Colgate-Palmolive’s Competitive Position

Colgate-Palmolive’s Competitive Position

As consumers are becoming more concerned and acknowledged about the health of their teeth, the toothbrush companies have made various types of toothbrushes to meet their consumers’ specific needs. Both parties have altered brushing habits and turned the purely functional (cavity-prevention) toothbrush into a trendy lifestyle accessory.

There have been many functional and aesthetic changes made to the designs of toothbrushes. Some developed an indicator that tells when to replace toothbrush. Of some handles were thickened for a more comfortable grip and lengthened to extend the reach of the bristles. Some toothbrushes’ shaft materials have changed by incorporating rub-ridged handle to prevent slippage.

Competition:

As of 1992, estimated

Top-tier Competition Sales Operating Margin Ads Exp. Media Exp. Consumer Promo. #SKUs

Oral B 90MM 18MM (20%) 17MM (19%) 11.2MM(12.7%) 5.8MM (6.4%) 27

J & J 54MM 4.53MM (8.4%) 21.7MM (40%) 17.1MM (31.7%) 4.6MM (8.6%) 18

P & G 6.4MM

Smithkline Beecham 18.4MM 14.6MM (79%) 10MM (50%) 4.6MM (25%) 6

Colgate-Palmolive 91.6MM 12% 24.1MM (27%)

As shown in the table, the toothbrush industry is a highly competitive market with high SKUs, proving various types developed. Although huge amount of money were spent on advertisement, including both media and consumer promotion expenses, the operating margin appeared not rewarding enough.

Colgate-Palmolive is well positioned in the industry, coming second to Oral B in dollar sales but ranked number one in volume sales by 1992. CP also has established a well-recognized brand name.

However, CP has relatively higher SKUs than the competitors, causing possible issue with managing the product portfolio.

Also, CP estimated that about 82% purchases were unplanned by the consumer, who are mostly not familiar with the toothbrush prices and has low frequency of toothbrushes replacement. This showed that the advertisement was not...