Thus, the product will initially launch in only one New York County. Rochester, in Monroe County was chosen on the basis that it holds the highest potential for the product’s success. Syracuse in Onondaga County and Binghamton in Broome County were not chosen. This choice is supported with data from a comparative analysis that demonstrates how and why it is believed to be the best potential geographical market. The recommended geographic area is premised on a detailed and careful assessment of the geographic market(s) and how the chosen county best suits this proposed strategy.
This will serve as a trial; if the product performs well in Monroe County, it will later be rolled-out to more areas. This subsequent roll-out will determine whether the product is given a national launch. SITUATIONAL ANALYSIS: SWOT STRENGTHS * Inventive design, unlike any other toothpaste product on the market. * TWBA Chiat Day will significantly assist Crest in leveraging the So Mod Mouth Pods™. * Consumers are seeking coupons due to the current state of the economy. WEAKNESSES * Most of Crest’s products are either mature or declining within the product life cycle.
As a result, new products are continuously introduced. * Competitors are able to quickly release comparable products, intensifying competition. * Toothpaste promotions often use sales to drive new purchases based on price. OPPORTUNITIES * Product differentiation- with the amount of rivalry, there is plenty of reason to invent and innovate. * Essential to western hygiene- there is no one who would argue that brushing one’s teeth with toothpaste is not a hygienic staple in western culture. * Emerging markets- as is true with a large variety of industries, the developing world poses a huge opportunity for growth.
THREATS * Everyone is essentially selling the same thing- The Company is no longer selling toothpaste, but more the brand or the features of the toothpaste. * Low switching costs- At one point, toothpaste purchases were mainly driven by individual habits, inclination towards particular flavor and familiarity with the product However, consumers are much more price-sensitive after the recession, even in the recovery stage. They do not always stick to brands they desire, they are now shopping for the best value. * Competitors, namely Colgate, infringing on prized shelf space. ISSUES ANALYSIS &OBJECTIVES
Issue #1: Product differentiation The toothpaste product market is heavily saturated with products (and product lines) that are very similar to each other. They all cover the range of benefits that toothpaste consumers seek, from whitening to tartar control. Consumers are fatigued by the vast array and similarity of toothpaste products available on store and virtual shelves. Fatigue in relation to innovation exists as well, because toothpaste brands have pushed innovation to its limit. Even the newest toothpaste products like Colgate “New? Optic White Toothpaste and Crest “New? 3D White Toothpaste do not have much of an edge.
Six months after launch, the perception of innovation and relevance fades away. Whitening was once an innovative feature, but is now expected. For a new toothpaste product to be successful, it will need to break free of this mold. Objective: To achieve sales of 50,000 packs of day and night “mouth pods” by the second quarter. Strategy: Crest will follow a strategy based on innovation and disruption. The launch of this new product will break through the clutter comprised of existing toothpaste products. It will feature the Crest logo, thereby boosting brand awareness and sales of other Crest products.
Ultimately, a new product category may arise out of a successful campaign for this launch. The new product will be available in two versions: one made specifically for brushing in the morning, and a companion product made specifically for brushing at night. The daytime use product would have light-colored packaging, and the nighttime use product would have dark-colored packaging. If the product is very successful, it could set other brands into their own category of being “anytime” toothpaste products. Crest’s new brand will gain market share from being in its own niche.
A companion product for nighttime use will push more people to brush their teeth before going to sleep. This will not only improve the top line growth of Crest’s new brand, but it will also cause consumers to develop the good habit of brushing two or more times a day; this may also increase the frequency in which a consumer must purchase toothpaste. Tactics: The new product will have a slightly higher price point than that of Crest’s current “New? products and those of competitors. Since toothpaste is a low involvement purchase, tactics will focus on drawing consumers? attention.
Display stands and posters will accomplish this by brining consumers? attention to the product’s placement on retail shelves. The package design will stand out amongst other toothpaste products on the shelves. Online promotions will include banner ads on retail websites and social media profiles, including Facebook and Twitter. Special offers for the product will be made both online and in stores. Issue #2: Growth Stagnant growth in the U. S. market has plagued the toothpaste industry. As mentioned in the Industry Analysis, 98% of Americans are users of toothpaste, which does not allow for much growth.
The population it is not increasing at a rate high enough to sustain our goals of driving up sales in this country. Objective: To move Crest to the position of market leader by at least 5% points by the end of the fourth quarter. In current terms, Crest would need to gain another 6% of the market to ultimately have 41% and a five point advantage over Colgate. Strategy: Jump start the competition against Colgate by targeting a niche segment of the U. S. population who already enjoy luxury grooming products and are willing to try wild and new products.
The primary target would be adults, ages 18-45 who consider themselves to be upper-middle class. The secondary target includes 18-30 year-olds who are still experimenting with new products and have not settled into a rut of brand loyalty. Our new product delivers the burst of innovation that has been so severely lacking in the toothpaste industry. We are offering a brand new delivery system and a feature that has yet to be mass-produced. Tactics: Strategic product releases that start in higher end supermarkets and drugstores. Releases will then move down the scale towards large discounters and superstores such as Wal-Mart.
Although the new product will be priced only slightly higher than the average toothpaste, the goal is to position it as a more luxurious and fun way to brush one’s teeth. The roll-out for the test market will begin in January of 2013 and continue being released, hitting discount stores in July. The time sensitivity of this product release is almost irrelevant because there is no season of increased sales. Starting early in the year is just a ploy to have a fresh and energizing start to 2013. Placement on shelf will be further taken into consideration once packaging is completely finalized.
Issue#3: Existing Brand Loyalty Consumers are more likely to continue purchasing toothpaste brands that they have used since an early age. Therefore, in order to gain a leading market share within the toothpaste segment of the oral care industry, it will be essential to break current purchasing behaviors of our targeted consumers. Objective: Our objective is to increase our brand equity by 25% within the first year of our pilot phase, specifically from repeat purchases by conquest buyers, who initially try Crest „New? So Mod Mouth Pods™ after being exposed to our integrated advertising campaign.
Strategy: To spend $3M on advertising and promotion through an integrated advertising campaign that will highlight the benefits exclusively offered by our brand. Crest „New? So Mod Mouth Pods™ will reinvent the functionality of toothpaste and will bring a refreshing change to consumer perceptions of the category. P&G and its competitors provide toothpaste products that meet current consumer expectations: whitening, plaque and tartar control, fluoride treatment, sensitivity, cavity and gingivitis prevention, and fresh breath. However, P&G understands that consumers more strongly demand value, quality, and convenience.
Overall, P&G acknowledges the current, stagnant, state of the oral care industry and projects that the “pod” design will be a profitable opportunity to capitalize upon. Crest „New? So Mod Mouth Pods™ will fuse the benefits of current products with such a futuristic product design, that in effect it will weaken the bonds of loyalty non-Crest users have. The awareness of this fusion will be accomplished through targeted advertisements. Tactics: Advertising & Promotion Ad Agency Service P&G will assign TBWA Chiat Day responsibilities for the launch campaign of Crest “New?
So Mod Mouth Pods™, aligning our vision of Crest “New? So Mod Mouth Pods™ with the culture of this agency that values the concept of disruption as the underlying basis of its campaigns. Trial offer P&G will send out to a sample of consumers $1. 50 off any purchase of our Crest “New? So Mod Mouth Pods™. This will be for a limited time of one month, before coupon discounts decline in value. Social Media Facebook “Likes” & Free Samples: P&G will offer a 2-flavor sample pack to the first 1000 consumers, who “like” the Crest “New? So Mod Mouth Pods™ Facebook Page on the day of our launch.
MARKETING MIX Product: Crest „New? So Mod Mouth Pods™ A pack will contain 60 pods; consumers could use one to brush in the morning and one at night. One product would be expected to last for one month before replacement. Crest aims to provide a whole-mouth cleaning experience that is convenient and intuitive. The product is sleek and modern in both look and feel. Our New Product’s Features The new product will have a mix of innovative and expected features. Innovative features include the products formulation; it is a fusion of toothpaste, gel and mouthwash in a round capsule.
Within each capsule there will be invisible pockets of pressurized air. Like foaming toothpastes, this product will begin to foam soon after popping in a user? s mouth. The foam will get in-between teeth to fight cavities and kill germs that cause bad breath. The volume of one capsule is smaller than the amount of toothpaste generally applied by consumers to a toothbrush. The mouth pods are safer than toothpaste in cases of accidental ingestion. Active Ingredients Sodium Fluoride (0. 243%). Energy blend: panax ginseng root extract, acai fruit extract, yerba mate leaf extract, guarana seed extract.
Inactive Ingredients: Glycerin Hydrated Silica, Water, Sorbitol, Sodium Hexametaphosphate, Propylene Glycol, Flavor, Peg-12, Cocamidopropyl Betaine, Sodium Lauryl Sulfate, Carbomer 956, Sodium Saccharin, Poloxamer 407, Polyethylene Oxide, Xanthan Gum, Sodium Hydroxide, Cellulose Gum, Titanium Dioxide. A blend of panax ginseng root extract, acai fruit extract, yerba mate leaf extract and guarana seed extract will serve as a very slight stimulant. While these substances won’t provide the kind of instant jolt expected from caffeine, they will deliver a healthier feeling of energy and alertness.
The product for use in mornings would promote this feature as a burst of energy, a perfect way to start the day. Silica is similar to what dentists use to create a professional clean feeling. Expected Features Initially in relation to the research found about our target market, there will be a variety of basic flavors like Mint and Bubblegum. One of the product’s ingredients are a patented flavor booster to keep breathe ultra fresh. The product uses a fluoride mineral formulation to strengthen weakened tooth enamel. It reinforces enamel layers by rebuilding the weak spots on teeth.
A sensitive element in the formulation protects against painful oral sensation. The product provides twelve hour protection from gingivitis, plaque, tender gums, bad breath, cavities and tartar. It promotes healthy gums and safely lifts off yellowing surface stains to restore natural whiteness to teeth. Packaging Design: The packaging will divide its capacity amongst a place for the day pods and the night pods. It will be clearly labeled. An advantage of this is that two different flavors can be included in one package, which gives the consumer the ability to have choice.
This is innovative because usually a consumer is confined to one flavor, until they purchase a new tube of paste. Price With an analysis of current products and our assumptions of the cost of goods sold, we believe Crest „New? So Mod Mouth Pods™ must initially be priced at $5. 25 unit cost (without sales tax or shipping cost). Promotion An integrated marketing communications campaign will leverage the strengths of outdoor, print and television advertisements to create positive brand impressions. Online promotions will also be used: the design of Crest? website is modern and easily navigable, with links to social media extensions. A Facebook page will be created to focus solely on the new product, while Crest? s main Twitter account will promote the new product. Word of mouth buzz will be generated as the product becomes more popular. It will stem from creative in-store displays and social media communications. Place & Distribution Channels Crest “New?
So Mod Mouth Pods will be available in the oral health care aisle of many stores in Monroe County, including CVS Pharmacy, Wegmans, Target, Walgreens, Wal-Mart, K-Mart, Sam? Club, and Costco. It will further be available for purchase online at the following websites: CVS. com, Target. com, Costco. com, Drugstore. com, Walgreens. com, Amazon. com, and Soap. com. Target Market Overall, the current target consumers for Crest „New? Toothpaste Pods™ are adults, ages 18-45 who consider themselves to be upper-middle class. The secondary target includes 18-30 year-olds who are still experimenting with new products and have not settled into a rut of brand loyalty. The basis for this decision is supported by the overall situational analysis, and pecifically the Consumer Analysis, which demonstrates that young adults are the largest demographic segment that adopts new product innovations. In effect, introducing a higher priced innovative product will be perceived as attractive to younger men and women, who are financially able and willing to try a new product. Given the research completed within the Consumer Analysis the county that best fulfills our target market is Monroe County. This county contains the highest population size of all three counties with a population of 735,343 people (Census, 2010).
As shown in figure 1, Rochester (the largest metropolis area in Monroe County) has one the largest percentage of individuals between the ages of 15-49. Figure 1 also indicates that Rochester contains the highest percentage of the population with households containing individuals less than 18 years of age. By capturing this segment of the market, Crest can capitalize on repeat purchasing of these individuals, who will eventually be purchasing their own products. The Rochester area contains the highest population of African Americans of the three major cities with 41. 7% (Census 2010).
This is a concern when marketing a new toothpaste product because as mentioned in the Consumer Analysis, African Americans are the most prone out of any demographic to purchase store brands over national brand toothpastes. However, when looking at the snap shot of the three counties provided in the Consumer Analysis African American’s only represent 15. 2% out of 735,343. This makes the finding insignificant and should not hinder the success of our new product when looking at the total population of the county. Figure 1: Overview of the three most populous areas in each of the counties | Monroe | Broome | Onondaga |
Households with individuals under 18 years | 30. 40% | 23. 40% | 29% | 15-49 | 54% | 44. 60% | 54. 70% | 0-49,999 | 70. 30% | 67. 60% | 70. 00% | $50,000 to $200,000+ | 29. 70% | 32. 40% | 30% | Per capita money income in past 12 months (2010 dollars) 2006-2010 | $17,865 | $21,455 | $17,866 | Median household income 2006-2010 | $30,138 | $30,702 | $30,891 | Persons below poverty level, percent, 2006-2010 | 30. 40% | 27. 80% | 31. 10% | Since we are marketing a new innovative toothpaste product, promotion is another primary aspect in reaching our target market. The advertisements that accompany the launch of the “New?
So Mod Mouth Pods™ should focus on the point of differentiation that this product will provide, such as convenience and multi-functionality. This will propel the product into a more diverse demographic segment as well. The income of the consumer is another factor driving the sales of this product. The Claritas? profiles that were identified in the Rochester Area were as follows: Suburban Sprawl, Young Influential, Domestic Duos, Home Sweet Home, New Empty Nests, and Country Casuals. These profiles were seen to be the most apt to be innovators or at the very least have the capital to try a new product.
As outlined in the Consumer Analysis, these profiles have the income as well as the innovator psyche. When analyzing the areas surrounding Rochester, Esri data shows that the population contains affluent Prosperous Empty Nesters, College Towns, Sophisticated Squires, Connoisseurs, and Aspiring Young Families. The profiles of the surrounding areas of Rochester are ideal consumers for our new product because they indicate savvy consumers, who have the appropriate discretionary income to spend on new innovations and are motivated to do so.
The Rochester area contains a number of colleges and universities, which will further fuel the sales of this new product, with convenience as the primary selling point. The benefits analysis section within the Consumer Analysis outlines what the consumer needs are. Consumers desire a product that makes clear points of difference, making the selection process less cumbersome. Since So Mod Mouth Pods™ are so unique from the other typical toothpaste products available, it will be easy for the consumer to perceive the added benefits of this product.
So Mod Mouth Pods™ provide the consumer with all the mainstream benefits, while reinventing the toothpaste industry. RESEARCH & EVALUATION 1. Objective: To achieve sales of 50,000 packs of day and night mouth pods by the second quarter. Evaluation Mechanisms: Sales will be monitored by retail databases as they occur, and reported back to Crest immediately. 2. Objective: To move Crest to the position of market leader by at least five (5) percentage points by the end of the fourth quarter. In current terms, Crest would need to gain another 6% of the market to ultimately have 41% and a five point
Advantage over Colgate. Evaluation Mechanisms: Market-share charts the issue of stagnant growth, will need a constant eye on the whole industry. Specifically, the amount of sales each company is acquiring. A market-share chart will become the most important tool in keeping the goal of becoming the industry leader on track. Sales will be monitored by retail databases as they occur, and reported back to Crest immediately. Other research will come from reevaluating the most desirable shelf space in stores. To negotiate the best spot in the aisle, the most looked-at spot needs to be known.
Its common knowledge that eye level is preferable, but reaffirming research wouldn’t hurt. The research on market share will begin immediately and continue throughout 2013. The ideal shelf space research will finish 3 months prior to the launch to allow time for negotiation with retailers. Evaluation of the tactics will come via tracking sales figures, units sold, and the market share throughout 2013. 3. Objective: Our objective is to increase our brand equity by 25% within the first year of our pilot phase, specifically from repeat purchases by conquest buyers, who initially try Crest „New?
So Mod Mouth Pods™ after being exposed to our integrated advertising campaign. Evaluation Mechanisms: Management Dashboard Through the use of our Active Data Warehouse we will be able to track all of our marketing campaigns and how closely they are aligning with our strategies stated above. We will initially be offering $1. 50 coupons, and will be actively measuring the impact of this on our weekly sales and revenue. Furthermore, TWBA Chiat Day will gather extensive consumer data based upon the advertising and promotion campaigns that the agency puts forth to implement within the next year.