Colgate-Palmolive

COLGATE – PALMOLIVE MEMORANDUM

As a global leader in a highly competitive market, we at Colgate-Palmolive (CP), are considering how to deploy a technologically innovated toothbrush, Precision. Precision, a three tiered bristle system, falls in line with CP’s five-year plan to launch new products, but the question at hand is whether to launch Precision through a niche or mainstream product market. Currently, we offer two lines of brushes value and professional segments, Colgate Class and Colgate Plus, respectfully; but no super-premium brand brush. As a niche launch, Precision would be a super-premium product offered primarily at food and drug stores. Conversely, a mainstream market designates Precision a premium brand and generates most sales at mass merchandisers and club stores. Although both launch approaches are appealing, due to market competition and consumer needs, the niche product-market would be more compelling to initiate our first stake in the super-premium market share and also allow for less variation in the effects of cannibalization.

The Precision toothbrush has two different market launch alternatives, niche and mainstream. As exhibited in tables 1 and 2, the pros and cons of each launch are evaluated. Presently, the toothbrush market is divided into three segments: professional, super-premium and value, where both premium and super-premium are priced above $2.00, corresponding to 42% and 46% of sales, respectively, boosting dollar growth in the toothbrush market. Most consumers view the primary role of toothbrushes to remove food particles and secondary is gum stimulation and plaque removal. Also, consumers factored head shape, handle, and bristles as most important toothbrush physical features. Furthermore, these consumers are divided into three segments: therapeutic, cosmetic and uninvolved, segmented at 46%, 21% and 33%, respectively. The therapeutic and involved consumers, 67%, might have more reaction to a bristle technical...