Executive summary: As customers become increasingly concerned about their oral health, toothbrush manufacturers make great efforts in rolling out product innovations to make functional and aesthetic changes. Without a super-premium product on its product line, Colgate should develop one to address customers' needs which are missed by its competitors, such as gum care needs. As proved by present value calculation, Colgate should position its Precision brush as a mainstream product to achieve bigger market share with comparatively low price. Colgate should also adopt a marketing mix consistent with its positioning to cater to the segment of customers who focus on the toothbrushes' technical functions.
1. What are the changes that are occurring in the toothbrush category at the time of the case? Why are they happening? Why does Colgate need another Toothbrush?
At the time of the case toothbrush market has become very competitive. Meanwhile, the product innovations increased and performance benefits, rather than price, became increasingly important purchase criteria.
That customers became more concerned about their oral health and increasingly interested in high-end toothbrushes was the fundamental driver behind these changes. To address the customers' need, manufacturers launched new products with technical performance improvements, including both functional and aesthetic changes. These toothbrushes were higher-priced with higher margin, which stimulated marketing and promotion input from both the manufacturers and distributors. These promotion efforts further drove up demand of the professional, super-premium toothbrushes.
Colgate-Palmolive was encountered with strong competition from existing companies such as Johnson & Johnson and Oral-B and new ...