Setting-up a Luxury Toothpaste Brand?


The task: A potential entrepreneur asked us to help her with a business plan for a luxury start-up – a luxury toothpaste brand. There already exist many well-established luxury cosmetics categories. For instance, a big share of women have no problem with paying 30€ or 40€ for a lipstick. So wouldn't it make sense to also offer them luxury toothpaste? According to her studies, there was no luxury toothpaste brand on the market yet. Even if only a small proportion of the luxury cosmetics consumers would be interested in luxury toothpaste – this could still mean a lot of €€€ for a luxury niche brand. Based on her expertise in the pharmaceutical industry, she found out that there are no major differences in the ingredients among existing toothpaste products. As it’s a very mature industry segment, investments in R&D are basically not necessary and ingredients are cheap, which promises even more €€€. In contrast, she observed that mass-market toothpaste brands claim in their advertising new innovations and special efficacy. However, based on her market insights, she believed that the unique selling proposition of a luxury toothpaste should not rely on its effectiveness, but better on a big variety of unusual flavors and fancy packaging, making it also suitable for gift-giving.

As a potential entrepreneur, she was wondering how we would evaluate her business model. Of course, she had many related questions: what should the brand stand for? For which brand name should she decide? How to do the marketing-mix? And what's the right price of a luxury toothpaste?


The approach: Similar to many other cases when (potential) entrepreneurs contact us, and also for many other marketing problems, it does not make sense to set-up a big project. In most cases, it's enough and most effective to conduct a mentoring workshop. During these sessions, we discuss the business model and potential problems and strategies with an unbiased view from an outside position. In this case, we analyzed the business idea, including the functional and symbolic product benefits, major purchasing motives and the market potential, together with the client and her team. We discussed similar case studies and the possibility of implementing a luxury brand revival strategy in cooperation with one of the world's oldest toothpaste manufacturers.

Results: Based on the mentoring sessions and after some consideration, the client decided not to further pursue this project. This sounds sad, especially as the business idea appeared so promising at first. The analysis of the business model brought up some solvable problems, but also some crucial weaknesses, which put a big question mark on this venture's chance of survival. Therefore, the client decided to concentrate all her efforts on her current business – and that's the happy end of this story.