P&G vs Colgate

Introduced in September 2002, Colgate’s ‘Simply White’ posed a threat to P&G’s dominant market share in the over- the-counter teeth whitening product category. Colgate emphasized that its product bleached teeth as effectively as P&G’s Crest Whitestrips and priced it at a significant 65% lower than Whitestrips which allowed it to gain almost 50% market share. Although concept tests done by P&G indicated that consumers perceived both products to be equal in terms of whitening levels, P&G’s internal scientific data suggested that the whitening level for Whitestrips was 5 times higher than Simply White. Thus P&G is faced with the core issue - Whether Simply White works as well as Whitestrips and how can P&G regain its market share by communicating the superior effectiveness of its product vis-a-vis Simply White to the consumers, in turn disproving Colgate’s claim of an equally good yet cheaper product.
P&G, the world’s largest consumer products company, is almost four times the size of Colgate in terms of revenues but both are leading multi-national companies and thus have substantial resources and are equally organized. Although P&G commands greater market power than Colgate due to its larger size, Colgate’s higher market share in the oral care market allows Colgate equal bargaining power against the other stakeholders in this industry e.g. regulators. One of the regulators in the US advertising space include the National Advertising division (NAD) of Council of Better Business Bureaus, an organization that allows dispute resolution in case of a difference in viewpoints and is a low cost alternative to litigation . NAD’s interest is to ensure accuracy of information in advertising messages. Although NAD has no legal authority to stop incompliant advertisers, the release of information by NAD may damage the brand equity of an advertiser and in turn that of the product in question and thus NAD can play a vital role in changing consumer perception. Other actors in the