Colgate PalmOlive Case Study
Colgate Palmolive Case Analysis
“Position Niche vs. Mainstream: In Respect to Sales Cannibalization”
Analysis of the marketing strategic for Colgate-Palmolive's (CP) new product launch of “Precision by Colgate” Toothbrush. How we would recommend to position (niche vs. mainstream), brand, and communicate the product in respect to sales cannibalization of the existing Colgate-Palmolive product “Colgate Plus” to ensure achieving the highest possible return.
Positioning:
Consider Appendix 1. On the X-axis we have the therapeutic consumer. This refers to consumers who use the product due to health concerns (e.g. avoid oral problems). On the other hand we have cosmetic costumers, who are more concerned with cosmetic factors such as bad breath. The middle ground between the two extremes are customers who are uninvolved and simply use the product to prevent oral problems. Furthermore, on the Y-axis, we can see the price segments: Value, Professional, and Super Premium. The Super Premium category shows the strongest growth whilst the other two categories are stagnating and declining respectively, as we know from the case (Appendix 1). The advantage of placing Colgate precision in the mainstream market is that it would be distributed through many mass merchandise and clubs stores, reaching a larger market. The product would be priced at $1.85 and would capture more revenue than if served under the niche market, with the potential to capture 10% of the US market in one year. The disadvantages are that some SKUs from the “Colgate Plus” line e.g. from the kid’s section would have to be removed and sales of old product lines would be cannibalizated after introducing “Precision by Colgate”. The advantages of positioning Colgate Precision as a niche product are that, despite lower profits (see Appendix 2), profits are still obtained and cannibalization of the mainstream product is kept to a minimum. Price of the product would be at a 15% premium over Oral-B at $2.13 and
“Position Niche vs. Mainstream: In Respect to Sales Cannibalization”
Analysis of the marketing strategic for Colgate-Palmolive's (CP) new product launch of “Precision by Colgate” Toothbrush. How we would recommend to position (niche vs. mainstream), brand, and communicate the product in respect to sales cannibalization of the existing Colgate-Palmolive product “Colgate Plus” to ensure achieving the highest possible return.
Positioning:
Consider Appendix 1. On the X-axis we have the therapeutic consumer. This refers to consumers who use the product due to health concerns (e.g. avoid oral problems). On the other hand we have cosmetic costumers, who are more concerned with cosmetic factors such as bad breath. The middle ground between the two extremes are customers who are uninvolved and simply use the product to prevent oral problems. Furthermore, on the Y-axis, we can see the price segments: Value, Professional, and Super Premium. The Super Premium category shows the strongest growth whilst the other two categories are stagnating and declining respectively, as we know from the case (Appendix 1). The advantage of placing Colgate precision in the mainstream market is that it would be distributed through many mass merchandise and clubs stores, reaching a larger market. The product would be priced at $1.85 and would capture more revenue than if served under the niche market, with the potential to capture 10% of the US market in one year. The disadvantages are that some SKUs from the “Colgate Plus” line e.g. from the kid’s section would have to be removed and sales of old product lines would be cannibalizated after introducing “Precision by Colgate”. The advantages of positioning Colgate Precision as a niche product are that, despite lower profits (see Appendix 2), profits are still obtained and cannibalization of the mainstream product is kept to a minimum. Price of the product would be at a 15% premium over Oral-B at $2.13 and