Description
It describes the Presentation on Gillette. It gives a brief overview of the Indian Shaving Products Market. It provides the competition Gillette faces in India. It provides an overview of Malhotra and Wiltech. It then describes the distribution channel of Indian Shaving Products Limited (ISPL). It then describes the 4P framework for Gillette
Case OF Gillette
Choosing the right distribution channel
1
Introduction
? Indian Shaving Products Limited(ISPL)- Gillette and
Poddar ? Gillette- 70% worldwide market share ? Sales in 1987-88 Rs 4 crores ? Accumulated losses Rs 7.24 crores ? Stainless steel blades ? Priced its blades about 50%-80% over Wiltechs’ ? Brands like 7 O'clock Ejtek, 7 O'clock Super Stainless
2
Indian Shaving Market
? World’s largest market in volume
( 2.4 billion blades annually)
? Small in value terms
( Rs 250 cr vs. US’s $800 million ) ? Low tech carbon steel blades prominent ? Stainless steel blades market small ? Technologically latest Twin blades segment(less than 2%)
3
Competition
? House of Malhotras
? Market leaders ( 80%-90% of market) ? Best selling brands like Topaz, Panama, Laser etc ? 7 manufacturing units; largest in Calcutta with a
capacity of 1500 million blades per year ? Highly street smart ( imitation products etc) ? Distributed products through network of very large wholesalers to semi wholesalers and retailers ? Special promotions and stock push strategies
4
Competition
? Wiltech
? RP Goenka group and Wilkinson Sword Ltd of UK ? Capacity of 120 million blades per year and 80%
capacity utilisation ? Brand like Wilman I, Wilman II ? 50% market share in twin blade ( by value) ? Priced its blade about 50% over Malhotras brands ? Accumulated losses of Rs 2 cr
5
ISPL’s Distribution Channel
? Two options:
? Build own distribution network ? Tie-up to use Lipton’s network at 5% margin
? Advantages of the tie-up with Lipton
? Low cost solution(5% commission)
? Well established sales network
? For Lipton, better utilization and profit without extra
investment
6
Problem
? After 2 years, less than 3% market share ? Accumulated losses of Rs 7.24 crores ? According to customer surveys, no serious
problem in product, prices, positioning. ? Problem in distribution strategy.
7
Marketing Mix Analysis
8
Product
? Low tech carbon steel blades making the bulk of ? ? ?
?
the market Stainless steel blades, present only in urban market Latest Technology Twin Blades-market less than 2% ISPL believed there was big opportunity at upper market. Created Stainless Steel Blades
9
Price
? ISPL believed that consumer is ready to pay
higher price for a better product ? ISPL priced 50%-80% above Wiltech’s brands, while Wiltech was priced 50% above Malhotra’s brands. ? ISPL priced 125%-170% above the main competitor Malhotra’s price.
10
Promotion
? Gillete and House of Poddars paid 5 Crores each. ? ? ? ?
(5 Crores=24 %) The joint venture raised 20.83 Crores Investment on Plant- Over 20 Crores Presumably, small budget on Promotion New Product- 7O’ Clock Launched at Higher Price- Poor Sales
11
Place-Proper Distribution Channel
? Combination of Push and Pull strategy
? More Emphasis on Pull Strategy through
promotions ? Simultaneously, start building its own distribution network ? Variable Sales Margin To Distributors & Stockists
12
Market: People who want to shave
Target Market Segment
Target Segment
People who want to have a clean and smooth shaving experience
Income: Low, medium, high Income: Medium, High Geographic location: rural, urban, semi-urban Location: Urban, semiurban Age: All age groups(15+) Psychographic: Lifestyle, personality:
13
Strengths & Opportunities
1. Global Presence 2. Experience in shaving needs 3. Latest technology and innovative products
Weakness & Threats
1. Lack of distribution channel 2. Low product variety 3. Price
1. Growing stainless steel blades market 2. World’s largest shaving blades market
14
1. Established rivals 2. Low value market
Proposed solution
? Combination of Push and Pull strategy should be
used ? Provide stainless steel blades to barbers all across the country at discounted rates ? Simultaneously, start building its own distribution network ? Target first time users, by promoting in high schools and colleges
15
Proposed Solution
? Promotion of the advantages of stainless steel
blades produced by ISPL ? Extensive market research to exactly know the future of stainless steel blades market ? Look for other tie-ups as part of horizontal marketing system ? Target based commission to Lipton 5% for sales upto Rs 5 crore 7% for sales between 5 and 10 crore
16
What actually happened?
? It merged Wilkinson Sword
? ? ?
?
17
Pvt. Ltd. with itself 97% of today’s Inidan market is double edged blades ISPL focusing only on premium products Strategy: Move people towards twin blades segment and gradually move them towards premium products Segmented the market with offerings at different price points 7’O Clock, Sensor and Mach III
doc_427293941.ppt
It describes the Presentation on Gillette. It gives a brief overview of the Indian Shaving Products Market. It provides the competition Gillette faces in India. It provides an overview of Malhotra and Wiltech. It then describes the distribution channel of Indian Shaving Products Limited (ISPL). It then describes the 4P framework for Gillette
Case OF Gillette
Choosing the right distribution channel
1
Introduction
? Indian Shaving Products Limited(ISPL)- Gillette and
Poddar ? Gillette- 70% worldwide market share ? Sales in 1987-88 Rs 4 crores ? Accumulated losses Rs 7.24 crores ? Stainless steel blades ? Priced its blades about 50%-80% over Wiltechs’ ? Brands like 7 O'clock Ejtek, 7 O'clock Super Stainless
2
Indian Shaving Market
? World’s largest market in volume
( 2.4 billion blades annually)
? Small in value terms
( Rs 250 cr vs. US’s $800 million ) ? Low tech carbon steel blades prominent ? Stainless steel blades market small ? Technologically latest Twin blades segment(less than 2%)
3
Competition
? House of Malhotras
? Market leaders ( 80%-90% of market) ? Best selling brands like Topaz, Panama, Laser etc ? 7 manufacturing units; largest in Calcutta with a
capacity of 1500 million blades per year ? Highly street smart ( imitation products etc) ? Distributed products through network of very large wholesalers to semi wholesalers and retailers ? Special promotions and stock push strategies
4
Competition
? Wiltech
? RP Goenka group and Wilkinson Sword Ltd of UK ? Capacity of 120 million blades per year and 80%
capacity utilisation ? Brand like Wilman I, Wilman II ? 50% market share in twin blade ( by value) ? Priced its blade about 50% over Malhotras brands ? Accumulated losses of Rs 2 cr
5
ISPL’s Distribution Channel
? Two options:
? Build own distribution network ? Tie-up to use Lipton’s network at 5% margin
? Advantages of the tie-up with Lipton
? Low cost solution(5% commission)
? Well established sales network
? For Lipton, better utilization and profit without extra
investment
6
Problem
? After 2 years, less than 3% market share ? Accumulated losses of Rs 7.24 crores ? According to customer surveys, no serious
problem in product, prices, positioning. ? Problem in distribution strategy.
7
Marketing Mix Analysis
8
Product
? Low tech carbon steel blades making the bulk of ? ? ?
?
the market Stainless steel blades, present only in urban market Latest Technology Twin Blades-market less than 2% ISPL believed there was big opportunity at upper market. Created Stainless Steel Blades
9
Price
? ISPL believed that consumer is ready to pay
higher price for a better product ? ISPL priced 50%-80% above Wiltech’s brands, while Wiltech was priced 50% above Malhotra’s brands. ? ISPL priced 125%-170% above the main competitor Malhotra’s price.
10
Promotion
? Gillete and House of Poddars paid 5 Crores each. ? ? ? ?
(5 Crores=24 %) The joint venture raised 20.83 Crores Investment on Plant- Over 20 Crores Presumably, small budget on Promotion New Product- 7O’ Clock Launched at Higher Price- Poor Sales
11
Place-Proper Distribution Channel
? Combination of Push and Pull strategy
? More Emphasis on Pull Strategy through
promotions ? Simultaneously, start building its own distribution network ? Variable Sales Margin To Distributors & Stockists
12
Market: People who want to shave
Target Market Segment
Target Segment
People who want to have a clean and smooth shaving experience
Income: Low, medium, high Income: Medium, High Geographic location: rural, urban, semi-urban Location: Urban, semiurban Age: All age groups(15+) Psychographic: Lifestyle, personality:
13
Strengths & Opportunities
1. Global Presence 2. Experience in shaving needs 3. Latest technology and innovative products
Weakness & Threats
1. Lack of distribution channel 2. Low product variety 3. Price
1. Growing stainless steel blades market 2. World’s largest shaving blades market
14
1. Established rivals 2. Low value market
Proposed solution
? Combination of Push and Pull strategy should be
used ? Provide stainless steel blades to barbers all across the country at discounted rates ? Simultaneously, start building its own distribution network ? Target first time users, by promoting in high schools and colleges
15
Proposed Solution
? Promotion of the advantages of stainless steel
blades produced by ISPL ? Extensive market research to exactly know the future of stainless steel blades market ? Look for other tie-ups as part of horizontal marketing system ? Target based commission to Lipton 5% for sales upto Rs 5 crore 7% for sales between 5 and 10 crore
16
What actually happened?
? It merged Wilkinson Sword
? ? ?
?
17
Pvt. Ltd. with itself 97% of today’s Inidan market is double edged blades ISPL focusing only on premium products Strategy: Move people towards twin blades segment and gradually move them towards premium products Segmented the market with offerings at different price points 7’O Clock, Sensor and Mach III
doc_427293941.ppt