Brighter Smiles for the Masses:

vs

Group 10
21P189 - Arushi Gupta
21P206 -Mayank Arora
21P210 - Vihang Natu
21P227 - Shubham Kumar Thakur
21P229 - Sneha Upadhyay
AGENDA
01 INTRODUCTION

02 POINTS OF CONTENTION

03 COLGATE'S ENTRY

04 RESPONSE TO SIMPLY
WHITE

05 PROPOSAL FOR
'MUMBLES'
 Introduction
This presentation is an analysis of how the two biggest players in the Oral-Healthcare market in US,
Colgate Palmolive and P&G, competed for market share in the 1990s.

Also we'll look at how a first movers advantage by P&G in the teeth whitening category became a star
product in the global market only to be thwarted by a better and cheap product by their rival.

We look at three important questions that throw light on how has this new product by Colgate
Palmolive affected the existing market and in what ways can P&G counter it to regain the lost market.

Oral Care Revenue Breakdown Contribution to Global revenues Market Share in 2001
40
Others
Others 13.1%
Asia Pacific
30
28.4% 26%

Toothpaste
20
44.2%
USA
25.5%
10

0
Toothbrushes Europe Colgate P&G Others
27.4% 35.4%
 Points of Contention

The key issues that P&G faced as Colgate not only took over their first mover's advantage but also came

up with a product (Simply White Night) with no major differentiation which would've further damaged

Crest White Strip's positioning

The market share of P&G dropped from more than 80% in August 2002 to 37% in October 2002

because of Colgate's new product

The price difference of USD 40 (White Strips) versus USD 15 (Simply White)
P&G solely relied on the b* test, to which there was opposition from some industry experts
The convenience of using Simply White (30 sec) as compared to White Strips, which took 30 minutes

of application
Conveying the effectiveness of White Strips as compared to Colgate's Simply White to the customers,

even though there were several distinct issues with the promise made by Colgate
The way ahead was a decision to be made- to retaliate and challenge the position of Colgate's product

and its effectiveness

Anticipating the counter course of action for any step taken by P&G to tackle the loss of market share
 Colgate's entry -
How costly is the entry of Simply White for P&G?
P&G's launch of Crest Whitestrips created a new category of At-Home-Teeth-Whitening in Oral Care

Year 2001 2002 2003

Market Size $ 310 Mn $ 460 Mn $ 590 Mn

P&G Whitestrips $263.5 Mn $170.2 Mn $247.8 Mn

Colgate Simply White - $225.4 Mn $289.1 Mn

R&D and Initial

Marketing
Contribution

Sales in Year 1 Selling Price Remarks
Marketing Cost Budget in year 1 Margin

P&G Whitestrips $130 Mn $75 Mn $ 10 Mn $40 12% of sales

2/3rd purchase
Colgate Simply

$170.2 Mn $15 45% intention and 50%
White
thought it worked

Unilever Metadent $20 Mn

Not well $19-22 NA

Comparison of Alternatives

Year of

Price Application Process Disadvantage
Introduction

Available at dentist office;

Power bleaching up to $1000

1884
procedure took one hour

Teeth would be

Dentist Made Trays $300-450 Worn for a few weeks at home sensitive during
NA
treatment

Unilever Metadent
Contact time with

Used mild abrasives and enzymes

and other whitening

$10-20 teeth was less, very less
1993
to dissolve stains
Toothpaste effective

Flexible material with no

WhiteStrips $40
1997 (2000)
requirement of holding

Not effective but

Simply White $15 Familiarity of wiping gel on teeth 2002

customers didn't mind
How should Ismail respond to the introduction of
Simply White?
In the midst of a new wave of competition, courtesy of Colgate, in at-home tooth whitening,

Ismail's team at P&G had to decide how to combat the recent advance of Colgate.

Probable response of P&G

A comparative campaign should be launched which would help White Strips change the customer

perception and bring back the lost market share while P&G should be careful of statements that

could be viewed as controversial since the methods of product testing are not standardized across

industries (B* test)

In the new White Strips value proposition, emphasis is to be placed on its superior features, such as
effectiveness, lasting effect, and scientific backing for the time of application
Legal action against Colgate can only be taken if P&G can establish the credibility of its testing

methods and prove beyond doubt the superior performance of the product (recognized testing

methods)
How should Ismail respond to the introduction of
Simply White?
In the midst of a new wave of competition, courtesy of Colgate, in at-home tooth whitening,

Ismail's team at P&G had to decide how to combat the recent advance of Colgate.

Probable response of P&G

Due to the high R&D costs ( USD 130 million already invested) involved and the potential for

cannibalization of sales of White Strips, the introduction of a new product to compete with Simply

White is not recommended

Also, the usage of coupons can be beneficial for the overall customer retention, and further

proposing a higher discount percentage for repeated purchases would establish customer loyalty

and play in on the price gap between white strips and the other products
Looking into the operating margin of the White strips, it was imperative that there was a scope for

price cut and this would have benefitted the brand with higher sales and new customers as it was

the price point that was the key decision-making point for the consumer to switch brands
 Do you recommend using the proposed "Mumbles"
commercial?
To face this new competition in the market, a suggestion was made to release a commercial that
would directly compare whitestrips and simply white titled 'Mumbles'

Pros of "Mumbles" Commercial Cons of "Mumbles" Commercial

Direct comparison showing advantage There is an inherent convenience factor
of WhiteStrips over competitors that is only brought out by the
Explains application of product better advertisement of choosing 2 minutes to
30 minutes in application

Does it mislead a "significant What is the legal precedence?

segment"? In US, a significant segment (around 15%)
need to believe in the claim being
Claims 5 times better whitening which
misleading for NAD to act against it
can be brought into contention

We would recommend going ahead and educating the customers since market survey did show that over 50% thought Mumbles worked
which was not the case. Creating awareness would be a good starting point to drive back customer loyalty