Colgate-Palmolive Case Study Colgate-Palmolive Company: The Precision

Colgate-Palmolive Case Study

Colgate-Palmolive Company: The Precision Toothbrush

The intent of this analysis is to evaluate the current promotional strategies, integrating marketing communications (IMC) strategies for the Colgate-Palmolive Precision toothbrush. Recommendations for a promotion and IMC-based strategy for the company are provided in addition to support for the specific decision. In 1992, Colgate-Palmolive faced the decision of positioning their latest generation toothbrush as mainstream, niche, or super-premium. Compounding this decision of which market position to address with the product, the "Precision by Colgate' brand messaging was being heavily favored. The messaging of precision and accuracy that "Precision by Colgate" illustrated was consistent with empowering a brand with positive, intangible value (Vigneron, Johnson, 1999). Colgate Precision was also considered, as this branding also conveyed the same value and positive, intangible attributes as the first one.

Analysis

The design criterion and consumer tests provided a wealth of statistics and quantified insights that served as the knowledgebase Colgate-Palmolive based their decision. The current promotional and IMC strategies were specifically based on these insights gained. Of particular interest in these findings is that 55% of consumers found the Precision model significantly different than any other toothbrush they had used before, and 77% claimed it was more effective. Studies also showed that the Precision could potentially dominate shelf-space due to its unique design and series of differentiated features. Additional studies indicated that the Triple Action aspects of the brush would remove 100% more plaque than any other competitor at the gum line and between teeth. This specific strength of the Precision aligned with the attributes most critical to consumers who had a high bias for healthcare-related products, specifically focusing on preventative maintenance (Othman, Yap, 2011). Countering all these benefits was the fact that 82% of all toothbrush purchases were unplanned and that promotions, industry association endorsements from the ADA and other organizations and intensive in-store displays continue to dominate the IMC landscape of this industry (Sikdar, Vel, 2010). Based on an analysis of the case, IMC strategies have overtaken branding to an extent in defining market positioning and role in a retailer's product line. Clearly if a brand emerges with a strong enough unique value proposition, it can dominate past the promotional strategies and IMC-based programs. That is the core challenge of this case.

The first of two strategies is to concentrate on making the Precision a very high-end, super-premium toothbrush. From the case study it has been projected this strategy will generate a 35% volume share and a 46% value share. The brand value of this strategy concentrates on reducing gum diseases and attaining a level of precision in preventative healthcare, which is a critical factor for the most health-conscious consumers of personal care products (Schultz, 2004).

The second option is to position the Precision as a mainstream, professional product. This strategy is expected to deliver a 41% volume share and 42% value share and 80% of the sales will be generated through dentists and also through drug stores and supermarkets. This strategy appeals to the issue of convenience and quality at a competitive price, a key buying criterion for the mainstream market (Othman, Yap, 2011). This strategy is expected to generate a far greater level of market share, netting out 10% in sales by 1993, growing to 14.7% in 1994. It will also result in a lower average retail price of between $1.59 and $2.09 and a factory price of $1.85, compared to the premium market positioning which will generates $2.13 per unit. The MIC strategies vary in terms of their effectiveness in attaining a higher level of profitability than these figures suggest, which means that over time gross margins will be increasingly difficult to earn on either product.

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