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GILLETTE’S Razor Sharp Edge Over Its Competition
Overview
Background info on Gillette Problems/Solutions company faced Current info/issues
Background Information Founded in 1901 Flagship product—safety razor Company’s strengths:
Focus on scientific knowledge/studies Innovative products Large-scale manufacturing capability Useful products sold at fair price
Sales in 2000: $9.3 billion
Global Company Strategy: “To manage its business
with a long-term, global perspective”
Over 1 billion people interact with a Gillette product every day
Manufacturing operations located in 23 countries
Distribution in 200+ countries 40,000+ employees
Manufacturing Locations
United States:-Andover, MA-Chicago, IL-Cleveland, TN-Iowa City, IA -La Grange, GA-Lancaster, SC
-Lexington, NC-South Boston, MA
European Locations
Manufacturing Sites:-Belgium-Czech Republic-France-Germany-Ireland -Poland-Russia -Spain-England
R & D Facilities: Germany, Spain, England
Vision Statement “To build TOTAL BRAND VALUE by
innovating to deliver consumer value and customer leadership faster, better, and more completely than our competition.”
Fundamental Principles: Organizational Excellence
Superior performance at every level Core Values
Achievement, Integrity, Collaboration
Products Overview: Worldwide leader in 12 major
consumer product categories Focus on continual development of
new products Currently introduces 20+ new
products per year
Three Core Businesses
Gillette is the undisputed global leader in:
Grooming
Portable Power
Oral Care
Grooming Products World leader in male
and female grooming products
Blades, razors Wet, dry 700 million consumers
use Gillette razor blades
Shaving preparations and after-shaves
Portable Power Duracell-most
popular brand of alkaline batteries in the world
Offers strategic power-consulting services to leading electronic device manufacturers
Oral Care Company’s
fastest growing business
Oral-B brand holds #1 position globally in manual and power toothbrushes
Facts 3 core businesses provide:
80% sales 90% profits
These core brands are the strength of Gillette Co.
Gillette Mach3 Gillette for Women Venus Right Guard Duracell CopperTop Oral-B Braun Oral-B Braun
Problem Background 1980s: Consumers chose inexpensive
disposable razors Gillette helped to foster trend:
Focus on price, not quality Results:
Disposable razor market inc. by 60% Loss of quality image, loss of profits *Gillette taught consumers the best razor
was the cheapest one!
Use of Marketing Research Focus groups and surveys
revealed: Gillette must reform its approach by:
Emphasizing quality and brand equity Discontinuing use of disposable razor ads Developing new products
Results of MR Inc. investments in research and
development Sensor, Sensor Excel, Mach III, Venus
Direct mail campaigns—free razors Catchphrase: “The best a man can
get.” Able to reverse the trend—
SUCCESS!
Role of Marketing Research
Told Gillette that it could change its former price approach to the market by emphasizing quality and brand equity as well as introducing new products.
Management Decision Problem
What should Gillette do to change the trend of our decreasing equity in the market?
What should Gillette do to increase consumer’s opinions of our brand image?
Marketing Research Problem
To determine the consumer’s opinions regarding the quality of products over their prices.
To determine the impact of Gillette’s competition on its sales.
To determine the wants and needs of consumers using Gillette’s various shaving products.
Research Question and Hypotheses
Are consumers more price conscious or brand loyal?
H1: Price is most important to consumers.H2: Price is not most important to
consumers.H3: Brand loyalty is most important to
consumers.H4: Brand loyalty is not most important to
consumers.
Current Issues facing Gillette
Razor Wars Feb. 24, 2003 Gillette, Bic, Schick Launch new razors in men and women’s
disposable lines Ex. Schick razor-dispenses shave gel for women Ex. Gillette-Pink Passion Venus
Marketing efforts total $120 million combined
Ad campaigns launched this month
Note Increased attention for disposable
razors again—RISK
Caution: resulted in loss of market share in the 1980s for Gillette
Gillette Marketing Spending
Jan. 30, 2003 24% increase in ad spending
(fourth quarter) 2002: Global ad spending rose
12%--$650 million
New Challenges Jan. 30, 2003 Battery rival Energizer to acquire
Schick brand of razors Energizer to invest $930 million Result: Aggressive marketing
wars?
Renegade Web Site Freerazor.com via mass e-mails offers free
Gillette Mach3 Turbo and Venus razors Also automatically enrolls customers to receive
8 replacement blades every two months (Misleading)
Uses photos of Gillette products and copy similar to Gillette’s ads
Gillette uncertain of legal implications (all terms spelled out)
Feb. 11, 2003
Duracell Jan. 13, 2003 Cut price of AA and AAA batteries
by 13% Prompted to reduce price gap with
competitors Energizer, Rayovac
Concerned with competitor’sheavy promotional activity
Ethics April 14, 2003 Gillette exec (Gino Deluca) arrested on 15 counts
of mail and wire fraud and 1 count of money laundering
pleaded not guilty Scheme: demanded kickbacks from 5 promotional
and marketing vendors Allegedly received $600,000 in kickbacks
$260,000 Arizona condo, $32,000 home addition, vacations and cruises, $225,000 wired to a Swiss bank account
Ordered his staff to select certain vendors despite their quality problems
Questions and Answers
The End