Essay About Colgate-Palmolive Case And Precision Toothbrush

Colgate-Palmolive Case – Marketing Plan
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Kim Pauszek
Colgate-Palmolive Case-Marketing Plan
I. Executive Summary
A. Summary of situation analysis
The Colgate-Palmolive case involves the Precision toothbrush, which was
entered into the market in 1993 by Colgate-Palmolive. This marketing plan
summarizes the companys situation at the time the Precision toothbrush was
introduced, and the different marketing strategies that we believe would be
best for Colgate-Palmolive and their new toothbrush.
B. Summary of marketing strategies
The marketing strategies include proposed strategies involving product,
price, place, and promotion.
C. Budget summary
Included in the marketing plan are pro-forma income statements for
Colgate Palmolive if they were to launch the product, and also if they were to
choose not the launch the product. Also included is an advertising budget.
II. Situation Analysis
A. The Industry
1. Definition of industry
The purpose and main focus of the oral health care industry is to prevent
teeth and gum diseases and to deliver cosmetic benefits. Examples of
products in this industry include toothbrushes, toothpaste, dental floss, and
mouth rinses.
2. History of Industry
Toothbrushes first evolved in 3000 B.C., and advancements have
continued ever since. Such advancements include the head shape, size,
flexibility, bristle texture and type, color, and angled handles. Companies,
other than Colgate-Palmolive, that have entered into the toothbrush market
include Oral-B, owned by Gillete, Johnson and Johnson, Procter and Gamble,
Smithkline Beecham, Lever, Pfizer, and Sunstar.
3. Growth Patterns
Consumers first purchased toothbrushes without much knowledge or
information concerning the products benefits. As new product development
increased, and consumers became better informed about the benefits of
toothbrushes, they began to focus their interest not only on cavity prevention,
but also on the health of their gums, their oral hygiene, and their cosmetic
appearance. Because consumer interest and toothbrush purchases began to
increase, advertising and promotion also began to increase, which lead to the
development and addition of the super-premium product class. The superpremium
product class was a “sub-category of toothbrushes partly offset by
downward pressure on average retail prices in mass-merchandiser channels,”
(Harvard). Consumers began to purchase toothbrushes based on the specific
benefits each toothbrush and company had to offer.
B. The Company
1. Brief History
The Colgate-Palmolive Company was founded in 1806 by William
Colgate. The company first began by centering their production around soaps,
perfumes, and candles. They began introducing oral health care products to
the market in 1873, by producing “its first toothpaste, an aromatic dental
cream sold in jars” (Colgate-Palmolive, 1 of 3). By 1991, Colgate-Palmolive
had become the leader in not only household products but also in oral health.
2. Size, growth, profitability
By the early 1990s there were many different companies that focused on
oral care products, with the leader being Colgate-Palmolive. By 1991,
Colgate-Palmolive held the number one position in the world for the sale of
oral care products, accounting for 19% of the worlds toothbrush market. The
companys sales and profits were increasing each year, and by 1991 sales
totaled “1.03 billion dollars, while profits totaled 9.8 million dollars,”
(Harvard). At this point in time Colgate had introduced two different types of
toothbrushes to the market, the Colgate Classic and the Colgate Plus.
C. The Product
1. Development and history
The product in which this marketing plan focuses around is the Precision
toothbrush. Production began in 1989 when the company put together a
research team whose purpose was aimed at testing the design of the
toothbrush, how the company would market the product, and how the
company would gain a competitive advantage over others. ColgatePalmolives
mission was to “develop a superior, technical, plaque-removing
device” (Harvard).
Colgate-Palmolive referred to the toothbrush as a “technical innovation,
[because] researchers used infrared motion analysis to track consumers
brushing movements and consequent levels of plaque removal” (Harvard). By
studying