Hi there. I'm Matt. Don't hate the player. Hate the game.1

New here? More info about me here.

Subscribe via email or RSS

Nov 22, 2009 | Comments

Recently over a glorious dinner at Nyonya, a friend and I began discussing toothpaste (he is employed by Colgate).

It began with my claim that you’d have to be insane to pay for Colgate’s price premium ($1.50 – $2.00). Colgate’s mid-tier brand, Colgate Total, surely didn’t justify a 100% premium over the generics.

No-no, he claimed. Colgate is a much better toothpaste. It uses Tricoslan, a patented formula, unique to Colgate.

I retorted that Tricoslan, and any patented Colgate concoction, is merely a marketing gimmick.

Blasphemy, he replied. It’s scientifically proven. Colgate Total cleans teeth better. Others at the table agreed. Generics like Aim, though 99 cents a tube, are morbidly inferior. And everyone was sure that they don’t fall for marketing tricks. So I asked, “How do you know that Colgate cleans better? Because that’s what the commercials say?”

It’s odd that an entire dinner table can recall Colgate’s positioning statement (props to their ad agency). Why is it so memorable?

First, a short marketing history lesson. People are very good at inventing why it is that they act a certain way, especially when it is irrational.

Via The Blank Swan by Nassim Taleb: in an experiment, psychologists asked women to select from among twelve pairs of nylon stockings the ones they preferred. The researches then asked the women their reasons for their choices. Texture, feel, and color featured among the selected reasons. All the pairs of stockings were, in fact, identical. The women supplied backfit, post hoc explanations.

The same experiment is often repeated for Coke vs. Pepsi and functionally similar products. Our brains like to interpret our behavior, where benefits like “texture, feel, color” prevail. When we make choices because of an irrational benefit, like brand equity, it’s a tough story for our minds to digest.

The Proctor & Gamble folks, mid 20th century, incorporated this cognitive bias into their marketing. No one pays an additional $2 for toothpaste simply because it is superficially labeled “Colgate.” They need a reason to believe. Suppose you’re in the toothpaste aisle, reaching for the Colgate tubes. It costs more, but you recall that Colgate functionally performs (allegedly) better for XYZ reasons. The “reason to believe” is a nod to the rational mind, justifying the price premium and purchase.

A story like “Colgate has Tricoslan and a patented formula” is the “post hoc explanation.” It’s not invented in the research lab, but rather by a brand manager.

Now I didn’t manage to convince anyone at dinner. Fighting decades of advertising and brand equity is an uphill battle. But that’s why we see brands like Tide, Colgate, and Coke with 30%+ market share. It’s convincing and it works.

Blog Widget by LinkWithin
  1. DW

    Lol, I remember this conversation! Kapil says that the higher grade toothpaste is indeed of a superior quality to warrant the higher price.

  2. Agreed.

    Shifting topics, I don't know where you are on the political spectrum, but I just saw this video today or Palin supporters at her book signing. Either way, you have to agree that these people are uninformed and simply parroting her “positioning statement.”

    They're familiar with Palin's “brand,” — liberty, being real, good judgement – but when pressed for specifics about the “quality” of her product, people are stumped. Here's the link:

    http://www.youtube.com/watch?v=mKKKgua7wQk

  3. Interesting stuff. I saw a similar video from these guys about the DC tea
    party–hilarious stuff:

    http://www.youtube.com/watch?v=lUPMjC9mq5Y

  4. I remember asking a dental hygienist a similar question, namely, “Are there any brands of toothpaste that are better for my teeth?” Her reply? Colgate Total. Because it has the patented formula with Triclosan.

    Another trick: Convince professionals to recommend your product and you can then exploit consumers' bias towards authority. How to convince professionals? Exploit their biases. Even small gifts, tiny sample tubes of toothpaste, for example, influence decision making processes.

  5. Now I'm not going to assume that Dentists are in bed with Colgate–perhaps it is possible that this Triclosan is marginally better for teeth.

    But if I went to a barber, they would recommend that I use top-tier shampoo. If I went to Best Buy, they'd show me the nicest computer. Such experts will always have a bias.

    I've also done some work in the pharma industry, and you could not imagine the level of marketing that reps spend on health-care professionals. I wouldn't be surprised that they could regurgitate a marketing message that has been repeated for months by traveling salesman.

  6. blancajavierre

    Colgate has a big R&D department and scientifics have proven a new Technology for the Dental Hipersensibilty. No doubt, I'll keep loyal to that brand because it worth it.

  7. blancajavierre

    Colgate has a big R&D department and scientifics have proven a new Technology for the Dental Hipersensibilty. No doubt, I'll keep loyal to that brand because it worth it.

  8. Colgate or Crest?

  9. Dental products have different ways of promoting their brand. Though they need to be careful to their claims.

  10. They have to consider appropriate pricing for the product. This is to ensure it will still be in circulation.

  11. this make sense.

  12. They all have different strategies to sell the product. The important thing they should do is that they have to meet their objectives and the people will surely love and buy the product.

  13. Sgfssddsssssssdsssssasfsfd

    thanks

  14. I have to agree with you. I think Colgate is overrated. People are very good at inventing why it is that they act a certain way, especially when it is irrational. I agree 100% with you.

  15. Helen

    I think Colgate was very successful in cultivating our minds. Their marketing strategy made them a part of our lives. Actually, my fort mill dentist said that it's okay to use other toothpastes than Colgate.

  16. Helen

    Maybe because of high demand. Actually, you don't have to buy Colgate if it's too expensive for you. My bartlett dentist prescribed a cheaper toothpaste than Colgate.

  17. Caroline Knight

    I have braces that's why my myrtle beach dentist gave me a different toothpaste and toothbrush that's why I'm not affected with this issue. If Colgate is too expensive for you, then buy another brand.

  18. Rhys Goodwin

    My son will undergo in a dentist veneers in lexington. Our dentist told us that it is needed to improve the aesthetics of the tooth.

  19. Carol

    The way I see it, people have been blinded about all the advertisements on how toothpaste brands can give you a white teeth. They all have similar formula that will help in cleaning your teeth. The difference is how regular your brush and what foods you consume. Aside from those two, I make sure to regularly visit my Sevierville dentist for dental cleaning.

  20. Skye Marsden

    I've always wanted to have a pearly white teeth because it gives me the confidence I needed. And with that, I always visit my hendersonville tn dentist.

  21. I would have to agree with Skye. Having clean and white teeth will definitely boost up your confidence. You can simply smile anytime you want wherever you are. 

  22. Call me cheap, but I would always buy the cheapest brand. I don't think it would make much of a difference in keeping your teeth white. The way I see it, it's how you brush your teeth and what foods you eat that will determine how white your teeth will be. 

  23. It's often just a matter of brand name these days. Brands that have been around for a while can get away with higher prices just because they're already established and have built a following.

  24. It's not that I'm cheap, but I really don't see any difference in buying an expensive tooth paste and the cheapest one in the store. The way I see it, both of them have the same effect. It's how often your brush your teeth that will matter, not the type of toothpaste that you use.

Reply to “Why should Colgate Toothpaste command a price premium?”