INTRODUCTION

In middle 1992 Colgate-palmolive (CP) introduced a new toothbrush model ,called Precision, and it was expected to be announced during 1993.Susan Steinberg ,Precision product manager, had now the dilemma how to position,brand and communicate their new product.Would it be a niche,super-premium product or would it be a mainstream professional product?Would the name of the new toothbrush follow standard naming conventions or would they make a revolution and call it “Precision by colgate”?Should the company increase their advertising budget so that they will inform people about gum diseases?All these questions were about to be answered as soon as possible by Steinberg so that Colgate-Palmolive would become the new major oral-care health company by launching Precision toothbrush to the market.

Questions:

1.What is changing in the toothbrush category?Assess Colgate Palmolive's competitive position.

In 1991 U.S Oral care market total sales were about $2.9 billion and had an annual increase rate of about 6.1% since 1986.Toothbrush companies changed the way that millions of people brush their teeth ,and managed to make toothbrush a not only necessary but also stylish good for people.Since the middle 80's, consumers became more concerned about their oral health care and were constantly increasing their purchase frequency.For this reason companies were focusing on giving maximum help to consumers,offering them various types of toothbrushes;each type based on what each consumer demands from her toothbrush.
Toothbrush companies have changed many things in toothbrushes.Most of the changes are not only in the function of the toothbrush but also in how pleasant feeling is when brushing teeth.Oral-B offered indicator bristles,Jonhson and Johnson offers angled neck,Procter and Gamble's Crest complete ad rippled bristle design and Smithkline Beecham's Aquafresh flex offered pressure sensitivity,flexible neck. In other words,companies changed the materials they used,more flexible plastics were used in the products,and overall the toothbrush market became quite competitive.Colgate-Palmolive had to compete not only to existing competitors such as Oral-B but new competitors as Smithkline Beecham and Procter and Gamble.
In 1991 Colgate-Palmolive's sales reached $6.06 billion and a gross profit of $2.76 billion.It was obvious that CP was a global leader in personal-care products. CP held 43% of the world toothpaste and 16% of the global toothbrush market.Other oral care products included dental floss and mouth rinses.Moreover in 1991, global sales of CP's oral care product sales increased by 12% reaching the amount of $1.3 billion accounting for 22% of total sales.Finally CP was the ruler company in the U.S. Retail toothbrush market with a 23.3% volume share.

How is the toothbrush market segmented?Compare consumer behavior for toothbrushes and toothpaste?

In the 1980s, the toothbrush category was separated into to segments: value and professional.The late 1980s saw the emergence of super-premium brushes, which were priced above $2.00. Toothbrushes also varied by bristle type (firm,medium,soft,extra soft) and by head size(full/adult,compact, and child/youth). In the late 1980s, many new toothbrushes were introduced on the basis of aesthetics rather than functional features. In 1991, though this changed and many new product introductions were focused on technical performance improvements.
Because of diverse needs for buying toothbrushes, we have three types of consumers. The first category consists of consumers who are therapeutic brushers (46% of adults). The consumers who care more about oral health tend to differentiate among products so they search out functionally effective products. The second group of consumers includes consumers who are cosmetic brushers(21% of adults). Cosmetic brushers search for products that effectively deliver cosmetic benefits. The third category consists of uninvolved oral health consumers(33% of adults). The consumers of this category view products as the same, and lack of interest in product category. Additionally, therapeutic and cosmetic brushers buy and use products for themselves, in contrast to uninvolved oral health consumers who buy and use products for all family members. Most consumers concured that toothbrushes were as important as toothpaste to effective oral hygiene and that the main role of a toothbrush was to remove food particles, plaque removal and gum stimulation were considered secondary.
Comparing toothbrushes to toothpastes, we can see that consumers are more careful for the toothbrushes.Toothpastes are shared by all members of the household.,whereas when buying a toothbrush,consumer's decision is based on personal needs such as size and shape of the mouth,sensitivity of gums and personal brushing style.As for the toothbrush characteristics as the handle bristles and headshape were considered the most important physical features.

Lay out the arguments for launching Precision as a niche product.Lay out the arguments for launching Precision as a mainstream brand.

CP created Precision with the intention of it becoming the best brush possible, a top level product, belonging to the super-premium segment. It could be either positioned as a niche or a mainstream product so Steinberg developed a marketing mix and financial projections for both scenarios.

Precision as a niche product
Niche positioning targets consumers who care about the prevention of gum diseases. Steinberg believed that with a niche positioning , Precision retail sales would represent 3% volume share of the toothbrush market in year 1 and 5% in year 2.
Under a niche positioning strategy, Steinberg decided that CP would establish a factory list price to the trade of $2.13, a premium over Oral-B regular and at parity with Oral-B Indicator. If the company decided to position the Precision toothbrush as a niche product many benefits would appear.
First of all, Precision toothbrush is more advanced and is characterized for its technological superiority over its competitors. Because of that, Colgate-Palmolive can be able to differentiate and promote something new to the market. CP can also charge premium prices as longs as it refers to consumers who are worried about gum diseases. Additionally, it is safe to say that SKUs would not decrease if CP were to position the Precision as a niche product beacause the possibility of cannibalization is reduced. Last, if costs were to decrease by maintaining Precision in the niche product category, the losses of Precision will be reduced if it were not succesful.
Niche positioning not only offers benefits but some disadvantages may appear too.As it is expected, sales in mass merchandisers would decrease, and also retail sales would be less.
Precision as a mainstream product
Mainstream positioning would place emphasis on the Precision toothbrush as being the most appealing and effective toothbrush available on the market. So the main advantage of mainstream positioning is that in the super premium category, the Precision toothbrush would be the most superior product. Also, the succes of the Precision in the super premium category would increase name recognition for Colgate in general.
Using mainstream positioning some disadvantages may appear too. First, even though the Precision brush is attributed as superior, compared to other brushes, the prices of all brands would be equal. This will lead to more competition, so as a result there will be an increase to the prices. Also beacause of the popularity of the product one or more SKUs will be removed. Last but not least, mainstream positioning of Precision could lead to the other Colgate-Palmolives super premium product, Colgate Plus.

4.What would you recommend to Steinberg?Niche or mainstream?What other marketing mix recommendations would you make to Steinberg?

First of all,as seen in the clinical tests,Precision achieved a 35% in plaque removal than other toothbrushes and especially those of Oral-B we conclude that Precision can be considered as a niche product and should be adressed to therapeutic consumers.Precision should be differentiated from all CP'S product so far such as Colgate Plus and Colgate Classic and be positioned in the category of super-premium products with Oral B products(indicator and regular) as both its price($2.13 a premium over Oral-B products, the design and its ingredients are superior than those of Oral-B.Since none of Oral-B and other competitors have released so far new improved products, Precision would be the first new product to be positioned in the niche market. Perhaps when it reach the maturity level in around 2 years then CP can transfer Precision to mainstream market in order to add both the cosmetic and the uninvolved consumers to its target markets.
Another one recommendation that we would make for Steinberg ,despite the fact that it doesnt help that much the brand equity of the company,we would choose the name “Precision by Colgate” in order to avoid the cannibalization of Colgate Plus the professional product of CP.Babyboom generation (adults born at 1940-1960) as seen in the case are more sensitive in gum disease and probably they will be willing to pay an extra amount for a toothbrush with a 35% better results in this oral-care problem.Thus CP should focus their efforts in this generation.In the case we saw that the main reason that Oral-B is dominant in the super-premium sector is that it was considered “the dentist's toothbrush.CP should compete Oral-B in the professional dental office segment and use dentists for reinforcement and recognition as the opinion of an expert always is valid in establishing credibility.Again from the data of the case,due to the fact that medium-bristle toothbrushes'sales were declining 4% per year but soft and extra-soft bristle'sales were growing at 7% and 5% correspondingly, we would advise CP to focus on soft and extra-soft toothbrushes as they have the higher percentage of increase.Finally, competition is constantly growing and we can see from the exhibits that other rivals spend big amounts of money in advertising and promoting their new products such as Johnson&Johnson's media expenditure that reached the amound of $17.1 million with a heavy reliance on television commercials.The same way should be followed by CP who should focus very carefully on promoting the benefits of Precision toothbrush through commercials not only in television but also on the radio and newspapers and magazines.