Colgate-Palmolive Digital Media Marketing & Branding Essay Example

can the industry be broken down by price models (super-premium, professional, and value), it can broken down a second time into niche and mainstream offerings. Consumers of this industry can be sorted into three categories: therapeutic, cosmetic, and uninvolved.

Competitive Analysis

One promising conclusion that can be drawn from the competitive analysis is that every company has been caught off guard by the change in consumer behavior, emergence of new technology, and introduction of new players entering the playing field.

For example, in 1988, Johnson & Johnson introduced “new brush technology” only to phase it out by 1992. In order to get an edge, competitors, Johnson & Johnson, Oral-B, Procter & Gamble, and Smithkline Beecham (latter two are new competitors), are offering promotions in the form of coupons, mail-in refunds, and bundles.

Environmental Analysis Strengths

With 43% of the global toothpaste market and 16% of the global toothbrush market, CP has defined itself a leader of household and personal are products worldwide, and positioned itself as the number one retailer of toothbrush products in the United States.

CP utilizes a cutting-edge infrared motion analysis and technique to measure exact levels of plaque removed by its products in consumer tests. CP’s Triple Action head removes 35% more surface plaque and 100% more gum line and in-between teeth plaque than its competitors’ products. As a company with years of experience, CP has formed a strong relationship with subcontracting manufacturer, Anchor Brush.

It has also put together a task force of research & development, marketing experts, dental professionals, and outside consultants. Because of its good standing relationship with retail stores, it is able to position its products on the middle shelf, right between its competitors,

Reach and Oral-B. Weaknesses Although industry players are manufacturing products to improve oral health, it has been difficult to educated consumers of the importance of preventing gum disease (which is a common motivator to improve dental care habits).

One major advantage that the competitor, Oral-B, has over the other companies is the ability to say it is recommended by dental professionals. By seeking accreditation from the American Dental Association, partnering with dental providers, and offering support to elementary school dental education programs, CP could not only work on educating the public, it would also position itself to steal market share away from its main competitor, Oral-B. Opportunities In consumer tests, 55% of consumers found the CP Precision model was very different from other brushes and 77% claimed it was more effective.

Seeing as a majority of consumers are willing to experiment with new brands/models, CP could make being new, different, and effective the major tenants of its marketing messaging; along with including messaging concerning their incredible ability to fight gum disease, it should have a rock solid campaign. Threats Because of the recent market saturation, the various producers of oral health care products have rushed to offer promotional incentives including two-for-one, buy-one-get-one-free and mail-in refund coupon deals.

In order combat this threat, CP could plan to launch the Precision brush paired with similar promotional offers and introduce fresh promotional offers such as coupling the toothbrush with Colgate brand toothpaste. With the increase of in-store advertising, toothbrushes and toothpastes have been found to sell 170% better when located in close proximity. The most worrisome threats to CP are from the company itself. If CP were to release the Precision

brush into the mainstream market as the “Colgate Precision,” not only would it knock the children’s Plus brush off of the shelves, it would also cannibalize its fiagship Plus model.

In order to avoid this, CP should introduce the model into the niche, super-premium market as the “Precision by Colgate. ”

Strategic Alternatives

The option that CP has would be to enter the Precision into the market as a niche, super-premium product. As a niche product, compared to the other CP models, the Precision would expect earn roughly 35% volume share and 46% value share. A positive factor of introducing the Precision as a niche product is not only would it give Colgate enough time to build up a stock of the product, CP would also be able to avoid taking the Children’s Plus model off store shelves.

With the Precision toothbrush, CP could finally introduce a super-premium product into the mix and give the therapeutic consumer segment some much needed attention. One key feature of the Precision toothbrush is that it is incredibly successful at removing significant amounts of plaque from teeth, especially when compared to competitor brushes. Another option that CP has is to enter the Precision into the market as a mainstream, professional product. As a mainstream product, the Precision would expect to earn roughly 41% volume share and 42% value share, when compared to other CP offerings.

At a price of $0. 79, and in order to boost referrals, CP would expect to earn 80% of its sales by distributing the toothbrush to dental professionals. One negative result of channeling the Precision toothbrush through the mainstream market is that the Children’s Plus model would need to

be dropped in order to make room for another product on shelf among the other professional models. As a result, CP would also go another year without any super-premium SKU on the market.

Proposed Strategy

Colgate-Palmolive should focus on launching its unique product to a narrow market and introduce the Precision brush first as a niche, super-premium product for therapeutic consumers. By 1994 or 1995, when it has had time to build up its stock of the Precision toothbrushes, it should move it to the mainstream, professional market in order to add cosmetic and uninvolved consumers to its target markets. By using this two-level approach, CP will be able to reach its maximum potential across all possible market segments.

In order to move as many units as possible, CP should start the Precision at a retail price slightly higher than the Oral-B Indicator ($2. 65 - $2. 89). After moving it to the mainstream market at a price no lower than $1. 75, CP could focus on changing its strategy to offering a low cost product to the population as a whole (approximately 260,327 1 Americans). Although it does not do as much to help the company’s brand equity, CP should launch the Precision with the name, “Precision by Colgate,” in order to avoid cannibalizing its figship, Plus, model. By the time Colgate moves the Precision to the mainstream tier a year or two later, it can take a spot next to the Plus model to make room for a new super-premium toothbrush. CP should plan to spend money educating the public on the dangers of gum disease. The American baby boomers, ages 32-46 2 (in 1992) with

an estimated population of 62,1453 are particularly concerned with the health of their gums and willing to spend extra money to give their mouths the best protection possible.

Many companies can be found focusing on rubber handles and angled heads, but only CP can claim the ability to dramatically decrease the likelihood of encountering future gum problems by having consumers use its brush. The major hinderance to pushing a product based on its effectiveness to prevent gum disease is that a majority of consumers do not understand what risks they face. In order to educate the public and to form a stronger bond with dental professionals, CP should seek accreditation from the American Dental Association (ADA).

Not only would this be a powerful disclaimer to add to advertisements, but CP would move into a position to steal sales away from Oral-B. Using this approach, Colgate-Palmolive should be able to reach a significant portion of the consumer population. Its main focus should be on seeking ADA accreditation (thereby stealing sales from Oral-B) and promoting it’s effectiveness to fight gum disease. It would be helpful to launch the Precision with coupons and new promotional ideas such as a a toothbrush/toothpaste bundle.

In order to insure an edge on the competition, Precision might want to look into offering some sort of dentist sampling program with a “satisfaction guaranteed” refund offer if the state of their oral health does not improve after using the Precision for a solid 6 months. This plan, paired with Precision’s efficacy, should prove to bring Colgate-Palmolive a successful year in the oral health care industry.

References

1. Wharton Universia. (2007). Dueling Age Groups in Today’s Workforce. Retrieved from http://bit.
   

ly/ei45LA US