Brighter Smiles for the Masses: Comparison of Toothpastes
Class 7: Brighter Smiles for the Masses
Parul Pubbi; BEM 106
1/25/15
1 How Costly was Simply White?
We can quantify how costly the entry of Simply White was for Procter and Gamble’s revenues and profits by examining how much of Whitestrip’s potential revenue was taken by Simply White and costs associated with additional advertising, research, and product development as a result (ie by examining the profit margin.)
On page 1, the case study states that whitening strips had become a $460 million business. On page 5, the study states that Whitesrips dropped from a share of 80% to 37% after Simply White reached markets; a loss of (460 million)(.8-.37)= $197800000 million in revenue and .166*197800000=- $32834800 in profit.
2 Moves and Countermoves
Colgate’s competitive advantage had been its association with whiter teeth: its whitening toothpaste had been the number one seller in the market. Now, not only had Procter and Gamble released a superior product for whitening, but the heavy capital investment in research and development had allowed for a scientific way to quantify the change that had held up against the NAD (Exhibit 4) and Would hold up against the Lanham Act (Exhibit 6). Based on the results of the concept test, an important move would consist of correcting public opinion regarding the potency of Simply White via mass advertising. This was easily doable as Procter and Gamble already had relationships with channels due to the high amount of past advertising.
Additionally, Colgate marketed two products with almost the same branding, Simply White and Simply White Night: this strategy could be utilized to market Whitestrips as well: generating both a Whitestrips as well as a Whitestrips for night in order to mitigate the advantage of marketing (both products seemed quite similar for day and night, but having Whitestrips for night would lower any competitive advantage offered by the concept of Simply White Night).
Exhibit 1 shows that a month after the
Parul Pubbi; BEM 106
1/25/15
1 How Costly was Simply White?
We can quantify how costly the entry of Simply White was for Procter and Gamble’s revenues and profits by examining how much of Whitestrip’s potential revenue was taken by Simply White and costs associated with additional advertising, research, and product development as a result (ie by examining the profit margin.)
On page 1, the case study states that whitening strips had become a $460 million business. On page 5, the study states that Whitesrips dropped from a share of 80% to 37% after Simply White reached markets; a loss of (460 million)(.8-.37)= $197800000 million in revenue and .166*197800000=- $32834800 in profit.
2 Moves and Countermoves
Colgate’s competitive advantage had been its association with whiter teeth: its whitening toothpaste had been the number one seller in the market. Now, not only had Procter and Gamble released a superior product for whitening, but the heavy capital investment in research and development had allowed for a scientific way to quantify the change that had held up against the NAD (Exhibit 4) and Would hold up against the Lanham Act (Exhibit 6). Based on the results of the concept test, an important move would consist of correcting public opinion regarding the potency of Simply White via mass advertising. This was easily doable as Procter and Gamble already had relationships with channels due to the high amount of past advertising.
Additionally, Colgate marketed two products with almost the same branding, Simply White and Simply White Night: this strategy could be utilized to market Whitestrips as well: generating both a Whitestrips as well as a Whitestrips for night in order to mitigate the advantage of marketing (both products seemed quite similar for day and night, but having Whitestrips for night would lower any competitive advantage offered by the concept of Simply White Night).
Exhibit 1 shows that a month after the