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Colgate Palmolive Essay

2138 words - 9 pages

Colgate Palmolive (CP), an extremely respected player in the U.S. Oral Care market, has spent several years developing a toothbrush that is technologically superior to all competitors presently available. However, the question remains as to whether CP should launch this toothbrush as a niche product or a mainstream brand. After considering many different variables, including a Profit and Loss forecast for both scenarios, we recommend that CP launch the Precision Toothbrush as a niche product. We support this recommendation with the following analysis of the toothbrush market and CP’s position within that market.
In the U.S. Oral Care Market, a market that commands 2.9 billion dollars ...view middle of the document...

There are currently three classes of toothbrushes from which the consumer can choose. They are Super-Premium, Professional, and Value toothbrushes. CP currently offers toothbrushes in both the Value segment (Colgate Classic) and the Professional segment (Colgate Plus) and is in a leadership position in both segments. The Super-Premium segment is the fastest growing product segment which currently makes up for a 35% market share by volume and 46% share by revenue. This segment is representative of a consumer class which is more concerned to the health of their gums and is willing to pay a premium price for a superior product. CP currently does not have any offering in this product segment however with the launch of Precision and a positioning as a Niche product would help CP gain important market share based on its technological superiority over the leading brand.
The toothbrush consumer market is also segmented with regards to consumers and their varying focus on oral hygiene and health. The market is primarily segmented into three different categories: the therapeutic brushers, cosmetic brushers and the uninvolved oral health consumers. CP currently is in a leadership position in two consumer categories which overall represent a 54% of the consumer market, however, CP is under-represented in the largest consumer category of therapeutic buyers, where it as a third of the market penetration. Positioning Precision as a niche product in this segment would help CP improve its market share and also charge a premium over the leading brand since the consumer in this category are able to differentiate between products and are willing to pay premium price for a better product. Positioning CP as a mainstream brand on the other hand could possibly improve CP’s market share in the therapeutic consumer group however its market positioning in two other categories would be severely impacted by the potential cannibalization of the leading CP’s brands in these categories.
Cannibalization of other CP family products should be a very important consideration while making a decision on the branding of Precision. One of the goals of CP’s executive management team should be to minimize the possibility of cannibalization. One way in which this team could succeed is making sure that Precision is properly packaged. We suggest that the Precision label appear quite large and be the major focus of the eye on the packaging. The Colgate brand name should be visible on the packaging, but it should not be the main focus of the consumer. Our goal is to maximize sales of the Precision line, but we want to be sure that CP is drawing new consumers from other brands, such as Oral-B, instead of drawing consumers from their other product lines.
The focus of CP’s marketing strategy for Precision as a niche product should be on Therapeutic Brushers. These consumers represent the fastest growing market segment and are more conscientious of their oral health with...

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