Colgate Palmolive Case Study

In the early 1990’s, the toothbrush industry was experiencing major growth; in fact, “in 1992 dollar sales increased by 21% in value and 18% in volume” (Quelch & Laidler, 2000, p.

48). The increase in sales was greatly due to a huge influx of new products, advertising, new technologies, and an increase in consumer concern for oral health. During this time, the Colgate-Palmolive (CP) company was not only a major player in the oral care industry, but also “CP was a global leader in household and personal care products” (Quelch & Laidler, 2000, p. 47).Management at CP understood consumer concerns and the need for advances in technology, and because of this, the Oral Care Division at CP was assigned for three years to develop a “technologically superior toothbrush” (Quelch & Laidler, 2000, p. 47).

With the increase in toothbrush sales and technology, accompanied by a change in the behavior of a new generation of consumers, the toothbrush market segment also experienced changes. To understand the changes in the oral health care market, it is helpful to first be knowledgeable of some of the changes in the occurring in the toothbrush product category.The toothbrush is an ever evolving object; however, the idea of the toothbrush is nothing new. There is evidence to support that in 3500 B. C.

, Egyptians were fraying the edges of twigs to create bristles used for brushing the teeth ("History of Toothbrushes," 2006). The modern toothbrush design was first seen around 1780; the nylon bristled toothbrush was introduced in 1938 and was quickly followed by an electric toothbrush in 1939 ("History of Toothbrushes," 2006). That is history, but more recently, three changes have occurred in the toothbrush product category that has changed the way toothbrushes come to market today.Good marketing strategies greatly improve public awareness and public desire, to increase product sales. Kotler and Keller state “the job is not to find the right customers for your products, but to find the right products for your customers” (Kotler & Keller, 2009, p.

11). In the early 1990’s, 47 new toothbrush products were brought to market. Public awareness was raised by utilizing advertising, “media support was increased by 49%” (Quelch & Laidler, 2000, p. 48).

Other marketing strategies and promotions were also used such as raising “consumer coupon circulation by 47%” (Quelch & Laidler, 2000, p. 8).These changes in the toothbrush marketing category increased the annual sales percentage growth of toothbrushes from 9. 3% in 1991 to 21% in 1992.

Another marketing tactic used to boost toothbrush sales was retail advertising. When an in-store display is used, toothbrush sales increase “by 90% over a normal shelf facing” (Quelch & Laidler, 2000, p. 53), and when a display combined a toothbrush with toothpaste in a common display, the toothbrush sales improved by 170%. Constant advances in technology have also changed the toothbrush product category.

Many basic design changes have been made to the overall toothbrush design. Starting in 1938, nylon bristles were introduced. In 1977, the toothbrush saw its first angled handle. The square shaped head of 1950 improved in 1985 to the diamond-shaped head. Throughout the 1980’s, other advances, such as a slightly longer handle, softer bristles, and various other handle changes, occurred.

Finally, in the 1990’s, huge advances began to occur by utilizing infrared motion analysis, computer aided design, and clinical trials.Toothbrush manufactures quickly developed non-slip handles, flexible necks, bristles that changed colors with use, rippled bristles, and triple action bristles (Quelch & Laidler, 2000, p. 60). At this point, with better toothbrushes and better measuring devices, researchers were able to actually measure the effectiveness of toothbrush design in areas such as the removal of plaque and pressure applied to the gums.

Another major change that has occurred within the toothbrush product category is consumer oral health concern and awareness.During the 1980’s, toothbrushes were marketed on the “basis of aesthetics that function” (Quelch & Laidler, 2000, p. 50). Quelch states that through marketing research, CP was able to identify that the baby boomers were now more worried about their oral gum health versus cavity prevention (Quelch & Laidler, 2000, p.

50). The research proved that over 46% of consumers were more worried about the therapeutic benefit of teeth brushing versus the smaller 33% of consumers that were not concerned with their oral health.The research also proved that the 46% group was willing to pay a premium amount for a superior toothbrush which was able to help prevent gum disease. These three mentioned changes - advertising, technology, and consumer concern - have influenced a change in toothbrush market segmentation.

The toothbrush industry is segmented to meet its consumers’ desires. During the 1980’s the toothbrush segment market was divided into two areas, the professional segment and the value segment.These two segments could further be divided into smaller segments based on bristle stiffness and head size, with larger brushes for adults and smaller brushes for children. The two majors segments of the toothbrush market eventually grew.

By the late 1980’s the “emergence” (Quelch & Laidler, 2000) of a third toothbrush segment formed with the arrival of a super-premium brush. Three major toothbrush segments now existed: the value segment, the professional segment, and the super-premium segment.These individual toothbrush segments could be sold at a price point that made the toothbrush desirable to each of the three individual toothbrush consumer segments: the involved therapeutically concerned customer, the involved cosmetic brusher, and the uninvolved oral health care customer. One major concern, which developed with the introduction of more product segments, is something called cannibalization.

Cannibalization occurs when a consumer in one segment leaves that original segment and purchases something from another segment in the same market.This portrays one segment as cannibalistic, eating the sales away from another segment. CP was faced with the challenge of positioning technologically advanced toothbrushes into the correct segment in order to maximize sales and minimize cannibalization. CP had developed and tested a brush that was far superior at removing plaque than any other super-premium brush on the market. At this point, CP management needed to decide on the proper marketing mix to bring this superior toothbrush to market to create a profit and to aid in keeping Colgate-Palmolive at the top of the market in personal health care products.