Problem Statement: In July 1992, CP senior management announced a new toothbrush model, the Precision that was set

to launch in early 1993. In order to meet consumer demand, CP could introduce the toothbrush as a niche, super-premium or a mainstream, professional product. It could also introduce the product using standard naming conventions or introduce a new labeling system by calling it the Precision by Colgate. The company could also increase its advertising budget to include educating the public on the dangers of gum disease. Depending on how it chooses to introduce the Precision toothbrush to the market, 1992 could serve as an important year for CP to establish itself as the definitive oral health care company.

Possible Alternatives: 1. Enter Colgate Precision as a Niche product: y By introducing a super premium product into the market, the therapeutic segment would get its share of attention. y CP can promote the product as a gum disease preventer. y Precision would expect to earn roughly 35% volume share and 46% value share. y It will avoid taking the children s Plus model off store shelves. y It will give Colgate enough time to build up the product stock. 2. Enter Colgate Precision as a mainstream product: y It would expect to earn roughly 41% volume share and 42% value share. y It will lead to children plus model getting dropped from the shelves. y It will lead to another years wait for bringing in a product in Super Premium range in the market. Niche, Super Premium 3% for 1993, 5% for 1994 $2.29 - $2.89 35% Volume, 46% Value 2.13 dollars SKUs No affect Channel Drug Stores S Therapeutic (46% of Market) Affect on gum disease probability Mainstream, professional 10% for 1993, 14.7% for 1994 89 $1.59 - $2.09 41% Volume, 42% Value 1.85 dollars $0.79 per unit, 80% of Sales Children s Plus brush would drop Dentists, Drug & Food Stores, etc. Therapeutic, Cosmetic, Uninvolved F Premium product on the market

Market Share Retail Price(Per unit) SKU share Factory Price Dentists Effect on other CP SKU Main Distribution Channel Target Segment Where to focus Target Where to

Proposed Strategy: Segment: Colgate-Palmolive should first of all launch its unique product to a narrow market and introduce the Precision brush as a niche, super-premium product for therapeutic consumers. In next 2-3 years, 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.the initial market price of Precision should be a little higher than Oral-B indicator.

Name: 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 flagship, 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. Budget: CP should plan to spend money educating the public on the dangers of gum disease. The American baby boomers, ages 32-46 (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 hindrance 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.