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Colgate-Palmolive Case Essay

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The Colgate-Palmolive Case
At the time Colgate-Palmolive was planning to launch the new toothbrush Precision, there were many toothbrush brands and types in the market. Major competitor brands in the super-premium segment that the new toothbrush Precision targeted included Oral-B, Reach Advanced Design, Crest Complete, and Aquafresh Flex. Oral-B had been the market leader since 1960s. Until 1991, the toothbrush category consisted of two segments: value and professional. Prior to 1990s toothbrush industry growth rates were single digits, but the profit margin was high in this business so the companies started to release more and more products every year. In 1992, 47 new products/line extensions were released. This led to a big growth of value and volume in the industry. Before 1992 CP had 2 types of toothbrushes; Colgate Classic was in the value segment and Colgate Plus was in the professional segment. The market share and volume of Classic were decreasing and Plus’ were increasing. In 1991 CP controlled 16% of the toothbrush market and toothbrushes represented 19% of CP’s overall Oral Care Division sales. In 1991, CP became the market leader the market leader with 23% of all retail toothbrush sales. The researches showed that there were mainly 3 consumer segments of toothbrush and toothpaste users: therapeutic brushers (46% of adults), cosmetic brushers (21% of adults) and 33% of adults were uninvolved oral health consumers. Therapeutic brushers differentiate among products, search out functionally effective products, 85% of them brushes twice a day, major brands they used were Oral-B followed by Colgate and Reach. Cosmetic brushers search for products that deliver cosmetic benefits, 85% brush twice a day, major brands they used are Colgate Classic and Oral-B Regular. Uninvolved customers view products as the same, 20% of them brushes once a day or less, major brands are Colgate Classic and Oral-B Regular. When the consumers were asked the biggest reasons for...

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