The case is an excellent one because it delves into issues involved in two classic marketing strategies: the pros and cons of focusing on a niche product-market or broadening the target market to a larger, mainstream market. The case also provides a very good example of product development and product line issues including product line “logic.”
Issues to Consider in Preparing Your Case Analysis
- Assess Colgate’s competitive position and current and proposed product line. Be sure to assess Colgate’s product line logic with the addition of Precision as a niche product, and then do the same for the addition of Precision as a mainstream product.
- What are the arguments for and against launching Precision as a niche product? As a mainstream product?
- What is Precision’s expected profit under the niche strategy? What is Precision’s expected profit under the mainstream strategy? How will cannibalization affect these profit estimates?
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