Introduction
Colgate-Palmolive ( CP ) is a planetary leader in family and personal attention merchandises. with over $ 6. 06 billion in gross revenues and a gross net income of $ 2. 76 billion. CP’s five-year program emphasizes new merchandise launches and entry into new geographic markets and a go oning focal point on nucleus consumer merchandises. Although international gross revenues remained CP’s strong suit. accounting for 64 % of gross revenues and 67 % of net incomes in 1991. the company faced tough competition in international markets from P & A ; G. Unilever. Nestle’s L’Oreal Division. Henkel of Germany and Kao of Japan.
Situation
In 1991. CP held 43 % of the universe toothpaste market and 16 % of the universe toothbrush market. Other unwritten attention merchandises included dental floss and oral cavity rinses. In 1991. world-wide gross revenues of CP’s oral attention merchandises increased 12 % to $ 1. 3 billion. accounting for 22 % of CP’s entire gross revenues. Toothbrushes represented 19 % of CP’s U. S. Oral Care Division gross revenues and net incomes. and CP held the figure one place in the U. S. retail toothbrush market with a 23. 3 % volume portion.
In 1991 the U. S. Oral Care market was $ 2. 9 billion in retail gross revenues ; toothbrushes accounted for 15. 5 % ( $ 453 million in retail gross revenues ) . Dollar gross revenues of toothbrushes had grown an mean rate of 9. 3 % per annum since 1987. but in 1992 they increased by 21 % in value and 18 % in volume. due to the debut of 47 new merchandises and line extensions.
Net gross revenues in 1993. nevertheless. was projected to be slower due to a buildup in family stock lists of toothbrushes in 1992 as a consequence of increased sampling of free coppices through tooth doctors and an abnormally high figure of two-for-one consumer publicities. Due to the high competence degree of the toothbrush industry. and an on-going hunt for invention and merchandise distinction in the market. CP has planned to establish its most recent creative activity – “The Precision Toothbrush” .
The state of affairs of CP and the debut of the Precision Toothbrush is evaluated based on strengths. failings. chances and menaces. Sing the current position of the company. the strengths based on the company’s advantages. available resources. past public presentation. and current repute are:
- Branding/Reputation – Following the recent exposure in different statistics provided by the article. CP has been noted as an industry leader. its unwritten attention merchandises widely accepted by both. the U. S. market and the international market.
- Technology/Innovation – Due to the debut of a series of new merchandises. the market for toothbrushes has grown 21 % in 1992. and because this peculiar merchandise is a profitable. high border merchandise. the launching of the new Precision Toothbrush becomes really attractive. Consumers are going more and more haunted with dental attention. and they demand technological promotion in the merchandises they purchase ; in the instance of the Precision Toothbrush. the fact that it is advertised as a plaque remover tool. assisting prevent gum disease. is a large asset.
- Marketing – CP’s Marketing section is good documented and has an extended program covering most options.
- Network – The extent and quality of contacts within the field of industry is extended. enabling close contact with retail merchants – supermarkets and drug shops. Besides. the “dentist” section should be exploited. as most consumers of dental attention merchandises listen to their physicians.
Weakness countries with a potency of betterment are:
- Market Situation – Establishing a new toothbrush during a clip in which unit gross revenues growing of that merchandise are expected to decelerate down due to a physique up in family stock lists.
- Positioning – Dilemma of CP to put Precision as a Super Premium Product ( with lower border potency ) or as a Mainstream Toothbrush ( viing with its ain merchandise. Colgate Plus ) .
- Consumer Ignorance – Benefit of reduced gum disease from excess plaque remotion hard to interpret into a message with wide consumer entreaty. since few consumers acknowledged that they might hold gum disease.
Opportunities are the identified countries of high possible sing interesting tendencies. engineering and market alteration. societal forms. and population profiles. The identified chances are:
- Competition – CP is recognized as a leader in Oral Care merchandises. and its name gives them a high competitory advantage.
- Good market chance – Consumers are more interested in hi-tech. preventative disease alveolar consonant merchandises than in decorative merchandises.
- Publicity – CP has the economic resources to establish a worldwide run to present Precision. Another chance to present Precision. for illustration. is to unite it with Colgate toothpaste in a individual show. proven to increase gross revenues up to 170 % .
- Product Design and Testing – Precision is viewed as a proficient invention. Clinical trials showed 35 % addition in plaque remotion over other toothbrushes.
Competition is considered as an external menace. as is the future alteration in services. merchandises and engineerings. Other menaces are:
- Cannibalization of its ain merchandises – Colgate Precision could vie with Colgate Plus. killing portion of CP’s market portion in the toothbrush industry.
- Lack of consensus among CP’s Board – Debate over publicity budget and placement of the merchandise.
- Estimated lower gross revenues of toothbrushes in 1993 due to increased family stock lists.
- Appraisal of CP’s competitory place and market cleavage
- Alternate Positioning Scenarios for Precision
Recommendations
From the analysis of this instance and the Numberss calculated above. the recommendation is that CP returns with the launching of its “Precision Toothbrush” as a mainstream merchandise. but stressing on the name “Precision” . instead than “Colgate” . By establishing Preciseness to the market as a mainstream merchandise. CP assures a much larger market portion every bit good as twofold net income borders. as seen in the above chart. By puting accent on the name “Precision” . the market will favourably near the merchandise as advanced and technologically advanced. forestalling cannibalization of Colgate Plus.
The channels to administer Precision should be the same as with Colgate Plus -supermarkets and apothecary’s shops. Further accent should be given to Precision’s ability to forestall gum disease and tartar build-up to see the appropriate market portion. Preciseness should be located following to Colgate Plus. and during the first twelvemonth of its establishing it should be sold including a free Colgate toothpaste ; by making this CP assures that the market will acknowledge the merchandise as a portion of CP’s merchandise line. every bit good as advancing its merchandise in a clip in which gross revenues are estimated to fall due to increased family stock lists.
