Section C Group 8
Company Background:
Colgate – Palmolive (CP) was a global leader in household and personal care products. It held
43% of the world toothpaste market, 16% of the world toothpaste market along with dental
floss and mouth rinses. CP offered two lines of toothbrush – the Colgate Classic and Colgate
Plus. Colgate Class was positioned in value segment while Colgate Plus was positioned in the
professional segment.
Brand Positioning:
The positioning of a brand is called the brand’s value proposition which is the combination of
benefits on which a brand is differentiated and positioned. It is the answer to the customer’s
question “Why should I buy your brand?” The five winning value propositions are:
1. More for more: Precision is the product of CP which falls in this category of positioning.
In initial test, it achieved an average 35% of plaque removal as compared to Reach and
Oral-B. If we sell Precision under niche positioning strategy, it would be factory list
priced to the trade of $2.13, a premium over Oral-B regular and at parity with Oral-B
indicator.
2. More for the same: Precision costs almost same as Oral-B and Aquafresh Flex but gives
the premium features in comparison to them.
3. The same for less: In comparison with Oral-B Regular which costs around $2.51,
Colgate Plus gives the more or less same benefits at around $2.00.
4. Less for much less: With less price of around $1.22, Colgate Classics meets consumer’s
lower performance or quality requirements at a much lower price. It is the cheapest
available product in the market for customers.
5. More for less: The factory listed price in mainstream category of Precision would be
around $1.85, which is at parity with Oral-B Regular and much lesser than Oral-B
Indicator.
Branding:
The company has conducted the survey to choose the best name for their product. The tested
names included Colgate Precision, Colgate System III, Colgate Advantage, Colgate 1.2.3,
Colgate Contour, Colgate Sensation, and Colgate Probe. The result favoured Colgate Precision
by 49% of concept acceptors and appealing by 31%.
Out of ‘Colgate Precision’ and ‘Precision by Colgate’, we consider ‘Colgate Precision’ to be
more appealing.
• It emphasizes the company name prior to the brand name.
• As it is the new product in the market, the company name in the beginning will help in
gaining the customer’s trust.
Promotion and Advertisement:
In 1991, on the scale of thousand $, CP spent $8761 on media promotion (43% of total
advertising and promotion), it also spent $5286 on consumer promotions (26% of total
advertising and promotion) and $6287 on trade promotions (31% of total advertising and
promotion). The total cost of CP’s advertising and promotion was $20334, and they are
planning to increase by around 18% for next year along with introducing Colgate Precision.
When Colgate toothbrush were combined with toothpaste in a single display, the toothbrush
sale by increased by 170%. AS compared to Johnson & Johnson, who spent $8 million in media
to introduce its new Reach toothbrush, Oral-B spend $10 million to launch its Indicator
toothbrush and Procter and Gamble was expected to support its Crest Complete toothbrush
