Colgate-Palmolive Case-Marketing Plan
I. Executive Summary A. Summary of situation analysis The Colgate-Palmolive case involves the Precision toothbrush, which was entered into the market in 1993 by Colgate-Palmolive. This marketing plan summarizes the company’s situation at the time the Precision toothbrush was introduced, and the different marketing strategies that we believewould be best for Colgate-Palmolive and their new toothbrush. B. Summary of marketing strategies The marketing strategies include proposed strategies involving product, price, place, and promotion. C. Budget summary Included in the marketing plan are pro-forma income statements for Colgate Palmolive if they were to launch the product, and also if they were to choose not the launch the product. Alsoincluded is an advertising budget. II. Situation Analysis A. The Industry 1. Definition of industry The purpose and main focus of the oral health care industry is to prevent teeth and gum diseases and to deliver cosmetic benefits. Examples of products in this industry include toothbrushes, toothpaste, dental floss, and mouth rinses.
2. History of Industry Toothbrushes first evolved in 3000B.C., and advancements have continued ever since. Such advancements include the head shape, size, flexibility, bristle texture and type, color, and angled handles. Companies, other than Colgate-Palmolive, that have entered into the toothbrush market include Oral-B, owned by Gillete, Johnson and Johnson, Procter and Gamble, Smithkline Beecham, Lever, Pfizer, and Sunstar. 3. Growth Patterns Consumersfirst purchased toothbrushes without much knowledge or information concerning the product’s benefits. As new product development increased, and consumers became better informed about the benefits of toothbrushes, they began to focus their interest not only on cavity prevention, but also on the health of their gums, their oral hygiene, and their cosmetic appearance. Because consumer interest andtoothbrush purchases began to increase, advertising and promotion also began to increase, which lead to the development and addition of the super-premium product class. The superpremium product class was a “sub-category of toothbrushes partly offset by downward pressure on average retail prices in mass-merchandiser channels,” (Harvard). Consumers began to purchase toothbrushes based on the specificbenefits each toothbrush and company had to offer. B. The Company 1. Brief History
The Colgate-Palmolive Company was founded in 1806 by William Colgate. The company first began by centering their production around soaps, perfumes, and candles. They began introducing oral health care products to the market in 1873, by producing “its first toothpaste, an aromatic dental cream sold in jars”(Colgate-Palmolive, 1 of 3). By 1991, Colgate-Palmolive had become the leader in not only household products but also in oral health. 2. Size, growth, profitability By the early 1990’s there were many different companies that focused on oral care products, with the leader being Colgate-Palmolive. By 1991, Colgate-Palmolive held the number one position in the world for the sale of oral care products,accounting for 19% of the worlds toothbrush market. The company’s sales and profits were increasing each year, and by 1991 sales totaled “1.03 billion dollars, while profits totaled 9.8 million dollars,” (Harvard). At this point in time Colgate had introduced two different types of toothbrushes to the market, the Colgate Classic and the Colgate Plus. C. The Product 1. Development and history Theproduct in which this marketing plan focuses around is the Precision toothbrush. Production began in 1989 when the company put together a research team whose purpose was aimed at testing the design of the toothbrush, how the company would market the product, and how the company would gain a competitive advantage over others. Colgate-
Palmolive’s mission was to “develop a superior, technical,...