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Colgate-Palmolive Case Analysis

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Colgate-Palmolive Company: The Precision Toothbrush

Company Background
As of 1981, Colgate-Palmolive (CP) was an international leader in household and personal care products with sales of approx. $6 billion. An area of focus for CP in 1991 was their manufacturing and distributing plants along with their products. They spent $243 million on upgrading a handful of their manufacturing plants while introducing 275 products worldwide. These efforts were the results of Reuben Mark, CEO of CP who was credited with turning a “sleepy and inefficient” company into a much more profitable one. The main competitors for CP in international markets included Procter & Gamble, Unilever and Kao, along with others.

Products and Industry Profile
The current toothbrush market has been growing at an average of 9.3% annually since 1987. It increased further by an additional 21% in volume in 1992 due to the introduction of nearly 50 new products. The toothbrush industry was divided essentially into 2 segments: value and professional. What set these two categories apart was the type of bristles and the head size. It was clear that soft and extra-soft bristles were the way to go as they experienced the greatest year over year growth although they had relatively low market shares. Soon after, super-premium brushes were introduced into the toothbrush market to try and gain greater market shares than professional toothbrushes. Value brushes were priced at around $1.29, professional brushes started typically at $1.59 and cost as much as $2.09. Last but not least, super-premium brushes ranging between $2.29 and $2.89.
CP had 5 goals that they wanted to meet with their products and marketing. The first one being, understanding the different techniques the consumers use while brushing their teeth. This will help them in determining what kind of bristles and brush head to use in order to

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