Colgate Palmolive Company ¡V The Precision Toothbrush
1. The toothbrush market was divided into three segments: super-premium, professional, and value brushes. The retail prices for each segment by 1992 were as follows:
?X Super-premium ¡V between $2.29 and $2.89
?X Professional ¡V between $1.59 and $2.09
?X Value ¡V averaged at $1.29
By 1992, super-premium brushes accounted for 35% of unit volume and 46% of dollar sales. Professional brushes accounted for 41% and 42%, and value brushes accounted for 24% and 12% respectively. Three companies dominated the U.S. toothbrush market: Colgate-Palmolive, Johnson & Johnson, and Oral-B.
2. Mainstream Positioning
The objective of positioning Precision as a mainstream brush was to broaden the appeal of being the most effective brush available on the market. Precision¡¦s price would be at parity with Oral-B regular and Aquafresh Flex at $1.85 (Exhibit 4). This raised concerns about possible cannibalization of Colgate Plus and inadequate supply of the product. Inadequate supply could create the perception of a ¡§hot¡¨ product but some executives thought shortage should be avoided if possible. CP would plan for an 80% increase in 1993 for advertising and promotion, with 75% of all advertising dollars assigned to Precision and 25% to Plus. This could be costly for profits and may increase cannibalization. Mainly mass merchandisers and club stores would carry the brush (24% retail toothbrush sales). Positioning Precision as a mainstream product with an existing 7 SKUs may result in dropping one or more existing SKUs, such as children¡¦s brush from the Plus line.
Niche Positioning
Precision was developed with the objective of creating the best brush possible ...