EXECUTIVE SUMMARY

Gillette has been the leading brand in men's grooming industry across the
globe. With its wide range of products caters to the premium segment of the
men's grooming market. It faces intense competition in the toiletries market
whereas the competition in the razor market is not that intense.
This case study aims at identifying the problems faced by Gillette in the
toiletries market. We have suggested a plan for Gillette toiletries along with
other suggestions for Gillette to face the competition in the near future and
the long run
SITUATIONAL ANALYSIS
Of Gillette's recent moves, by far the riskiest is the toiletries line. Gillette's
track record there is spotty, with successes in the 1960s and 1970s followed
by a series of disappointments, such as a failed foray into European women's
toiletries in the 1980s. But Gillette's strength is with men, and executives are
convinced they can use their strong brand name as an umbrella for a wider
range of men's products. The line includes 14 items, notably pre- and aftershaves and a gel shaving cream. The most innovative product: a gel-based
deodorant that will roll on using a patented, sieve like delivery system.
Will it work? Many outsiders are sceptical, citing Gillette's sorry record in
toiletries. Besides, competition has become very stiff in the once fragmented
men's toiletries business. Procter & Gamble now owns Old Spice and
Noxzema, Colgate bought Mennen, and Unilever grabbed Faberge's Brut
brand. But nobody has a better brand name than Gillette.
If the line flops, some believe Gillette should simply abandon the whole field.
But while the company has tried to apply the Gillette way to its toiletries, the
basic problem remains: There's not much difference between Gillette's stuff
and everybody else's, except that Gillette's costs more. That means toiletries
become a kind of loss leader for Gillette's shaving business. But would
retailers refuse to stock Gillette's blades--the best-selling blades in the
world--just because they aren't getting Right Guard too?
2.1 MARKET SUMMARY
The market for men's toiletries has developed in tandem with a number of
lifestyle changes affecting the population in general, and men in particular.
These include a growing interest in health, fitness and appearance among

consumers, with the rise in gym attendance having been of particular

consequence to the market for men's toiletries. There have also been
changes in men's perceptions of themselves, meaning that they are more
willing to show their `feminine sides'. However, despite many attempts to
`label' this phenomenon, there is now a recognition that these changes have
been more subtle than first thought and that changing the habits of men is
not particularly easy. The development of the men's magazine market, which
began in earnest during the late 1980s, was very important in providing
direct contact with male consumers through advertising. However, this
sector declined sharply (in both volume and value terms) lately.
Demographic trends (in particular, the ageing population) have not been
particularly favourable to the men's toiletries market. However, between in
recent years, there was a significant increase in the number of men
in the 15 to 24 age range. These men tend to be mass market
consumers and their numerical strength, combined with a
willingness to spend time and money on skincare products and
grooming routines, has been beneficial to the male toiletries market
in general.
There are forecasts indicating that the male toiletries market will continue to
be more dynamic than male fragrances. There is still plenty of room for
growth in the former market, in particular as the current generation of young
males reach a more mature life stage and, hopefully, will be more willing and
able to spend on premium products. Growth in the male fragrances market
will be less strong the current economic climate may mean that
consumers are less able to spend significant amounts of money on premium
fragrances as gifts or as personal indulgences.
2.2 KEY ENVIRONMENT TRENDS
2.2.1 Competitive Environment
Gillette experiences intense competition for sales of its products in most
markets. Gillette's products compete with widely advertised, well-known,
branded products, as well as private label products, which typically are sold
at lower prices. In most of its markets, Gillette has major competitors, some
of which are larger and more diversified than Gillette. Aggressive competition
within Gillette's markets to preserve, gain or regain market share can affect
Gillette's results in any given period.
2.2.2

Changes in Technology & New Product Introductions

In most product categories in which Gillette competes, there are continuous

technological changes and frequent introductions of new products and line
extensions. Gillette's ability to successfully introduce new products and/or
extend lines of existing products depends on, among other things, Gillette's
ability to identify changing consumer tastes and needs, develop new
technology, differentiate its products and gain market acceptance of new
products. Gillette cannot be certain that it will successfully achieve these
goals.
2.2.3

Intellectual Property

Gillette relies upon patent, copyright, trademark and trade secret laws in the
United States and in other countries to establish and maintain its proprietary
rights in technology, products and Gillette's brands. Gillette's intellectual
property rights, however, could be challenged, invalidated or circumvented.
Gillette does not believe that its products infringe the intellectual property
rights of others, but such claims, if they are established, can result in
material liabilities or loss of business.
2.2.4

Cost Savings Strategy

Gillette has implemented a number of programmes designed to reduce costs.

Such programs will require, among other things, the consolidation and
integration of facilities, functions, systems and procedures, all of which
present significant management challenges. There can be no assurance that
such actions will be accomplished as rapidly as anticipated or that the full
extent of expected cost reductions will be achieved.
2.2.5

Sales & Operations outside of the United States

Sales outside of the United States represent a substantial portion of Gillette's

business. In addition, Gillette has a number of manufacturing facilities and
suppliers located outside of the United States. Accordingly, the following
factors could adversely affect operating results in any reporting period:
- Changes in political or economic conditions;
- Trade protection measures;
- Import or export licensing requirements;
- The overlap of different tax structures;
- Unexpected changes in regulatory requirements or tax laws; or

- Longer payment cycles in certain countries.

Gillette also is exposed to foreign currency exchange rate risk to its sales,
profits, and assets and liabilities denominated in currencies other than the
U.S. dollar. Although Gillette uses instruments to hedge certain foreign
currency risks (through foreign currency forward, swap and option contracts
and non-U.S. dollar denominated financings) and is implicitly hedged through
its foreign manufacturing operations, there can be no assurance that Gillette
will be fully protected against foreign currency fluctuations.
2.2.6

Retail Environment

With the growing trend towards retail trade consolidation, especially in

developed markets such as the United States and Europe, Gillette is
increasingly dependent upon key retailers whose bargaining strength is
growing. Accordingly, Gillette faces greater pressure from retail trade
customers to provide more favourable trade terms. Gillette can be negatively
affected by changes in the policies of its retail trade customers,such as
inventory destocking, limitations on access to shelf space and other
conditions. Many of Gillette's customers, particularly Gillette's high-volume
retail trade customers, have engaged in accelerated efforts to reduce
inventory levels and shrinkage and change inventory delivery systems. While
Gillette expects the level of trade inventory of its products to decline over
time, the speed and magnitude of such reductions and/or the inability of
Gillette to develop satisfactory inventory delivery systems could adversely
affect operating results in any reporting period.
2.3 MARKET PROFITABILITY & GROWTH
Gillette sold only 51 razors and 163 blades in its first year, but then
discovered that men were "Willing to pay up to $5.00 for his new razor.
Instead of paying at the local barbershop, men could now shave at home
without the bother of sharpening the blades. Because blades were so cheap,
they could be thrown out when they blunted. As shaving at home became
cheaper and easier, social customs changed to encourage daily shaving.
With these changes, Gillette's business boomed. By that time, Gillette's
domestic market share had grown to exceed 80%, a leadership position it
had sustained ever since.
Gillette then focused on growing sales at home and abroad. The company's
strategy turned to push for an extensive international. To supply foreign
markets, which accounted for almost half of Gillette's total sales and the

growing demand in the United States, Gillette built new manufacturing plants
in Boston and England.
ThenGillette began to expand its product line into other shaving products.
Neither of these products was very successful, and Gillette's management
began to consider expanding outside the shaving industry to reduce the
company's dependence on blades.
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
strategythat distracted management's attention from blades and razors had
diluted the valuable Gillette brand name by associating it with non-shaving
products.
To rectify that, Gillette's management had to improve operating
performance. Some managers believed that Gillette should concentrate on
the blades and razors and sell off the other businesses, while others thought
that those businesses should be retained but revamped. Gillette's
CEObelieved in the synergy of the different businesses and regarded product
innovation as the key to growth and profits. The result was the "Sensor"
gamble.
Theintroduction 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.
2.4 CUSTOMER METRICS
2.4.2. Satisfaction
Men toiletries' preliminary main two segments are:

Experimenters and Adopters: This category of consumer comprises

of males from the age group 16-30 years. These are the people who
are willing to try new brands. These people are generally found to
be taking more care than others in terms of grooming. These people
want to make a style statement through the products they are using
and hence are generally found using highly advertised products.
They tend to prefer shopping centres with a wide variety.
Suspicious Traditionalists: These are men who are more traditional
and not very much willing to try new brands. They are a slightly
older age group (33-50 years) whose main concern is the safety and
health of their skin. They also show a preference for products or
brands that have been present in the market place for many years
and which they have already tried and tested.
We can conclude that, Gillette toiletries primarily targets consumers
which are more focused on the product attributes like brand, foam
formation, ease of use etc.; whereas the perception of price
sensitive consumer towards Gillette is of an over-priced brand.
For price sensitive customers products like P & G's Old Spice,
Colgate-Palmolive and Johnson are more satisfying than Gillette.
Gillette is considered to have the best packaging among all the brands. This
feature highlights the fact that point of purchase is an important selling point
for the toiletries market and Gillette has been outperforming the
competitors.
High satisfaction in the availability in stores shows the robust distribution
system that Gillette has put into place to cater to diversified markets.
In the customer-value hierarchy, Customers evaluate Gillette to be significant
along the product attributes and the point of purchase factors, giving it an
image of high quality brand with attractive packaging and best availability.
Old Spice and Mennen are its closest competitors in attribute and price
sensitivity respectively. Gillette lags behind all its competitors in price
sensitivity which includes price and offers. Additional features of the Gillette
toiletries have below satisfaction level performance which implies that the
variants introduced in the market for toiletries have not able to satisfy the
demand of the consumers.

In analysing this case, it has been deducted that consumers are

most satisfied with Gillette in all cases except when the purchasing
decision is based on price along with additional features.
2.4.3. Loyalty
The study argues that it can be concluded that the Brand loyalty in
the Gillette's toiletries line segment has proven to be low compared
to Gillette's razor segment where customers would not stick to it
and would easily switch to substitutes. The case also argues that
convincing consumers that the Gillette Series line is actually better
and the higher price justified is more difficult than in the case with
Sensor.
With the razor, Gillette had name recognition as the dominant firm
in the industry. In addition, the design differences in the Sensor
were visible, and a consumer could directly experience the closer
shave. With the toiletries, Gillette does not have a strong position in
consumers' minds, nor are the benefits provided by the products
obvious.
2.5. BRAND WEAKNESSES & STRENGHTS (SWOT)
The following SWOT analysis captures the key strengths and
weaknesses within the company, and describes the opportunities
and threats facing Gillette.
2.5.1. Strengths
Strong brand equity Gillette's portfolio contains well established
brands such as Gillette and Braun, Oral-B line and Duracell. It eases
the introduction of new products, as consumers are already well
acquainted with the names and more receptive to promises of
improved user experiences. The strength and quality image of these
brands allows the company to charge higher prices and achieve high
margins.
Market Leadership the Company's products are well known with a
reputation of quality and a market leader in its respective market.
Well Diversified portfolio Gillette has a well-diversified portfolio in
terms of product diversification and market diversification.

Diversification of this nature helps the company avoid the risk of

overdependence on any one source for its revenue stream.
Technological Innovation Gillette has always been an industry
innovator, with ample budget allocation for R & D.
2.5.2. Weaknesses
Profitability highly dependent on core business Gillette's
profitability is highly reliant on the performance of its razors and
blades business. A substantial portion of its revenues come from
this sector. Any downturn in the sector or in Gillette's competitive
position within it could have a serious negative effect on the
company.
Over-reliance on high-street retail outlets for example, Wal-Mart
Stores is Gillette's major customer. With a large part of its revenues
originating from a single costumer, the company is at risk of
adversely affecting its business, operating results and financial
condition if its strategic relationship with Wal-Mart Stores is
terminated for any reason.
2.5.3 Opportunities
New product launches Gillette is known for constantly introducing
new products in the market with better technology and
performance. This new product launches will help the company to
gain competitive advantage over its competitors.
Price increases in premium shaving segments Gillette has been
increasing the price of its razors and blades at an average rate of
around 4% per year over the last ten years. This price increase will
help the company to accumulate more profits from the present level
of sales.
Changing Societal Attitudes Due to increased awareness and rising
income levels, the industry is undergoing a major shift from
traditional double-edged razors segment to twin, triple until five
blades razors segment. Within the industry, cosmetics and personal
care industry has been growing at an average rate of 20 per cent for
the last few years. However, current consumption is still below
many countries in Asia which shows that there are further growth
opportunities. Thus, the industry is growing at a decent rate but

still is at an infant stage and this offers great opportunities to

players like Gillette to expand their customer base to include higher
number of lower middle class people and thereby increase their
revenues and profitability.
2.5.4 Threats
Imitations / disposables are a threat to the Gillette's offering
Gillette's ability to sustain a price premium and earn an attractive
return on its extensive investment 'Sensor', including disposables
and private label systems, and even including Gillette's own threeblade disposable. This numerous imitations are threat to the
company in the long term as they going to reduce the sales of the
original products.
Pressure on pricing power Gillette's pricing power is being further
eroded by channel migration and increasing consumer resistance to
paying significantly higher prices for innovation. Pricing power is
key to revenue growth in a mature category especially when
Gillette's strategy has historically been to drive revenue growth per
consumer and not volume growth.
Competitive environment Gillette faces intense competition in most
markets. Its products compete with widely advertised, well-known,
branded products, as well as private label products, which typically
are sold at lower prices. The company's survival depends upon its
ability to adopt itself in this kind of competitive environment.
3.0 COMPETITION
3.1. Competitive Forces
3.1.1. Threat of Intense Segment Rivalry
The segment of toiletries to Gillette is already unattractive because
it already contains numerous, strong and aggressive competitors
and have high stakes in staying in the segment. These conditions
lead to frequent price wars, advertising battles, and new-product
introductions and is making it expensive for Gillette to compete.
3.1.2. Threat of New Entrants
In the toiletries segment, entry barriers are high due high set-up
costs as well and exit barriers are high too.

3.1.3. Threat of Substitute Products

In this segment, there are actual and potential substitutes for
Gillette toiletries. Substitutes are placing a limit on prices and
profits. Due to technological advances and increase in competition,
prices and profits are likely to fall.
3.1.4. Threat of Buyers' Growing Bargaining Power
Buyers in the toiletries segment possess strong or growing
bargaining power. Wal-Mart being the main retailer for Gillette's
products makes us conclude that the potential profitability can
become curtailed. This growing buyer's bargaining power increases
because toiletries represent a significant fraction of the buyer's cost
and the products are undifferentiated, and the buyers in this
category are price sensitive.
3.1.5. Threat of Suppliers' Growing Bargaining Power
For Gillette, this threat represents the least threat possible because
it's the manufacturer of its own products and maintains a win-win
relationship with its raw-material suppliers, in addition to
maintaining a powerful supply-chain management model over the
years. Moreover, global competitiveness always keeps suppliers
prices low.
3.2. Competition Analysis
The two main competitors for Gillette in the toiletries business are: P& G,
especially by acquiring Old Spice and Noxzema
Old Spice is one of the top brands across world in the shaving products
category. In the shaving cream market it has a good hold over the perception
of the consumers. It is recognised by its fragrance and is seen as a macho
brand. It is has products in all the three categories (cream, gel and foam).
Old Spice is also present in after shave market and its after shave product is
very dominant in the market. It has a lot of products in the shaving products
market. This also makes the brand much stronger than its competitor.
Colgate-Palmolive, especially by owning Mennen
Colgate-Palmolive is one of the largest companies in the FMCG sector. The
Company has launched its International Palmolive Shave Gel and Palmolive
Shave Foam in the in response to growing consumer interest in skin

conditioning benefits. The company's strategy for Personal Care is to remain

in top niches. Every year, they intend to take 3-4 initiatives. Colpal has
shaving products under the brand name Palmolive shaving cream. It has
three variants in the shaving cream/gel/foam category.
4.0 MARKETING PROCESS: EFFICIENCY/EFFECTIVENESS
4.1 Product Development
At Gillette, it seems that almost everyone gets involved in one way or
another with new-product development. Gillette also excels at bringing new
products to market. The company understands that, once introduced,
fledgling products need generous manufacturing and marketing support to
thrive in the hotly competitive consumer products marketplace. To deliver
the required support, Gillette has devised a formula that calls for R&D,
capital investment, and advertising expenditureswhich it refers to
collectively as "growth drivers"to rise in combination at least as fast as
sales. Thus, over the decades, superior new products have been the
cornerstone of Gillette's amazing success. The company commands the
loyalty of more than 700 million shavers in 200 countries around the globe.
Gillette's new-product prowess is so much a part of its image that it has even
become the stuff of jokes.
4.2 Marketing of Sensor
Significant development and manufacturing costs dictated a premium price
for Sensor. Gillette planned to price the razor at a level lower than some nondisposables but judged high enough to preserve Sensor's prestige image.
After allowing for the fact that disposable blades tended to provide fewer
shaves than cartridge blades, it appeared that Sensor's cost per shave would
be slightly high. Such calculations were predicated, however, on specific
assumptions about the number of "satisfactory" shaves per Sensor blade. If
consumers used Sensor for just one more shave than the predicted 10 to 12
shaves per blade, the implied losses in unit volume might significantly affect
Gillette's bottom line.
Launch patterns raised a second issue. Gillette favoured introducing Sensor
in January 1990 in the United States, during the Super Bowl, followed by
rollout within a few days in 16 European countries, and within a month in
Japan(where Gillette trailed Schick, the first-mover). The same visuals and
musicwere planned for each country, although languages were to be varied
appropriately. Gillette's international rollouts had been staggered rather

more in the past and had been tailored "on a national basis to address
perceived nuances within each cultural area."
Advertising levels constituted a final marketing issue. Gillette had already
ratcheted up its advertising expenditures. The Sensor team was proposing an
advertising campaign that would pump up the costs already being incurred
to support existing razors by an additional $100 million based on the fact
that there's a price of entry in most consumer product categories and that
lots of companies try to cheat, if you will, on putting the kind of dollars
behind their program that is critical to its success.
4.3 Competitive Positioning of Sensor
The Sensor team wanted Sensor to be the antithesis of the disposable razor
and become the best-selling cartridge razor in the North Atlantic market. It
was unclear how well this quality over price positioning would work. If pricesensitivity continued unabated, Gillette's top management would probably
be ousted. And when Sensor did meet market share forecasts, its profitability
to Gillette now depend on the sources from which it drew its customers.
5.0. GAPS IN PERFORMANCE, RELATIVE TO CORPORATE VISIONS/GOALS
The Gillette approach to innovation (which started with the SENSOR in late
80s when they faced the threat from the BIC disposable razor) is a classic
example of big R&D leading to a blockbuster product. This approach is
getting outdated. In sharp contrast is P&G's connect + develop
programmewhich is actively seeking technologies and ideas from the outside
world, which are relevant to its categories /consumers and which can be
successfully commercialised. This is not a covert corporate effort. There is
dedicated website for it. There are already 5-6 big hits which have come out
of this programme and come to think of it P&G with over 1000 Ph.D.
scientists has perhaps the largest in-house R&D strength within the FMCG
world. This is more than a subtle shift. Every consumer goods company
realises that to stay ahead of the game (in an environment of media
fragmentation and big retail squeeze) they don't just need to innovate faster
and cheaper, but also have REALinnovation, which the consumer values
enough to pay a premium for and which retailers value enough to list it in
their outlets. Imagine going to Wal-Mart and asking for Shelf space because
the company is launching a new extension of an already established Gillette
Gel brand, called Gillette Gel with Aloe Vera.

If Gillette was truly an innovative company it would have not missed

the boom in the Male grooming segment. They stayed focused on
just one aspect of the male grooming regimen (shaving) while Old
Spice for Men, in the mass market and Clinique for Men, in the
premium segment took the lead. Gillette's belated attempt - the
"Gillette Series" came in a bit too late. So what is the big point! It's
about consumer centricity vs. brand /product centricity. By narrowly
defining its brand around shaving Gillette missed a huge
opportunity. There was no other brand in a man's toilet kit stronger
than Gillette and they blew it up. If they were spending time
researching evolution of the male grooming habits (instead of
tracking the rate at which the facial hair grows), other brands that
focused largely on Men's toiletries would not have been the market
leader in that range.
The application of the manufacturer's brand can have important strategic
implications. Gillette consciously limited or de-emphasized the use of its
name on its products. A key reason was the desire to enter multiple product
categories, many of which were sold to women. Gillette was attacked by Bic
through employing the opposite strategy to great effect. Bic built a
formidable company across multiple categories with a single brand
essence:"good enough, plastic disposable products at a very low price, with a
bit of personality." The strategy built sizeable advantages in plastic extrusion
and superior scale in branding and distribution. With toiletries, Gillette is
tying the new line to the Sensor but using a different brand name.If
consumers don't associate the Gillette series with the innovativeness and
success of Sensor, the new line may just be another brand in the already
cluttered market.
Gillette has made extensive promotion campaign for its razors in the market
and the world market. Tiger Woods, David Beckham and Terry Henry are a
few of Gillette's global ambassadors called Gillette Champions. But for
toiletries, Gillette does not have any brand ambassador nor has been much
of advertisements. In fact, there is only one ad for Gillette Series Shaving Gel
shown not too prominently. For the toiletries products, Gillette has coadvertised with its razors.

6.0. STRATEGIC ISSUES THAT REQUIRE MANAGEMENT ATTENTION

6.1.
Difficulty convincing consumers that the "Gillette Series"
is actually better than the competition and the higher price
justified.
ALTERNATIVE 1: Behavioural Segmentation
Using this strategy, Gillette will divide buyers into groups on the
basis of their knowledge of, attitude toward, use of, pricesensitivity, loyalty and response to the product. The advantagesare
to combine different behavioural bases that can help provide a more
comprehensive way to break down a target market by various
behavioural segmentation bases. Gillette can also learn a lot by
analysing the degrees of brand loyalty and relation to price. Split
loyalty, for example, can show Gillette which brands are most
competitive with its own, in addition to learning its marketing
weaknesses and attempt to correct them. The disadvantage is that
what would appear to be one purchase pattern due to certain
behaviour (loyalty), for example, may reflect other behaviours, such
as, habit, indifference, a low price, a high switching cost, or the
unavailability of other brands.
ALTERNATIVE 2: Differentiated Marketing
By adopting this method, Gillette will operate in several market
segments and apply product modifications indesign/ingredients of
"Series" to fit each segment. Advantagesare that differentiated
marketing typically creates more total sales. However, a
disadvantage is that it also increases the costs of doing business,
because it leads to higher sales and higher costs, nothing general
can be said about the profitability of the this strategy. Gillette
should be cautious using this strategy about over segmentingtheir
market. If this happens, counter segmentation measures should be
taken.
ALTERNATIVE 3: Mixed Bundling Pricing
Since the "Gillette Series" line products are closely related in
consumption behaviour, mixed bundling pricing could be a solution
by offering the products both individually and in bundles. Gillette
will charge less for the bundle than if the items were purchased
individually, for example, aftershave and gel. The advantage is that
customers may not have planned to buy all the products, but the

savings on the price bundle will be enough to induce them to buy it.
The disadvantagewould be that as promotional activity increases on
individual items in the bundle, buyers perceive less savings on the
bundle and less apt to pay for it.
6.2.
With the toiletries, Gillette does not have a strong
position in the consumers' minds, nor are the benefits of the
products obvious.
ALTERNATIVE 1: Lifestyle Positioning
Gillette as a global brand is well suited for lifestyle positioning.
Lifestyle positioning allows consumers to wear a badge on how they
want to be perceived. For consumers, lifestyle can be seen as selfindulgent but also as a reward for a life of hard work and
achievement. It is not something experienced as passive observers,
but rather something engaged in by all senses. More often than not,
it involves a sense of community which is dynamic, individualistic
and experiential. A value platform can be a solid base for Gillette to
expand into markets, where consumers are becoming more
aspirational and are moving out of basic needs into early wants. An
advantage is that it puts the consumer in charge rather than the
distributor, intermediaries, and retailers. It is also a pivot for
entering emerging markets by introducing the idea of affordable
pricing for value. The disadvantagesare that Gillette needs to
identify the key attributes or benefits that represent the value of
"Gillette Series" along with investing heavily in customer-value
market research and promises have to backed by support all the
time to reinforce the "Series" value and "'hype'.
ALTERNATIVE 2: Feature-driven Differentiation
Gillette should try relying on the "Series" features to differentiate it.
The advantage is that the message is clear and the positioning will
be credible if they stick to the facts about the product, especially
that the trust is already there through the shaving experience.
Unfortunately, the disadvantage is that feature-orientated stances
are often rendered useless if the competition comes out with a
faster or more advanced model.
ALTERNATIVE 3: Online Branding

Building an online "Gillette Series"brand doesn't mean they are

cheap. The main benefit is that they are going to be fast, and they
will have a large selection. The prices in this case are not as
important, service is not as important. Selection and deliveryare the
buzz word. The Web will allow "Gillette Series"to take on new edge
or benefit that the company would not be able to use in the real
world. For instance, the "Series"on the store shelf does not give
many choices about the positioning of the products. An advantageof
being online, however, Gillette can brand itself as more than just
toiletries' supplier, but rather as a hygiene/beauty expert. The site
can walk visitors through a personalised analysis based on their
needs, complexions and usage level. Once the information is
entered into the database, answers are compressed, data is cross
referenced, and information telling the customer which products to
use from the "Series" and when. Another advantage is building a
community-- Community is the other buzz online. If Gillette can
stimulate a community around it, then it has a powerful ally. For a
community to be successful, it needs to have a category that will
engage people and spur them to want to talk with one another, what
better category than toiletries - "Gillette Series"? Customers of the
"Series" will have opinions about what they like and don't like,
which leads to many opportunities for community interaction and
product development at the same time.
6.3.
Gillette is tying the Series to Sensor but using a different
name, which might cause disassociation in the consumers' mind;
hence, the company is not building up on Sensor's success.
ALTERNATIVE 1: Value Pricing (Combination of high-low and
everyday low pricing)
Gillette has priced its "Gillette Series" well above the industry
average. The Perceived-value pricing strategysuggests that Gillette
is leveraging its customer loyalty (i.e. 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 strategywould 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 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.
Disadvantageswould be the risk of getting trapped in to either, lowquality 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.
ALTERNATIVE 2: Brand reinforcement
The Gillette brand needs to be carefully managed so that its value
doesn't depreciate. Gillette brand equity can be reinforced by
marketing actions that consistently convey the meaning of the
brand in terms of: what products does the brand represent, what
are the core benefits it supplies, how the brand makes the products
superior, and which strong, favourable and unique brand
associations should exist in the consumers' mind. This requires
more innovation from Gillette and relevance throughout the
marketing programme. The advantagesare maintaining the brand
equity value and ultimately supporting all the brand products.
Disadvantagesof this strategy are that Gillette has to maintain
consistency in amount and kind, recognising the trade-offs between
activities that fortify the brand and reinforce its meaning. Failure to
reinforce at any point will diminish brand awareness and weaken
brand image.
ALTERNATIVE 3: Brand extension
Everything begins with shaving,' It's the ultimate male ritual the
big "man moment" of the day. And this ritual can be used as a pivot
for selling men a host of other toiletries based on the "Sensor"

shaving ritual, from moisturisers and anti-ageing creams to

fragrances and bronzing lotions. If the subtle link with the shaving
ritual is established, the products take on a masculine image and
the consumer doesn't feel feminised.' By using this strategy, Gillette
is leveraging "Sensor" to introduce the "Series" under the same
brand name. Two main advantagesof brand extension are that they
can facilitate the "Series" acceptance and provide positive feedback
to the "Sensor" and Gillette. The disadvantages are that line
extension may cause the brand name "Sensor" to be less strongly
identified with any one product. The risk of brand dilution can occur
if the consumers no longer associate "Sensor" with a specific
product. The worse possible scenario is for "Gillette Series" not only
to fail, but also to harm the "Sensor" brand image. Another pitfall is
that even of sales of "Gillette Series" are high and meet targets, the
revenue may be coming from consumers switching to the extension
from and existing parent offering in effect cannibalising
"Sensor". By using this strategy, Gillette also forgoes the chance to
create a new brand with its own unique image and equity.
6.4.
The ruthless competition in the toiletries market, which
is far much stronger on Gillette than the razor market.
ALTERNATIVE 1: Co-Branding
Gillette will do good combining its toiletries products with one of its
main competitors, such as P&G or Colgate-Palmolive (co-branding).
The main advantageis that the toiletries line of products may be
convincingly positioned by virtue of the multiple brands. Generate
greater sales from the existing target market as well as opening
additional opportunities for new consumers and channels. It images
and speeds adoption, in addition to learning about consumers and
how other companies are approaching them. The potential
disadvantagesare the risks and lack of control in becoming aligned
with another brand in the minds of the consumers. Consumer
expectations about the level of involvement and commitment with
co-brands are likely to be high, so unsatisfactory performance could
have negative repercussions for both Gillette and the other brand.
On the other hand, if the other brand has entered into a number of
co-branding arrangements, overexposure may dilute the transfer of
any association. It may also result in a lack of focus on existing
brands.

ALTERNATIVE 2: Guerrilla Warfare

We would argue that Gillette is a market challenger in the toiletries
business after a life-time focus on shaving. Being a market
challenger with "Gillette Series", Gillette can adopt the Guerrilla
attack. The idea is to wage small, intermittent attacks just to harass
and demoralise its competitors with the launch of the new line, and
eventually secure permanent footholds. These attacks could include
selective price cuts, intense promotional blitzes, and legal actions
on patents. The advantages is simply exhausting the competitors
and gaining territory meanwhile. Gillette can challenge consumers
to be the judgeby investing heavily on creating a volunteers
campaign to try the "Series" and enter their feedback on-line. The
disadvantagesare that these attacks can be expensive and
ultimately they must be backed by a stronger attack if Gillette
hopes to beat the competitors. There is also the risk of crossing the
legality or the morality line.
ALTERNATIVE 3: Segment-by-segment invasion plans
Gillette would be wise to enter one segment at a time. The idea is to
gain a foothold in one segment with one product and then move to
another segment with another product or the same one. Gillette
should analyse the profit potential of each product market segment
singly and in combination and decide which segment to enter first.
Gillette would enter the Gel in one segment first and then move it to
another segment market, while surprising the competition with
another product, shampoo for instance, for the second segment
market, then take the Gel back to the first segment and then launch
the third product, say foam, for the first segment market. The
advantageof this strategy is that the competitors will not know to
what segment(s) Gillette will move into with each product of the
"Series" next. The other advantage is that if the plan works, Gillette
will own a good part of the first two segments and serve them with
two or more products. The disadvantage is that Gillette's hidden
planned moves are provisional in that much depends on the
competitors' segment moves and responses.
7.0 INTEGRATED ACTION PLAN
The primary customers of this action plan will be those concerned
about the attributes, additional features as well as the price of the

"Gillette Series". This segment comprises of more than 40% of the

total male grooming market. Gillette can target this segment with
the introduction of the "Gillette Series". These customers are
concerned about the attribute and additional features besides the
price. The brands like P&G and Colgate-Palmolive can be said to be
catering to the needs of this cluster of customers.
7.1 STRATEGY PYRAMID
7.1.1 SEGMENTATION
Behavioural Segmentation
In the toiletries market there exist different categories of customers
who have different needs and are willing to pay different amount for
the product that meets their demand. Introduction of the "Gillette
Series" would help Gillette identify the needs of the customers and
take advantage of the segment which has not yet been targeted by
the company. Price sensitivity, importance of attributes, point of
purchase decision makers and customers influenced by additional
features are the factors on which we will segment the toiletries
market.
Segment One: Is the most price-sensitive and values additional
features the least. This segment has one third of our sample size. As
Gillette is a premium brand which focuses on differentiating its
products from the competitors and upgrading the customers in the
value chain, targeting this segment will not be a strategically
appropriate decision.
Segment Two: Is more influenced by attributes of the products and
is not a price sensitive segment. Gillette through its toiletries
products iscurrently catering to this segment.
Segment three: Is concerned about the attributes, additional
features as well as price. This segment comprises of more than 40%
percent of the total market. Gillette through its "Series" can enter
this segment.
7.1.2. TARGETING
Target market: - The target market has been identified as the
customers who are concerned about the attributes of the products

but are not willing to shift from the current price band to a higher
price band.
Competitor Brands:-.The Gillette Series will be competing with
brands like P&G and Colgate-Palmolive.
Choice Criteria:- The proposed 4 factors on grouping attributes that
could contribute to the "Gillette Series" purchase decision are:
Factor 1:Product attributes (Fragrance, Brand Name, Foam
Formation, Antiseptic Attributes and Ease of Use)
Factor 2:Price Sensitivity (Price, It takes care of Skin and
Offers/Discounts)
Factor 3:Point of Purchase (Availability in Stores and Stylish
Package Design)
Factor 4: Additional Features (Colour of toiletries and Ingredients)
7.1.3. POSITIONING
"Gillette Series" needs to position itself above P&G and ColgatePalmolive in order to attract the target segment. "Gillette
Sensor"has already achieved the top of the mind recall, which shows
that Gillette has an excellent real positioningin the men's grooming
market and Gillette Series can leverage this positioning in the
target market. Gillette needs to identify the key attributes or
benefits that represent the value of "Gillette Series".
Lifestyle Positioning
One way is through: Relevance to the customer's lifestyle- The more
apparent the connection is between the "Series" and Gillette's
customer's daily activities, the greater the chances are that
customers will buy them. Relevance, or the connection that the
customer has to the brand identity, is how customers ultimately
decide to buy the products.
Another is through: Promises backed by support- Benefits need to
be backed with some sort of persuasive reason to believe the
"Series" hype. The stress on the "uniqueness" of the "Series" by
educating the customers about the formula that is "different" from
all the other brands out there. The customer should think: Why do

we trust "Gillette Series",for instance? Because we believe in the

brand's "revolutionary" formula that complements "the closer
shave".
As part of the lifestyle positioning, the customer values to be
promised and delivered by the new "Gillette Series" are: Functional
value: The utilitarian/functional promise. Social Value: The espoused
social value would be from the angle that everyone in the family and
society has an instant respect and admiration for the clean shaven
Gillette man. Emotional value: The emotional value promised is of
great importance for a commoditised product like the toiletries line.
The espoused value would be the charming yet masculine Gillette
man who is attractive to all the people including women. Conditional
Value: The best possible start for the day would be the conditional
value. The value communicated should be of a confident, satisfied,
and charged up man for the day's grind.
7.1.4 Branding
Co-branding
Gillette will do good combining its toiletries products with one of its
main competitor P&G (co-branding). For Gillette to succeed in cobranding, the two potential co-brands must have two separate
brand equity adequate brand awareness and a sufficiently positive
brand image which exists in case of P&G. The most important
requirement is a logical fit between the two brands, such that the
combines brand or marketing activity maximises the advantages of
each while minimising their disadvantages, i.e. customers will
prefer the two brands to complement each other more than being
similar. Besides remembering these strategic considerations,
Gillette managers must enter into the co-branding venture carefully.
There must be the right kind of fit in values, capabilities, and goals,
in addition to an appropriate balance of brand equity. There must be
detailed plans to legalise contracts, make financial arrangements
and coordinate marketing programmes.
8.0 MARKETING MIX
8.1 Product
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.
8.2 Pricing
Value Pricing (Combination of high-low and everyday low pricing)
Value pricing strategywould 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.
8.3 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.
8.4 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 Gilletteshould 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
strategyto communicate the abovementioned values. The ads would
involve a sturdy, tough, smart man and project him as the Gillette
man(much like the Marlboro man). The focus would be on the
"Gillette Series" though it will also co-advertise "Gillette Sensor".
9.0 LESSONS LEARNED
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.
The company should start with a consumer-driven product profile: Identify a
winning product profile from the very start. Even when screening compounds
or looking at receptors and molecules, have a clear vision of the consumer
experience you want to create.
The company should select a partnerthat can enhance your technical
innovation and deliver differentiating commercial innovation: The partner
should help you get the greatest consumer and commercial value from your
innovation throughout its lifecycle. The chosen company should have a
proven track record of building holistic brand experiences that differentiate
each product's value.
Retaining customers isn't about pricing, bundling or gimmicks. It's about
getting your company so engrained into the customers' unmet needs
through the use of retention plans and the excellent execution that the
company becomes essential to their success. As rewarding as companies at
times find fire-fighting because of the "quick fix" satisfaction it provides,
does nothing to actually hold onto customers. Investing time in tailoring
specific retention plans that deliver results does.
Kill the brand, save the company. For companies with numerous brands it is
often better to admit defeat early on and terminate a brandfor the sake of
the overall reputation of the company.
Companies shouldn't alienate their core customers. For brands that inspire
strong loyalty, the temptation is to test that loyalty to its limits by stretching
the brand into other product categories. However, this is a dangerous
strategy and can lead to what marketing experts refer to as brand dilution'
in other words, a watered-down brand.
Brand amnesia.For old brands, as for old people, memory becomes an
increasing issue. When a brand forgets what it is supposed to stand for, it

runs into trouble. The most obvious case of brand amnesia occurs when a
venerable, long-standing brand tries to create a radical new identity.
Brand irrelevance.When a market radically evolves, the brands associated
with it risk becoming irrelevant and obsolete. A company must strive to
maintain relevance by staying ahead of the category.
Have a core brand. While Ries and Trout are right to highlight the potential
problems of line extension, it is important to differentiate between those
companies that can get away with it, and those that can't. Brand extensions
aren't bad in themselves.
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?
a. Premium to competition
b. The Best a Man can Get" - not the most convenient or cheap at all, but the
most value added products, building on the popularity of sensor.
c. Differentiated on functional attributes through innovation
d. Price premium at an index of 110 to 120.
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 mens 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.
2. Is Gillette making the best use of the brand equity that has been created
with Sensor?
Given that Gillett is attempting to make a name for itself and that Sensor has
been its biggest success, it makes sense to use the impetus of that to tie into
the rest of its line. The tagline of the best a man can get is a solid enough
vague claim to make, and own. Since the equity was established for the 'the
best a man can get' and not just Sensor, Gillette is making good use of this,
since the Sensor can be seen as a product from Gillette, and one that works

very well, at least as per consumer response.

Also, given that for mens grooming, shaving is tied into the process very
intricately, it is a logical next step to build onwards from shaving razor
blade....

Market research
Market research results have been analyzed in section 7 of the report. The
following conclusions from the survey helps us in identifying the positioning
of the Gillette shaving cream:
Target market:- The target market has been identified as the customers
who are concerned about the attributes of the shaving cream but are not
willing to shift from the current price band to a higher price band.
Competitor Brands:- The competitor brands have been discussed in section
5. The Gillette Shaving Cream will be competing with brands like Old Spice
and Denim.
Choice Criteria:- As per our findings (Section 7.4.3) the 4 factors on
grouping attributes post factor analysis that contribute to the shaving
cream/foam/gel purchase decision are:
Factor 1 Product attributes (Fragrance, Brand Name, Foam Formation,
Antiseptic Attributes and Ease of Use)
Factor 2 Price Sensitivity (Price, It keeps my Skin Soft And
Offers/Discounts)
Factor 3 Point of Purchase (Availability in Stores and Stylish Package
Design)
Factor 4 Additional Features (Color of Shaving cream/gel/foam and
Ingredients)
Customer Evaluation:- Perceptual maps in the section 10.21 shows how the
customers evaluate Gillette with respect to competitive brands.
The customers surveyed in Indore found Gillette to be significant along
both factor 1 and factor 3 giving it an image of high quality brand with
attractive packaging and best availability.
Old Spice and Denim are its closest competitors in factor one and two
respectively.
Gillette lags behind all its competitors in factor 2 which includes price and
offers.
In factor 3, additional features, all companies have below satisfaction level
performance which implies that the variants introduced in the market for

shaving cream/gel/foam are not able to satisfy the demand of the

consumers.
Positioning Strategy The present perception of the brands between factors
one and two is shown below. Gillette shaving cream needs to position itself
above Old Spice and Denim in order to attract the target segment.
9.4.3. Real Positioning
In the survey conducted, Gillette had the top of the mind recall of 57%. This
shows that Gillette has an excellent real positioning in the mens grooming
market and Gillette shaving cream can leverage this positioning in the target
market.
9.4.4. Psychological Positioning
Gillette shaving cream will primarily alter the attributes importance in the
target segment by increasing the importance of attributes like brand name,
foam formation etc and decreasing the importance of price. This will be
consistent with its strategy of moving the customers up the value chain.
9.5. Marketing Mix
9.5.1. Product and Service
Customer value hierarchy chart in the 4 Ps analysis shows that Gillette
products (7 O clock) is currently fulfilling only the core and basic needs to
some extent. Further, it alsoIIM Indore Group 6 Section B
shows that Gillette does not have any product fulfilling the basic needs and
expected needs of the consumers. Thus, our new product will cater to these
needs. Further, since, our new product will target the third cluster; it has to
be very strong on attributes. Again, additional features need to be there to
satisfy the basic and expected needs of the people. Our new product will
have superior fragrance and higher antiseptic attributes. Further, initially, the
product shall be launched with variants like lemon and musk. The new
Gillette Cream 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 indianise 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 in India with very little
customization. For our new product, this strategy would not work well. The
customer values to be promised and delivered by the new GILLETTE Shaving
Cream are: Functional value: The utilitarian/functional promise would be
The best possible shave from the best Shaving cream. The existing price
range in the market for a 70 g shaving cream is Rs 25 (Godrej) to Rs 45 (Old
Spice). We would price our Cream at Rs 40 which is below that of Old Spice
and Denim (Rs 43). We would also promise the basic attributes ( soft on skin,

lather etc.) . Social Value: The espoused social value would be from the angle
that everyone in the family and society have an instant respect and
admiration for the clean shaven Gillette man. Emotional value: The
emotional value promised is of great importance for a commoditized product
like a shaving cream. The espoused value would be the charming yet
masculine Gillette man who is attractive to all the people including women.
Epistemic value:
The novelty value should be such that it must entice only the cream users,
not our gel/foam users. Hence, we must tell about how good a cream it is
and the active ingredients involved in the product. Conditional Value: The
best possible start for the day would be the conditional value. The value
communicated should be of a confident, satisfied, charged up young Indian
for the days grind. COMMUNICATION OF VALUE: We would adopt a push cum
pull strategy to communicate the above values. Our ads would involve a
sturdy, tough, smart Indian and project him as the Gillette man (much like
the Marlboro man). The focus would be on the shaving cream though we will
also co-advertise Gillette Razors.
9.5.2. Pricing
The customers in the target cluster are not very price sensitive. The
customers in the cluster prefer brands like Axe and Denim which lie in the
price range of Rs 43-45 for a 70ml pack. However, since Gillette is perceived
as an expensive brand as compared to its competitors, we plan to price our
new product slightly cheaper than these brands. As per our analysis, Gillette
should charge a price of Rs 42 for 70ml pack.
9.5.3. Promotion
Since we see a great opportunity for Gillette in the Shaving cream category,
we recommend an aggressive promotional campaign for the new product.
Our promotion would adopt a push cum pull strategy.
Push Approach: The product would be pilot tested in Indore itself where we
have performed our market research. We would offer a 20g tube of the
Gillette Shaving Cream free with every Gillette Presto( Priced at Rs 17) and
30g with Gillette Vector ( Priced slightly at above Rs 50). The selling price of
the tube being Rs 40 and the margin at 25%, we would incur around Rs 8 for
the 20g tube and Rs 12 for the 30g tube. The increase in sales of the razors
would be a good indication of the interest shown by the consumers in the
new shaving cream. This promotional strategy might also give Gillette
consumers who want to upgrade themselves to the premium shaving cream
category from the regular category. The level of success of the pilot project
would help us in modifying the product for the national launch. Pull
Approach: So far, Gillette has always shown ads which are futuristic in nature

( Shaving with Mach 3 on a space shuttle is an example). But the

advertisements for the shaving cream have to be Indianised. This is the
biggest challenge for Gillette which has so far treated the Indian market as a
dumping ground for its outdated products in the US. Our advertisement has
to entice the target consumer - the aspiring consumer who comes from the
middle and lower middle class and gives importance to attributes but is also
price sensitive. Our target consumer is widespread throughout the countryrural, urban(including Tier 2 and Tier 3 cities) and rurban. The ads have to
appeal to the customer values mentioned above.
Series Tube Shave Gel Variants, namely Sensitive Skin and Moisturising to
suit different skin types. 2005- The companys parent company Gillette, USA
was acquired by the Procter & Gamble Company, USA worldwide through
merger in October 2005. In India, the company while continuing as a
separate legal entity, will also, be part of the Procter & Gamble company,
USA. The company has started the process of transition from its current
distributor structure to the P&G Distributors
10.2. SWOT ANALYSIS
Strengths Strong brand equity Gillettes portfolio contains well established
brands such as Gillette and Braun, Oral-B line and Duracell. It eases the
introduction of new products, as consumers are already well acquainted with
the names and more receptive to promises of improved user experiences.
The strength and quality image of these brands allows the company to
charge higher prices and achieve high margins. Market Leadership The
companys product are well known with a reputation of quality are also
market leader in their respective segment. Well Diversified portfolio Gillette
has a well-diversified portfolio in terms of product diversification and market
diversification. Diversification of this nature helps the company avoid the risk
of overdependence on any one source for its revenue stream. Weakness
Profitability highly dependent on core business
Gillettes profitability is highly reliant on the performance of its razors and
blades business. A substantial portion of its revenues come from this sector.
Any downturn in the sector or in Gillettes competitive position within it
could have a serious negative effect on the company. Over-reliance on a
single customer Wal-Mart Stores is Gillettes major customer. With a large
part of its revenues originating from a single costumer, the company is at
risk of adversely affecting its business, operating results and financial
condition if its strategic relationship with Wal-Mart Stores is terminated for
any reason. Opportunities New product launches Gillette is known for

constantly introducing new products in the market with better technology

and performance. This new product launches will help the company to gain
competitive advantage over its competitors. Price increases in premium
shaving segments Gillette has been increasing the price of its razors and
blades at an average rate of around 4% per year over the last ten years. This
price increase will help the company to accumulate more profits from the
present level of sales. Growth potential for battery business in China The
Chinese battery market is a large and fast-growing market. Gillette has
acquired a majority interest in the Fujian Nanping Nanfu Battery Company.
This has resulted to significantly improve the performance of the companys
overall battery business and will have its impact on the future performance
of the company.
Threats
Imitations / disposables are a threat to the Mach3 offering Gillettes ability to
sustain a price premium and earn an attractive return on its extensive
investment three-blade platform is threatened by the numerous imitators of
the Mach3/Mach3 Turbo franchise, including disposables and private label
systems, and even including Gillettes own three-blade disposable. This
numerous imitations are threat to the company in the long term as they
going to reduce the sales of the original products. Pressure on pricing power
Gillettes pricing power is being further eroded by channel migration and
increasing consumer resistance to paying significantly higher prices for
innovation. Pricing power is key to revenue growth in a mature category
especially when Gillettes strategy has historically been to drive revenue
growth per consumer and not volume growth. Competitive environment
Gillette faces intense competition in most markets. Its products compete
with widely advertised, well-known, branded products, as well as private
label products, which typically are sold at lower prices. The companys
survival depends upon its ability to adopt itself in this kind of competitive
environment
Marketing Strategy
9.4.1. Segmentation
In the shaving cream/foam/gel market there exist different categories of
customers who have different needs and are willing to pay different amount
for the product that meets their demand. Introduction of shaving cream
would help Gillette identify the needs of the customers and take advantage
of the segment which has not yet been targeted by the company. Price
sensitivity, importance of attributes, point of purchase decision makers and
customers influenced by additional features are the factors on which we will

segment the shaving cream market.

Segment One-> is most price sensitive and values additional features the
least. This segment has one third of our sample size. As Gillette is a premium
brand which focuses on differentiating its products from the competitors and
upgrading the customers in the value chain, targeting this segment will not
be a strategically appropriate decision.
Segment Two-> is more influenced by attributes of the products and is not
a price sensitive segment. Gillette through its shaving gel and foam series is
currently catering to this segment. This segment has more than one fourth of
the survey sample.
Segment three-> is concerned about the attributes, additional features as
well as price. This segment comprised of more than forty percent of the
survey sample. Gillette through its shaving cream can enter this segment.