Colgate Palmolive's senior management decided to launch a new toothbrush priced in the Super Premium segment. Susan Steinberg, the product manager, has to determinate the best marketing mix to implement and which of the follow options are the best in order to position the product in the market: A) Under a mainstream B) Under a niche strategy. Each strategy has involves different prices and volumes of unit sold.
Customers: More and more customers look for toothbrushes that satisfy their needs. For example Baby boomer's generation, one of our main targets, look for products that help them to have healthy gums. Colgate research identified that 82% of the toothbrush sales were unplanned, as well the average of the consumer replaced their brushes occurred every 7.5 months. Consumers differed in the industry of their involvement in oral hygiene: 1) involved oral health consumers therapeutic brushers (46%); 2) involved oral health consumers cosmetic brushers (21%); 3) uninvolved oral health consumers (33%).
Competition: Competition in the Toothbrush market for Colgate Palmolive was tough. Competition by segments. Value segment: Level (7.2% by volume of total market shares in 1991), Pizar and Sunstar. Professional segment: Johnson & Johnson (19.2% by volume of total market shares in 1991). Super-premium segment: Oral-B (23.1% by volume of total market shares in 1991), Procter & Gamble and Smithkline Beecham (0.9 % by volume of total market shares in 1991). Oral B's brushes were positioned in the super premium segment. Where it had no strong competition for the moment since Johnson and Johnson, with its Reach brand focused only on the professional segment.
Company: CP global leader in household and personal care. The company was profitable and shows annual volume growth. Their plan for 1991-1995 emphasized new product launches and entry into new geographic markets, improved efficiencies in manufacturing and distribution and focus on core consumer products (toothbrush is one of them).
Collaborators: In 1992 22% of all TB will be distributed by dentists. Because of their knowledge they can explain the main advantages of a technological breakthrough product such as the one we're proposing to launch. Food and Drug retailers still account for more than 40% of the product distribution and are interested in selling it since their margins are big. Also Colgate dominated the food stores (25.9 % vol) following by Johnson & Johnson (22.3% vol).
Context: The toothbrush market has been growing steady year by year at an average rate of almost 10%. But In 1992 they increased 21% in value due to the introduction of more than 45 new products and line extension. Therefore, the advertising campaigns and promotion activities increased considerably. Subsequent the consumers are more interested on oral health care and therefore buy more sophisticated health products like toothbrushes.