Gillette and Men's Wet Shaving Market

2) How is the nondisposable razor market segmented? What are the crucial elements of consumer behavior for nondisposable razors?

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?

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.

Your handsome azz Grandfather had only one blade… and polio! So, stop paying for shave tech you don’t need. (Dollar Shaving Club commercial)

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.

Sports’ marketing is becoming more readily known as the vehicle that drives the sports business to success. It is “orientated toward consumers and about thinking, deciding and acting in terms of the final consumer. You have to know who your consumers are, what they want and need and use this effectively as a sports marketer orientating the drive more toward the market, not the product (Sports Marketing: The motor that drives the sports business

Competitors, on the other hand knew how to react towards Gillette’s distraction. This was when Shick, company founded by Wilkinson Sword made its movements and introduced to the market its “stainless-steel blade”. As mentioned before, Gillette was distracted by the loss on its acquisitions and failed to foresee the problems this could bring. Although Shick did not have the enough resources to compete with Gillette in order to exploit the niche markets it had penetrated and ended up being sold by Wilkinson Sword to Gillette; they took 21 percent of market share away from Gillette.

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.

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.

The acquisition of Duracell was seen as many as a smart move. Analyst, shareholders, executives, had high expectations with this merger. Unfortunately, this acquisition created several problems for Gillette since their main goal of profit maximization was not being accomplished.

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.

Gillette has been successful in convincing the world that more is better, in regards to the number of blades and other features of a razor. To be successful in the

Gillett’s product line was closely related to P&G in a sense that their businesses tend to cater to household personal products with the exception of a few.