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Abstract
This paper follows the path of seven studies (see below). However, it is different in one important respect: it also offers a benefit segmentation profile of the U.S. Toothpaste Market.Porter associates high market share with cost leadership strategy which is based on the idea of competing on a price that is lower than that of the competition. However, customer-perceived quality—not low cost—should be the foundation of competitive strategy, because it is far more vital to long-term competitive position and profitability than any other factor. So, a superior alternative is to offer better quality vs. the competition.In most consumer markets a business seeking market share leadership should try to serve the middle class by competing in the mid-price segment; and offering quality better than that of the competition: at a price somewhat higher, to signify an image of quality, and to ensure that the strategy is both profitable and sustainable in the long run. Quality, however, is a complex concept that consumers generally find difficult to understand. So, they often use relative price, and a brand’s reputation as a symbol of quality.In 2008 retail sales in the U.S. were $1.27 Billion for the Toothpaste Market. The market leader Crest had a market share of 34.7%, closely followed by Colgate with a share of 33.5%. We focused on the most popular pack-size—5.8-6.5oz—which had a 45.3% share. Employing Hierarchical Cluster Analysis, we tested two hypotheses: (1) That a market leader is likely to compete in the mid-price segment, and (2) That the unit price of the market leader is likely to be somewhat higher than that of the nearest competition. Employing U.S. retail sales data for 2008 and 2007, we found that, for both 2008 and 2007, the market leader in the U.S. Toothpaste market—Crest—was a member of the mid-price segment. Furthermore, the unit price of Crest was somewhat higher than that of Colgate, the runner-up, which was also a member of the mid-price segment.Thus, the results fully supported both Hypothesis I and II—for 2008 and 2007.We also found strong support for the idea, that relative price is a strategic variable, as we have hypothesized.We discovered five benefit segments. The most fundamental result of this analysis is that it revealed an avalanche of various brands of toothpaste that not only whitened teeth, but were also helpful in preventing tooth decay, as before.Finally, we discovered four strategic groups in the industry.
Highlights
This work follows the path of seven studies: the U.S Men’s Shaving Cream, the U.S Beer, the U.S Shampoo, the U.S Shredded/Grated Cheese, the U.S Refrigerated Orange Juice, the U.S Men’s Razor-Blades, and the U.S Women’s Razor-Blades markets (Datta, 2012, 2017, 2018a, 2018b, 2018c, 2019a, 2019b)
In most consumer markets a business seeking market share leadership should try to serve the middle class by competing in the mid-price segment; and offering quality better than that of the competition: at a price somewhat higher, to signify an image of quality, and to ensure that the strategy is both profitable and sustainable in the long run
According to Procter & Gamble (P&G), this toothpaste uses a “breakthrough shine technology that noticeably brightens your smile after just one brushing”, and that it “removes up to 90 percent of surface stains in just five days”. It seems that the two early Colgate whitening toothpastes—introduced in 2001 and 2003—opened the floodgate of whitening toothpaste in America, as whitening toothpaste sales catapulted to 68% of total U.S retail toothpaste sales in 2008! In Figure 1 we present a 2008 profile of benefit segments of the U.S Toothpaste market that recognizes five segments. 6.2 Benefit Segments: 2008 vs. 1996 In Table 1 we present a benefit-segmentation profile of the U.S Toothpaste market
Summary
This work follows the path of seven studies: the U.S Men’s Shaving Cream, the U.S Beer, the U.S Shampoo, the U.S Shredded/Grated Cheese, the U.S Refrigerated Orange Juice, the U.S Men’s Razor-Blades, and the U.S Women’s Razor-Blades markets (Datta, 2012, 2017, 2018a, 2018b, 2018c, 2019a, 2019b). The roller milling process removed wheat germ—and its nutrients—and the fiber, leaving behind nothing but starch and a little protein (Note 11) Starches made from white flour are carbohydrates that can linger in your mouth and break down into simple sugars Bacteria feed on these sugars and produce acid, which causes tooth decay (Note 12). In 2018 Colgate introduced the generation of Colgate Total toothpaste which contains a new stannous fluoride formula that “fights plaque-causing bacteria on 100% of mouth surface, including teeth, tongue, cheeks, and gums” (italics added) (Note 15). According to the company Aquafresh was the first brand to offer ‘freshness’ as a major product benefit This is because “fresh breath” and “good-tasting” toothpastes were important to young people and families at that time (Note 18). Each class is associated with a price-quality segment typified by the retail stores where they generally shop: each a symbol of their lifestyle (Datta, 2011)
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