Colgate
Key recommendations conclude in this case study are as follow Target therapeutic and cosmetic consumers Position Precision in the super-premium segment and reposition to the mainstream market during its maturity Emphasize on professional endorsement Environmental Analysis SOOT Analysts Strengths Colgate-Palmolive (CAP) Is the global leader In oral care products and its great reputation among the household and personal care products arena. Based on the statistics In the case study, CAP has successfully reached Its International markets and set up manufacturing faceless overseas which contributed direct sales and profits to the company. O The Precision toothbrush was a technical Innovation supported by CAPS extensive R&D department, Marketing department, dental professionals and outside consultants (John Squelch, 1993). O CAPS developed worldwide manufacturing facilities and established a good relationship with its partners. Cop’s ointment in R also provides the Precision toothbrush with a strong innovative design suit.
The product is also proven to be more effective in removing plaque than existing brands specially Reach and Oral-B. Cohn Squelch, 1993) CAP could use the design aspects as strength to improve the existing “professional” toothbrush lines. O CAPS current retail advertising features and In-store displays have been attributed to the Increase In toothbrush sales. O CAP has a large number of product lines and Is targeting a broad spectrum of market segments. Weaknesses o Previously, CAPS media expenditure has been Limited compared to Its key rivals such as Reach and Oral-B.
O There is quite a fierce competition in super-premium segment.
As stated in the case study, Precision was seeking professional dental endorsement so as to establish the credibility of the new product; however, Oral-B has already been well-known for such a tactic. Opportunities o There is an increasing need in the market of premium toothbrush. O Baby boomers and younger generations are becoming more concerned with the health of their gums, they will be willing to pay more money for toothbrushes that are optimized for better gum care. O Super-premium segment accounts for 35% of the illume and 46% of the dollar sales of toothbrushes, which shows that this niche category may result In a substantial profit.
John Squelch, 1993) o The product Itself Is a technological breakthrough in the industry. CAPS constant innovation provides an purchase toothbrushes unplanned. Noon Squelch, 1993) Threats o The super-premium toothbrush market is highly competitive, hosting many brands and private label toothbrushes. CAP may lose its market share if any existing rivals or new competitors create a toothbrush with better design technology but lower costs o Colgate-Palmolive depends on its supplier Anchor toothbrush for its outsourced manufacturing.
Hence, Anchor toothbrush has a decided supplier advantage in the relationship with Colgate-Palmolive.
Lot doesn’t cost too much for consumers to switch from one oral care brand to another. Competitors Analysis Key competitors of Precision in super-premium toothbrush market are Indicator (Abroad-B), Reach Monsoon&Johnson), Crest Complete (Proctor&Gamble) and Aquifers Flex (Smithies Beseech). The following chart shows where Precision is positioned. Target Consumers Precision should be targeting “involved oral health consumers”, both therapeutic and cosmetic brusher.
This population is fueled by a large number of baby boomers who are more concerned with healthier gums than the whiteness of teeth, therefore, willing to pay more for a superior toothbrush that would protect their gums against disease.
Positioning Strategy – From Niche Market to Mass Market Precision should be entering the super-premium niche market and moving to the mass market when the super-premium market share is invaded by existing or new competitors in the future.
CAP could also consider develop new product to remain in the category. Precision is inherently designed and developed to be the best toothbrush possible and placed in the super-premium category CAP would be able to charge premium price if they were to enter the niche market. With this type of positioning, a 15% increase in price above Oral-B regular would be anticipated, bringing the cost to consumers to $2. 13 per unit. A mainstream market could only be anticipated to pay $1.
85, in accordance with the Oral-B regular line.
Noon Squelch, 1993) To offer Precision in the niche market allows CAP for a more specific, concentrated promotion tactics within the relatively small promotion budgets so as to reach the specific population more effectively. Additionally, to keep Precision as a specialized product means that the new product is less likely to invade the market share of other Colgate-Palmolive products, like the Colgate Plus. This would also preserve the number of SKU that Colgate-Palmolive currently produces in the toothbrush sector. The greatest issue CAP were to face if you entered the mass market is that Precision would be distributed through the same channels as Colgate Plus, Noon Squelch, 1993), and consequently may potentially cause cannibalize the sales of Colgate Plus.
Recommendation CAP should position Precision in the super-premium segment specifically tailored to hermeneutic and cosmetic brusher CAP should be promoted as a technology breakthrough in the industry and shall be promoted strictly to create awareness in its introduction stage CAP should position the Precision as a niche market product at its introductory and growth life cycle stages.
When the product reaches its maturity, CAP product to remain in the super-premium segment Precision shall consider seeking for professional dental endorsement to reinforce its image as a higher- quality product.
