Introducing a New Toothpaste Product

By positioning the product as a member of the existing ColgatePalmolive toothpaste family, the company should be able to gain access to shelf space in retail outlets and use its existing distribution system. In addition, the company can price the product as a brand name since it is part of a larger family of products. All of these factors suggest that the product should be successful in the market if the taste can be accepted by consumers.

Financial projects indicate that prices of $2.49 and $4.79 should yield unit sales in excess of 11 million units per year, resulting in revenues of $50 million in the first year; these are expected to increase at a rate of 12 percent per year for the first three years, and then increase at a rate of seven percent annually as the market becomes attuned to the new product. The overall marketing budget for the toothpaste is $205 for five years; this, combined with projected revenues, results in gr

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bstitution offers it the wide variety of flavors available from any number of manufacturers (some large and some small). Consumers often do not see a difference among toothpastes (except for whitening agents) and toothpastes for children are chosen nearly exclusively on taste (Sasseen, 1994, p. 56). This factor is a negative for the company in that substitute products are readily available, but a positive in that consumers who are currently using a different toothpaste because of taste may return to the Colgate-Palmolive brand family with the new offering. Threat of New Entrants New entrants on a national level are not very likely because of the large capital investment required to compete both from a production, distribution and marketing standpoint (Sasseen, 1994, p. 57). However, new entrants on a local level are more likely, with generic brands and store brands posing the greatest threat. While this is not a serious threat to Colgate-Palmolive, the threat of new entrants into the market cannot be ignored. Regulatory Environment The regulatory environment is neither a positive nor a negative since it has little impact on toothpastes beyond the claims that advertisers can make in their marketing activities. The American
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Approximate Word count = 2959
Approximate Pages = 12 (250 words per page)

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