colgate toothpaste
a 50 cent coupon
Financial Forecast
In depth analysis indicates profit over 2 year time frame for both markets
Niche - greater estimated gross profit than mainstream
Cannibalization of existing Colgate products leading to loss of sales of colgate
plus by 20% in both cases
Financial Implications of Product Cannibalization
Niche - estimated 35% of sales from other products decreasing net profit
Mainstream- an estimated 60% of sales would come from existing products
decreasing Colgate's overall toothbrush net profit
Only Niche market generates a profit over a 2 year period
Branding
Emphasizing Colgate's name on the new Precision toothbrush would cause
cannibalization of existing Colgate toothbrushes- estimated 20%
Using the Colgate brand name would be congruent with the existing Colgate
strategy of building the brand equity
Communication
Information that may contribute to capturing market share
4 concept tests conducted- results show that consumers were highly motivated
by Precision toothbrush's claims
In home usage tests conducted-77% users claimed Precision more effective
Other research- higher exposure higher acceptance
Company Analysis
$243 million spent to upgrade 25 manufacturing plants
If needed, some production can be re-directed to manufacturing sub-contractors
which are currently in use by CP for other products
43% toothpaste, 16% toothbrush
Toothbrush sales total $77 mil, operating profit $9.8 mil
Positioning - Niche
Pros:
Could later be broadened to mainstream position with additional capacity
Easy transition in PLC
Less erosion of Colgate Plus since products are more isolated
Entry into new superior toothbrush market, in which CP currently holds no
position
CP faces less competition
Positioning - Niche

Cons:
Less contribution to net profit in future
Positioning - Mainstream
Pros:
Unsatisfied demand could create perception of "Hot" product
Possible increase in sales
Positioning - Mainstream
Cons:
Greater erosion of Colgate Plus
Might need to drop one of the slow-moving children's brush from the plus line
Possible pressure on production schedules leading to inadequate supply
More competition
Recommendations
CP would have a strong position against competitors due to its product attributes
- better product with higher performance value
New product development specifically focused on gum care
Position brush in Super Premium segment tailored to theraputic brushers
R&D investment concludes that super premium niche segment more consistent
than mainstream