I would like to address the market size of whole toothpaste market.
In the report of 2011 US toothpaste market, the total sales excluding Walmart is $1.38 Billion and 476.2 Million in unit volume. Of that, Colgate and Crest occupy 70%, which leaves 30% for rest of brands and products. Also, the sales of toothpaste has increased by 5.7% compared to last year. Therefore, I assume the growth rate will at least be the same in 2012 since the US is experiencing a economy recovery. In conclusion, there will be $.65 Billion for products other than Crest and Colgate. However, even among those minor brands, the market is still not divided evenly. Products and brands such as Sensodyne and Aquafresh are still own larger market share than unknown brands. Based on another resource, Aquafresh has a market share of 8% in the US market in 2010. Therefore, I would assume rest brands hold a left market share of 15%. According to an article in WSJ, there are 352 different types and sizes toothpaste in the market. Of that, 80 products come from Colgate and Crest, and according to my research, Aquafresh and Sensodyne have 8 and 10 different toothpaste, respectively. Thus, I would assume there are 250 products left for those 10% market.
In conclusion, I assume we will have 1.38*1.057*.15/250=.875 Million in the US.
Hi Michelle - this is probably a stupid question but can you please explain in text what you are calculating in your equation? I see that you are factoring in the growth rate but I am missing what you are doing with the .15/250...
ReplyDeleteThis is a tough market where there are so many competetors and you are really targeting a niche space!
The number 250 is the total brand other than major competitors' products.
DeleteIt seems the toothpaste market is highly concentrated and competitive that a few brands dominate the major market. So, what is the opportunity there for you as an start-up company to differentiate yourself in the competition?
ReplyDeleteWell, since we are doing a completely different toothpaste, type of cartridges, that not one company has ever done before, I believe we can differentiate our product well enough. However, we do need to consider the chance of success since it's so different.
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