Colgate-Palmolive:
The Precision Toothbrush
Strategic Marketing Case Analysis
Group 9
MBAEx 1/19 Aayush Kashyap
MBAEx 33/19 Kamalkant Goyal
MBAEx 39/19 Mahajan Aniket Shankar
MBAEx 43/19 Nishant Singh
MBAEx 44/19 Nitish Kumar
MBAEx 45/19 P S Anjana Namboodiri
MBAEx 60/19 Rohit Lal
MBAEx 78/19 Sumanth Raju Vysya Raju
MBAEx 86/19 Vikalp Bibhuti
Executive Summary – Sharpening Our Strategy
Colgate's Dilemma Strategic Options
Enter the booming "super-premium" toothbrush segment Position Precision as a niche premium product vs. a
with the new Precision brush or risk ceding ground. The mainstream offering. Niche targeting yields moderate
U.S. Oral care market ($2.9 Billion) is evolving, with share but protects margins and brand; mainstream
toothbrush accounting for 15.5% market and around promises volume but risks cannibalising Colgate's own
~21% annual growth in 1992. products.
Our Analysis Recommendation
The high-involvement "therapeutic" consumer segment Go with a focused niche launch. Leverage Precision's
(46% of adults) is willing to pay for superior gum care. technological edge and Colgate's brand to capture the
Precision's advanced design (35% more plaque removal) premium segment now, then consider scaling mainstream
fits their needs. Financial forecasts show a niche launch is once the product is established. This strategy maximises
less loss-making in Year 1, whereas a Mainstream launch long-term profit and minimises internal cannibalisation.
would be more profitable in Year 2
Industry Overview – A Market in
Transformation
Growing Market Consumer Trends
U.S. toothbrush sales ~$453M, rising Oral care awareness is rising –
~9% annually (1987–92) and spiking especially among ageing baby
+21% in value in 1992. Dollar growth boomers concerned with gum health.
outpaces unit growth as consumers Shoppers show higher involvement,
trade up to pricier brushes. replacing brushes more often and
paying extra for superior performance.
Segmentation Shift Competitive Intensity
A third tier, "Super-Premium," emerged The category is crowded and innovating
in the late '80s, focusing on advanced rapidly. 47 new toothbrush products
plaque removal and gum care. By early launched in 1991–92. Major players
'90s this segment commands ~35% of jumped into super-premium, with media
volume and ~46% of dollar sales, and promotion investments surging
fuelling industry growth. ~50% to grab consumer attention.
Colgate-Palmolive's Position – SWOT Highlights
Strengths Weaknesses
• Market leader in toothbrushes (23.3% U.S. volume share) • Portfolio gap in super-premium segment – fastest-growing category
• Trusted brand with extensive distribution • Reliance on mid-tier products (Plus) means Precision could
• Strong R&D yielded Precision's innovative design (angled bristles cannibalise internal sales
removing 35% more plaque) • Intense competition from Oral-B, P&G, etc.
• Strong reputation in oral care with existing Colgate Plus/Classic lines • Traditional retail channel strength must adapt as mass retailers gain
power
Opportunities Threats
• Rising consumer focus on therapeutic benefits (gum health) aligns • Competitors aggressively launching advanced brushes
with Precision's value proposition • Heavy marketing spend by rivals could spark price/promotion battles
• ~46% of adults prioritise gum care – a ripe target
• Cannibalisation of Colgate's own Plus and Classic lines
• Professional endorsements carry weight with consumers
• Supply shortages or lukewarm consumer response could hinder
• Potential to set new quality benchmark and charge premium prices momentum
STP Analysis – Segmenting, Targeting &
Positioning Precision
Segmentation Positioning
The toothbrush market divides into "Colgate Precision: The ultimate gum-
distinct groups: care toothbrush delivering
professional-level cleaning at home."
By Product Tier: Value (low-cost basic),
Professional (mid-range), and Super- We will position Precision as a
Premium (high-tech, therapeutic). premium, dentist-endorsed solution
that raises the bar for plaque removal
By Consumer Behaviour: High-
and gum health. Key positioning
involvement "Therapeutic" users (46%
elements:
of adults) vs. Low-involvement
"Routine" users. Therapeutic brushers • Superior efficacy (backed by R&D
are health-conscious, seek plaque/gum and clinical tests showing 35%
disease prevention, and invest in better plaque removal)
premium products. • Colgate brand trust
• Price that signals high quality while
Targeting delivering value
Colgate Precision will target the high-
involvement therapeutic segment within
the super-premium category. These
consumers (often adults 30–50+
concerned with gum health) are willing
to pay $2–3 for superior cleaning
performance.
Segmentation Analysis – Mapping the Market Landscape
Value Segment Professional Segment
24% of market by units ($109M sales) 41% of units ($186M)
• Low-priced, no-frills brushes • Mid-price brushes with design enhancements
• Price-sensitive consumers • Mainstream core of the market
• Low brand loyalty • Consumers seek balance of quality and price
• View toothbrush as basic commodity • Colgate's Plus is a key player here
Market Trends
Super-Premium Segment
Premiumisation is driving growth
35% of units (~$159M)
• 2% jump in unit sales but +21% in dollar sales
• High-end brushes with advanced technology
(1992)
• 35% of dollar sales due to higher prices
• Consumers trading up for better benefits
• Driven by consumers viewing brushes as
• Technical features now trump aesthetics
healthcare tools
• High-involvement buyers fuelling super-premium
• Colgate currently has no presence here
surge
Colgate's current coverage spans Value (Colgate Classic) and Professional (Colgate Plus) segments, capturing the #1 market share overall.
However, the company has zero presence in Super-Premium, where rivals like Oral-B are reaping profits. This gap leaves Colgate vulnerable
as Super-Premium grows. Precision is designed to close that gap.
Financial Projections – Niche vs. Mainstream Strategy
P/L Statement ($ Millions)
Niche Mainstream
Year 1
Revenue 18.65 53.68
COGS 8.58 26.75
Gross Profit 10.07 26.92
Operating Expenses 11.52 33.69
Cannibalization Impact 0.63 3.49
Net Profit (Loss) -2.08 -10.25
Year 2
Revenue 32.82 84.09
COGS 13.20 37.82
Gross Profit 19.62 46.27
Operating Expenses 12.15 30.27
Cannibalization Impact 0.98 4.94
Net Profit 6.49 11.06
Launch Options – Niche vs. Mainstream Strategy
Niche Launch (Premium Focus) Mainstream Launch (Broad Market)
• Target high-involvement "therapeutic" users focused on • Target all toothbrush buyers across segments
gum health • Position as new Colgate flagship for everyone ($ 2.49 retail)
• Position as specialised premium product ($ 2.89 retail) • Leverage Colgate name heavily for mass acceptance
• Emphasise unique technology and clinical superiority • High volume potential (10-20%+ share) but lower unit profit
• Lower volume (~5% market share Year 1) but higher margins • Severe cannibalisation (~60% from Plus/Classic)
• Limited cannibalisation (~35% of Precision sales from Plus) • Net profit over 2 years: ~ $ 0.81 M after cannibalisation
• Net profit over 2 years: ~$ 4.41 M after cannibalisation
Both strategies would introduce Precision to market, but with dramatically different financial outcomes. While
mainstream positioning offers higher potential volume, the cannibalisation impact makes it financially destructive
in Year 1. The niche approach is less loss-making in Year 1 while preserving Colgate's existing business. Whereas,
from Year 2, once the Capacity is expanded, it can diversify into Mainstream sector.
Recommendation – Precision as a Niche Premium Launch
We recommend launching Colgate Precision as a focused niche product, targeting the super-premium segment (therapeutic consumers) first.
This strategy best aligns with Colgate's strengths and market realities:
Superior Financials Strategic Alignment
The niche approach yields lesser losses ($ 2.08 M) in Year 1, This strategy effectively leverages Colgate's established expertise in
contrasting with a $ 10.25 M net loss from a mainstream approach. premium oral care and reinforces its credibility with dental
However, in Year 2 it should diversify in Mainstream. professionals.
Clear Consumer Demand Brand & Long-Term Value
There's a strong market signal: 46% of adults prioritize gum health, and This approach maintains a premium brand positioning and safeguards
77% of consumers found Precision much more effective during the existing Plus franchise, while also setting a solid foundation for
concept testing. potential market expansion in the future.
A niche launch allows Colgate to establish Precision as a premium brand before considering broader expansion. This phased approach protects
existing business while capturing the high-growth segment.
In summary, launching Precision as a niche product is the "go" decision that aligns with both market opportunity and prudent management of
Colgate's brand portfolio.
Precision Marketing Mix – Crafting the 4 Ps
1 2
Product Price
"The Precision Toothbrush" features a unique triple-length bristle design and Premium pricing strategy to reflect superior value: $ 2.89 MSRP
ergonomic head, proven to remove 35% more plaque than leading
• Healthy margin for Colgate ($ 0.87 per unit)
competitors.
• ~40% margin for retailers, in line with other super-premium products
• Quality cues: soft rubberised grip, premium packaging highlighting
clinical results • Limited couponing initially to protect premium image
• Educational brochure on proper brushing/gum care included • Value-added promotions (e.g., free Colgate Total sample) rather than price cuts
• Distinct branding to avoid overlap with Colgate Plus (different colour scheme)
3 4
Place (Distribution) Promotion
Focused channel strategy targeting high-involvement consumers: Educational marketing emphasising technical superiority:
• Drugstores and supermarkets (60% of initial volume) • TV/print ads showing unique bristles with before/after plaque removal visuals
• Dental offices (23% as samples/recommendations) • Professional endorsements from dentists and periodontists
• Eye-level shelf placement between Colgate Plus and Oral-B • Value-added promotions rather than deep discounts
• Delay heavy push into mass merchandisers (Walmart, Target) to avoid • Sampling through dental offices and direct mail to loyal customers
price pressure • Informative, empowering tone making consumers feel smart about
investing in better oral care
Blue Ocean Lens – Is Precision Charting New Waters?
Value Innovation Elements Red Ocean Reality
Colgate Precision introduces a leap in performance that could redefine The super-premium space won't remain uncontested:
consumer expectations: • Oral-B, J&J, P&G already launching high-end brushes
• Focuses on gum health efficacy (previously underemphasised) • Competitors can add similar bristle technology
• Creates new value for people with heightened oral health concerns • Dental endorsements available to multiple brands
• Raises standard of plaque removal (35% improvement) • Intense competition over similar value factors
• New value proposition: "advanced gum care at home"
Verdict: Partially Blue, Largely Red
In theory, this could be a "blue ocean" play, attracting consumers willing to pay
more for health benefits rather than competing solely on price or minor design Precision seeks differentiation on therapeutic outcome vs. price, but given rivals'
differences. simultaneous moves, success requires continuous innovation to keep
Precision's value curve distinct from competitors.
Risks & Mitigations – Staying on Our Toes
Cannibalisation of Colgate Plus/Classic
1 Precision's success could come at the expense of our own mid-tier products.
Mitigation: Carefully differentiate positioning (therapeutic gum care vs. general cleaning). Monitor Plus sales monthly; if cannibalisation exceeds expected
35%, adjust marketing to emphasise Precision as "special use." Stagger promotional campaigns for different lines.
Competitive Response
2 Rivals will increase ad spend, cut prices, or launch innovations to outshine Precision.
Mitigation: Sustain differentiation through ongoing R&D and clinical testing. Invest in exclusive partnerships (e.g., American Dental Association
endorsement). Bundle products instead of cutting prices. Maintain flexible marketing budget to counter competitor campaigns.
Supply Chain Constraints
3 Even in niche launch, demand exceeding forecast could strain manufacturing.
Mitigation: Ramp up production cautiously, engage external manufacturers if needed, build buffer inventory pre-launch, and coordinate closely with retailers
on restocking needs.
Retailer Acceptance
4 Retail buyers might be skeptical or demand high slotting fees for shelf space.
Mitigation: Present Precision as a profit opportunity with attractive 26% margins. Support sell-through with strong marketing. Offer promotional allowances
for in-store displays and sampling programs.
Consumer Adoption Risk
5 If consumers don't perceive a difference, Precision might stagnate at its high price.
Mitigation: Focus on education and trial. Visually demonstrate superiority (plaque disclosure tests in ads). Leverage early adopter reviews. Offer money-back
guarantees to reduce trial barriers.
Go / No-Go Decision – GO for Launch and Next Steps
Decision: GO
We green-light the launch of Colgate Precision as a niche super-premium Key Next Steps
product. Not launching would forfeit Colgate's opportunity in a segment
comprising nearly half of category value. To maintain leadership in oral care, Finalise Product & Branding 1
Colgate must participate in the high-end segment. Complete production of initial stock.
Finalise packaging with clear "35%
Launch Timeline
more plaque removal" messaging. 2 Internal Alignment
Target launch in Q1 1993 (to ride wave of rising oral care awareness). Initial Fine-tune branding to minimise
shipments to hit top drugstore and grocery accounts first, with full marketing cannibalisation confusion. Train sales force on benefits
rollout by March. and retailer objection handling.
Prepare customer service for
Trade Agreements 3 consumer questions post-
Secure premium shelf space and launch.
negotiate introductory
promotions. Emphasise category 4 Marketing Launch
expansion potential.
Initiate advertising campaign
and dentist outreach. Host CE
Monitor & Adapt 5 seminars for dental
professionals. Deploy
Establish "Precision Task Force"
consumer ad creatives.
to track sales, stock levels, and
competitor reactions. Evaluate
mainstream expansion after 12
months.
Appendix – Data & Exhibits
Exhibit 1: Market Segmentation Exhibit 3: Financial Projections Niche vs Mainstream (2-Year)
U.S. Retail Toothbrush Market Breakdown:
Value Segment 24% of unit volume $ 108.7M sales
Professional 41% of unit volume $ 185.7M sales
Segment
Super-Premium 35% of unit volume $ 158.6M sales
Segment
Total market size ≈ $ 453M annually
Exhibit 2: Super-Premium Launches 1991-92
• Reach Advanced Design (J&J, 1991)
• Oral-B Indicator (Gillette's Oral-B, Jul 1991)
• Aquafresh Flex (SmithKline, Aug 1991) All figures in $ Millions
• Crest Complete (P&G, Sep 1992)
