Current pricing strategy and product positioning analysis of Colgate-Palmolive toothbrush and toothpaste

Colgate Palmolive's toothpaste and toothbrush business is a mature market in most countries, with limited growth prospects. The company is positioned at the high end of the market with its flagship Colgate lines, and this positioning is supported by extensive marketing campaigns aimed at bolstering the brand. The company has responded to this by focusing its efforts on growth in emerging markets. Naydenov (2012) notes that the company derives over 50% of its sales from emerging markets. By focusing on spending increases in marketing, the company has been able to extend its share in regions like India where it has a 54.5% share (Vijayraghavan, 2012). The company generates 28% of its sales volume from Latin America, 21% from Asia/Africa and only 18% in North America. Both the Latin American and Asia/Africa markets are experiencing strong growth as more consumers are able to afford not only dental care but higher end toothpaste like Colgate. The company's market share in Latin America is 79.3% and it has a 34.6% share in China. The company is the market leader in Brazil, China, India and Russia. Colgate is therefore the global market leader in home dental care, a market that is estimated to be worth $12.6 billion worldwide and growing (GIA, 2010).

The Colgate brand functions as a family of home dental care, with Colgate producing both toothpaste and toothbrushes. The company competes again Procter & Gambler (Crest, Oral B) and against local brands. Colgate utilizes local flavors in order to appeal to local markets. It also competes on the basis of technological innovation. For example, new developments in toothpaste technology have addressed the issue of sensitivity and have even promoted tooth re-growth (GIA, 2010).

Colgate's pricing strategy focuses on supporting the idea that the company's products are superior. Colgate's products are priced at the high end of the market, to convey the idea that they are more technologically advanced and sophisticated, especially relative to local brands. Colgate also believes that this pricing strategy resonates well with consumers. The market is growing around the world as there is a growing knowledge of dental health issues around the world, and the premium positioning helps support the idea that one should seek to provide the best dental care possible for one's family.

Colgate does, however, seek to ensure that its products are affordable for middle class consumers, even in the developing world. This pricing strategy is essentially designed to maximize the quantity of units sold, as the company seeks to build both brand loyalty and economies of scale (NetMBA, 2010). This strategy is more effective in markets where consumers value dental care, however.