Group 8Section BSubash P.B. ||| Swaroop Vijayakumar |

Gillette and the Men’s Wet Shaving Market

Gillette – S(h)aving Men Since 1903

King C.Gillette invented the safety razor systems in 1895

Permanent razor handle – replaceable blade systems

Huge invention – Changed the way men perceived shaving

Dominated the market Concentrated on Advertising and Distribution

1932 – Blue blade

1938-Thin blade1959-Super Blue blade 1962 -

Sterliton1971 – Trac2

1977- Atra

Innovation at the Heart of Growth

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6Safety Razor-61Stationary-9Cosmetics-14Braun Products-13Oral B-3

Product Lines by Company Division

US Men’s Shaving Industry(100%)

Wet Shaving Market (75%)

Gillette(62%)

Permanent(56%) Disposables(24%) Injectors(10%)

BIC(12.7%) Wilkinson Sword (4%) Schick(16.2%)

Permanent(54%) Disposable(25.2%) Injectors(21%)

Dry Shaving Market(25%)

US Men’s Shaving Market

Leader in the Injection shaving market – controls over 80% of the market Late entrant in the disposable shaving marketEntered with narrow headed disposable razor – Slim Twin in 198867% of its revenues are overseas – mainly Europe and Japan

Mainly concentrated in the disposable market segmentMain Product – BIC shaver for sensitive skinCore philosophy – maximum service, minimum pricePlanned to market only single blade disposable razors

Entered with Super Sword edge – blade with a steel coatingIntroduced Ultra Glide to compete with Gillette’s Atra Plus – priced at 5-8% lowerCompeted head on with Gillette in advertising – used comparative advertisements

Competitor Analysis

Current State – Move Towards Disposables

1980s: Consumers chose inexpensive disposable razors

Gillette helped to foster trend : Focus on price, not quality

Mainly preferred by the younger customers who do not perceive the differences between the system and disposable blades

Disposable razor market increases by 60%

Loss of quality image, loss of profit

*Gillette taught consumers the best razor was the cheapest one!

The Shift

The Consequence

Sales of Atra blades have leveled off & Trac II is declining

Less focus on advertising – only what was left over was spent on advertising

One half of advertising spent on Atra and rest spent on Good News

Same themes for both system razors and disposables – ‘Essence of Shaving’

90% product based and 10% image based advertising

Men over forty have strong connection with Gillette

Strong connection between Gillette and male image of shaving

Younger men prefer disposables – feel all razors are the same

Gillette logo does not give a masculine feel

Woman identify Gillette name with men and shaving

Options

No change . Watch yourself bleed

Buck the Trend- Go for the Kill

Situation Analysis

Disposables represent a high volume businessThe disposable shaver segment is growing at a fast rate

Every 1% change to disposables = $10m hit

One third of system razors’ margin

Costlier to manufacture

Commoditization Price war

Goes against the company philosophy of innovation

Core competency is their R&D prowess to get newer blades and razor systems

Is Disposables the Way Forward?

Therefore focusing on disposables will lead to a constant price war, and may also lead to erosion of Gillette’s brand equity

The disposables was a short term solution

Further focus on creating low cost low margin products will erode profitability

Hence Gillette should not pursue this strategy

Higher Margins for the productsIn line with Gillette’s core philosophy of product innovationCan leverage upon the brandIn line with Gillette’s broader strategyCan focus all energies on the launch of new system razor product

May lose out on the increasing disposable shaving category – a sizable

chunk of the market

Going the System Razor Way

Strategy RationaleMove towards a global strategy Pan European success of Contour Plus; Universal high

quality product; “a shave is a shave everywhere”.

Move from product based to image based advertising; Initial marketing efforts should focus on the brand rather than product - Focus on an ‘ultimate shaving experience’ for Gillette razors

Revitalizing the brand name; focusing on a pull strategy – the brand should sell

Go for High Exposure advertising across Europe & US focusing on Gillette’s core competency

Bringing the brand into focus and setting the stage for launch of new razor system.

Pull the plug on advertising for Disposables “Good News”; instead create a new disposable brand for women

Goes with the overall strategy of weaning away the customers from disposables to high end razors

The Strategy Roadmap Pre Launch

Positioning

Position Gillette as a revolution in shaving & one the provides an much superior shaving experience on the whole compared to disposable razors; one which gives supreme confidence and happiness

Statement : Gillette – Differentiates Men from the Boys

Pre Launch Television Commercial

Essence

The main aim of the TVC would be to bring the brand into focus and associate it with all facets of a man’s life

Storyboard

With a catchy jingle & booming background music, show clean shaven men exceling in various spheres of life – sports, business and also in various roles – as a father, friend, husband and bridegroom etc. At last, there is a showing a system razor with a voice over mentioning its benefit & mentioning the positioning statement

The Strategy Roadmap – Launch Stage : Gillette Stimulus Marketing Mix

Product: Spring mounted twin blades,

Price : $3.75 per system; slighter lesser Atra

Place – Existing outlets & distribution network

Promotion – blitzkrieg advertising campaign; associations with major sporting events like Superbowl in US & soccer leagues in Europe

Stimulus

Positioning

Position Gillette Stimulus as one that has a state of the art shaving system & provides a clean shave due to its product features

Statement : Gillette Stimulus – The closest shave a man can get

Gillette – The Best a man can get Thank You for listening