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...m positioning, these volume shares would be 10% in year 1 and 14.7% in year 2, or 27 million and 44 million retail units each year. However, such market gains would not come without a cost. It was estimated that anywhere from 35% to 60% of the volumes indicated above could come from Colgate Classic and Colgate Plus. However, the question of Precision's placement still remains. To determine this, CP must analyze the profit implications of the niche versus mainstream positioning strategies. It has been determined that 35% to 60% cannibalization may occur in the Plus and Classic lines as a result of Precision’s release. Furthermore, branding is a serious question in the economic considerations for Precision. Executives debated whether the brush should be known as “Colgate Precision” and thus abide by CP’s stated corporate strategy to build on the Colgate brand equity, or as “Precision by Colgate” and allow the product to stand alone. Stressing Precision as opposed to Colgate would, it was argued, limit the extent of cannibalization of Colgate Plus. It was estimated, both under the mainstream and niche positioning scenarios that cannibalization figures for Colgate Plus would increase by 20% if the Colgate brand name was stressed, but remains unchanged if the Precision brand name was stressed. Thus, with the label “Colgate Precision” maximum cannibalization would reach 80%. Under a niche positioning, Precision would be priced at a small premium above the Oral-B Indicator. Positioned as mainstream, Precision’s price would be at parity with Oral-B regular and Aquafresh Flex. Advertising and promotion expenses would also greatly vary between the two strategies. Given a niche positioning, CP would increase total category spending by $11.2 million and allocate this to the Precision launch. With a mainstream positioning, CP would plan for an 80% increase in CP category spending in 1993, with fully 75% assigned to Precision and 25% to Plus. Such a strategy would be very costly for overall profits and increase cannibalization. Finally, placement would be effected by the two strategies. Through the niche positioning, the main distribution would be food and drug stores (74% of total retail toothbrush sales-1992) where involved oral health consumers most often purchase their brushes. Under the mainstream position, the greater proportion of sales would occur through mass merchandisers and club stores (24% retail toothbrush sales). Also, if Precision is positioned as a niche product, with 4 SKUs, it is unlikely that any existing SKUs would be dropped. However, positioning Precision as a mainstream product, with 7 SKUs, would probably require dropping one or more existing SKUs such as a children’s brush from the Plus line. Although stressing the Colgate brand name may increase the cannibalization figures for Colgate Plus by an extra 20%, we recommend that CP uphold its stated corporate strategy of building upon its brand equity and name the brush “Colgate Precision.” This is clear for many reasons. First, the name “Colgate Precision” was consistently viewed more favorably in consumer concept tests than “Precision by Colgate.” Second, Colgate would benefit through brand loyalty, as new customers and increased market share gained through Precision would increase new purchases across CP’s oral health products. Finally, Precision would benefit from increased brand awareness and perceived quality. As mentioned earlier, a brush’s physical appearance has a significant impact upon consumer purchasing. In consumer tests, Precision was labeled “unusual” in appearance and received “mixed first impressions.” Thus, emphasizing the Colgate brand name will help to overcome this unfamiliarity and grant the product a greater perceived quality. Furthermore, problems in production possibilities would arise, as the mainstream positioning would require 10 months lead time. This could result in inadequate supply of product, issues with quality control, and increased costs of equipment. As a new entrant into the super-premium market, CP should first establish a consumer base, maintain a steady supply, consolidate its market share, and then proceed with expansion. Finally, for CP to maintain broad customer satisfaction, it must establish a niche positioning. As mentioned earlier, such a positioning would only increase Colgate’s total SKUs, while a mainstream positioning would require dropping existing SKUs from its children’s line, a portion of the market which it currently leads but could easily lose. Under the niche positioning strategy, Precision’s recommen...