case study of gillette company

Gilette Case Study

This document discusses Gillette's position as the market leader in razors and discusses opportunities and threats facing the company. It notes Gillette controls a large market share but operates in a saturated, mature market. The document evaluates Gillette's strengths in brand recognition and marketing and weaknesses like consumer skepticism. It recommends solutions like expanding into foreign markets, promoting cultural sensitivity, and glamorizing shaving to attract new customers through innovative marketing strategies. Read less

Consumer Behavior Case Study Gillette

Consumer behavior (na), the university of the west indies mona.

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When most people hear ―GILLETTE‖, one thing comes to mind—Razors. That‘s to be expected, since safety razors were invented by King C. Gillette in 1903, and the product in various forms has been the core of the company‘s business ever since. Few firms have dominated an industry so completely and for so long. Wet-razor shaving (as distinct from electric razors) is a $900 million market. Gillette‘s share is 62 percent, with the remainder divided among SCHICK—15 per cent, BIC— 11 percent, WILKINSON sword—2 percent, and a number of private brands. Gillette would like to achieve a similar position in the men‘s toiletries with a new line of products called the GILLETTE Series. However, its record that market is spotty at best.

One Gillette success, Right Guard Deodorant, was market leader in the 1960‘s. Right Guard was one of the first Aerosols, and it became a family product which was used both by men and women. However, the product has not changed although the deodorant market has become fragmented with the introduction of antiperspirants, various product forms and applicators, and many different scents. As a result, Gillette slipped to third position in deodorant sales behind P & G and Colgate—Palmolive. An even more embarrassing situation is Gillette‘s foamy shaving cream, a natural fit with the razor business. S. C Johnson and Sons Edge Gel have supplanted that brand as the leading seller. These experiences created frustration at Gillette. Despite its pre-eminence in razors and blades, the company has been unable to sustain a leading position across the full range of toiletries. Gillette is using its most recent success, the sensor razor, as a springboard for its new toiletries. The Sensor story provides the background necessary to understand the marketing of the Gillette Series, and also offers some insight into Gillette‘s marketing prowess. Sensor- a high technology cartridge razor- was a gamble for Gillette because it ran counter to consumers‘ buying preferences. Disposable razors, which were produced by the French firm BIC in 1974, had gained control in nearly 80 % of the razor market by 1990. Gillette‘s analysis showed that disposables provide a worse shave than a cartridge blade, cost more to make than a blade and are sold at a lower profit margin. Despite its disdain for the product, competitive pressure forced Gillette to introduce its own disposable, Good News As concern about the squeeze that disposables were putting on profit margins grew, Gillette began looking for a way to displace them. The company spent $ 300 million to develop a technology to significantly improve on the three attributes desired in shaving- closeness, comfort and safety. They came up with the Sensor, a razor with independently moving twin blades. The Sensor produces a superior shave, but it is also more expensive to produce than a disposable. So Gillette‘s gamble was that a better shave would be enough to justify a premium price, and in the process, displace the successful but not a very comfortable disposable razor. In addition to the R & D investment, Gillette spent $ 110 in the first year to advertise Sensor. The strategy paid off. Estimated 1992 sales for the brand was $ 390 million, and equally important, the share of the market held by the disposables has gone down to 42%. Gillette then moved to capitalize on the success of Sensor. The company had a line of toiletries in development, and the decision was made to tie them closely to sensor. The line consists of 14 items:

two shaving gels for sensitive and regular skin

two shaving creams

two concentrated shaving gels

a clear gel anti- perspirant

a clear gel deodorant

an anti- perspiring stick

a deodorant stick

An after- shave gel

An after-shave lotion

An anti- perspiring aerosol and a deodorant body spray available only in Europe.

The products in the Gillette series were developed over a three year period at a cost of $ 75 million. They were tested on 70000 consumers. An indication of their newness is the fact that Gillette has 20 patents pending with them. Consideration had been given to introducing the line in 1992, but the introduction was cancelled by Gillette‘s CEO, Alfred Zeien. He insisted that the line not be launched until consumer tests showed that each of the 14 products was preferred to the best- performing brand in its category. All the products have a common fragrance that Gillette calls Cool Wave. They come in silver and blue packages like the Sensor, and the black lines on the packages match the grooved sides of the Sensor Razor handle. The items retail at $ 2 each, 10- 20 % higher than the prices of major competing items. As was the case with Sensor, Gillette hopes that the products‘ innovation will convince men to switch brands and pay the higher prices. During the Gillette Series first year, the company spent $ 60 million on a joint advertising campaign with Sensor. Just like Sensor, the line was to introduce in January with ads on the Super Bowl. The campaign uses the same theme as Sensor. ― The Best a man can get‖. Initial TV commercials were one minute in length. They started with 15 seconds on shaving gels, and cream, followed by 30 seconds on Sensor and 15 seconds on aftershaves. The deodorants are advertised separately. The Gillette series faces two major problems:  Convincing consumers that the line is actually better and the higher price justified will be more difficult than with SENSOR. With the razor, Gillette had name recognition as the dominant firm in the industry. In addition, the design differences the sensor were visible, and a consumer can directly enjoy a closer shave. With the toiletries, Gillette does not have a strong position in the consumers‘ minds, nor are the benefits provided by the products obvious. Furthermore, the men‘s toiletries market is extremely competitive. Powerful firms with proven marketing skills have taken a greater interest un this category. P & G has acquired Old Spice and Noxzema; Colgate owns Mennen, and Unilever purchased Brut. It‘s unlikely the rest of the firms in the market will sit back and ignore Gillette‘s activity.  Gillette is tying, the new product line to the Sensor but using a different brand name. If consumers do not associate the Gillette Series with the innovativeness and success of Sensor, the new line may just be another brand in an already cluttered market. According to a Gillette Vice President, one of the most compelling aspects of the Gillette series is its synergy with the company‘s core business—razors. If the new line is successful, Gillette anticipates adding other men‘s grooming products such as hair sprays and shampoos. The firm‘s CEO, Zeien says, ― we‘re already the worldwide leader in blades, Will we be the world leader in other (toiletries) or not? That‘s our goal.‖

b. Target Market :-

Gillette has five major lines of business: blades and razors, toiletries and cosmetics, stationery products, Braun appliances, and Oral-B dental products. Blades and razors contributed over 60% of Gillette's profits through most of the 1970s and 1980s. This performance let the company meet its stated goal of "sustained profitable growth."

This tradition of profitable growth was challenged when profits on blades and razors faltered and the price of Gillette's stock stagnated. The diversification strategy that distracted management's attention from blades and razors had diluted the valuable Gillette brand name by associating it with non-shaving products.

The introduction of a line of men's toiletries (Gillette Series) that was years in development represent a risky, perhaps final, attempt by Gillette to fix its flagging toiletries operation. The trouble: Despite its pre-eminence in razors and blades, Gillette has had difficulty persuading men to stock other Gillette goods in their medicine cabinets. In part, that's because its offerings, including Right Guard deodorant and Foamy shaving cream, have suffered from unfocused marketing and commodity pricing.

Gillette has put across its brand very elegantly in both Men and Women Segment. In men Segment they have targeted each class right from Rich class to higher middle and lower middle class. Apart from this they had kept a range of products for men like shaving gels for sensitive and regular skin, clear gel deodorant etc. However, to beat the cut throat competition in market they didn‘t limit their target market to Men. They introduced a Blue Ocean. This is yet another aspect of Gillette's excellent brand management. In doing so, they have created a huge new potential market for themselves - 50% of the population that was out of bounds for them as long as they were dealing with men alone. True, the market is nascent and a small chunk of their revenues; however the market itself has very few branded players, and even they are scattered in numerous categories - epilators, hair removal creams, etc. Considering that majority of women around the world (esp. the developing countries) still rely on waxing for body hair removal, Gillette has rightly recognized the potential in this market.

Gillette has priced its "Gillette Series" well above the industry average. The Perceived-value pricing strategy suggests that Gillette is leveraging its customer loyalty (i. the consumers who are brand loyal to Gillette razors). Gillette has been using Perceived-value pricing strategy for its toiletries products based on the buyer's image of the product performance (Gillette's quality perceived image), the channel deliverables and Gillette's reputation, trustworthiness and esteem. This strategy has not been working well for Gillette in the toiletries category as this segment's customers are price-sensitive because they are frequent users of this category of items. Gillette has failed to convince the customer that it offers the lowest total cost of ownership (TCO) so far. Value pricing strategy would be better for Gillette because the toiletries is a highly price sensitive and low price stimulus market growth industry. Its advantages is that production and distribution costs fall with accumulated production and a low price discourages actual and potential competition, in addition to maximising market share in this category. Value Pricing is aimed at winning loyal customers by charging fairly low price for a high-quality offering. It isn't a matter of simply setting lower prices; it's a matter of reengineering the Gillette's operations to become low-cost producer without sacrificing quality - a strategy already adopted in the razor's category – to attract a large number of value-conscious customers. Disadvantages would be the risk of getting trapped in to either, low-quality trap, fragile-market-share trap or price-war trap. In addition, Gillette has to be willing to make a commitment to have and be able to operate with lower ratios of expense than everybody else.

d. Differentiated on functional attributes through innovation

Gillette has always been an industry innovator, with ample budget allocation for R & D.

 Consumer-driven innovation may sound obvious, but the latest technological discoveries are often what drive innovation in many companies (including Gillette). Yet technology-driven innovation is only successful if it fulfils an unmet consumer need. So by starting with a clear understanding of what the consumer desires and allowing that understanding to guide the search for innovation, the company increases its chance for success.

 Yesterday's passive consumer is today's engaged consumer: A company should not underestimate the importance of consumer-driven innovation in an environment where healthcare consumers are better informed and more demanding.

e. What other positioning possibilities are there?

Market Positioning Possibilities for Gillette can be proposed in variety of products. It can break into a range of products like

Shaving line

Deodorant line

Aftershave line

The shaving line can further be divided into the shaving cream and razor. In this scenario there can be 3 distinct positioning that Gillette can take up in the consumers‘ minds. If Gillett is one Brand, then the positioning should be the same as for the other series of men‘s grooming products.

Apart from this, Gillette has always been on it toes when it comes to introducing latest technology product and has thus reaped the benefits of being the first entrant in introducing the new products.

There are many other positioning possibilities for a Brand. Gillette can position the various products it has separately, or treat Gillette as a master Brand. If Gillett is one Brand, then the positioning should be the same as for the other series of men‘s grooming products. However if it breaks it into categories, then there is a shaving line, and then a deodorant line, and it can get into an aftershave line as well, unless it wishes to keep it aligned with the shaving category. In this scenario there can be 3 distinct positioning that Gillette can take up in the consumers‘ minds.

Q. What strategies do you propose to Gillette? Address the entire marketing mix.

Marketing Mix

Gillette products are currently fulfilling only the core and basic needs to some extent. But since the"Gillette Series" will target a new segment; it has to be very strong on attributes. Again, additional features need to be there to satisfy the basic and expected needs of the consumer. The "Series" should have superior fragrance and higher antiseptic attributes, in connection with "Sensor". Further, initially, the product will be launched with variants. The new Gillette Series would target the basic and core product consumers where Gillette has no presence so far. So, the customer values promised and delivered would also be different from that of the premium segment. The focus would be to 'Gillettifying' the product. This is important because we have to reach a larger, price sensitive, not so loyal segment of the market. So far, Gillette has only followed a dumping strategy with very little customisation. For the "Gillette Series", this strategy would not work well.

Value Pricing (Combination of high-low and everyday low pricing)

Value pricing strategy would be better for Gillette because the toiletries is a highly price sensitive and low price stimulus market growth industry. Value Pricing is aimed at wining loyal customers by charging fairly low price for a high-quality offering. It isn't a matter of simply setting lower prices; it's a matter of reengineering the Gillette's operations to become low-cost producer without sacrificing quality - a strategy already adopted in the razor's category – to attract a large number of value-conscious customers.

Place (Distribution)

Hybrid Channels

Gillette's major channel is Wal-Mart, which acts as a threat by having a buyer's bargaining power. By adopting a hybrid channel strategy and having direct-response Internet site, virtual mall, and thousands of links and affiliated sites, Gillette can reduce this threat. Gillette must make sure that these channels work well together and match each target customer's preferred ways of doing things. Customers expect channel integration to have features such as: the ability to order a product online and pick it up at a convenient retail location, the ability to return an online-ordered product to a nearby retailer and the right to receive discounts and promotional offers based on total online and off-line purchases.

Advertising and Promotion

The strategy of pitching men with a few extras while they're in the barber's chair is very old but shows no sign of dying out. Gillette should launch "Gillette Series" with its first male grooming collection by sending product samples to hair salons around the country. These should come with a ̳complete with a detailed guide suggesting language, dress code and marketing strategies design to make men feel more comfortable when reaching for Gillette shampoo, gel or aftershave'.

Gillette is to rely on word of mouth and media coverage to attract customers.

Choose authentic male role models. There are signs that the brand is shifting its focus away from technology and towards sponsorship. Celebrities and sports ambassadors of Gillette should be fully integrated into "Gillette Series" brand programmes as they did with "Sensor" and will be leveraged to the "Gillette Series" through multifaceted marketing initiatives, including global print and broadcast advertising, consumer promotions, point-of- sale materials, online and public relations in support of "Gillette Series" line.

Crucially, it should also depend on women. One of the surprising discoveries is that women are the most influential source to men when it comes to buying toiletries. Sales could be driven by gift vouchers, and most of those are bought by women for Father's Day or birthdays (Never underestimate the influence of women).

Communicating Value Gillette should adopt a push and pull strategy to communicate the abovementioned values. The ads would involve a sturdy, tough, smart man and project him as theGillette man (much like the Marlboro man). The focus would be on the "Gillette Series" though it will also co-advertise "Gillette Sensor".

Strategies proposed to Gillette:

Perhaps a more staggered approach would work better, from releasing the gels and after shaves, and then moving onto deodorant, since you do not want to put too many different variants out there. It takes time to build a powerful reason to believe in a product for a consumer, and diluting the equity of sensor with too many different product types would be a disaster.

A better strategy would be to first gauge not just consumer reaction to product quality, but to gauge consumer understanding of the brand Gillette. If the Brand is best known for a smooth comfortable shaving razor, then it would be advisable to first build on that equity further and introduce more razors, and add in a shaving gel. Hence the products need to be staggered out.

Secondly, to build on the Price, they have one premium product in the form of razors. However there is still room to build a pyramid within Gillette's razors and add in a further premium variant, as well as a discounted variant as well.

The Gels and Deodorants, when they come in should follow a similar strategy come in at a similar premium of 110-120 and then build variants surrounding it. For example the Cool Wave series can be positioned at a 130 premium to competition. A further more niche variant can come in at a 150 index, and then a more standard variant series at a 100 index as the discounted variant series.

Ownership of the category in the market is extremely important. The worst thing to do is to not take advantage of proper Placement. Globally companies such as Procter and Gamble as well as L'oreal have taken a space in the mind of the shopper through ownerships of shelves in store. It is important for Gillett series to be placed in a premium place, next to perhaps associated categories, and at eye level to most male consumers in the relevant age group. Shop shelf decoration is also important to announce the premium position.

Finally, the promotional angle must not be discounted. It is the single biggest reason after the Product itself, and is the right call for the consumers to initially think of trial. To achieve this trial, the communication must incorporate the same tagline of Gillette sensor, i the Best a man can get, and build on the equity that was created by Sensor. In this manner using all the tools to cater further success.

Multiple Choice

Course : Consumer Behavior (NA)

University : the university of the west indies mona.

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Home » Management Case Studies » Case Study on Consumer Behavior: Gillette

Case Study on Consumer Behavior: Gillette

When most people hear “GILLETTE”, one thing comes to mind–Razors. That’s to be expected, since safety razors were invented by King C. Gillette in 1903, and the product in various forms has been the core of the company’s business ever since. Few firms have dominated an industry so completely and for so long. Wet-razor shaving (as distinct from electric razors) is a $900 million market. Gillette’s share is 62 percent, with the remainder divided among SCHICK–15 percent, BIC–11 percent, WILKINSON sword–2 percent, and a number of private brands.

Gillette would like to achieve a similar position in the men’s toiletries with a new line of products called the GILLETTE Series. However, its record that market is spotty at best.

One Gillette success, Right Guard Deodorant, was market leader in the 1960’s. Right Guard was one of the first Aerosols, and it became a family product which was used both by men and women. However, the product has not changed although the deodorant market has become fragmented with the introduction of antiperspirants, various product forms and applicators, and many different scents. As a result, Gillette slipped to third position in deodorant sales behind P & G and Colgate–Palmolive.

An even more embarrassing situation is Gillette’s foamy shaving cream, a natural fit with the razor business. S. C Johnson and Sons Edge Gel have supplanted that brand as the leading seller. These experiences created frustration at Gillette. Despite its preeminence in razors and blades, the company has been unable to sustain a leading position across the full range of toiletries.

Gillette is using its most recent success, the sensor razor, as a springboard for its new toiletries. The Sensor story provides the background necessary to understand the marketing of the Gillette Series, and also offers some insight into Gillette’s marketing prowess.

Sensor- a high technology cartridge razor- was a gamble for Gillette because it ran counter to consumers’ buying preferences. Disposable razors, which were produced by the French firm BIC in 1974, had gained control in nearly 80 % of the razor market by 1990. Gillette’s analysis showed that disposables provide a worse shave than a cartridge blade, cost more to make than a blade and are sold at a lower profit margin. Despite its disdain for the product, competitive pressure forced Gillette to introduce its own disposable, Good News.

As concern about the squeeze that disposables were putting on profit margins grew, Gillette began looking for a way to displace them. The company spent $ 300 million to develop a technology to significantly improve on the three attributes desired in shaving- closeness, comfort and safety. They came up with the Sensor, a razor with independently moving twin blades. The Sensor produces a superior shave, but it is also more expensive to produce than a disposable. So Gillette’s gamble was that a better shave would be enough to justify a premium price, and in the process, displace the successful but not a very comfortable disposable razor. In addition to the R & D investment, Gillette spent $ 110 in the first year to advertise Sensor. The strategy paid off. Estimated 1992 sales for the brand was $ 390 million, and equally important, the share of the market held by the disposables has gone down to 42%.

Gillette then moved to capitalize on the success of Sensor. The company had a line of toiletries in development, and the decision was made to tie them closely to sensor. The line consists of 14 items:

two shaving gels for sensitive and regular skin
two shaving creams
two concentrated shaving gels
a clear gel anti- perspirant
a clear gel deodorant
an anti- perspirant stick
a deodorant stick
An after- shave gel
An after-shave lotion
An anti- perspirant aerosol and a deodorant body spray available only in Europe.

All the products have a common fragrance that Gillette calls Cool Wave. They come in silver and blue packages like the Sensor, and the black lines on the packages match the grooved sides of the Sensor Razor handle.

The items retail at $ 2.69 each, 10- 20 % higher than the prices of major competing items. As was the case with Sensor, Gillette hopes that the products’ innovation will convince men to switch brands and pay the higher prices.

During the Gillette Series first year, the company spent $ 60 million on a joint advertising campaign with Sensor. Just like Sensor, the line was to introduce in January with ads on the Super Bowl. The campaign uses the same theme as Sensor. “The Best a man can get”. Initial TV commercials were one minute in length. They started with 15 seconds on shaving gels, and cream, followed by 30 seconds on Sensor and 15 seconds on aftershaves. The deodorants are advertised separately.

The Gillette series faces two major problems:

Convincing consumers that the line is actually better and the higher price justified will be more difficult than with SENSOR. With the razor, Gillette had name recognition as the dominant firm in the industry. In addition, the design differences the sensor were visible, and a consumer can directly enjoy a closer shave. With the toiletries, Gillette does not have a strong position in the consumers’ minds, nor are the benefits provided by the products obvious. Furthermore, the men’s toiletries market is extremely competitive . Powerful firms with proven marketing skills have taken a greater interest un this category. P & G has acquired Old Spice and Noxzema; Colgate owns Mennen, and Unilever purchased Brut. It’s unlikely the rest of the firms in the market will sit back and ignore Gillette’s activity.
Gillette is tying, the new product line to the Sensor but using a different brand name. If consumers do not associate the Gillette Series with the innovativeness and success of Sensor, the new line may just be another brand in an already cluttered market.

According to a Gillette Vice President, one of the most compelling aspects of the Gillette series is its synergy with the company’s core business—razors. If the new line is successful, Gillette anticipates adding other men’s grooming products such as hair sprays and shampoos. The firm’s CEO, Zeien says, “ we’re already the worldwide leader in blades, Will we be the world leader in other (toiletries) or not? That’s our goal.”

How is the Gillette Series being positioned with respect to (a) competitors, (b) the target market, (c) the product class, (d) price and quality? What other positioning possibilities are there?
Is Gillette making the best use of the brand equity that has been created with Sensor?
What strategies do you propose to Gillette? Address the entire marketing mix.

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Gillette Case

Executive Summary Gillette is a world known multinational company in shaving products market and holds more than 70% market share (Hartline 2007) in this segment. Since its very inception in 1901, Gillette has always been envied for delivering the finest shaving care products both for men and women. Besides, it has also diversified its product lines extending it to toothbrushes, toiletries, stationeries, cosmetics and other household appliances.

Originated in Boston, Gillette has been dominating its domestic market in the United States since starting and then slowly and gradually becoming a global leader. This case study provides an overview of the constant product innovation by Gillette throughout its’ history and scope for further research and development in an innovation driven wet shaving market. The case also discusses the strategy of Gillette for further expanding its dominant market share around the world under the ownership and guidance of Procter and Gamble (P;G) and making Fusion – a first five-bladed razor its flagship brand.

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While doing this Gillette also has to face stiff competition from its premier competitors, Wilkinson Sword-Schick Company and BIC. Though being at the top, Gillette now deals with the problem of product innovation in a somewhat stagnant and mature shaving market and needs to find other ways to remain on top. The possible solutions relate to acquiring its competitors’ business, developing and expanding the women’s market and further reducing the prices to reach more customers.

It calls for some broad recommendations and implementation. SWOT Analysis Internal Strengths • World leader in producing extraordinary shaving care products of world class quality through constant innovation and successful in most of them • Holding a major share of the global wet shaving market (more than 70%) (Hartline 2007) • Huge financial resources at its disposal giving Gillette an edge over the others for extensively undertaking Research and

Development (R;D) activities for product development and innovation • Well established production and marketing channels worldwide • Diversification of Gillette’s product lines to toiletries, cosmetics and other home appliances, thus providing a complete range of shaving solutions • Fair price of all the major shaving products (customers get the value for money) • Differential marketing i. e.

it adopts different marketing strategies for different market segments from country to country (Hartline 2007)

Internal Weaknesses • Some analysts consider that Gillette is growing slowly in the world market and is still below its’ actual potential (Hartline 2007) • Past diversification activities and acquisitions have not been very successful (Hartline 2007) • Gillette’s involvement in too many lawsuits increase the company costs and also affect its’ brand value (Hartline 2007) • Predominant reliance on single product line- 2/3rd profits from razor blade and razor division • Delayed response to competitors’ moves The company seem to diversify haphazardly External Opportunities • Increasing demand for personal grooming products worldwide due to sociocultural trends • A huge portion of global population both men and women shaving with a razor blade • No close competition from any other company (Schick claims only 18% of the market and BIC holds about 5%) (Hartline 2007) • Majority of Gillette’s sales is generated outside the United States (more than 60%) (Hartline 2007) External threats Many industry analysts believe that Gillette has come to an end of its’ historical product innovations in the already grown-up wet shaving market • Industry analysts believe that Schick may introduce a six-bladed razor anytime in response to Gillette’s five-bladed Fusion • Growing popularity of use and throw away disposable razors (serious competition from BIC in this segment of the market) • Problem of cannibalization with most of its products Problem Identification and Analysis Today no company can survive in any type of market without continuous development and innovation of its products and services.

Product innovation can be in terms of introducing/creating a new product/service or significant improvements in the existing one in relation to its technological specifications, components and materials, incorporated software, user friendliness or other functional characteristics (Weyrich 1998). Gillette has always followed the concept of innovation, making it a part of its corporate culture, the result is some technologically superior products in the consumer products industry and most importantly, sales boosting for the company.

Annexure 1 provides details (Gillette Fusion Case Study 2008) of some of the razor innovations introduced by Gillette over the years including the first double-bladed razor in 1971 (Trac II), loaded blades in 1990 (Sensor), the three-blade razor in 1998 (Mach3) and finally the five-bladed razor in 2005 (Fusion). These include both manual and battery operated versions. It also introduced razors specifically for women like Sensor, Sensor Excel in 1993 and Venus.

Some of its products sales hit $ billion mark winning many awards also for technology.

But the game of innovation has often turned ugly with each of the company trying to bring in something new every time and filing lawsuits against each other. This is what happened when Schick introduced Quattro- the world’s first four bladed razor in 2003. This also created the battle for upmanship. The main problem discussed here in the case is that how Gillette can further enlarge its already dominant market share in an industry which is purely based on innovation and where many analysts believe that the companies in this market segment have reached the end of meaningful product innovation.

Given this what marketing strategies should Gillette adopt as it moves into the future to maintain Fusion as P&G’s 24th billion dollar brand? This is significant if Gillette wants to remain ahead of its competitors and maintain its dominance.

Generation and Evaluation of Alternative Solutions Innovations take time and we can see that (refer Annexure 1) there is a big time difference between different razor innovations done by Gillette (last one being Fusion, 2007).

Given the limited scope of something new to come-up in the shaving market too early, Gillette may adopt the following strategies to maintain its current leadership in the future as well with reference to Fusion: 1) A Merger, Acquisition and Collaboration- Gillette has done this in the past also, acquiring the business of its competitors or providing the product/service in collaboration like when Wilkinson Sword due to its limited resources could not compete with Gillette sold much of its blade business to the latter.

Adopting this technique even today can reduce its competition significantly especially in the disposable razors segment where BIC is the leader. This way it can gain BIC’s market share which is very strong in Europe. But as case data shows Gillette’s most of the acquisitions have not been successful and have also led to a decrease in its market share. 2) Gillette can also reduce the prices of its razors and replacement cartridges to be more competitive in future.

When compared to Schick and BIC’s prices Gillette is at a disadvantage irrespective of superior technology. Presently many people may be shaving with other company’s razor considering only the price factor especially in the underdeveloped and developing countries. Most of its razors and cartridges’ price is high compared to Schick and BIC. Following the price reduction strategy can surely create new customers adding to the size of its market and may also increase the frequency of buying by existing customers, thus maintaining the market share.

But heavy expenditure on R&D and promotional activities ultimately increases the selling price of the product which also cannot be avoided. 3) Gillette should also focus on Women’s market as this market is still underdeveloped (especially in Europe where only one-third women wet shave) due to less number of women shaving with a razor compared to men.

So Gillette should introduce razors specifically for women (the last one was Venus in 1998) and further penetrate the market. Recommendations

Considering the above alternatives, the more urgent for Gillette is to cut down the prices keeping in view the competition in future and defending its market share. Because people today want good quality products at reasonable prices and what may seem as reasonable today may tend to be looked as costly tomorrow by the customers, in spite of good quality. Consequently people may go for other brands’ Shaving blades and Razors which will decrease Gillette’s market share and profitability in the long run. Implementation

Gillette, rather than conducting R;D activities in its own laboratories should decentralize them and hire well-reputed agencies/organisations specialising in it because setting up own laboratories and then hiring experts is a very costly affair especially considering the size of Gillette. The direct impact will be in the form of reduced prices of its products and saving millions of dollars also which can be further reinvested or else used in marketing the product.

This will automatically expand its market share by creating new customers and maintaining the present ones by increasing the frequency of their buying.

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How Gillette innovated and improved its market share in India

Executive Summary : Traditionally, Gillette relied on extensive research and development to create a single product for global distribution. The product was supported by a marketing premise that it would be equally valuable to customers globally. But Gillette set aside its global strategy in India and grew its market share dramatically. This case study looks at how Gillette innovated by tailoring advertising and inventing a new product development process to reflect local shaving habits.

Gabriela Berner, Jade Chang, Marina Dunaeva, and Leonardo Scamazzo.

Although Gillette entered the Indian market in 1984 and launched its newest triple-blade system, Mach3 in 2004, sales were flat for a long time. The product did not go through any changes and kept its key features - such as long lasting diamond-like coating blades, 'PowerGlide' smoothness, ergonomic handles, pivoting precision heads - and premium price, which was 10 times more than its two-blade competitors.

Even though the target customers were professional men with higher disposable incomes than the average Indian, the traditional, double-edged razor, could not be dislodged. Indian men do not consider shaving a significant enough activity to justify such a premium. Gillette's Mach3 value proposition was based on extensive consumer research, which highlighted key concerns men had about shaving: it was time-consuming, caused skin irritation and was generally unpleasant. Mach3 promised "the closest shave ever in fewer strokes - with less irritation". Research and development served as the key value network component supporting this value proposition, as it was crucial to deliver the promised performance. Manufacturing, distribution, marketing and advertising were geared for the global introduction through increased production capacity and aligned promotional material.

With such indifference towards shaving, Gillette had to focus on changing the consumer's attitude, leading to some creative marketing campaigns. For example, the launch of the newest Gillette Mach3 in 2009 was supported by the 'Shave India Movement 2009' campaign which included several initiatives. Gillette created the platform 'India Votes... to shave or not' to support this campaign, which asked three controversial questions: Are clean-shaven men more successful? Did the nation prefer clean-shaven celebrities? And the big one: do women prefer clean-shaven men? For two months, various media channels picked up on the campaign and ran interviews, discussions, editorials and news stories, which triggered popular interest. The main purpose was to create a debate around shaving.

The company created the Women Against Lazy Stubble (WALS) association, where women were encouraged to ask their men to shave, capitalising on their role as influencers of men in this aspect. Gillette recruited Bollywood celebrities such as Arjun Rampal and Neha Dhupia to support the campaign. This innovative way of marketing proved to be effective and as awareness grew, sales and market share increased by 38 per cent and 35 per cent respectively.

Until 2010, Gillette India had been following a strategy of marketing cheaper-end US-developed razors. However, low-income Indian customers who could not afford Gillette's premium price relied on the outdated, but traditional, double-edged razor shaving systems. An estimated 400 million customers not happy with existing market offerings provided a promising growth opportunity for Gillette. Thus, it focused on understanding its customers and the challenges they faced, which required spending hours visiting and interviewing consumers in order to understand the role of grooming in their lives and their needs.

The company realised that apart from affordability, customers also valued safety and ease of use. Those customers' needs would not be satisfied by Gillette's existing offering - most lacked running water, had to manage longer facial hair and sit on the floor while shaving. Nor were they satisfied with the existing double-razor solution as they caused frequent cuts.

Once Gillette understood this consumer segment, the company created a new customised product. Gillette Guard, the first product created just for the Indian market, was introduced in October 2010. It was priced at just Rs15 per razor - less than 35 cents and three per cent of the top-ofthe-range Fusion ProGlide price. At Rs5 for a refill cartridge, Gillette Guard met customer expectations on safety and ease of use.

Gillette made several changes to Gillette Guard from the traditional razor systems produced in the developed world. Extra blades were eliminated. Gillette Guard's single-blade system does not follow the trend of increasing the number of blades in a razor made for developed countries. Design complexity was reduced. Gillette Guard is a much simpler design with fewer parts to assemble during the manufacturing process.

Features such as easy-rinse cartridges and lightweight, ribbed handles were designed. Easy-rinse cartridges help customers save water and ensure the blades are clean, even if running water is not available. The new handle has a better grip, making the experience easier and safer. Safety comb and hang hole in the handle was introduced. Designing a safety comb tackles the problem of frequent cuts, especially for men who are not daily shavers and deal with longer hair. The hang hole was introduced as a response to less convenient conditions and to allow for easy drying and storage.

Gillette's success in India hinged on its capacity to innovate. Firstly, it used innovative ways to communicate with its consumers in 2009 in order to attract a once indifferent segment. Through a creative use of traditional ads and marketing campaigns that supported the launch of the new Gillette Mach3, Gillette was able to change consumers' indifference towards shaving and create a true momentum for its products. In this way, Gillette shifted from a market-driven to a market-driving approach.

Secondly, in 2010, Gillette did something the Harvard Business Review described as "reverse innovation" to develop a product that would satisfy the needs of the lower income customer. After failing to gain significant market share in India by selling its lower and mid-tier American razors in different packaging, Gillette adopted a different approach. It went back to the source by making significant investments in market research to better understand the needs and preferences of target consumers.

Gillette understood that Indian consumers' needs, culture and attitude towards shaving were radically different from those of Western consumers. Rather than lowering performance, Gillette kept the valued customer at the core of its strategy and introduced an innovative value proposition for the value-for-money customer. Moreover, Gillette was able to deliver its promise to customers by putting in place an appropriate value network. In addition to a customised product, all the elements of the business model were coherent with the value proposition and mutually reinforcing.

Local manufacturing enabled Gillette to lower its cost structure and maintain low prices. The distribution model, not based on few large retailers, but on millions of local shops called kiranas, allowed Gillette to achieve a higher market penetration. The Gillette Guard case in India is the typical success story suitable for a marketing strategy book. However, there are some aspects of the strategy that appear to be controversial. One is related to environmental sustainability. Guard uses disposable cartridges which makes it not exactly an environmentally-friendly product.

A mistake that multinationals make is to push global brands in a one-size-fits-all strategy. Gillette's strategy of spending time and resources understanding Indian consumers' needs proved to be the key to its success.

To remain competitive, Gillette must keep the valued customer at the core of its strategy and adapt its business model accordingly.

Other companies can learn from Gillette's case in India. A recurrent mistake that multinationals make is to push global brands in a one-sizefits-all strategy. Gillette's strategy of spending time and resources understanding Indian consumers' needs proved to be the key to its success. This understanding helped it innovate through developing new products and creative communication ways to attract and engage Indian consumers.

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COMMENTS

Case Study: Product Innovation at Gillette - MBA Knowledge Base
Gillette is considered as the first choice of both male and females. Both genders 16 years of age or above are the target market for Gillettes shaving products. The brand marks its success to a passion for innovation and new product development. The Gillette Company was established in 1901 and then acquired by Procter and Gamble in 2005 for US$57 billion. After the success revealed by Gillette ...
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A Gillette case study. First mover: advantages and risks. The Gillette Company has a long history of being 'the first to market...' in its own areas of operation. Its achievements include producing the first successful: safety razor 1901; twin bladed razor 1972; twin bladed disposable razor 1976; pivoting head razor 1979
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Apr 29, 2013 · This document discusses Gillette's position as the market leader in razors and discusses opportunities and threats facing the company. It notes Gillette controls a large market share but operates in a saturated, mature market. The document evaluates Gillette's strengths in brand recognition and marketing and weaknesses like consumer skepticism.
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The items retail at $ 2 each, 10- 20 % higher than the prices of major competing items. As was the case with Sensor, Gillette hopes that the products‘ innovation will convince men to switch brands and pay the higher prices. During the Gillette Series first year, the company spent $ 60 million on a joint advertising campaign with Sensor.
Case Study on Consumer Behavior: Gillette - MBA Knowledge Base
The items retail at $ 2.69 each, 10- 20 % higher than the prices of major competing items. As was the case with Sensor, Gillette hopes that the products’ innovation will convince men to switch brands and pay the higher prices. During the Gillette Series first year, the company spent $ 60 million on a joint advertising campaign with Sensor.
Gillette Case | Case Study Template
Annexure 1 provides details (Gillette Fusion Case Study 2008) of some of the razor innovations introduced by Gillette over the years including the first double-bladed razor in 1971 (Trac II), loaded blades in 1990 (Sensor), the three-blade razor in 1998 (Mach3) and finally the five-bladed razor in 2005 (Fusion).
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Jun 7, 2024 · Gillette, a brand synonymous with shaving and personal grooming, offers an exemplary case study in effective product lifecycle management. Since its inception in the early 20th century, Gillette ...
Setting aside its global strategy helped Gillette in India ...
Apr 4, 2014 · This case study looks at how Gillette innovated by tailoring advertising and inventing a new product development process to reflect local shaving habits. - Issue Date: Apr 13, 2014
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