Colgate Palmolive’s Strategies Essay

A distribution channel is defined as a set of intermediaries performing a variety of functions. These interdependent organizations are involved in the process of making a product or service available for use or consumption. Marketing channels for a product are considered one of the more important decisions made for a product. It is believed that these channels not only serve the markets that the products move thru, but they make the markets. Distribution channels determine the price thus the profit of any given product. The final stop for any product/service is the consumers, what channels the product move through has many options. One very important decision in the channel is the push verse pull marketing. A company’s push strategy uses a sales force and other promotions to pursued intermediates to carry, promote and sell the product to the consumer (Kotler & Keller, 2009). This strategy is most effective when market share or name recognition is low, when consumers have no brand loyalty and product benefits are well known. In contrast, pull strategies use advertising and promotions to provoke consumers to request the product from intermediaries. The strategy is successful when consumers make a choice prior to purchase and choose based on brand loyalty and name recognition. A company must first identify the types of intermediaries available to assist with distribution to the consumer. When Colgate-Palmolive developed the new Precision toothbrush, they had to determine the distribution channel for the product. Like its other products, the Precision toothbrush would be sub-contracted to Anchor Brush. Anchor Brush would produce the new toothbrush (which required three different types of equipment), warehouse- hold inventories, and handle transport- channel is responsible for ensuring quicker delivery. Precision’s positioning as a niche or mainstream product played a major part in the pricing and production schedules being determined. Each positioning had a different effect on pricing and adequate supply for the market. The product positioning also determined what markets and where the product would be sold. Since research had shown the new product would create a new market of consumers and Colgate-Palmolive was an established brand in the toothbrush category, a â€Å"pull strategy† would seem effective. CP could collaborate with Anchor Brush, and sell the niche Precision toothbrushes in food and drug stores. Selling a mainstream Precision toothbrush would send product to mass merchandisers and club stores. Prior to the introduction of Precision toothbrush, Colgate-Palmolive did not sell directly to dentist, a definite area of opportunity for the product, whether niche or mainstream. Colgate-Palmolive like most companies developed a product and determined what distribution channels would be used to get the final product to the end users/consumer. A production, warehousing, and transporting partner were used to move the product to the final stage of the process, retail stores for consumer purchase. Colgate-Palmolive could benefit from using a sales force that worked directly with dentist to distribute the Precision toothbrush. This partnership between the niche product –Precision and dentist would increase awareness and provide â€Å"expert† endorsement to the new product. Once the demand was increased- fueled by dentist promotion, Precision can be moved to a mainstream product with little adjustment in production and warehousing. Colgate-Palmolive’s uses a vertical marketing system strategy to move the Precision toothbrush to market. Colgate-Palmolive is the channel captain with name recognition and the product ideal that the producer, warehouse, and transporter collaborate with to produce the product.