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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
32
1128
23
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