Introduction:
The Colgate-Palmolive Company (CP.Co) is poised to launch a new toothbrush in the United States, tentatively called, “Colgate Precision Toothbrush”. The Cp’s Oral Care Division has developed Colgate Precision after three years of intensive research but now face a significant market competition with substantial new product activity. Ms.Susan Steinberg, CP’s Precision Product Manager is responsible to determine the appropriate marketing mix and recommend positioning, branding and communication strategies to division manager Nigel Burton.
Synopsis:
Colgate-Palmolive is the global leader in household and personal care products with 1991 sales of $6.06 billion and a gross profit of $2.76 billion. The company had an expenditure of $114 million in R & D and total of $428 million on media advertising. During this period, it held 43% of the world toothpaste market and 16% of the world toothbrush market. Since 1985, the company’s gross margin climbed from 39% to 45% while annual volume growth since 1986 had averaged 5%. In 1991, although international sales remained CP’s strong suit, the company faced tough competition from P&G, Kao, Unilever, Nestlé’s L’Oreal Division and Henkel of Germany.
In the United States, toothbrushes accounted for 15.5% of $2.9 billion in retail sales of oral care products. CP held the number one position in the U.S retail sales with a 23% volume share (Toothbrushes represented 19% of CP’s oral care and profits). In order to boost its sales, CP had instituted a five year plan for 1991 to 1995 that emphasized new product launches and entry into new geographic markets accompanied by improved efficiencies in manufacturing and distribution arenas.
Increased advertising and Promotion of toothbrushes enhanced the catego ...