COLGATE- PALMOLIVE MAKES A “TOTAL” EFFORT
In the mid- 1990s, Colgate- Palmolive developed a new tooth-paste for the U. S. market, Colgate Total, with an antibacterial ingredient that was already being successfully sold overseas. However, the word antibacterial was not allowed for such products by the Food and Drug Administration rules. So Colgate- Palmolive had to come up with another way of marketing this and other features of their new toothpaste to U. S. consumers. Market researchers told Colgate- Palmolive that consumers were weary of trying to discern among the different advantages of various toothpaste brands and wanted simplification in their shopping lives. In response, the name “Total” was given to the product in the United States: The one word would convey that the toothpaste is the “total” package of various benefits.
Young & Rubicam developed several commercials illustrating Total’s benefits and tested the commercials with focus groups. One commercial touting Total’s long- lasting benefits was particularly successful. Meanwhile, in 1997, Colgate- Palmolive received FDA approval for Total, five years after the company had applied for it. The product was launched in the United States in January of 1998 using commercials that were designed from the more successful ideas of the focus group tests. Total was introduced with a $100 million advertising campaign. Ten months later, 21% of all United States households had purchased Total for the first time. During this same time period, 43% of those who initially tried Total purchased it again. A year after its release, Total was the number one toothpaste in the United States. Total is advertised as not just a toothpaste but as a protective shield that protects you for a full range of oral health problems for up to 12 hours. Total is now offered in a variety of forms, including Colgate Total Enamel Strength, Colgate Total Advanced Whitening, Colgate Total Advanced Clean, Colgate Total Advanced Fresh, Colgate Total Clean Mint, Colgate Total Whitening, and Colgate Total Mint Stripe. In the United States, market share for Colgate Total toothpaste was 16.2% in the second quarter of 2008, which was its highest quarterly share ever.

1. What probabilities are given in this case? Use these probabilities and the probability laws to determine what percentage of U. S. households purchased Total at least twice in the first 10 months of its release.
Solution: The probability of event A is equal to 21% of the randomly chosen U.S. households who purchased Total for the first time. Or P(A) = 0.21. The probability of event B equals 43% of the randomly chosen U.S. households who chose Total again (or twice). So, P(B/A ) =0.43
In this case, I’m going to use the multiplication rule. P(A∩B) = P(A) x P(B/A) or 0.21 x 0.43 = 0.0903

2. Is age category independent of willingness to try new products? According to the U. S. Census Bureau, approximately 20% of all Americans are in the 45- 64 age category. Suppose 24% of the consumers who purchased Total for the first time during the initial 10- month period were in the 45– 64 age category. Use this information to determine whether age is independent of the initial purchase of Total during the introductory time period. Explain your answer.
Solution: Event C equals a person picked randomly in all of the U.S. and is also in the 45-64 category. Or, P(C) = 0.2. Event D equals the randomly picked person who have tried the Total and also belong in the 45-64 category. Or P(D) = P(E/A) = 0.24
Therefore, P(E) = P(A) x P(E/A) = .24 x .21 = .0504 or P(A∩C)= .0504
When you look at the P(A) and P(D), the values are different which means that age is not independent of the initial purchase of Total during the introductory time period.
3. Using the probabilities given in Question 2, calculate the probability that a randomly selected U. S. consumer is either in the 45– 64 age category or purchased Total during the initial 10- month period. What is the probability that a randomly selected person purchased Total in the first 10 months given that the person is in the 45– 64 age category?
Solution: P(AUC) = P(A) + P(C) - P(A∩C) = .21 + .2 - .0504 = .3596
P(A/C) = P(A∩C)/P(C) = .0504/.2 = .252
4. Suppose 32% of all toothpaste consumers in the United States saw the Total commercials. Of those who saw the commercials, 40% purchased Total at least once in the first 10 months of its introduction. Of those who did not see the commercials, 12.06% purchased Total at least once in the first 10 months of its introduction. Suppose a toothpaste consumer is randomly selected and it is learned that they purchased Total during the first 10 months of its introduction. Revise the probability that this person saw the Total commercials and the probability that the person did not see the Total commercials.
Solution: P(A) = all toothpaste consumers who saw the Total commercials. P(B) = all toothpaste consumers who did not see the commercials. Or, P(A) = .32; P(B) = .68 (100-32)
P(X/A) = .4 or probability of consumers who saw Total commercials and purchased Total in the first 10 months of its introduction.
P (Y/A) = .1206 or probability of consumers who purchased Total in the first 10 months of its introduction but did not see the commercial.
P (X∩A) = P(A) x P(X/A) = .32 x .4 = .128
P(Y∩A) = P(A) x P(Y/A) = .68 x .1206 = .082