Re-generating a mature market A SmithKline Beecham case study

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Page 1: Introduction

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Conventional wisdom tells us that most products have a limited life-cycle. Initially the product may flourish and grow, eventually the market will mature and finally the product will move towards decline. At each stage in the product life-cycle there is a close relationship between sales and profits so that as organisations or brands go into decline, their profitability decreases.

When markets mature there is less scope for firms operating in these markets to extend the success of their existing brands. In a mature market there are likely to be a number of existing products each commanding an established share of the market. There may be little point in new firms entering the market. Competitive jockeying such a product differentiation in the form of new flavours, colours, sizes, etc. will sift out the weaker brands.

However, this case study demonstrates that there is life after what (at first) appears to be maturity. This case highlights the way in which SmithKline Beecham relaunched their Dr.Best toothbrush to radically alter perceptions and buying patterns in the German toothbrush market. The German success was then exported to many other countries thereby transforming the world toothbrush market.

The importance of creating consumer benefits

When consumers buy a product they are doing more than simply buying that product - the reality is that they are buying the “benefits” that the product creates. The successful firm will be the one which provides those benefits consumers require. Transform the benefits and you transform the product. This is the real secret of adding value to a product and is one of the most important lessons that a student can learn about business. On the surface there are often clear and tangible benefits to particular products such as:

  • SHAPE
  • DESIGN
  • COLOUR
  • PACKAGING
  • SIZE
  • APPEARANCE

Added to these are the intangible benefits such as after sales service, prestige, guarantees and customer care policies. Successful businesses are ones which recognise that today’s consumers often require products to do more than meet minimum requirements. For example, people rarely buy cars simply to take them from A to B. Rather they want to travel from A to B in comfort, style and safety. Manufacturers who are able to provide these extended dimensions are the ones most likely to be successful.

Product benefits can be broken down into a number of important dimensions, of which we shall consider three.

  • Generic dimensions are the key benefits of a particular item. Shoe polish cleans shoes. Freezers store frozen food. Toothbrushes clean, refresh and protect teeth and gums, etc.
  • Sensual dimensions of a product are those that provide sensual benefits. These include design, colour, taste, smell and texture. For example, particular toothpastes have their own appearance, texture, taste and smell. These sensual benefits of products are frequently highlighted in advertising.
  • Extended dimensions of a product include a wide range of additional benefits such as guarantees and servicing arrangements.

Page 2: Turnaround marketing

The Dr.Best success story is about turnaround marketing i.e. moving from a position of weakness to one of strength. Lingner + Fischer is a German subsidiary of SmithKline Beecham Consumer Healthcare. In the late 1980s it launched a new toothbrush which, within months, became one of the most outstanding Oral Care products ever seen in Germany. The new product was the Dr.Best “Flex” and it was to trigger a radical change in consumer buying habits ... and cause a revolution in the whole nature, size and value of the toothbrush market - both within Germany and later in other countries.

At the beginning of 1987, the survival of the Dr.Best brand was in doubt. For years it had been losing Market Share to Procter & Gamble, who at the time had established an enormous superiority. In 1987, Lingner + Fischer were not sure about whether to keep or sell the Dr.Best brand. They had identified a few strengths associated with the brand, in particular, a high brand awareness. Dr.Best was a very familiar name to the German consumer. It was first launched in 1953 and its “aided brand awareness” figure was equal to the market leader in 1987. However, there were a number of weaknesses - for example the Brand Share for Dr.Best was 6%. Also there did not seem to be much mileage in toothbrushes in 1987. They were all seen as to be the same - i.e. in cleaning teeth in a fairly standard way. For many years there had been very little innovation or attempt to improve the product.

Page 3: Re-launch

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After a lot of discussion it was decided to investigate a re-launch of Dr.Best. This was to prove to be a highly successful decision. The first step was to carry out and study detailed market research to learn more about consumer perceptions. At the same time, Lingner + Fischer began to work closely with a design studio to create new visual ideas.

One of the findings from the research into consumers attitudes caught the attention of the team. Consumers were keen not only on physically cleaning the teeth, but in addition they wanted to make sure that they did not hurt their gums. In other words they were looking for a toothbrush which enabled its user to operate with a degree of gentleness. It was this piece of information which was to provide the basis for the transformation of Dr.Best and which was to create a revolution in toothbrush manufacture.

By identifying a key new benefit that consumers required, SmithKline Beecham had the secret to substantially increase the value of their product. This breakthrough was to change Dr.Best from a well known but declining brand into the market leader.

The new design

The new toothbrush was revolutionary in that it was the first toothbrush to provide a new benefit that went beyond the generic requirements of a toothbrush: it was the first toothbrush that was flexible. The design studio Halm came up with a design that was distinctive, attractive and expensive-looking. The benefit of a flexible toothbrush was brilliantly visualised for the consumer.

Until this time the 2-component technology which was used in the grip had only been seen in expensive products such as electric razors. It offered better handling due to the soft rubber material of the toothbrush’s grip. By using this new technology it was possible to charge a premium price for the product, because it would be so much better than any of its rivals. In effect, if the innovation was successful it would make many existing rival products appear out of date. The new Dr.Best Flex was to create a great leap forward in people’s thinking and requirements for toothbrushes.

Getting the product made

Once there is a new design for a product, it is then necessary to make sure that the new product can be made on a large scale. In order to minimise the risk, Lingner + Fischer went to two different manufacturing companies to commence the creation of pilot moulds. The samples from these pilot moulds were then sent for three weeks of quantitative in-home consumer tests. These tests had such outstandingly good results that the company knew they had a winner. In fact the results outperformed expectations.

The company realised that they had a commercially viable product and that it was necessary to move ahead as fast as possible. Meanwhile the current Dr.Best was continuing to fall in sales and therefore action had to be taken to ensure that the new toothbrush would be on the market for the next summer season (1988). An essential ingredient in making Dr.Best Flex a success was the advertising. The advertising development started as soon as the product test results were completed and it had been decided to go ahead with the brush. The company’s advertising agency, Grey, was employed to carry out this task with a carefully prepared advertising brief. The advertising agency felt that it was important to inject a degree of personality into the brand.

Page 4: Advertising

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The advertising agency found the personality for the campaign: a real Dr.Best, a professor of dentistry. In this capacity, he had also added value to the development team by bringing in his broad experience. The great advantage of the real Dr.Best was that he was tremendously convincing as an expert in the field of dental care. The character, coupled with the clear and visible benefits of the product, provided a winning formula.

It was at this time that a hitch arose in the preparation for the launch. Lingner + Fischer’s preferred supplier announced that the firm would require nine months’ lead time to produce the new toothbrushes. A meeting was arranged to discuss the problem. The manufacturer was cautious about the new development because of the substantial involvement of new technology. It had been producing “blue” test samples and was at this time unaware that there was another firm also producing samples. During the meeting the marketing manager for Lingner + Fischer placed the second manufacturer’s toothbrush on the table - it was a red one! Realising that there was an alternative manufacturer competing for the order, the preferred supplier realised the importance of fast action, in order to help the product launch keep to budgeted time schedules.

The creative advertisement

In preparing the advertising campaign the agency put forward the idea that if something as delicate as a raw egg could be brushed without actually damaging it, this would show how effective the brush would be on the gums. The next stage was to move on from the egg to a tomato which, with its brittle red skin, was found to be the perfect way of demonstrating the gentleness of the brush.

Two advertisements were consumer tested, the one with the tomato and one with a computer-style demonstration, both using Dr.Best as presenter. The tomato demonstration was far more convincing. Research using the advertisement showed that it had one of the strongest impacts on the buying intention of consumers ever measured in Germany.

Typically, SmithKline Beecham test market all their new products by bringing together all of the successful ingredients of a campaign in a particular area, such as a television region. However, in this instance, there was not sufficient time to go through with this process before the launch.

Page 5: The launch

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The launch of Dr.Best Flex went ahead on the 2nd May 1988 and Dr.Best’s declining fortunes were immediately reversed. The brand’s market share increased steadily and by 1990 Lingner + Fischer were number two again in Germany behind the Blendax brand produced by Procter & Gamble. Lingner + Fischer were convinced that they had a chance to dominate the market. At the end of the day, it was the tomato that was to spearhead the success of the new product. Over the next few years, Lingner + Fischer introduced a range of attractive line extensions - the Compact, Sensitive, Junior and Design variants. These continued to take the German toothbrush market by storm.

There is a saying that “imitation is the surest sign of flattery.” However, in business it is certain that a brilliant idea will be quickly copied. Anticipating this reaction, Lingner + Fischer started developing the second generation of new toothbrushes immediately. The “Flex and Direct” were launched in 1993 and within a year the new toothbrush was rolled out across Europe, the US and Canada. Dr. Best’s market share has continued to increase and the brand took over market leadership in Germany in early 1995 and globally SmithKline Beecham are driving this market.

Market leadership

Dr. Best’s incredible success in Germany is shown by the movement of Brand Share from approximately 6% in early 1988 to approximately 36% in 1996. At the same time there has been a fall in sales of the Blendax brand so that their market share has fallen from 58% in 1984 to 28% in 1995. This was primarily due to:

  • Superior product innovation originating in the Dr.Best “Flex” product, with flexible handle to “SchwingKopf” with added flexible “head” and currently “InterDent” with both previous features and different lengths of bristles to clean more effectively.
  • A premium price. The product is innovatory and has extensive benefits over and above those provided by rival products.
  • Strong communications using the Dr.Best Tomato commercial.
  • Strong point of sales and promotional activities.

Not only has the Dr.Best Flex and its extensions led to a reversal of the fortunes of Lingner + Fischer in this sector, it has also led to an expansion of the German and world toothbrush market. A mature market has therefore been transformed. For example, in 1986, the average number of toothbrushes sold in Germany was at 1 brush per capita per year. Currently, this stands at 1.8 per head (German dentists recommend a minimum of four brushes per head per annum). Data from the UK indicates that we have similar toothbrush consumption patterns to Germany, while highest consumption occurs in Japan at 3.1 and Switzerland at 2.7 per head. Toothbrush sales are now making up an important part of SmithKline Beecham’s oral care portfolio.

In 1986, SmithKline Beecham sold four million Dr.Best toothbrushes in Germany. In 1996, SmithKline Beecham world-wide sales, under the Aquafresh, Dr.Best and Binaca brand names, exceeded 120 million toothbrushes. Forty million of these were sold in Germany under the Dr.Best brand, while 20 million were sold in the rest of Europe and 60 million in North America and other parts of the world under the Aquafresh brand.

Page 6: Conclusion

This case study provides a fascinating insight into successful marketing. Instead of selling off the Dr.Best line, SmithKline Beecham decided to inject fresh capital and ideas into it. By identifying consumers’ requirements for new benefits i.e. a product that was “gentle to the gums,” then introducing the product that delivers this benefit, the company was able to transform the toothbrush market. Persuasive and intelligent advertising helped to build a premium product at a premium price and to change our thinking about cleaning teeth.

As a global enterprise, SmithKline Beecham has been able to exploit this experience on a much larger scale. SmithKline Beecham has a commitment to standardise and share marketing “best practices” in every country in which it does business. The company has set out to ensure that its people use the same world-class marketing methods throughout the world. In this respect it has been possible to apply the lessons learnt from Dr.Best Flex to the marketing of Aquafresh toothbrushes in the UK and many other countries in the world.

SmithKline Beecham | Re-generating a mature market