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Group 10 Colgate Case Analysis

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36 views3 pages

Group 10 Colgate Case Analysis

Uploaded by

mansha
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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MARKETING

ASSIGNMENT 2

COLGATE PALMOLIVE:
PRECISION TOOTHBRUSH
PREPARED BY: GROUP 10, SECTION H
ARSHIT SHETTY - 2023PGP064
KRISHNA PRASAD DEEKONDA - 2023PGP096
MANSHA BAIRIGANAJN - 2023PGP194
SUDEEP SHAW - 2023PGP365
MITALI DOSHI - 2023PGPH040
PROBLEM STATEMENT

-Positioning of the new product ‘Precision Toothbrush’ of CP among the highly competitive
market.
-Branding and introducing the product as ‘Niche’ or ‘Mainstream’ product.

-Budget for advertising and promotion amongst other CP toothbrushes not cannibalizing the

existing mainstream brand ‘Colgate Plus’ which is the bread and butter.
-Pricing of the new Precision Toothbrush

-Resistance from colleagues particularly Colgate Plus Manager for higher focus on promotion of
Precision instead of Colgate Plus.
- High cost for promotion via coupons and discounts for the mainstream positioning strategy of
Precision.

CAUSES OF PROBLEM

-The debate was about launching Precision as niche or mainstream. Consumer preferences shifted
from aesthetics to gum and cavity protection, driven by the baby boom generation. With 82% of
toothbrush purchases being spontaneous and price not a concern, competition increased from
P&G, Unilever, Nestle's Loreal, Henkel, Kao, and Oral-B. Positioning a new product in this
crowded super-premium market was challenging.

-The debate focused on launching Precision as niche (3-5% market share, 28M sales) or
mainstream (10-14.7% market share, 85.9M sales). Existing production capacity constraints could
lead to supply shortages alongside current products.

- CP's budget dispute centered on advertising distribution: 75% for Precision, 25% for Plus. Plus's
manager opposed this, fearing a hit to its competitive position with a reduced budget despite its
substantial revenue contribution.

-Depending on launching of Precision as niche or mainstream product the price had to be


determined with sufficient profit margin.

- Internal conflict among product managers for greater mainstream positioning among Precision
and Plus as Plus’s product manager feared there might be internal competition among products of
same company and trade deals such as discounts cannot support two Colgate brushes at the same
time.

DECISION CRITERIA AND SOLUTION ALTERNATIVES

The solution alternatives are:


-Product launch- Niche v/s Mainstream
-Name launch- Colgate Precision v/s Precision by Colgate
RECOMMENDED SOLUTION

The recommended strategy for Colgate-Palmolive (CP) involves the phased launch of its unique
product, the Precision toothbrush. Initially, CP should introduce it as a niche, super-premium
product for therapeutic consumers. After building a stock of Precision toothbrushes, they should
transition it to the mainstream, professional market, targeting cosmetic and uninvolved consumers.
This two-level approach aims to maximize CP's reach across different market segments.

To optimize sales, CP should price the Precision slightly higher than the Oral-B Indicator
toothbrush (between $2.65 - $2.89) during the initial launch and then lower the price to no less
than $1.75 when moving it to the mainstream market. Launching it under the name "Precision by
Colgate" will prevent cannibalization of the flagship Plus model.

Educating the public about the risks of gum disease should be a priority, targeting the health-
conscious American baby boomers. Seeking accreditation from the American Dental Association
(ADA) would enhance credibility and potentially divert sales from Oral-B.

Additional promotional strategies include offering coupons, bundling with toothpaste, and a dentist
sampling program with a "satisfaction guaranteed" refund offer after six months of use. This
comprehensive plan, emphasizing effectiveness against gum disease and professional
endorsements, aims for success in the oral health care industry.

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