Colgate – Palmolive Company: The Precision Toothbrush
MARKETING MANAGEMENTCOLGATE -PALMOLIVE COMPANY: THE PRECISION TOOTHBRUSHAn AnalysisBy Group3 (CCBMDO 12): Instructor:Anurag, Amit, Anjali, Shashank, Inderjeet Professor Aditya Billore[pic 1]ANALYSIS1. Analysis from Company point of view : Considering the fact that CP is quickly gaining up in the market and is holds the first position in tooth Brush market. Firstly, The company is relatively new to the super-premium segment, so the name i.e. “Precision” should rather lay more stress on the brand name to use the present brand value which is considered as trustworthy and credible. Secondly, The problem perceived in launching of the product as mainstream/line extension product can result in stocking out costs in 1993. Therefore, the precision should initially be launched as the Niche product and then should be shifted to a mainstream product when sufficient quantity of Precision has been built/stocked up.2. Choice of Channel : As per Table C entering into a mainstream positioning strategy will mean that 8MM unit supplies through professionals and 3MM with niche category. Presently, the Oral-B is regarded as leader in the professional market. CPs lacks in this front and does not have strong network among Dentists. The company if introduces precision through dentists and aimed as a niche product then company will have advantage to launch it more aggressively in the mainstream once the product has been stamped.
3. Market Analysis: It is quite evident from Exhibit 3, that the consumers are increasingly choosing the tooth brush based on their personnel needs, and Exhibit 17 clearly indicates that they are not so much price sensitive. Therefore, it ideally suits CP to launch Precision as the niche product with higher price. Also, the cosmetic brushers who will be using CPs two products will react positively once it is launched in mainstream market afterwards, with the clear benefits that it offers. Also, both the therapeutic and cosmetic brushers use super-premium and professional toothbrushes, considering it, CP should ideally go with the name “Colgate Precision” to target super-premium segment.4. Competition Penetration: CP precision has unique technical point of having three different length bristles. the company should use this differentiation to enter the niche market (super premium category) so that it can overpower the present leader i.e. Oral B.5. Financial/Profit analysis. Niche Product (in$)Mainstream Product(in $)Manufacturing Cost/unit 0.660.64Ist year total manufacturing cost8.58 million(13 million brushes)26.88 million(42 million brushes)Cost to Company(Deduct capital expenditure and other costs)23.35 million69.68 millionSales8 million brushes26.8 million brushesSecond year Income30.3 million77.62 millionSimilarly, at the end of 5 year Profits earned11.1411.18