Essay about Gillette Safety Razor Division: Blank Cassette Project

1. What changes are occurring in the non-disposable razor category? Assess Paramount’s competitive position. What are the strategic life-cycle challenges for Paramount’s current products as well as Clean Edge?

• Having the real customer profitability numbers and using CRM tool, RBC know clearly about the customer preferences and needs, issue is what should RBC do with this

Examining the consumer behavior for nondisposable razors, we can observe that consumers are focusing on the premium segment. Also, they are becoming more sophisticated and expecting new technologies to smooth the shaving process. Focusing on that, Paramount should invest in the premium products category. Even though that would create cannibalism for the “pro-products” which is already loosing market.

There are a lot of strong competitors: Blockbuster, Apple, Red box, and etc… Beside, product in this industry is not differentiated. On the other hand, the products and services are not difficult to imitate. This market is very competitive.

Make a customer analysis and segment the market. What impact does your analysis have on the current business model of the company?

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.

the success of the company. The pricing strategy adopted by the company for its highly durable

* 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.

By all this we can conclude that Gillette was actually consumed by its ambition to earn more revenue through the wrong way. Instead of trying to generate more profits buying other businesses, the Gillette executives should have focused more on the continuous innovation to their own company, because after all it was this continuous innovation and dedication that took Gillette to the top and avoid it to have any serious competition until 1962.

Present sales of the Paramount in razor industry come to $170 million and Paramount Pro contributes to this significantly. By introducing Clean Edge in the mainstream sector a 60% fall in the sales of Pro is predicted and the revenue generated by it will come down to $68 million. But it is expected that clean edge will generate a revenue of $147.8 million* and in turn Paramount can achieve a net sales of $215.8 million. Marketing cost is approximated to $42 million and Paramount will be able to generate a profit of $173.8 million. If they had positioned it in the niche segment they would lose only 35% sales of Pro. But at the same time, due to the constraints in the market clean edge can raise sales of only $52.8 million and the net sales will total to $163.3 million. Here the marketing cost is approximated to $15 million and the revenue generated will amount to $148.3 million. Thus the figures clearly indicate that concentrating the mainstream would be more beneficial. Also Paramount will be able to achieve a profit margin of $3.09 per unit even after providing distributors a margin of $3.36 per unit.

1.Detail and discuss alt the challenges you faced in projecting demand: meeting customer needs and wants, pricing, competitive actions and competitive response. How did your decisions impact your end performance (market share, income statement)?

The Gillette Company has effectively entered the razor blade market in the main parts of Indonesia. Even though there is still a lot of potential for growth, it faces stiff competition, as well

Thus, it would increase the demand for low price batteries, giving a competitive advantage to big players such as Rayovac and Energizer whose prices are lower than Duracell.

Gillette is seeking means to retain dominance in market share they have lead for the last century. Along with sustaining market share Gillette has continued focus on expanding worldwide into less saturated markets. In this analysis multiple alternatives will be explored in order to make a recommendation on steps that would favor Gillette’s organization in meeting their aspirations.

By getting feedback and suggestion from the customer organization should work on their strengths and weakness. Its also important to get the target customers.