Keywords: colgate swot, swot colgate, colgate competitive analysis
Colgate-Palmolive is recognized as the worlds leader in personal health care sales including oral health products like toothbrushes and toothpastes. In 1991, its sales topped at $6 billion and gains at $2. 76 billion as it cornered 43% of the world's toothpaste market and 16% of the world's toothbrush market. In america, the world's largest market, Colgate-Palmolive retains the number one place in toothbrush sales with market talk about of 23%. From these figures, one of Colgate-Palmolive's main strengths is being the market leader in dental care products.
Colgate-Palmolive's extensive overseas reach is another main strength. Based on the data in the case study, Colgate-Palmolive released 275 services worldwide and set up production facilities in China and Eastern Europe breaching the rising economies of the 21st century. On top of that, international sales accounted for 64% of total sales and 67% of the full total profits for Colgate-Palmolive.
Colgate-Palmolive has an intensive Research and Development team boasting 170 employees worldwide. Though having a sizable R&D department will not directly donate to increased income, Colgate-Palmolive's record of development in the toothbrush market is associated with its current position as the marketplace innovator in the toothbrush industry. Therefore Colgate-Palmolive's strong commitment to technology through investment in R&D is a prominent strength.
With an energetic and visionary leader like Reuben Make at the helm of Colgate-Palmolive, the business has changed itself into a low fat and profitable machine, leading to increased profit margins and volume development. Clearly, having a visionary CEO is a durability.
Colgate-Palmolive's positioning technique for its toothbrush range in food stores has aided in recording their current dominant market show. Its in-store displays, incorporating toothbrushes with toothpaste packages and locating the Colgate-Palmolive line of toothbrushes in the center of the stores' shelves have contributed to the dominance. This plan has prevailed, as sales through food stores, drug stores and mass merchandising programs have produced the best volume and money sales historically.
Colgate-Palmolive has a huge number of stock keeping systems for their toothbrush series. Multitudes of SKUs show that Colgate-Palmolive is targeting a broad spectral range of market sections in the toothbrush market, which spreads the risk inherent to hauling any product. Diversification of product types within the toothbrush market is another power factor Colgate-Palmolive keeps.
Colgate-Palmolive's secret tool in the battle for supremacy in the super-premium market, Colgate Perfection, is shown to be very effective in removing plaque - 35% more effective than existing brands - and in protecting against gum disease. This benefit can be related to the progressive design, high-tech research using CAD and infrared scanning, consumer research and considerable product screening. Although this technology is a solid argument for positioning Precision in the "super-premium" category, Colgate-Palmolive may possibly also use its design aspects to improve Colgate-Palmolive's existing "professional" and "value" toothbrush lines to increase their individual market shares. Colgate-Palmolive's patented invention for Accuracy also stands as a power upon which Colgate-Palmolive can trim for other market differentiating developments.
Colgate-Palmolive's recent infusion of new capital into its developing facilities will bode well as it prepares to battle for market share in the new "super-premium" market segment. Colgate-Palmolive will be able to leverage its existing romance with its manufacturing spouse, Anchor toothbrush, to quickly and cost-effectively product its most recent product.
The impending release of Colgate-Palmolive's new toothbrush, Perfection, may have an impact on sales of its existing toothbrush lines. This might lead to a "cannibalization" of the Colgate Plus and Colgate Old classic market as high as 60%. Because the existing toothbrush lines will be the "cash cows" of the company's oral care section, a dismal performance by the new Colgate-Palmolive Precision might drain the "cash cows" of these resources totally.
Colgate-Palmolive's media expenses layout is very small in comparison to its rivals. It has put in only $7 million us dollars on its Colgate-Palmolive Plus marketing efforts and has only 19% of the show voice. Since advertising publicity fuels consumer demand for a new product, this is one area where Colgate-Palmolive will need its expenditures equivalent to that of its competitors.
Another marketing weakness that Colgate-Palmolive encounters is its insufficient professional dental endorsements, with not even half that in market share and money sales than that of their greatest competitor, Oral-B.
Similar to Colgate-Palmolive's lack of professional endorsement, the Accuracy toothbrush doesn't have the fullest endorsement from the American Dental Associations (ADA). However the ADA granted its seal to the merchandise, the seal by itself stands for bit more than identification that the toothbrush works. Actually, only once the ADA issues its seal and an official quote stating that a product is superior to similar product types, will a product have the fullest support possible. Not having the full support of the ADA is a weakness which Colgate-Palmolive may have to overcome to gain the professional endorsement they seek.
The introduction of the topic "super-premium" category presents a golden chance of Colgate-Palmolive to increase market talk about for many reasons. First, although its rivals, i. e. Oral-B, Johnson & Johnson and Procter & Gamble, have gained a foot-hold in this niche market already, Colgate-Palmolive can still make a dent with its new Precision toothbrush, thus permitting them to enter into a fresh and probably highly profitable market portion. Since the "super-premium" category makes up about 35% of the quantity and 46% of the dollar sales of toothbrushes this topic category may subsequently result in a considerable profit margin.
Secondly, with the baby boomers and more radiant years becoming more worried about the fitness of their gums, they will be willing to pay the above mentioned superior for a toothbrush which is optimized for better gum care and attention. Colgate-Palmolive can capitalize upon this demographic portion to ensure an effective release of their "super-premium" Perfection toothbrush.
Finally, since 82% of toothbrush buys are unplanned and many individuals are unaware of the technical and cost variance among toothbrush brands, Colgate-Palmolive could establish a press blitz with educational advertising depicting Perfection toothbrushes as technologically superior to its competitors at an comparable cost. The advertisements can also serve to teach consumers about proper toothbrush substitute schedules to ensure effective plaque removal and gum disease avoidance. Finally, Colgate-Palmolive could leverage their marketing campaign to improve sales and revenues.
One of Colgate-Palmolive's opponents, Johnson & Johnson, rated third in toothbrush sales, was phasing out one of its toothbrush lines at the time of the Precision introduction. As the toothbrush market remains rather constant, courting customer from other brands, especially ones being phased out, is a significant chance to gain market talk about. Another competition, Smithkline Beecham, was predicting an operating damage in its toothbrush business. In case the losses are suffered, it might cause Smithkline Beecham to move out of the toothbrush business all together, yet again starting the door for further gain of market share. Colgate-Palmolive's constant advancement also provides an opportunity to convert consumers from less advanced toothbrushes, such as those made available from Lever.
Threat of extreme segment rivalry
The super-premium toothbrush market is highly competitive, web host many brands and private label toothbrushes. If any of these competitors creates a toothbrush which tops or even equals the technology of Precision, specifically if done at a lesser creation cost, Colgate-Palmolive may lose market talk about.
Threat of new entrants
Along with powerful rivalry from existing challengers, Colgate-Palmolive must package with new competition. In 1991, the toothbrush market exploded with a dramatic increase in new entrants. Proctor and Gamble unveiled Crest Complete, their first toothbrush. Smithkline Beecham moved into the market with Aquafresh Flex and a 9% market share level for 1991. Levre, Pfizer and Sunstar all came into the market in 1991 and gained a complete 11% market show. These numbers strengthen the seriousness of the threat of new entrants that Colgate-Palmolive must contend with when they unveiling Colgate Accuracy.
Threat of swap products
Similar to numerous industries, oral good care technology has advanced enormously since its inception in around 3000 B. C. The release of the nylon bristled toothbrush in 1938 represents one of the latest quantum improvements for the industry, nonetheless it had not been the last. The introduction of electronic digital toothbrushes and water picks are intimidating to usurp traditional dental attention product's market show. This is a menace which Colgate-Palmolive must heed, despite its assurance in the technology of Perfection.
Threat of suppliers' growing bargaining power
Colgate-Palmolive depends on Anchor toothbrush because of its outsourced manufacturing. Hence, Anchor toothbrush has a decided supplier gain in the partnership with Colgate-Palmolive. If Anchor toothbrush were to increase its resource cost, it could affect Colgate-Palmolive's production costs which in turn would impact Precision's market talk about by potentially costing it above even the super-premium section. Colgate-Palmolive needs to maintain a wholesome romance with Anchor toothbrush to reduce the risk of an expensive supplier switching process.
Threat of customers' growing bargaining power
One of the factors which can cause potential buyers' bargaining power to increase is when the turning costs for buyers are low. Even if Colgate-Palmolive were to position Precision as the utmost expensive toothbrush on the marketplace, it is still a relatively inexpensive product, compared to many daily purchases (i. e. lunch time in NYC or a sit down elsewhere at Starbucks). Therefore, purchasers can easily move between toothbrush brands without giving the decision much thought. To fight this hazard, Colgate-Palmolive could position Accuracy as an excellent toothbrush that customers can not manage to be without.
In 1992, after analyzing the current market condition and concluding its research and development, Colgate-Palmolive was prepared to commence marketing its newest toothbrush, Colgate Detail. Of major matter to Colgate-Palmolive was how to put, brand and talk this new product to the overall people. Colgate-Palmolive also possessed to build up budget constraints and create a marketing combination that would boost the sales and earnings of the new product.
Colgate-Palmolive was faced with your choice of whether to market the new product as a high quality niche product advertised mainly towards individuals concerned about gum disease, or as a mainstream toothbrush that might be promoted as the best toothbrush available. If advertised as a niche product, Colgate-Palmolive would aim for a smaller market portion without as much competition vying for market talk about. A niche market segment would also be happy to pay a premium for the new toothbrush. If, however, the toothbrush were promoted as a high quality mainstream toothbrush, Colgate-Palmolive would realize profits from larger quantities of sales despite a lower price plus more competition.
To reach its verdict, Colgate-Palmolive examined forecasted data with regard to potential sales quantities and prices, advertising, presentation, and manufacturing costs, among other factors. A summary of this examination, and a marketing strategy recommendation employs.
EVALUATION OF ALTERNATIVES
In August 1992, Colgate-Palmolive possessed two options about the positioning strategy for their new toothbrush entitled Colgate Accuracy. Their choice was to position the merchandise as a mainstream offering or aim for the Perfection toothbrush to a distinct segment market. The positioning of the product would have little to do with any improvements to the actual design of this toothbrush, but would result the perception of the toothbrush within the marketplace.
Mainstream or mass marketing refers to the mass production, distribution and advertising of a single product to all potential buyers. Contrarily, niche marketing is a form of micro-marketing. It refers to a specifically defined band of consumers with a need that is not currently well dished up. A niche is created from a subdivision of a market segment. Due to the diversity of these two market types, the decision to market the Accuracy toothbrush as a mass-market product or as a niche product involves examination of advantages and disadvantages for each.
The principal reasons to use a mainstream marketing methodology is that the product is made accessible to a larger market. Marketing to a more diverse audience would permit Colgate-Palmolive to construct a far more simple and direct campaign that would address the normal concerns of all toothbrush buyers. Consequently, the use of tv set and radio would be more affordable as it could reach this larger audience.
The clear goal of such a position is always to capture a larger return on investment Colgate-Palmolive made upon this product's research and development effort. It's estimated that within twelve months this product could secure 10% of the marketplace and a size show of 14. 7% by its second 12 months. This would mean 27 million retail unit sales in calendar year one and 44 million in the next year, if located as a mainstream product.
There are also many issues with marketing Detail to the public. Within the mainstream market a higher price makes a product less appealing to the common consumer. This means that Colgate will have to price their product within realistic position of other similar products to become a serious competitor inside this market, eventually diminishing their potential profit margin and profits on return.
There is a variance amidst consumers with regards to oral hygiene. They may be categorised into three organizations:
Involved teeth's health consumers - Therapeutic brushers
Involved teeth's health consumers - Plastic brushers
Uninvolved oral health consumers
These sections are divided into comparative percentages of adult toothbrush users. They are simply 46%, 21% and 33% respectively. This illustrates that one third of the toothbrush using adult inhabitants has only little involvement in oral cleanliness and are most likely not a beneficial audience to which to pitch the Accuracy toothbrush. The trouble of including these consumers in the mark market wouldn't normally be beneficial.
In the design and testing phase of the Precision toothbrush, Colgate-Palmolive accrued significant scientific data concerning the product. These details wouldn't normally be highly relevant to the mainstream market that a lot of likely would notice as too medical.
The Perfection toothbrush was at first conceived to be a "top-of the-range, super-premium product" indicating that development schedules have been developed consistent with a niche marketing strategy. Mainstream marketing would need a greater volume creation of the toothbrush with an estimated ten month lead time to achieve sufficient levels of the product. This could result in an inadequate way to obtain the product at the outset.
The purpose of the study and development group focusing on the product was to "create a superior, technical, plaque-removing device. " It was produced to be "the best toothbrush possible" and become the "top-of the-range, super-premium product. " All of these phrases are greatly skewed towards area of interest merchandising. A mainstream product should aim to serve all of the people, all the time. This product evidently was created with niche-oriented goals.
The greatest concern facing Colgate-Palmolive if indeed they were to promote the product in the mainstream market is that it might be allocated through the same channels as an existing Colgate-Palmolive toothbrush called Colgate Plus. Colgate Classic was the company's original entrance in the toothbrush sector and was placed as a value segment. The Colgate Plus emerged later and was placed in the professional segment as an increased quality product. Including Precision as a high-end, mainstream product may potentially "cannibalize" Colgate Plus sales.
Finally, Susan Steinberg, the product manager of Detail, felt that incorporating the new product in to the mass market would require the business to delete one or more of the seven existing SKUs (stock keeping items) that Colgate-Palmolive produced. This plan could lead to a lack of market talk about in the worthiness or high-end sections.
Advertising companies have access to audience profiles through a wide variety of media products, such as tv set, radio and printing media. This is actually the fundamental basis for successful topic marketing. An excellent good thing about offering any entitled product to a distinct segment market is which it permits a focused, specific advertising campaign, targeted to a particular demographic, psychographic, behavioral or geographic segment through whichever medium is most effective at reaching the specific population. This allows productive use of advertising finances. Precision falls within the school of goods that can tender itself as a distinct segment product. Developed to be the best toothbrush possible and located in the super-premium category, this toothbrush is inherently a distinct segment product.
Members of the general public most interested in this toothbrush would be those in the "Involved teeth's health consumers" groups; therapeutic and aesthetic brushers. Healing brushers are considering functionally effective products and differentiate between brands. Both sections of customers would appreciate the methodical data Colgate-Palmolive has complied upon this toothbrush. The reality that the initial clinical trials removed typically 35% more plaque over that of Reach and Oral-B, and this it facilitates in the reduced amount of the likelihood of gum disease, would be effective information for this group. Unlike the mass market, these are issues which a niche market portion would comprehend and about that they would care and attention.
Niche market individuals are also more likely to pay a premium for this product because of the fact that Precision suits a distinct group of needs they may have. With this type of placement, a 15% increase in price above Oral-B regular would be expected, bringing the cost to consumers to $2. 13 per unit (more aligned with Oral-B Signal). A mainstream market could only be anticipated to pay $1. 85, in accordance with the Oral-B regular series.
As Perfection was conceived more as a niche-type product, initial production was established for the low demands of the smaller market segment. As discussed previously, to improve the natural emphasis of the toothbrush to mainstream circulation would need a major overhaul of projected production routine and costs because of the increase range of products required.
Additionally, to keep Precision as a specialised product means that the new product is less likely to invade the marketplace show of other Colgate-Palmolive products, like the Colgate Plus. This would also preserve the number of SKU that Colgate-Palmolive currently produces in the toothbrush sector.
Niche marketplaces historically attract fewer competitors. This gives time and room for a fresh product such as Detail to establish itself and build up a market share before it may have to fight a fresh contender.
Marketing the Precision product to a distinct segment market would make less earnings for Colgate-Palmolive when compared to a mainstream approach. Working with the estimated numbers for the first 2 yrs of release produces the following table.
No. models sold
Factory list price
Total income generated
$17, 040, 000
$31, 950, 000
$49, 950, 000
$81, 400, 000
Obviously, the market revenue is less than the mainstream market income, regardless of the 13% higher price.
Developing and connecting a positioning technique for a product is necessary and critical. Differentiating a product, and the degree to which that product is differentiated, can be guided by quantifying the following criteria:
Using these variables, a company provides the public with a reason to buy their product.
Another tool used in resolving the marketing combination problem companies face when introducing a fresh product is a perceptual map. This is a visual representation of two or more features against which similar products can be rated. When graphed, the resulting map displays areas to which the product types cater, exposing both regions of over population and areas of potential opportunity. Clusters of products can be found when similar products charm to the same consumer market participants. In these areas, competition is powerful, therefore, they are not as attractive when positioning a new product. An maximum plan is to make a space within the merchandise market that is relatively free of competitors and can enable a fresh product to develop and dominate.
A perceptual map for Detail was created from the following data:
Butter GUM Microtip
Butter GUM Supertip
Oral-B mix action
Generic Eckerd Interdental
Generic Eckerd Angle
Using these evaluative requirements with regards to the advantages and cons of area of interest and mainstream marketing, we believe Colgate-Palmolive should position the Precision toothbrush as a niche product. This would establish Precision as the main toothbrush on the market at a competitive price. It might be a superior and distinctive oral care and attention product.
However, we imagine this product would also work in the mainstream market and we envision it moving on the mass market in the future. After the toothbrush has generated itself as a superior quality product with area of expertise features, we believe that Colgate-Palmolive could change the product to a wider audience. This may also allow time for Colgate to reconcile the position that the Colgate Plus product will keep relative to the Precision brand.
Further, we assume no significantly negative issues will be experienced by initially marketing Precision as a niche product and then moving it into the mainstream market. We do not imagine the opposite would be true, as a distinct segment market will not really accept a product that has been wanted to the public as the cost effective, and then advertised as a niche item.
The expected cyclical nature of the product on the marketplace is well illustrated by the Boston Consulting Group's Growth-Share matrix. The Accuracy toothbrush will get started as a "question tag. " This means the business will spend cash developing and establishing the merchandise in expectation of increasing its market talk about. Subsequently, the trust would be for Precision to become "star, " meaning it's been successful by obtaining a high market talk about and progress rate. If the merchandise evolves into a mainstream offering by this time around, the company will enjoy higher rewards.
Going even more in to the future, the toothbrush will most likely decrease its market development rate while maintaining its high market show. At this phase the product will be a "cash cow. " Profits produced from Precision at this phase may be used to create other "question marks" and/or subsidize other "stars" if required. The ultimate phase in this product's life cycle is a drop into "dog" position. This refers to the product when it has vulnerable market share and low expansion. At that time, Precision would need to be taken off the company's products, allowed to decrease further or altogether repositioned on the market.
At this aspect, the research and development stage for Accuracy has been completed, an intensive examination has been performed on the existing market situation, and a marketing strategy has been recommended. The final aspects of launching a fresh product must now be investigated - product, price, place and promotion.
Colgate-Palmolive has many important decisions to make regarding the new toothbrush before it becomes on store shelves for customers to purchase, including the positioning technique for the new toothbrush. To reach a finish, the new toothbrush must be examined on three product levels - the main product, the actual product, and the augmented product - so that customer's needs are totally comprehended and the Perfection toothbrush is correctly sold to meet those needs.
Since we could suggesting that Colgate-Palmolive choose a distinct segment market for Accuracy, the core advantage that the toothbrush will deliver to its users is plaque removal. Less plaque subsequently contributes to the added good thing about a reduction of the probability of gum disease. This is the key reason that the prospective niche market customers will choose the toothbrush. Colgate-Palmolive must therefore position itself as the premiere benefit supplier to these consumers. To do so, the toothbrush must be placed and marketed in regards to to the physical or real product. This contains the products name, the merchandise features and style, the packaging, and the quality of the product.
Colgate-Palmolive's branding decision resulted from four principle tests used to judge the potency of potential names. Inevitably, the name "Precision" surfaced from others as it brought to mind connotations of your oral health care product that cleans one's teeth completely and regularly. Further, the term Precision exudes lots of the qualities that are attractive in a brand, such as positive traits, high quality and a name which is straightforward to pronounce, recognize, and most essentially, remember. Irrespective of which name was chosen, however, the individual product's branding would also have the ability to take advantage of the brand identification of Colgate-Palmolive - children name that most the population associates with good dental care.
Colgate-Palmolive could also have considered using the line extension tactic of "introducing additional items in the same product category under the same brand name, " in so doing marketing the toothbrush as "Colgate Detail. " This brand name, as with other Colgate-Palmolive products, should come to symbolize Precision's intentions to deliver features that are synonymous with the consumers dependence on good dental health as provided by a well realize and trusted company.
As mentioned above, a brand name should bring certain features, benefits and worth to the minds of consumers. Consumers should recognize the physical attributes of the Accuracy toothbrush as an helpful design that will work better than a lot of the toothbrushes on the market. The benefits that the consumer should connect with the Perfection toothbrush will include noticeably cleaner and healthier pearly whites and gums. The beliefs inherent to Detail should be a powerful tool for better oral care. Merging the characteristics, benefits and worth of Detail into a readily recognizable product is a step towards Colgate-Palmolive's ultimate goal - brand loyalty to Detail.
Precision has trademarked the look and top features of the triple action bristles that work with one another so the short, long, and angled bristles remove 35% more plaque a standard toothbrush. You will find, however, some areas of the toothbrush that still need to be defined, like the cosmetics.
Most people definitely associate toothbrushes and basic oral hygiene with a dentist. To capitalize upon this association, Colgate-Palmolive could make the Accuracy toothbrush a metallic, gold color so that consumers immediately conjure images of the dental equipment that may technically and thoroughly clean teeth. To include some flare, as well as for convenience, the toothbrushes could also be made with a dazzling streak of color within the silver history for easy differentiation when multiple household members use Accuracy toothbrushes. These shiny streaks should also be the palate after that your name Accuracy should be establish to provide as a continuous reminder of the brand. To maximize on these plastic ideas, the new toothbrush should be offered with a multitude of color stripes, full and small minds, and with very sensitive, delicate, and medium bristles. The silver trade dress will eventually become known to represent the Accuracy toothbrush and can signify a high quality item that consumers will know by aesthetic cue.
Since packaging in and of itself is an efficient marketing tool, the offer of the Precision toothbrush should be carefully designed. The toothbrush should be packaged to be able to focus on the recommended trade dress of the silver precious metal toothbrush. The toothbrush should be packed in an obvious plastic pipe. The name Colgate Perfection should be written in striking, silver lettering along the length of the tube, but it should not cover the bristles since their particular design is also a distinguishing symbol. This might place focus on the main features of the toothbrush, which will be the triple action bristles, and the silver precious metal, metallic color of the bottom of the toothbrush. To tell apart the product further, the presentation should be completely rounded and contoured to the toothbrush itself. Similar to the trade dress, this package deal would be good for the Detail product because the circular tube would come to be named the Precision packaging and consumers would begin to shop for the merchandise based on visible recognition. The pipe would provide a supplementary value to consumers as its impressive, reusable design may possibly also provide as a travel box for the toothbrush.
This packaging will be more costly to produce then the common cardboard backed, cheap bubble twisted toothbrush, however, since the toothbrush is a distinct segment product and customers will be willing to pay reduced (see Price section below), the price associated with the pricier product packaging will be offset.
The label on the tubing and on the merchandise also signifies an important branding opportunity, as it will be looked at by consumers every day. The label font should stay continuous on all branded material including the packaging, print advertisements and the toothbrush itself. The name "Precision" should be written in a distinctive font to further distinguish it, and the "Colgate" should be written in Colgate-Palmolive's traditional printing font. The labeling on the deal itself should imitate the bright, striking colors to be able to off establish the silver record. Consistent, fluent branding is paramount to the success of any new product - Accuracy is no exemption.
The product quality of the precision toothbrush should be extremely high. The toothbrush should surpass its statements of lowering gum disease by removing 35% more plaque than a regular toothbrush. If the merchandise quality is high and matches customer's prior prospects, they'll be content with the toothbrush. Having satisfied customers is very important to non-durable items such as toothbrushes, which are purchased frequently, in order to ensure repeat purchases. Eventually, customer's brand commitment increase with product satisfaction.
The final level of analysis for Accuracy - the augmented product - includes post-purchase services offered for the product. Precision should provide a guarantee on its products so that customers who are unsatisfied with the merchandise can gain it. Since we assume that most people who choose the toothbrush will not be dissatisfied with the product, the guarantee will pose a minimal financial tension on Colgate-Palmolive. Accuracy should also be accompanied by a toll-free contact number which customers could call should they have questions or concerns about the product.
Despite Colgate-Palmolive's dominance in the toothbrush market, Accuracy symbolizes its first endeavor into the super-premium category - a segment filled with extreme competition. Hence, prices Precision so that it will own an extensive life circuit, as proven above, is another critical step towards guaranteeing its survival. From the four pricing theories offered by today's market, swift skimming is by far the most appropriate for Precision.
First, as a niche market product, Accuracy will be offered by a cost equal to that of the best priced toothbrush available, $2. 13 per device. This immediately gets rid of both penetration prices theories, as offering Perfection at a value based mostly cost level would basically bankrupt the product line. Additionally, but the $2. 13 per product cost may be high relative to all toothbrushes, Accuracy is being targeted towards a specific group of consumers who have a demand for an excellent oral care product. Thus, relative to the super-premium portion, Precision is actually the best purchase available, as it includes superior technology and upgraded oral health care for no additional expense.
Secondly, Precision's unique and impressive design has generated its own group of toothbrush within the super-premium section, as it is distinctly different from the other currently available toothbrushes. Consequently, the general public must be educated about the capabilities, benefits and ideals of this new product. Educating the general public is an expensive effort unto itself whatever the product, but Colgate-Palmolive gets the added push of keeping rate with the increased promotional expenditures of its competitors as well. We are therefore also suggesting that Colgate-Palmolive spend around 8% of the advertising budget on product special offers such as two-for-one purchases and discounts to attract attention to Detail in non-mass-media ways.
Finally, as mentioned above, Colgate-Palmolive's ultimate goal is to make total brand devotion among the niche market participants. Such loyalty is hard to come by and delicate at best given the non-durable aspect of your toothbrush. However, promoting and pricing precision accurately will nurture customers into duplicate purchasers.
Choosing the appropriate place to sell Detail is, relatively, minimal complicated matter which Colgate-Palmolive will undertake along the way of launching the new product. After all the painstaking research, in-depth research, evaluations, and endless financial and production planning, one affirmation bands true throughout - from the toothbrush. No-one will ever before, specifically go out of their way to purchase a toothbrush as it in the end holds no inherent moral, financial or social value.
Colgate-Palmolive shouldn't try to create a special clique of Accuracy toothbrush owners (such a Ferrari does with its super-premium race cars) by choosing an exclusive or selective syndication channel. Detail is a toiletry, and it needs to be accessible through intensive distribution atlanta divorce attorneys possible place that toiletries can be purchased, otherwise the chance of getting rid of - or more to the idea, never gaining - market talk about scheduled to simple hassle is monumental.
Additionally, negotiating exclusive or selective circulation agreements with sellers would be prohibitively costly for both Colgate-Palmolive and owner. Instead, Colgate-Palmolive should target their work on intensive syndication, preserving and increasing the strength they have got in their current shelf positioning, screen models and supplier relationships.
Promoting Colgate Perfection requires effectively communicating the proper concept to the right audience through the correct channels. You will discover eight essential steps to which Colgate-Palmolive must adhere to achieve an effective promotion plan. The first step in the marketing campaign is to look for the audience to that your campaign will be directed. As concluded from the examination above, we recommend that Colgate-Palmolive concentrate on both involved teeth's health consumer groups. Determining these two categories more completely, and thus fine tuning the advertising message, requires determining that the central benefits Perfection offers are indeed a concern for the prospective audience. Research indicates that there surely is a change in oral care concerns among seniors. Those blessed in the 1940's, 50's and early 60's have a tendency to place more importance on gum disease elimination as opposed to cavity prevention. Further research also signifies that today's youthful generations are even more worried about their oral health care routines than past generations. Despite having the development towards better oral good care, recent segmentation of toothbrush users demonstrates only 67% of adults are "Involved teeth's health consumers". Although this 67% includes the niche to which we recommend Colgate-Palmolive market their new Detail toothbrush, there remains one third of the total populace of toothbrush users to which Perfection wouldn't normally be interesting.
From looking at Simmons research data, we can also make some additional concentrate on assumptions. By assessing the index information for the Aqua-Fresh Flex, another super-premium product, we can speculate which demographics would be well suited for Colgate Perfection: sole, college-educated professional women and men, 18-34 years, getting over $40, 000, surviving in New Britain (just to name one possible set of target conditions). Having now discovered our market, we can move to the next step in the promotion campaign - determining the communication aims.
Buying a toothbrush is a fairly easy process and hardly ever a high involvement purchase for consumers. Therefore, although we recommend that Colgate-Palmolive's campaign of Precision follow the AIDA response hierarchy model to be able to include all three periods of responses - cognitive, affective and habit - we believe the emphasis should be put on getting the customer's attention and quickly moving them through the interest and desire phases, right to action: purchasing the toothbrush. The communication aim for the new product becomes to convince therapeutic and aesthetic brushers that they should purchase and use Colgate Accuracy because Precision was created to be the best toothbrush for removing plaque and stopping gum disease.
The next step to growing effective marketing communications for the Colgate Precision promotion is designing the message. Things to consider include communication content and communication structure. Communication content should align with the communication goals for the target audience - Perfection removes plaque better and avoids gum disease. It will be important to place certain message emphasis on the prevention of gum disease, as this is a differentiator not only contrary to the ad campaign for Colgate Plus - "Inside the fight plaque, it's a Plus. ", but also against all the other toothbrushes in the super-premium category. Precision would be the first toothbrush to make use of such a strong oral care meaning in its placement.
Two appropriate approaches to communicate Precision's main ideals would be text messages appealing to either the rational or emotional aspect of consumers. A logical appeal focuses on how the product will benefit consumers, whereas an psychological appeal tries to influence purchasing habit by stimulating emotions such as fear, shame, guilt, humor, love or delight. Exhibit A is a print advertisement demonstrating a logical appeal to consumers. The advertisement clearly identifies the main value of using Colgate Accuracy. It rationally offers consumers results if they use Precision rather than another toothbrush. Exhibit C also obviously states the benefits, yet will so using a humorous note and image.
Message structure really helps to determine an advertisement's success. "Research implies that the best advertisements ask questions and invite readers and audiences to create their own conclusions. " Exhibit A depicts this technique by asking the audience "Why do nothing of these stick out from the crowd?" The advertising induces the audience to consider the alternatives, and then provides an answer to get Colgate Detail. Although this can be effective, Show B shows the same ad, with a shorter headline, "Lost in the crowd". The shorter headline allows the audience to scan the ad and get to the communication of the key benefits quicker. From the five print advertisements presented in the Appendix, we believe that Display B would be the very best.
The next thing in developing effective communications is to ascertain which communication channels to use to promote Detail. One option, personal communication channels, center around people connecting face-to-face, or by word-of-mouth. Compared to investing in a car or a pair of trousers where others' views are very important, purchasing a toothbrush typically does not require high involvement purchase decisions. Therefore, word-of-mouth excitement around any specific toothbrush is all but non-existent, and therefore wouldn't normally be a highly effective promotion channel.
The only people who could potentially influence consumers' toothbrush-making decisions are dentists. In 1992, Mouth B had 34% of the market show of sales to dental practitioners, dominating the marketplace and outperforming Colgate-Palmolive by $14. 3MM to $6. 7MM. To obtain more market talk about, Colgate Palmolive would need to invest millions of dollars more into their sales force, and even then there would be no warrant that they might succeed in increasing their sales to dental care professionals. According to your research, toothbrush promotions through experts have little to do with the effectiveness of the toothbrush itself, plus more regarding whom you understand, who takes you to lunchtime, and recognise the business takes you to the course. Therefore, we advise that Colgate-Palmolive continue their give attention to consumer sales through non-personal communication programs, such as printing press and broadcast advertising (to be mentioned in greater detail in step six, deciding the marketing and sales communications mixture).
Step five is to determine the total marketing and sales communications budget and allocate it among the several communication programs. Colgate Accuracy is a new product launch, and therefore we recommend it have sufficient budgetary support to make it do well. In 1991, Oral-B put in $10 million, Reach $15. 5 million, and Procter and Gamble was expected to spend $15 million to aid Crest Complete. While it is helpful to comprehend competitors' costs, we do not sign up to the comparative-parity method of developing promotion costs. There are too many factors and objectives involved in creating a budget to bottom part decisions solely on what your competition is doing. Examination indicates a total of $11. 2 million, divided between advertising, consumer deals and trade promotions will be sufficient to support Precision in attaining its sales goals. Although Colgate-Palmolive's own evaluation determined that the budget for Precision as a niche product should be divide as follows: advertising, $5 million; consumer special offers, $4. 6 million; and trade campaigns, $1. 6 million, we recommend Colgate-Palmolive spend less money on consumer's offers.
One of the main element insights we've into the target audience is that they can pay a premium for a toothbrush if they feel it is an excellent product that will keep their gums and tooth healthy. Therefore, Colgate-Palmolive will have less need to invest thousands and thousands on consumer coupons, 2-for-1 discounts, and rebates. However, as reviewed above, Colgate-Palmolive still must maintain industry standard degrees of consumer promotion expenditures as they are an effective method of introducing a new product. On top of that, we recommend Colgate spend only $0. 9 million in their first season on consumer campaigns because the market will be ready to pay a premium for the principles and benefits Accuracy offers. Therefore, they do not need as many free or discounted product promotions. Also, consider the prices of super-premium toothbrushes: they range from $1. 67 to $2. 13. The price differential of $. 46 is significantly less than the price of making a call from a payphone (now $. 50). We predict that consumers in the restorative and cosmetic brusher segments will not consider $. 46 as a cost barrier and will pay the high quality $2. 13 without hesitation. Conversely, Colgate-Palmolive should spend additional money on trade deals. Colgate-Palmolive has already established much success at this point with trade campaigns and we feel they have to capitalize on their existing trade relationships to get the merchandise effectively put on shelves and included prominently. We recommend a divide of $5. 75, $0. 9 and $4. 55 million to promote, consumer campaigns and trade special offers, respectively, for a total of $11. 2 million.
Step six is choosing the marketing communications combination - allocating the budget of $11. 2 million in the most useful method possible taking into consideration the full range of possibilities. The suggested budget for advertising is $5. 75 million, which we recommend splitting among print media (newspapers and mags) and broadcast advertising (radio and tv set advertisings). Both print and broadcast marketing can serve to build recognition and understanding of the new Detail product at the benefits period of its lifecycle. Further, print out press can be targeted to the market participants to a certain extent. The multimedia plan should include several demographically appropriate magazines, like the New York Times plus the Boston Earth (read by college-educated men and women in New Great britain, one of our own hypothetical market segments). Periodicals can target segments to a much greater extent. Self, Shape and Outside would all reach restorative and cosmetic brushers.
Broadcast media, though it is more suited to mainstream concentrating on as there is no way to regulate who hears the broadcasts, can still serve as a very effective and cost conscience communication channel as the niche market is compiled of two-thirds of the toothbrush-using population.
For the Accuracy kick off, we recommend Colgate spend $4. 55 million on trade offers. The "Colgate Palmolive toothbrush series [keeps] 25% to 40% of category shelf space in most stores. " These figures aren't coincidental. As Colgate Perfection is a new product launch, merchants will have to be persuaded to even take the new toothbrush, or in some instances, to transport more units than they normally would. When retail stores feature Colgate-Palmolive toothbrushes through in-store shows, sales increase by 90%. Trade deals dollars would work to ensure these displays get included prominently in shops, leveraging Colgate-Palmolive's existing dominance in this area.
The second to previous stage is calculating the results of the marketing communications' performance. As the recommended marketing combination is not immediately measurable (unlike using immediate marketing), Colgate-Palmolive would have to carry out additional research to evaluate the promotion's effect on the mark audience, therapeutic and cosmetic brushers. Colgate-Palmolive should conduct focus-group research to explore responses and evaluate creative.
The previous step to growing effective communications is organizing integrated marketing communications. As stated above, steady and fluent communication is a essential component of any marketing plan:
Making sure all communications have compatible themes and are speaking to customers in one voice
Colgate-Palmolive can make this happen by either using one firm for many marketing needs, or by creating an inter-agency task power whose responsibility is to ensure communications are developed across the same theme
Understanding the customers and their needs
Colgate-Palmolive can continue to conduct customer-focused research to understand how to raised market with their customers
Ensuring that customers have positive encounters with the company across all factors of contact
Colgate-Palmolive might use "enigma callers" to check the client Service Representatives on the 800#, which would provide them with important feedback about their ITM channel
In summation, we recommend that Colgate-Palmolive position the Detail toothbrush as a distinct segment market product during its introductory and progress life cycle levels. Thereafter, through the products' maturity, Perfection should be repositioned to the mainstream market. Our analysis has conclusivly described that the capabilities, benefits and principles of the product are suitable for area of interest consumers and would therefore benefit from the greatest success in that market. To ensure the success of Perfection, Colgate-Palmolive should:
Ensure the product does, and continues to, address the precise needs of the explained consumer sections;
Price Perfection at competitive levels within the super-premium section in order to offer more value than competition, for an equivalent cost;
Leverage their existing rigorous distribution channel human relationships to ensure that Accuracy receives the most effective placement;
And, commit industry-standard levels of capital into the advertising of the new toothbrush.
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