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8/13/2019 P&G secondary research
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GILLETTE BY P&G
SBU: PERSONAL CARE
CONTENTS
1. Background of the company
2. Mission and objectives of the company
3. Provide its market definition on the basis of Customer Groups, Customer Functions
and Customer Technologies
4. Internal Environmental Analysis
5. Customer Analysis
6. Industry Analysis (with special focus on PESTEL)
7. Competitor Analysis (with special focus on Five Forces Competitor model)
8. On the basis of above information conduct a SWOT analysis
9. Perform a Portfolio analysis for the company chosen
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10.Strategies using Ansoffs Growth Share Matrix
11.Perform a 4-P (Product, Price, Place, Promotion) analysis mentioning the major
strategies adopted for these elements
Procter & Gamble (P&G)
The Procter & Gamble Company (P&G) boasts boatloads of brands. The world's top maker ofhousehold products courts market share and billion-dollar names. It's divided into three global units:household care, beauty and grooming, and health and well-being. The company also makes pet foodand water filters and produces a soap opera. Some two dozen of P&G's brands are billion-dollarsellers, including Fusion, Always/Whisper, Braun, Bounty, Charmin, Crest, Downy/Lenor, Gillette,Iams, Olay, Pampers, Pantene, Pringles, Tide, and Wella, among others. P&G shed its coffee brandsin 2008. Being the acquisitive type, with Clairol and Wella as notable conquests, P&G's biggest buy
in company history was Gillette in 2005. Procter and Gamble Home Products Ltd (P&G) isattempting to capture a bigger share of the Indian home and personal care products market and not
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just in detergents. In recent calls with analysts, it has been mentioning the Indian male groomingmarket in which its unit Gillette India Ltd operates, and its efforts to increase its share.
The Procter & Gamble Company (P&G) is one of the world's largest consumer goods companies. It
markets more than 300 brands in the beauty, health, fabric, home, baby, family, and personal care
product categories. The company operates in the Americas, Europe and Asia. It is headquartered inCincinnati, Ohio, and employs about 135,000 people. The company recorded revenues of $79,029
million during the financial year ended June 2009 (FY2009), a decrease of 3.3% compared with 2008.
B r a n d s Ariel is a brand of laundry detergent/liquidavailable in numerous forms and scents.Bounty is a brand ofpaper towelsold in the United States and Canada.Braun is a small-appliances manufacturer specializing in electric shavers, epilators, hair careappliances andblenders.Cover Girl is a brand of women's cosmetics.Crest/Oral B is a brand of toothpasteand teeth whitening products.Dawn/Fairy is a brand of dishwashingdetergent.[Downy/Lenor is a brand of fabric softener .Duracell is a brand of batteries and flashlights.Fusion is a brand of men's wet shave razors and is the quickest P&G brand to have reached $1 billionin annual sales.Gainis a brand of laundry detergent, fabric softeners and liquid dish soap.Gillette is a brand of safety razor and male grooming products.Head & Shoulders is a brand of anti-dandruff shampooand conditioners.Olay is a brand of women'sskin careproducts.Oral-B is a brand of toothbrush, and oral care products.Pampers is a brand of disposablediaper and other baby care products.Pantene is a brand of hair careproducts (conditioners/styling aids).
Pringles is a brand of potato chips.Tide is a brand of laundry detergent.Wella is a brand name of hair care products (shampoo, conditioner, styling, and hair color).Whisper is a brand of pantyliners sold primarily in Asian markets.Mister Cleanis a brand of multi-purpose cleaner, and spray sold in theUnited StatesandGreat Britain.
M LE GROOMING ND PERSON L C REGILLETTE
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In the more than 100 years since the Company was founded,Gil lette has gained, held and streng thened leadership posit ion s
through the Company's st rategy of managing i ts business w ith a
long -term, globalperspective.
http://www.pg.com/en_US/company/purpose_people/index.shtml
In the December quarter, blades and razor shipments were up by 25%, while grooming segment valuesales grew by 21%. Lower value growth could be partly explained by lower per-unit realizations onthe new range. It has also dropped prices on its refills by 12-15%.Gillette also appears to havereconfigured Mach3 to ensure its margins do not suffer. Its segment margin actually improved to31.6% in the December quarter, compared with 24.8% in the year-ago period. Initially, its valuegrowth may suffer, especially if the product cannibalizes sales of Mach3 Turbo. But the refill costsnearly 70% of the razor cost, higher than even Mach3 Turbos 60%. Thus, what it may lose on therazor it will recover from the refill. With a proprietary design, users have no option but to buyGillettes cartridges. Gillettes strategy, backed by P&Gs focus on higher growth from developingmarkets, will see it grow at higher rates in the coming years.http://www.livemint.com/2010/03/21212857/Gillette-India-to-beat-market.html
GILLETTE: MISSION AND VALUESOUR VISION:The Gillette Companys Vision is to build Total Brand Value by innovating todeliver consumer value and customer leadership faster, better and more completelythan our competition. This Vision is supported by two fundamental principles that
provide the foundation for all of our activities: Organizational Excellence and CoreValues.
ORGANIZATIONAL EXCELLENCE:Attaining our Vision requires superior and continually improving performance in
every area and at every level of the organization.Our performance will be guided by a clear and concise strategic statement for each
http://www.pg.com/en_US/company/purpose_people/index.shtmlhttp://www.pg.com/en_US/company/purpose_people/index.shtmlhttp://www.livemint.com/2010/03/21212857/Gillette-India-to-beat-market.htmlhttp://www.livemint.com/2010/03/21212857/Gillette-India-to-beat-market.htmlhttp://www.livemint.com/2010/03/21212857/Gillette-India-to-beat-market.htmlhttp://www.pg.com/en_US/company/purpose_people/index.shtml8/13/2019 P&G secondary research
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business unit and by an ongoing Quest for Excellence within all operational andstaff functions.This Quest for Excellence requires hiring, developing and retaining a diverseworkforce of the highest caliber. To support this Quest, each function employsmetrics to define, and implements processes to achieve, world-class status.
CORE VALUES:As we work toward our Vision, three core Values define the way we operate:
ACHIEVMENTWe are dedicated to the highest standards of achievement in all areas of our
business. We strive to consistently exceed the expectations of both external andinternal customers
INTEGRITYMutual respect and ethical behavior are the basis for our relationships withcolleagues, customers and the community. Fair practice is the hallmark of theCompany.
COLLABORATIONWe work closely together as one global team to improve the way we do businessevery day. We communicate openly and establish clear accountability for makingdecisions, identifying issues and solutions, and maximizing business opportunities.
MARKET DEFINITION
Customergroups(Product)
Customersegment
Customerneed
Gillette shavingrazors
Regular and HeavyUsers
Salon likeshaving
Gillete Hair care Teens/youth, midlevelexecutives
Removes dirt andoil
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Gillette ShavingCream
Employees/Students Smoothness,Skin protection
Gillette Deodrant Executives,working men
Better wetnessprotection
ENVIORNMENTAL ANALYSIS
The Environment in India:Gillette's experience in India indicates the type of challenges that the companyfaces in emerging markets. India is the largest blade market in the world in volume,though not in value terms. The Indian company, Harbans Lal Malhotra & Sons
(Malhotras), is the second largest blade maker in the world after Gillette. For long,this company has enjoyed a monopoly and indeed been accused of many restrictive
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trade practices.Gillette entered India in 1984, with a 24 per cent stake in Indian Shaving ProductsLtd (ISPL), a company it promoted jointly with the local Poddar Group. Later, itincreased its stake to 51 per cent. The company has two arms in India, ISPL andWilkinson Sword, which it acquired in 1995. Gillette has set up a manufacturing
facility at Bhiwadi in Rajasthan. . Gillette's distribution network currently controls2000 distributors and 400,000 outlets all over India.
Internal Environment(Global)Our unique organizational structure offers the global scale benefits of an international company andthe local focus to be relevant for consumers in roughly 180 countries where our brands are sold. Ourcorporate structure provides the framework that allows us to tap the benefits of a global organizationwith speed and efficiency. Our global operations keep us in touch with our local communities. Andour strong governance practices ensure that we conduct our operations with consistently highstandards and integrity. P&Gs structure has removed many of the traditional overlaps andinefficiencies that exist in many large companies.
Global Business Units (GBUs) focus solely on consumers, brands and competitors around the world.They are responsible for the innovation pipeline, profitability and shareholder returns from theirbusinesses.
Market Development Organizations (MDOs) are charged with knowing consumers and retailers ineach market where P&G competes and integrating the innovations flowing from the GBUs intobusiness plans that work in each country.
Global Business Services (GBS) utilizes P&G talent and expert partners to provide best-in-classbusiness support services at the lowest possible costs to leverage P&Gs scale for a winningadvantage.
Lean Corporate Functions ensure ongoing functional innovation and capability improvement.
Core strengths
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Consumer Understanding
No company in the world has invested more in market research than P&G. We interact with morethan five million consumers each year in nearly 100 countries. We conduct over 20,000 research
studies every year, and invest more than $400 million annually in consumer understanding. Theinsights we gain help us identify opportunities for innovation and better serve and communicate withour consumers.
Innovation
P&G is the industrys innovation leader. Nearly all organic sales growth over the past nine years hascome from new brands or improved products. We continually strengthen our capabilities and pipelineby investing twice as much, on average, as our major competitors. We also leverage a global networkof research partnersand more than half of all product innovation coming from P&G today includesat least one major component from an external partner. Their contributions have consistently helpedus earn honors from the SymphonyIRI New Product Pacesetters Reportthe annual list of the biggestinnovations in our industry. Over the past 15 years, 125 P&G products have earned a spot on the top
25 Pacesetters listmore than our six largest competitors combined. Symphony IRI recognized P&Gas the most innovative manufacturer in the consumer packaged goods industry for the last decadepresenting the Company with its Outstanding Achievement in Innovation award. In 2009, P&Glaunched 5 of the top 10 most successful non-food products as judged by SymphonyIRI: Tide TotalCare, Gillette Venus Embrace, Bounty Extra Soft, Always Infinity and Secret Flawless.
Brand-Building
P&G is the brand-building leader of our industry. Weve built the strongestportfolio of brands in theindustry with 50 leadership brands that are among some of the worlds best-known household namesand which together make up 90% of P&Gs sales and more than 90% of profits. Twenty-three of thesebrands each generate more than $1 billion dollars in annual sales.
Human Resources
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Hire and retain some of the most talented people in the industry. Rewarded and recognized for their contributions through financial
compensation, promotions and freedom to influence project selection
Global training programs on managing the innovation process Training for high-potential junior staff
P&G operates in more than 80 countries worldwide
Marketing Constant emphasis on building brand recognition and brand value In the 1880s it was one ofthe first companies to advertise nationally. In the 1930s, P&G was the first firm to develop the idea of brand
management. They would set up marketing teams for each brand and
urge them to compete against each other.
In the 1930s they used their own soap operas and radio programs to
promote their products and appeal household women.
Research
Research World class R&D organization, with more than 7,500 scientists working
in 12 countries around the world. This includes 1,250 Ph.D. scientists.
For perspective, this is larger than the combined science faculties at
Harvard, Stanford & MIT.
Invest 4% of sales back into research & development which is higherthan most of their global competitors
Social Development P&G focuses on two areas they can make a difference
1. Water2. Hygiene and health3. These focus areas support ongoing work to understand issues concerning water
availability, quality and quantity, and health, hygiene and nutritional issues.
http://www.pg.com/en_US/company/purpose_people/index.shtml
We Share P&Gs Purpose and Values.
Our Purpose, Values and Principles are the foundation on which we develop leaders at P&G. Ourshared Purposeimproving the lives of the worlds consumersin addition to our Valuestrust,
integrity, ownership, leadership and passion for winningunify us as we collaborate as a teaminternally and compete to win externally.
http://www.pg.com/en_US/company/purpose_people/index.shtmlhttp://www.pg.com/en_US/company/purpose_people/index.shtmlhttp://www.pg.com/en_US/company/purpose_people/index.shtml8/13/2019 P&G secondary research
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We Hire the Best.
Nearly a half-million people apply for P&G jobs every year. We hire less than 1%. We attract toptalent because of P&Gs reputation as a great company for leaders, and we identify the best applicantsby using a proven recruiting process that measures intelligence, assesses character and leadership, andpredicts success at P&G.
We Challenge P&G People from Day One.
We believe theres no substitute for hands-on experience when it comes to leadership development.Thats why we create early, meaningful responsibilities for every employee. Typical assignmentsdemand collaboration inside and outside the Company, disciplined project management and the needto be in touch with consumers, retail customers and other external stakeholders.
Business and Functional Leaders Actively Recruit, Teach and Coach.
Line business leaders are accountable and involved at every step of the process. This starts at the top.Our Chief Executive Officer, Vice Chairs, Presidents and Functional Officers recruit on collegecampuses and teach in our executive education programs. These senior executives also act as mentorsand coaches for younger managers, helping them develop the skills necessary to lead large businesses
and organizations.
Customer analysis
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Whoare our current and potential customers
Whatdo our customers do with our products
Wheredo our customers purchase our products
Whendo our customers purchase our products
Whyand howdo our customers choose our products
Whydo potential customers not purchase our products
Majority of people associate Gillette with shaving. More than half of the people purchase shaving products from locality stores. Quality of shave as the primary attribute that they consider when they make
their buying decision.
More than 50% responded to advertisements in buying decisions. Around two third were unaware that 7 Oclock and Wilkinson were actually
under the Gillette umbrella brand and thought competitors.
SEGMENTATION
Personal Grooming IndustryAn Outlook
Industry Analysis
BENEFIT DEMOGRAPHIC BEHAVIORISTIC PSYCHOGRAPHIC FAVOUREDBRANDS
Quality of shave Executive,Workingmen
Regular and HeavyUsers High autonomyValue oriented
Gillette
Convenience Employees Regular and HeavyUsers
HedonisticHigh self-involvement
Gillette
Technology &Fashion
Teen /YouthsMid level Executive
First time users High sociability,active
Gillette
Price conscious Low Income,Illiterates,
Unaware
Laggards and nonregulars.
Hypochondriacconservative
Local players
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Due to increased awareness and rising income levels, the industry is expected to undergo a major shiftfrom traditional double-edged razors segment to twin and triple blades razors segment. Razor blademarket has tripled from Rs 2 billion in 1986 to Rs 6 billion in 2006. In value terms, in 2003, double-
edged blades comprised 78%, systems 15% and disposables 7%. As per AC Nielsen/ORG's estimates,the domestic shaving preparations market in 2003 was pegged at Rs 1.5 billion. Within the industry,cosmetics and personal care industry has been growing at an average rate of 20 per cent for the lastfew years. However, current consumption is still below many countries in Asia which shows thatthere are further growth opportunities. In 2004, market size of men's personal care segment isestimated at approximately Rs 750 crores, with Gillette having the largest market share.G illette,which followed a strategy of targeting first-time shavers, introduced the Vector for the lower endsegment; Mach3 Turbo was aimed at the premium end. Gillette is the market leader in the Rs1,000crore and five billion units razors and blades market. Its market share was 40% while that of itsnearest competitor, the House of Malhotras, was 14%, according to a report byMotilal OswalSecurities Ltd. Gillette is the market leader, but its growth rate was tepid in fiscal 2009(year endedJune), as volume sales grew by just 2.8%. In a bid to increase share and growth, Gillette introduced
the Mach3 in November, priced at Rs125 or 60% lower than the Mach3 Turbo. This product istargeted at greater conversions from the doubled-edged segment, which accounts for 62% and 86% ofthe razors and blades market, in value and volume terms, respectively. And nearly half of this marketcomprises users who get their shaves done in a salon. Gillette is attempting to convert this segment bygiving salon quality shave at an affordable price. Thus, the industry is growing at a decent rate butstill is at an infant stage and this offers great opportunities to players like Gillette and ColgatePalmolive to expand their customer base to include higher number of lower middle class people andthereby increase their revenues and profitability.
The Indian blade market consists of four broad segments1) Flat blades2) Disposables
3) Twin blades4) Triple blades.
http://www.indiainfoline.com/Markets/Company/Fundamentals/Management-Discussions/Gillette-India-Ltd/507815
http://www.business-standard.com/india/index2.php
PESTEL ANALYSIS
http://www.indiainfoline.com/Markets/Company/Fundamentals/Management-Discussions/Gillette-India-Ltd/507815http://www.indiainfoline.com/Markets/Company/Fundamentals/Management-Discussions/Gillette-India-Ltd/507815http://www.indiainfoline.com/Markets/Company/Fundamentals/Management-Discussions/Gillette-India-Ltd/507815http://www.business-standard.com/india/index2.phphttp://www.business-standard.com/india/index2.phphttp://www.business-standard.com/india/index2.phphttp://www.indiainfoline.com/Markets/Company/Fundamentals/Management-Discussions/Gillette-India-Ltd/507815http://www.indiainfoline.com/Markets/Company/Fundamentals/Management-Discussions/Gillette-India-Ltd/5078158/13/2019 P&G secondary research
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External Forces
ECONOMICAL:The external environmental factors in terms of increasing purchasingpower of the Indian consumers and a high level of interest in personal groomingamongst Indian men and a strong focus of the company to create awareness fortechnologically advanced products have resulted in signs of growth in the triple blade
and twin blade systems. Due to higher income elasticity of demand, demand forpersonal grooming products are expected to grow at a rate higher than the rise inincome levels of people. However, since the market is still driven largely by price andnot quality (typically in rural markets and smaller towns), consumers might not valuethe potential benefit of paying higher prices for better and safer products. Theincreased awareness coupled with the increase in disposable incomes has led to adesire to upgrade lifestyles through owning and using better quality brands.
Adapted to the recession by lowering earning projections Shed 15% of the management staff to help cope with the tough economy Focus their greatest resources on the 43 best-selling brands
TECHNOLOGICAL:Gillette came up with new and improved products like Mach3 Turboand New Vector Plus to cater to the increasing needs of this section of the market. Further,
penetration of cable television into the smallest of Indian towns has led to an increasedawareness of latest lifestyle trends and brands, which have become an aspiration for manyconsumers. ProSeries represents Gillettes innovative shave care science at its best.Including:
Gillette Fusion ProSeries Thermal Scrub: Gently warms and helps to clean and clear awaydirt, excess oils and dead skin cells, softening facial hair before shaving.
Gillette Fusion ProSeries Sensitive Face Wash: A mild soap-free formula with aloe verasuitable for everyday use on sensitive skin.
Gillette Fusion ProSeries Intense Cooling Lotion: A soothing aftershave gel that helpsprovide instant cooling relief for just shaved skin and hydrates for an incredibly comfortableend to your shave.
Available in manual and power, theGillette Fusion ProGliderazor is most technologicallyadvanced razor to date. By addressing every aspect of the razors contact with hair and skin,
its an advancement in mens shaving comfort and performance. Enhanced Fusion featuresinclude:
Re-engineered Low Cutting Force blades with thinner edges Fusions advanced low-resistance blade coating Improved blade suspension system 25% larger Lubrastrip Streamlined Comfort Guard Innovative microcomb, exclusively on ProGlide Power
http://www.gillette.com/en/us/home.aspx#/international/
http://www.gillette.com/en/us/products/razors/proglide/fusion-proglide-power-razor.aspxhttp://www.gillette.com/en/us/products/razors/proglide/fusion-proglide-power-razor.aspxhttp://www.gillette.com/en/us/products/razors/proglide/fusion-proglide-power-razor.aspxhttp://www.gillette.com/en/us/home.aspx#/international/http://www.gillette.com/en/us/home.aspx#/international/http://www.gillette.com/en/us/home.aspx#/international/http://www.gillette.com/en/us/products/razors/proglide/fusion-proglide-power-razor.aspx8/13/2019 P&G secondary research
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POLITICAL:The Government's continued focus on liberalization; trade friendly policies andimprovement in infrastructure have resulted in a steady inflow of global investments into theIndian market which has again resulted in higher income levels due to increased employmentopportunities and sustained economic boom.SOCIAL:Grooming is gaining popularity among male at a rapid rate.The society is changing
and people are getting more conscious on improving their looks.Now people dont prefersalons because they are busy and need to save to time.As s result ,market is booming andgrowing rapidly.They are spending more money and time on grooming and are increasinglyseeking information and advice to ensure they have the best products available to help themlook and feel their best.With the number of men engaging in facial and body grooming on adaily, weekly or monthly basis, one thing is clear: Men have carved out their own niche in the
beauty industry and they demand products and services tailored to their specific needs.
Have to keep up with changing trends in consumer demand and culture of differentcountries.
P&G SHIKSHA in partnership with CRY.
PADHEGA INDIA BADHEGA INDIA
Reached to over 87000+ childrens.
Legal / RegulatoryMust meet industry regulations and standards in many different countries
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FIVE FORCE COMPETITORS MODEL
MICHAEL.E... PORTERS 5 FORCE MODEL
Int roduct ion:
The model of the Five Competitive Forces was developed by Michael E. Porter inhis book Competi tive Strategy: Techni ques for Analyzing Industr ies andCompetitors in 1980. Since that time it has become an important tool foranalyzing an organizations industry structure in strategic processes.Porters model is based on the insight that a corporate strategy should meet theopportunities and threats in the organizations external environment. Especially,competitive strategy should base on and understanding of industry structures andthe way they change.Porter has identified five competitive forces that shape every industry and everymarket. These forces determine the intensity of competition and hence theprofitability and attractiveness of an industry. The objective of corporate strategy
should be to modify these competitive forces in a way that improves the position ofthe organization. Porters model supports analysis of the driving forces in anindustry. Based on the information derived from the Five Forces Analysis,management can decide how to influence or to exploit particular characteristics oftheir industry.
The Five Competi tive Forces:The Five Competitive Forces are typically described as follows:1) The threat of entry by new competitors.2) The intensity of rivalry among existing competitors.3) Pressure from substitute products.
4) The bargaining power of buyers.5) The bargaining power of suppliers
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Bargaining Power of Suppl iers
The term 'suppliers' comprises all sources for inputs that are needed in order toprovide goods or services.Supplier bargaining power is likely to be high when:
fragmented source of supply.
pliers customers are fragmented, so their bargaining power islow,
obtain higher prices and margins. This threat is especially high when
industry,
development (e.g. reluctance to accept new releases of products),
In such situations, the buying industry often faces a high pressure on margins fromtheir suppliers.The relationship to powerful suppliers can potentially reducestrategic options for the organization.THE GILLETTE CASE:
It is indeed enjoying greater supplier power due to its sole presence in theorganized, premium technology shaving razors market in India. Also there are noclose substitutes to their razors. The only substitutes in terms of the product per seare in fact very poor on the technology and quality fronts. For example: there areseveral twin blade razors in the market but none would match the superior
technology of a sensor excel, or the triple blade offering by Super-Max 3 is in nocomparison with the Mach 3. So in reality there are no potential threats.
Bargaining Power of Customers:Similarly, the bargaining power of customers determines how much customers canimpose pressure on margins and volumes.Customers bargaining power is likely to be high when
product is undifferentiated and can be replaces by substitutes,
related to high costs
-sensitive,themselves,
THE GILLETTE CASE:
The buyers as a result are not very powerful as there are no close substitutes, theybuy in small numbers, switching to an alternate product is not easy (as onecartridge does not fit another razor, and also because once an investment is madeon a premium Gillette razor, it is difficult for the consumer to leave it as such and
move on to another razor), and customers of Mach 3 razors (executive class whichcomprises a sufficient market) are not price sensitive. However, the only thing the
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customer can do is to revert to lower versions by compromising on technology orswitch over to barber shaving.
Thr eat of New Entrants:
The competition in an industry will be the higher; the easier it is for othercompanies to enter this industry. In such a situation, new entrants could changemajor determinants of the market environment (e.g. market shares, prices, customerloyalty) at any time. There is always a latent pressure for reaction and adjustmentfor existing players in this industry.The threat of new entries will depend on the extent to which there are barriers toentry. These are typically
operations),
operation with fully depreciated assets,
Scarcity of important resources, e.g. qualified expert staff
-termservice contracts,
THE GILLETTE CASE:
The Indian shaving razor market is completely dominated by Gillette. Any newentrants should very carefully launch themselves because they would be directlypitting against a monopolist kind of market giant. Also the barriers to entry are notmany except minimum size requirements for economies of scale, high initial
investments and above all the retaliation by Gillette which could be anything.However, there is news that the American Safety Razor would be soon entering theIndian market. We can only wait and watch what would happen then.
Threat of Substitutes:
A threat from substitutes exists if there are alternative products with lower prices ofbetter performance parameters for the same purpose. They could potentially attracta significant proportion of market volume and hence reduce the potential sales
volume for existing players. This category also relates to complementary products.Similarly to the threat of new entrants, the treat of substitutes is determined byfactors like
ustomer relationships,
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COMPETITORSThere is virtually no competition in most of the segments except in the flat bladessegment, low income segment, traditional double edged users ( laggards), and technology-illiterates.In the flat blade segment, which is also the cheapest, Malhotra dominates the market.In the mid and high-end segments, Gillette has been the clear leader in terms of new product
introduction and branding. The Gillette brand has a high recall and is associated with quality,precision and technology.
Colgate-Palmolive
Colgate-Palmolive is one of the largest companies in the FMCG sector. The Company has launch ofits International Palmolive Shave Gel and Palmolive Shave Foam in the year 2000, in response togrowing consumer interest in skin conditioning benefits. The Chairman of Indian Operationsmentioned that the companys strategy for Personal Care is to remain in top niches. Every year, theyintended to take 3-4 initiatives. Colpal has shaving products under the brand name Palmolive shavingcream. It has three variants in the shaving cream/gel/foam category.Harbans Lal Malhotra & Sons
(Malhotra),
Gillette's experience in India indicates the type of challenges that the companyfaces in emerging markets. India is the largest blade market in the world in volume,though not in value terms. The Indian company, Harbans Lal Malhotra & Sons(Malhotra), is the second largest blade maker in the world after Gillette.For long,this company has enjoyed a monopoly and indeed been accused of many restrictivetrade practices. However in the twin and triple blade segment, Gillette has undoubtedlybeen a market leader with effectively no competition at all, both in volume as well asvalue terms.
Godrej
Godrej is a domestic brand of shaving cream and now it is looking to expand in the global market forhair color and shaving creams. It has two variants in the shaving cream category. They are GodrejShaving Cream and Godrej Premium Shaving Cream. The price of these two is shown in the tablebelow. One observation is that even the premium shaving cream from Godrej is priced quite below(44%) below the competitors products of same quantity.
HLL
Hindustan Lever Limited, which is now called as Hindustan Unilever Limited, is a subsidiary ofUnilever (USA). It is the largest FMCG company in India. It is also reputed to be the largest exporterof India. Its distribution network is very strong. It has over 2000 suppliers and associates and about7000 redistribution stockists. With this massive distribution network in place, HLL enjoyscommanding position in many FMCG products in Indian market. In the Shaving Cream/Gel/Foamcategory also HLL has two brands. Both of them are very strong brands in the Indian market. With the
help of the its distribution system these brands have a deeper reach to the Indian consumers. Thesebrands are shown in the tree below: HLLs Shaving Cream/Gel/Foam:
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similar to that of Old Spice shaving cream. But HLL does not have any product in the gel or foamcategory to compete brands like Old Spice and Gillette.
Other Brands
Other competitive brands like Dettol and Park Avenue are also there in the market scene. The pricefor their shaving cream product is mentioned below. These are not premium segment brands and werepriced accordingly
http://economictimes.indiatimes.com/articleshow/575888.cmsAmerican Safety Razor to enter local
markets
The world's third largest shaving products maker, the American Safety Razor(ASRCL), is planning to spread its wings in India through a distribution tie-up withthe Salora group. The Indian shaving products market, so far dominated by theHouse of Malhotras and Gillette, will see a third large player for the first time
The $279m company has a large repertoire, but at the moment, it wants to focus ondisposables and shaving systems priced 15-25% cheaper than that of GilletteAt a later stage it also plans to bring in double edge razor blades with a superiortechnology to take on House of Malhotra that virtually controls that segment
indiainfoline.comASRC eager to drive growth from Indian
market
New Delhi: American Safety Razor Company (ASRC), the $240-million globalshaving products major, is betting on India as a key growth market for thecompany. With the company already having a significant presence in the North
American and WesternEuropean markets, it is now making inroads into the Asian one and has identifiedIndia as a focus market.Sourceindiainfoline.com
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SWOT ANALYSIS
SRENGTH Market leader
Strong brand leader Global presence Aggressive advertising Quality and innovation Portfolio range (Mach 3 etc)
WEAKNESS
Relatively static marketgrowth
Heavy dependence on highstreet retail outlets.
OPPORTUNITES
Consumer brand preference
Demand for high qualityNew innovative technologyIncreased grooming sophistication
THREAT
New competitorsImitating the productsGrowth in substitutes
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Portfolio Analysis
Alkaline Batteries Duracell Blades & Razors Gillette, Mach 3, Sensor, Atra, Trac, Custom plus,
Good News, Agility. Oral Care Oral-B Small appliances Braun Stationery Products Parker, Paper Mate, Watermen, Liquid Paper,
Dryline Toiletries Gillette, Right Guard, Soft & Dri,
Dry Idea, Satin Care
BCG MATRIXThe BCG matrix helps a company think about the portfolio of products andservices which it offers and make decisions about which it should keep, which itshould let go and which it should invest further in.
It is used in initial audit discussions to identify product developmentopportunities.The company then plots its products on the matrixfor example a product in afast growing market in which it has a low share would appear in the top left handarea, whilst one in which it had a high market share but where the market wasgrowing slowly would appear in the bottom right.Key Assumptions of BCG Matrix
lower average unit costs in the future)er influences the average costs
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Analysis:The reasons for placing the product portfolio in the above manner is as follows:
DOGS: 7 O CLOCK P II AND WILMAN RAZORSHere we have considered Wilman razors and the 7 OClock razor P II because Wilman razors are losing market share very rapidly while the 7 OClock razors aretoo expensive for their segmentation. Consider this: the P II, which is a twin razorcosts Rs.85 while a Vector Plus costs only Rs.29, which also has several addedfeatures like superior technology, imported blades, anti-hair clogging mechanism,etc. As a result, they have a low market share as well as low market growth, as thecomplete eradication of double edged shaving pattern is one of the primaryobjectives of GilletteQUESTION MARKS: SENSOR EXCEL, VECTOR PLUS AND STERLING
Here we put sensor excel because it has been losing its market share due to itspricing close to that of Mach 3 . A Sensor Excel would initially cost Rs.125 and it
successively boils down to Rs.3 per shave (price per shave), which is the same forthat of Mach 3 (which however costs Rs.235 initially). People actually are tendingto buy either vector plus or Mach 3 as a result of which Sensor Excel is becomingredundant. Vector Plus is one product with tremendous potential for market growth,since it combines superior technology, great looks, attractive and competitive priceand above all the Gillette tag. Then we have the Sterling, the double-edged razorwhich may not have much growth in the future, which also doesnt gel with thecompanys objectives but then it is the only such product in the companys productbasket. There still are some customers who use only double-edged razors and arealso specific about the 7 o clock brand.STARS: MACH 3 ,PRESTO,GILLETTE GUARD
Here we placed Mach 3 and Presto because they have a high market share as well
as market growth. Presto would never decline in sales because the market for adisposable razor always exists due to its simple characteristic of ready to use andthrow. Mach 3, the premium product of the company has also been a huge successamongst its segmented markets of youth and executives and its demand is onlygrowing. So the company has in fact launched more innovations or developmentsof the basic product like Mach 3 Power and Mach 3 Turbo.CASH COWS: WILKINSON AND 7 O CLOCK BLADES (FLAT BLADES)
The reason for putting them here is that they currently enjoy both high market shareas well as market growth. But now there could be slow growth or even decline inthis segment due to decline in double-edged razors ( if the company succeeds in itsobjective), so these products should be 'milked' to provide cash for investments in
future product areas.
Conclusion
As long as management understands that the BCG Growth/Share Matrix generatesoptions which require further analysis and validation, this tool can greatly enhancestrategic decision making
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Ansoff Growth matrix
Market penetration:Exisiting Products into existing markets.
Gillette Mach3 ,Gillette Vector plus
Product development:Introduction of new product into existing
markets.
Mach3 Turbo,Gillete guardGillette introduced the Mach3 in November, priced at Rs125 or 60% lower than the Mach3
Turbo. This product is targeted at greater conversions from the doubled-edged segment,
which accounts for 62% and 86% of the razors and blades market, in value and volume terms,
respectively. And nearly half of this market comprises users who get their shaves done in a
salon.
This new shaving system is easy to use and offers a great shaving experience at a price
that millions of Indian men can afford.
Gillette, a name synonymous with superior shaving innovations, has today announced thelaunch of Gillette Guard, the brands first product designed especially for India. This occasion marks
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the first time that a razor has been designed and created to suit the needs of an Indian consumer,offering a superior & safe shave at an incredibly affordable price of Re 1 for one shave.
Priced at an affordable Re 1 for 1 shave*, the Gillette Guard promises a much safer shave than thecurrent available double edge razors. The product has many innovative features that help to reducenicks, cuts and irritation besides ensuring better hygiene for the consumer.
Diversification:New product New market
Gillete guard:Entering the rural market at low price with high
standard.
http://www.indiainfoline.com/Markets/News/Gillette-unveils-Gillette-Guard/4955753264
http://www.business-standard.com/india/index2.php
http://www.indiainfoline.com/Markets/News/Gillette-unveils-Gillette-Guard/4955753264http://www.indiainfoline.com/Markets/News/Gillette-unveils-Gillette-Guard/4955753264http://www.business-standard.com/india/index2.phphttp://www.business-standard.com/india/index2.phphttp://www.business-standard.com/india/index2.phphttp://www.indiainfoline.com/Markets/News/Gillette-unveils-Gillette-Guard/49557532648/13/2019 P&G secondary research
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4ps analysis of Gillette
Product and Service
Customer value hierarchy chart in the 4 Ps analysis shows that Gillette products (Vector Plus) is
currently fulfilling only the core and basic needs to some extent. Thus, other new product will cater to
these needs. Again, additional features need to be there to satisfy the basic and expected needs of the
people.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 is on to indianise the product which is evident with the launch of
Gillette Guard.
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, Price of Gillette cartridges
is very high .But Gillette vector plus and Gillette guard are popular products at a mid and low pricerange.
The price cut offer on vector plus was to take on the smuggled versions thathad entered the Indian market.The hike in the price of presto from Rs 12 to Rs 15 was to induce thecustomer to move on to vector plus.
Promotion
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. Roger Federer, Tiger Woods, David Beckham and Thierry Henry are a few of
Gillettes global ambassadors called Gillette Champions.Irfan Pathan has done a couple of ads
for Sensor Excel. But the advertisement should also focus rural market.
Place
Indirect distribution Direct Distribution
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The appointment of distributors is handled by Gillette India directly. In NCRregion, a separate well-defined area is allocated to each distributor.The distributor appoints the EFF (Effective Field force). This comprises a team of5-6 people who work directly under the distributor and are paid by him (and not thecompany).The broad structure in the distribution network is as follows :
The goods are stored at depots before they move into the hands of the distributor.
The ASM and TSI are on company payroll.The Territory Sales Manager prepares the TMR (Total Market Report) detailing important variableslike market share, growth trends, etc for the area under him. Also, it is the TSI who communicatesschemes and benefits rolled out by the company to the distributor who in turn informs his EFF. TheTSI meets distributors on a monthly basis for periodic review. The TSI is responsible for thetargets/performance of the area under him and he is expected to communicate actual results back tothe company on a regular basis.
ASM
TSM
Distributor