WAC for Colgate-Palmolive "The Precision Toothbrush"
Introduction
Colgate-Palmolive (CP) is a global leader in household and personal care products, with over $6.06 billion in sales and a gross profit of $2.76 billion. CP's five-year plan emphasizes new product launches and entry into new geographic markets and a continuing focus on core consumer products. Although international sales remained CP's strong suit, accounting for 64% of sales and 67% of profits in 1991, the company faced tough competition in international markets from P&G, Unilever, Nestle's L'Oreal Division, Henkel of Germany and Kao of Japan.
Situation
In 1991, CP held 43% of the world toothpaste market and 16% of the world toothbrush market. Other oral care products included dental floss and mouth rinses. In 1991, worldwide sales of CP's oral care products increased 12% to $1.3 billion, accounting for 22% of CP's total sales. Toothbrushes represented 19% of CP's U.S. Oral Care Division sales and profits, and CP held the number one position in the U.S.
1922 magazine advertisement for Palmolive Soap.
English: Palmolive Soap magazine ad from 1915
English: Colgate Toothpaste Pump Dispenserretail toothbrush market with a 23.3% volume share.
In 1991 the U.S. Oral Care market was $2.9 billion in retail sales; toothbrushes accounted for 15.5% ($453 million in retail sales). Dollar sales of toothbrushes had grown an average rate of 9.3% per annum since 1987, but in 1992 they increased by 21% in value and 18% in volume, due to the introduction of 47 new products and line extensions. Net sales in 1993, however, was projected to be slower due to a buildup in household inventories of toothbrushes in 1992 as a result of increased sampling of free brushes through dentists and an abnormally high number of two-for-one consumer promotions. Due to the high competency level of the toothbrush industry, and an ongoing search for innovation and product differentiation in the market, CP has planned to launch...