Michael Smurfit UCD Graduate Business School University College Dublin Frank Bradley 17 October 2011 GILLETTE INNOVATION Gillette with over 70 percent market share in the wet shave market in both the US and Europe dominated the category. This dominance was born from a relentless pursuit of better shaving technology, a willingness to invest whatever was needed to manufacture its products effectively, and a formulaic, integrated marketing strategy. Gillette prided itself on its innovations in shaving technology and its ability to persuade consumers to trade up as new improved versions of existing razors were launched. In 1990, the Gillette Sensor represented a breakthrough in shaving systems technology with its twin blade cartridge. This …show more content…
Company executives believed that Gillette became a truly global brand company with the introduction of the Gillette Sensor in 1990, when it sold in 200 countries and territories and manufactured in 28 countries. Although some of the packaging and ways of selling it products were customized, Gillette sold a universal product. It was the company’s belief that shaving systems offered the same benefits, regardless of where in the world they were sold. This gave the company vast economies of scale in manufacturing and distribution. Advertisements were filmed identically across the globe and shot in the US. According to David Bashaw, Gillette’s marketing manager for northern Europe „Locally, TV spots are bought, and it's the same film with the odd phrase modified from Asia to the UK. The PR may be tweaked, so that radio gets more weight in the UK than say in Germany, and everything is tested locally before it's rolled out, but it's pretty much homogenous and that's what has worked before,' (Marketing, 1 October 1998): The company’s global marketing budget was estimated to be approximately $600 million annually at the turn of the century. Gillette's Competitors Gillette had two principal competitors, Wilkinson Sword and Schick and a third competitor, Bic, mainly in the disposable sector. Wilkinson Sword: For some time Wilkinson was regarded as Gillette's poor relation. Its market share dropped from 26% in 1986 to 19% in 1990 against the background of an advertising
Growth and earnings slowed in the 1990s as the company’s costs increased, value-added services and solutions were not offered, new products were slow to market, and the products were not
Since the early 1990s, the players in the market have copied each other's innovations and this has led to very little differentiation of products in the market. Customers in this industry are very price sensitive and little differentiation allows them to shop around for the best deal. In businesses, there was also a trend towards contracts with multiple suppliers and this further increased customer power. These factors combined have led to lower industry attractiveness since 1990.
A group of executives from Paramount Health and Beauty Company (Paramount) sat in a research room intently observing a dozen men shaving on the other side of a two-way mirror. The subjects were testing out Paramount’s newest nondisposable razor, Clean Edge, and discussing the experience. The verdict was extremely encouraging. The majority of men felt it was the closest, cleanest, and smoothest shave they had encountered. All executives at Paramount agreed Clean Edge should be priced in the super-premium segment of the market. However, some executives believed Clean Edge should be launched as a mainstream entry
The introduction of the Sensor Shaving System, one of the biggest product launches ever, forced Gillette to reevaluate its strategy in its shaving and non-shaving business. It had to decide whether to go ahead with the launch and if so, at what scale.
Synopsis: Gillette has long been known for innovation in both product development and marketing strategy. In the highly competitive, but mature, razor and blade market, Gillette holds a commanding worldwide market share. The peak of its innovation occurred in 2006 with the introduction of the Fusion 5-bladed razor. Today, innovation in razors and blades is thwarted by a lack of new technology and increasing consumer reluctance to pay for the “latest and greatest” in shaving technology. Gillette must decide how to put the razor wars behind them and maintain or increase its share of the global razor market.
* Customers: Male consumer products have been trending upward in the last decade. The customer segments are broken up into three areas; social/emotional, involved razor users, and uninvolved or maintenance users. Social/emotional are responsible for 39% of Nondisposable razors, Involved is for 28%, and maintenance users account for 33%. In 2009 consumers razors and replacement cartridges at a higher rate than ever before.
market share of General Motors fell from 28.2% in 2000 to 17.6% by 2014. The other two of the Big
For this reason, Gillette has always been trying to innovate in the market with new products. But they did not want their product to be bought just because they are a novelty but because it was perceived by the customer as a good quality product and have a staying power and product loyalty. This can be illustrated by the launch of the “Fusion” product by
Paramount Health and Beauty Company is in the process of launching a new technologically advanced nondisposable razor “Clean Edge”. With its improved design, Clean Edge provides superior performance by utilizing a vibrating technology to stimulate hair follicles and lift the hair from the skin, allowing for a more thorough shave. The company has decided to introduce it in the men’s market where it has a strong presence. The company is now focussing on positioning and naming of this new product. It also needs to decide on the promotional activities to be performed adhering to the budget constraints and also must decide on the distribution channels through which it can reach to the masses.
The Indonesian economy has constantly grown within the last 20 years. However, the shaving market is still underdeveloped compared with Western markets. Hence, Gillette should provide more information to spread widely concept of shaving. Moreover, it should introduce new products to facilitate the introduction of shaving products to non-shavers and increase the frequency of shaving in current shavers.
Another factor decreasing our market share is the international market. Although we are increasing in every market domestically, our international market has greatly decreased by 26.6% during 2001 to 2002. Our decrease is equal to a full-year percentage of sales of 2001- 2002 in Southern New England. (MA, CT, RI).
Could you identify any product systems in this product mix? Is the toothpaste considered a shopping, specialty or convenience product? At what conditions, could this product considered a business product? With respect to Scope, do you consider it a "star" or "cash cow"? Why? With respect to the product life cycle of scope, what is the current status of the product? What is your marketing advice at this particular product life cycle stage?
Compliment current leading product lines that keep consumers happy. Promoting Christmas, Father’s day and Mother’s day gift grooming kits that meets more of the consumer’s needs will also introduce consumers to other product lines Gillette has to offer. Focus marketing potential growth opportunities globally by challenging resistance in product awareness and interests.
Gillette has successfully convinced the world that “more is better” in terms of number of blades and other razor features. Why has that worked in the past? What next?
Around late 1990 Dow Corning encountered major performance and financial losses, customers were defecting to low-priced