HBS Case: Colgate-Palmolive Co.: The Precision Toothbrush

How is the toothbrush market segmented? Compare consumer behavior for toothbrushes and toothpaste. 

The toothbrush market is segmented into three categories: Value, Professional and Super-premium Brushes. The “value” segment brushes were priced on average at $1.29 and accounted for 24% of unit volume and 12% of the dollar sales. Professional brushes priced between $1.59 and $2.09 and accounted for 41% of unit volume and 42% of the dollar sales. Super-premium brushes priced between $2.29 and $2.89 and accounted for 35% of unit volume and 46% of the dollar sales. Companies like C-P and J&J were positioned in the professional segment whereas Oral-B was positioned in the super-premium segment. The super-premium segment also included new entrants like P&G and Smithkline-Beecham.

Both toothbrush and toothpaste were considered important for effective oral hygiene. However, unlike toothpaste, toothbrush was not typically shared by members of the same household. Moreover, it was hard to increase primary demand in the toothpaste category, so new products tend to eat away existing products. In case of toothbrushes, increased advertising and promotion enhanced the category’s visibility which in turned seemed to fuel consumer demand. Additionally, toothbrushes provided retailers an average margin between 25% to 35%, twice that for toothpaste. As a result, many retailers were more receptive to adding new toothbrush products than new varieties of toothpaste. Combining toothbrushes and toothpaste, sales increased for example by 170% for C-P. Companies such as P&G and Smithkline-Beecham entered the toothbrush market as an extension of its toothpaste brand.

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