Free Gillete Case Study Example

Gillette has for decades been recognized for its creativity in both product development and marketing strategy. For this reason, Gillette has been able to remain highly competitive and is a global leader in the razor and blade industry. The renowned razor and blades company comprises majority of the industry’s market share. Gillette was established in 1901 by King.C.Gillette it significantly altered personal hygiene and grooming with new inventions such as the safety razor. The company dominated the razor and blade industry until 1962 when serious competition started. Other competitors such as Wilkinson Sword joined the industry when they launched the stainless steel blade.

Key Themes

In 1980s, the consumer opted for cheap disposable razors and Gillette established itself as an ideal product that met those qualities. The company assisted in cultivating focus on price and not quality. This resulted in a 60% growth in the razor market industry. Gillette’s three major businesses are grooming (Gillette), portable power (Duracell) and oral care (Oral-B). The three major businesses contribute to 80% sales and 90% profits and are the forces behind the company (Iacobucci and Churchill, 20). The primary brands are listed as Gillette for women Venus, Gillette Mach3, Right Guard, Duracell Coppertop, Oral-B, Braun Oral-B and Braun. A couple of the crucial themes exhibited in the Gillette case are marketing equity, brand image, new product development failures, post purchase dissonance and marketing ethics.
Brand Image- Proctor and Gamble purchased The Gillette Company as part of a plan to fight off competition from new competitors such as Schick and its product the Quattro, which was similar to the Mach3. As a strategy to reclaim the market share and sales in 2006, the company released the world’s 5(+1) blade razor. The first phase of the product release was a success with more than $4billion in sales after these things went downhill. Gillette had taught its customers that the best razor was the one that was less costly. The 5(+1) blade razor was more expensive with each cartridge costing 75 cents to more than $1 than the Mach3. The consumers also complained that there were no additional performance benefits provided by the 5-bladed fusion. The company experienced loss of quality image, profits and brand loyalty.
New Product Development Failures- The 5-bladed fusion product resulted in a skeptical response from consumers despite it being more costly it did not make sense to release a product that results in no additional performance benefits. New product development can be quite uncertain, as research has indicated a 95% constant failure in the USA due to various reasons. New product development failures may occur due to the weak positioning strategy or weak pricing strategy. In Gillette’s case, the company released products that went against a pricing strategy that had been in place for centuries. This lost the company the consumer loyalty at an alarming rate.

SWOT Analysis for Gillette Mach3

Parent Company: Procter & Gamble
Category: Personal Grooming Products
Sector: Fast Moving Consumer Goods
Slogan: The beast a man can get
Unique Selling Point: Advanced technology that entered early in the market attracting loyal customers and developed its base
Segment: Young males and females in the age group of 25-44
Target Group: Males and females that need high-quality sprucing products
Positioning: Triple blade razor (Mach3) with improved protection and easy to use
Strengths
Triple blade razor is a new technology attracting consumers
Uranium coating on the blades increases the durability and safety. It is safe and easy to use because it results in fewer cuts.

Aggressive advertising

Offers both quality and originality to the users
Weaknesses
More costly than other razors, consumers need every day to use items to be inexpensive
Not easily available only in big stores
Expensive brand maintenance
Opportunity
Consumer brand preference
Greater than before grooming of men has contributed to an enhanced demand of refined products
Increasing demand for high quality products with different technology
Threats
Growth in substitutes
Price sensitive market
Price wars with competitors
Missing Information and Assumptions
The missing information in this analysis entails a lot of statistical data. This in turn leads to the development of assumptions. There are many assumptions; however, the major assumption made in this case is that it is impossible for Gillette to alter its prices without consequently causing an impact on the unit sales. An increase in the product prices for Gillette would reflect an immense decrease in the unit sales and vice versa.

Statement of the Problem

The marketing research problem in Gillette’s case is to:
Determine the consumer’s opinions regarding the quality of products over their prices
Verify the impact of Gillette’s rivalry on its sales
Determine the wants and needs of consumers using Gillette’s various shaving products
Development of Alternatives
Gillette needs constant innovation to take a different direction from producing razor blades that had no additional performance benefits. The company focused on creating products that would enhance existing products considering the fact that the razor and blade production had already firmly established itself. The company resorted to expand its product line to hair care and body deodorants. This strategy proved effective as Gillette currently caters to 600 million men with its razors, body wash, deodorant, and shampoos.

Evaluation of Alternatives

Continuous adoption of innovative technologies by Gillette will see the company improve its products immensely. Through the combination of superior technologies and hundreds of years of experience in male-grooming P&G has been able to create innovative Gillette branded products. The company also established research and development to identify what the customers wants and desires when using Gillette programs. Through this, the P&G has been able to conduct global expansion effectively.

Recommendations

Gillette’s sequential change in products has mystified consumers loyalty with inertia. Most of its consumers do not value the relationship that explains the constant relapse in market share. Consumers are more concerned about paying less for a product they get to use every day. For a majority of consumers, $45 for blades is on the extreme (Graham, 20). The company was built on providing customers with grooming options that were cheap to obtain. The company needs to work on building strong consumer brand loyalty this will ensure that there is market equity. In order for the company to successfully remain competitive in the grooming industry, it is vital that the business model is switched. It should possibly change its focus from being controlled completely by wholesalers and retailers to becoming a subscription company that enjoys a direct relationship with its consumers.

Implementation, Evaluation, and Control

One of the major recommendations is the reduction of the size of the product distribution channel. Gillette’s distribution channel is quite long being majorly composed of wholesalers, large scale retailers, and small scale retailers. Each of this has to make a profit and hence hiking the price of the blades. For that reason, the Gillette Company should reduce this distribution channel and only use large scale retailers such as supermarkets. This would see a significant reduction in price of the final Gillette product to the consumers.

Other: Additional Thoughts

The idea of Gillette expanding its personal care business by producing other personal effects is quite good. There is still a lot of market that is unexploited in this field that Gillette can take advantage of. Moreover, producing women personal effects is even a wiser idea. This is because women are well known groomers who are ready to go an extra mile to achieve supreme beauty. Moreover, their number is quite high than that of men and hence women oriented products are expected to do well in the market.

Works Cited

Ferrell, Odies C., and Michael Hartline. Marketing Strategy, Text and Cases. Cengage Learning, 2012.
Graham, Hooley. Marketing strategy and competitive positioning. Pearson Education India, 2008.
Iacobucci, Dawn, and Gilbert Churchill. Marketing research: methodological foundations. Cengage Learning, 2009.