The Rise of Battery-Powered Toothbrushes
Executive Summary
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The oral care category has been witnessing increasing sales over the
past few years, especially in the battery-powered toothbrush segment.
Between August 2001 and 2002, sales of power dental accessories in
U.S. food, drug and mass outlets grew by 21.8% (Neff, 2002). There are
many competitors in this industry including Colgate-Palmolive and
Procter & Gamble. In May 2000, Colgate-Palmolive introduced the
Colgate Actibrush with a retail price of $19.99 (Young, 2002). Procter
& Gamble was quick to follow suit and introduced the Crest SpinBrush
in mid 2001 and priced it at $5.99 (Young, 2002). With 50% of the
market share, the Crest SpinBrush dominates the battery-powered
toothbrush industry today (Neff, 2001).
More and more companies are introducing their own battery-powered
toothbrushes and
this increasing competition is driving down price points. Along with
lower price points, competition has led to price wars between
companies.
A major competitor for both Colgate-Palmolive and Procter & Gamble is
Gillette. Gillette introduced its new CrossAction Power toothbrush in
October 2002 (Neffb, 2002). Priced at $6.99, this toothbrush offers
many benefits over the power brushes available to date. Both
Colgate-Palmolive and Procter & Gamble must be aware of ensuing
competition and strategize a plan to conquer new products that emerge.
In the same time frame that power dental accessories rose 21%, manual
toothbrush sales declined by 8% (Neff, 2002). Manual toothbrushes
provide a large amount of profit for Colgate-Palmolive and Procter &
Gamble...
... middle of paper ...
...rushes declined by 8.1% between August 2001 and
2002 (Neff, 2002). Colgate-Palmolive and P&G are cannibalizing their
own products (manual toothbrushes) in the course of promoting another
one (battery-powered toothbrushes). This may negatively affect both
companies' oral care categories in the upcoming years.
Both Colgate-Palmolive and P&G need to keep in mind that the range for
prices of their battery-powered toothbrushes need to fall between
customers' maximum willingness to pay and their production costs
(Messinger, 1995). Understanding their target market and keeping in
line with competition will help both of these companies to offer
better products and in turn gain from higher profits.
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[1] All prices in this report are in U.S dollars.
To evaluate the sustainability of an artefact such as the James Watt’s Micrometer a number of conditions should ideally be observed. As part of the research procedure, our group identified the following conditions:
Colgate versus Crest is one of the marketing industries most famous battles. While Colgate has enjoyed the lead around the world with sales in over 170 countries and over 2 billion dollars, the United States has been their fiercest battle ground and one that Procter and Gamble’s Crest dominated for thirty years as America’s favorite toothpaste. That came to an end when Colgate Total was launched in 1998, Colgate took the lead in the United States. Procter and Gamble to compete began expanding their family brand into other oral health products, which included whitening, toothbrushes, mouthwashes and floss. Finally in 2007 Crest once again regained its top ranked position. (adbrands.net, 2013) We will begin to delve deeper into both companies brand equity, the elements of their Points of Differences, what their past and current brand positioning is, what is included in their brand portfolio, future targets, any segmentation and the marketing mix which makes up each company’s current marketing strategy.
An industry analysis has shown Procter & Gamble’s top competitors; in the personal product industry are Kimberly Clark, Elizabeth Arden, Colgate Palmolive and Avon. PG is a mature saturated company and finds it difficult to expand market share, for a company of its size. To deal with market share expansion and competition PG focuses on cost reduction through a decrease in promotions, coupons and plans to advertise heavily. PG recently teamed with Coke, Wrigley, and Gillett and has the available cash flow to make several businesses investments such as acquisitions and merger, and is not afraid of this business venture. Procter and Gamble has been around for a long time and their methods appeared to work for the company. The earnings growth in the past year has accelerated moderately, compared to growth in the past three years.
This was the world’s first 5 blade razor, introduced in 2006. At first customers bought it and generated a good amount of revenue, nevertheless Gillette feared that customers won’t buy the product again because the price of the refills was more expensive than their other products and this company makes its revenues from the sale of refills. In addition, the Consumer Reports concluded that there was no added value to this product, according to them, the “Fusion” line had the same benefits than the Match3 and they were both “the best a man can get”.
Listerine created a market for mouthwash in the 1920’s when they marketed it as a solution to chronic halitosis. However, in 1983, a new feature was added in which Listerine also fights plaque making it more desirable for consumers concerned with dental hygiene. Today, it continues to fight bad breath, and plaque having 70% of the total market share. According to Johnson & Johnson’s 2012 Annual Report one of the positive contributors to operational results was international sales of Listerine oral care products.
Hatfield , Heather , and Alfred D. Wyatt . "Electric Toothbrushes: Are They for You?." WebMD. WebMD, n.d. Web. 28 Apr. 2014. .
Paramount Health and Beauty Company (Paramount) set out to introduce a new non-disposable razor to the market, the Clean Edge. “Clean Edge’s improved design provided superior performance by utilizing a vibrating technology to stimulate hair follicles and lift the hair from the skin, allowing for a more thorough shave” (Quelch and Beckham, 2011). While Paramount’s senior management agreed on pricing segmentation, they (management) remained split on product positioning in the market. Kotler and Keller (2012) define positioning as “the act of designing a company’s offering and image to occupy a distinctive place in the minds of the target market.” Some of Paramount’s executives envisioned a broad positioning
3. Is it possible for Colgate and Hawley and Hazel to change the toothpaste’s advertising without sacrificing consumer brand loyalty? Is that a possible reason for Colgate’s not responding quickly to domestic complaints?
... your personal supplies. No more, nasty, dried up toothpaste containers our patented squeezing system eliminates the mess. The Multi Express Toothbrush is for everyone whether you’re going on sleepovers, brushing your teeth after lunch, camping in the woods, or traveling for business or for pleasure. Replacement cartridges are quick and easy to switch. The price of the Multi Express Toothbrush will be affordable, because we are charging the lowest price possible that allows our company to obtain a profit. Discount by coupons and other promotional offers will be used. Advertising on television will allow us the opportunity to draw in new customers and keep the ones we have already. Packages should be durable cutting down on the amount of damaged products. Our package should be attractive and draw customers’ attention. The use of intensive distribution will allow us full coverage of the market, making the product available to all consumers at a variety of locations. In conclusion our goal is to keep customers satisfied buy offering them a quality product at a reasonable price. We like to think were making the world brighter one smile at a time.
According to the common size analysis, for instance in 2015, the cash & cash equivalent is a major component of the balance sheet; since it represents 30.81% of total assets, which influence positively on the liquidity of
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