anjalicutek
Anjali Khurana
Marketing Strategy of Gillette : Gillette is a brand of Procter & Gamble currently used for safety razors, among other personal care products. Based in Boston, Massachusetts, it is one of several brands originally owned by The Gillette Company, a leading global supplier of products under various brands, which was acquired by P&G in 2005. Their slogan is "The Best a Man Can Get". The original Gillette Company was founded by King Camp Gillette in 1895 as a safety razor manufacturer.
On October 1, 2005, Procter & Gamble finalized its purchase of The Gillette Company. As a result of this merger, the Gillette Company no longer exists. Its last day of market trading—symbol G on the New York Stock Exchange—was September 30, 2005. The merger created the world's largest personal care and household products company. In addition to Gillette, the company marketed under Braun, Duracell and Oral-B, among others, which have also been maintained by P&G.
The Gillette Company's assets were initially incorporated into a P&G unit known internally as "Global Gillette". In July 2007, Global Gillette was dissolved and incorporated into Procter & Gamble's other two main divisions, Procter & Gamble Beauty and Procter & Gamble Household Care. Gillette's brands and products were divided between the two accordingly.
The Gillette brand is synonymous with shaving and personal care products. As such, trademark protection becomes invaluable to distinguish a company's products and services from its competition to the public. King Gillette sought protection of his fledgling business for safety razors when he applied for the trademarks for razors and razor blades, soap, and shaving brushes on Wednesday, May 27, 1908. King C. Gillette filed trademark applications with the USPTO simultaneously in separate goods and services classes. King C. Gillette filed trademark applications under the early company name, Gillette Safety Razor Company.
And while trademark applications were filed at the same time, each registration was granted on different dates. Registration for the Gillette trademark was assigned to razors and razor blades and was granted on October 13, 1908 with a serial number 71034984. Trademark for soap was awarded on September 29, 1908, with serial number 71034985, for shaving brushes on September 1, 1908 with 71034986. First use for this early Gillette trademark is declared as May 16, 1908. All three trademarks for the Gillette diamond are listed as expired.
Marketing Strategy
9.4.1. Segmentation
In the shaving cream/foam/gel market there exist different categories of customers who have different needs and are willing to pay different amount for the product that meets their demand. Introduction of shaving cream would help Gillette identify the needs of the customers and take advantage of the segment which has not yet been targeted by the company. Price sensitivity, importance of attributes, point of purchase decision makers and customers influenced by additional features are the factors on which we will segment the shaving cream market.
Segment One-> is most price sensitive and values additional features the least. This segment has one third of our sample size. As Gillette is a premium brand which focuses on differentiating its products from the competitors and upgrading the customers in the value chain, targeting this segment will not be a strategically appropriate decision.
Segment Two-> is more influenced by attributes of the products and is not a price sensitive segment. Gillette through its shaving gel and foam series is currently catering to this segment. This segment has more than one fourth of the survey sample.
Segment three-> is concerned about the attributes, additional features as well as price. This segment comprised of more than forty percent of the survey sample. Gillette through its shaving cream can enter this segment.
9.4.2. Positioning
Market research
Market research results have been analyzed in section 7 of the report. The following conclusions from the survey helps us in identifying the positioning of the Gillette shaving cream:
Target market:- The target market has been identified as the customers who are concerned about the attributes of the shaving cream but are not willing to shift from the current price band to a higher price band.
Competitor Brands:- The competitor brands have been discussed in section 5. The Gillette Shaving Cream will be competing with brands like Old Spice and Denim.
Choice Criteria:- As per our findings (Section 7.4.3) the 4 factors on grouping attributes post factor analysis that contribute to the shaving cream/foam/gel purchase decision are:
Factor 1 Product attributes (Fragrance, Brand Name, Foam Formation, Antiseptic Attributes and Ease of Use)
Factor 2 Price Sensitivity (Price, It keeps my Skin Soft And Offers/Discounts)
Factor 3 Point of Purchase (Availability in Stores and Stylish Package Design)
Factor 4 Additional Features (Color of Shaving cream/gel/foam and Ingredients)
Customer Evaluation:- Perceptual maps in the section 10.21 shows how the customers evaluate Gillette with respect to competitive brands.
The customers surveyed in Indore found Gillette to be significant along both factor 1 and factor 3 giving it an image of high quality brand with attractive packaging and best availability.
Old Spice and Denim are its closest competitors in factor one and two respectively.
Gillette lags behind all its competitors in factor 2 which includes price and offers.
In factor 3, additional features, all companies have below satisfaction level performance which implies that the variants introduced in the market for shaving cream/gel/foam are not able to satisfy the demand of the consumers.
Positioning Strategy The present perception of the brands between factors one and two is shown below. Gillette shaving cream needs to position itself above Old Spice and Denim in order to attract the target segment.
9.4.3. Real Positioning
In the survey conducted, Gillette had the top of the mind recall of 57%. This shows that Gillette has an excellent real positioning in the men‟s grooming market and Gillette shaving cream can leverage this positioning in the target market.
9.4.4. Psychological Positioning
Gillette shaving cream will primarily alter the attributes importance in the target segment by increasing the importance of attributes like brand name, foam formation etc and decreasing the importance of price. This will be consistent with its strategy of moving the customers up the value chain.
9.5. Marketing Mix
9.5.1. Product and Service
Customer value hierarchy chart in the 4 P‟s analysis shows that Gillette products (7‟ O clock) is currently fulfilling only the core and basic needs to some extent. Further, it alsoIIM Indore Group 6 Section B
shows that Gillette does not have any product fulfilling the basic needs and expected needs of the consumers. Thus, our new product will cater to these needs. Further, since, our new product will target the third cluster; it has to be very strong on attributes. Again, additional features need to be there to satisfy the basic and expected needs of the people. Our new product will have superior fragrance and higher antiseptic attributes. Further, initially, the product shall be launched with variants like lemon and musk. The new Gillette Cream would target the basic and core product consumers where Gillette has no presence so far. So, the customer values promised and delivered would also be different from that of the premium segment. The focus would be to indianise the product. This is important because we have to reach a larger, price sensitive, not so loyal segment of the market. So far, Gillette has only followed a dumping strategy in India with very little customization. For our new product, this strategy would not work well. The customer values to be promised and delivered by the new GILLETTE Shaving Cream are: Functional value: The utilitarian/functional promise would be “ The best possible shave from the best Shaving cream”. The existing price range in the market for a 70 g shaving cream is Rs 25 (Godrej) to Rs 45 (Old Spice). We would price our Cream at Rs 40 which is below that of Old Spice and Denim (Rs 43). We would also promise the basic attributes ( soft on skin, lather etc.) . Social Value: The espoused social value would be from the angle that everyone in the family and society have an instant respect and admiration for the clean shaven Gillette man. Emotional value: The emotional value promised is of great importance for a commoditized product like a shaving cream. The espoused value would be the charming yet masculine Gillette man who is attractive to all the people including women.
Epistemic value:
The novelty value should be such that it must entice only the cream users, not our gel/foam users. Hence, we must tell about how good a cream it is and the active ingredients involved in the product. Conditional Value: The best possible start for the day would be the conditional value. The value communicated should be of a confident, satisfied, charged up young Indian for the day‟s grind. COMMUNICATION OF VALUE: We would adopt a push cum pull strategy to communicate the above values. Our ads would involve a sturdy, tough, smart Indian and project him as the Gillette man (much like the Marlboro man). The focus would be on the shaving cream though we will also co-advertise Gillette Razors.
9.5.2. Pricing
The customers in the target cluster are not very price sensitive. The customers in the cluster prefer brands like Axe and Denim which lie in the price range of Rs 43-45 for a 70ml pack. However, since Gillette is perceived as an expensive brand as compared to its competitors, we plan to price our new product slightly cheaper than these brands. As per our analysis, Gillette should charge a price of Rs 42 for 70ml pack.
9.5.3. Promotion
Since we see a great opportunity for Gillette in the Shaving cream category, we recommend an aggressive promotional campaign for the new product. Our promotion would adopt a push cum pull strategy.
Push Approach: The product would be pilot tested in Indore itself where we have performed our market research. We would offer a 20g tube of the Gillette Shaving Cream free with every Gillette Presto( Priced at Rs 17) and 30g with Gillette Vector ( Priced slightly at above Rs 50). The selling price of the tube being Rs 40 and the margin at 25%, we would incur around Rs 8 for the 20g tube and Rs 12 for the 30g tube. The increase in sales of the razors would be a good indication of the interest shown by the consumers in the new shaving cream. This promotional strategy might also give Gillette consumers who want to upgrade themselves to the premium shaving cream category from the regular category. The level of success of the pilot project would help us in modifying the product for the national launch. Pull Approach: So far, Gillette has always shown ads which are futuristic in nature ( Shaving with Mach 3 on a space shuttle is an example). But the advertisements for the shaving cream have to be Indianised. This is the biggest challenge for Gillette which has so far treated the Indian market as a dumping ground for its outdated products in the US. Our advertisement has to entice the target consumer - the aspiring consumer who comes from the middle and lower middle class and gives importance to attributes but is also price sensitive. Our target consumer is widespread throughout the country- rural, urban(including Tier 2 and Tier 3 cities) and rurban. The ads have to appeal to the customer values mentioned above.
Series Tube Shave Gel Variants, namely Sensitive Skin and Moisturising to suit different skin types. 2005- The company‟s parent company Gillette, USA was acquired by the Procter & Gamble Company, USA worldwide through merger in October 2005. In India, the company while continuing as a separate legal entity, will also, be part of the Procter & Gamble company, USA. The company has started the process of transition from its current distributor structure to the P&G Distributors
10.2. SWOT ANALYSIS
Strengths Strong brand equity Gillette‟s portfolio contains well established brands such as Gillette and Braun, Oral-B line and Duracell. It eases the introduction of new products, as consumers are already well acquainted with the names and more receptive to promises of improved user experiences. The strength and quality image of these brands allows the company to charge higher prices and achieve high margins. Market Leadership The company‟s product are well known with a reputation of quality are also market leader in their respective segment. Well Diversified portfolio Gillette has a well-diversified portfolio in terms of product diversification and market diversification. Diversification of this nature helps the company avoid the risk of overdependence on any one source for its revenue stream. Weakness
Profitability highly dependent on core business
Gillette‟s profitability is highly reliant on the performance of its razors and blades business. A substantial portion of its revenues come from this sector. Any downturn in the sector or in Gillette‟s competitive position within it could have a serious negative effect on the company. Over-reliance on a single customer Wal-Mart Stores is Gillette‟s major customer. With a large part of its revenues originating from a single costumer, the company is at risk of adversely affecting its business, operating results and financial condition if its strategic relationship with Wal-Mart Stores is terminated for any reason. Opportunities New product launches Gillette is known for constantly introducing new products in the market with better technology and performance. This new product launches will help the company to gain competitive advantage over its competitors. Price increases in premium shaving segments Gillette has been increasing the price of its razors and blades at an average rate of around 4% per year over the last ten years. This price increase will help the company to accumulate more profits from the present level of sales. Growth potential for battery business in China The Chinese battery market is a large and fast-growing market. Gillette has acquired a majority interest in the Fujian Nanping Nanfu Battery Company. This has resulted to significantly improve the performance of the company‟s overall battery business and will have its impact on the future performance of the company.
Threats
Imitations / disposables are a threat to the Mach3 offering Gillette‟s ability to sustain a price premium and earn an attractive return on its extensive investment three-blade platform is threatened by the numerous imitators of the Mach3/Mach3 Turbo franchise, including disposables and private label systems, and even including Gillette‟s own three-blade disposable. This numerous imitations are threat to the company in the long term as they going to reduce the sales of the original products. Pressure on pricing power Gillette‟s pricing power is being further eroded by channel migration and increasing consumer resistance to paying significantly higher prices for innovation. Pricing power is key to revenue growth in a mature category especially when Gillette‟s strategy has historically been to drive revenue growth per consumer and not volume growth. Competitive environment Gillette faces intense competition in most markets. Its products compete with widely advertised, well-known, branded products, as well as private label products, which typically are sold at lower prices. The company‟s survival depends upon its ability to adopt itself in this kind of competitive environment.
On October 1, 2005, Procter & Gamble finalized its purchase of The Gillette Company. As a result of this merger, the Gillette Company no longer exists. Its last day of market trading—symbol G on the New York Stock Exchange—was September 30, 2005. The merger created the world's largest personal care and household products company. In addition to Gillette, the company marketed under Braun, Duracell and Oral-B, among others, which have also been maintained by P&G.
The Gillette Company's assets were initially incorporated into a P&G unit known internally as "Global Gillette". In July 2007, Global Gillette was dissolved and incorporated into Procter & Gamble's other two main divisions, Procter & Gamble Beauty and Procter & Gamble Household Care. Gillette's brands and products were divided between the two accordingly.
The Gillette brand is synonymous with shaving and personal care products. As such, trademark protection becomes invaluable to distinguish a company's products and services from its competition to the public. King Gillette sought protection of his fledgling business for safety razors when he applied for the trademarks for razors and razor blades, soap, and shaving brushes on Wednesday, May 27, 1908. King C. Gillette filed trademark applications with the USPTO simultaneously in separate goods and services classes. King C. Gillette filed trademark applications under the early company name, Gillette Safety Razor Company.
And while trademark applications were filed at the same time, each registration was granted on different dates. Registration for the Gillette trademark was assigned to razors and razor blades and was granted on October 13, 1908 with a serial number 71034984. Trademark for soap was awarded on September 29, 1908, with serial number 71034985, for shaving brushes on September 1, 1908 with 71034986. First use for this early Gillette trademark is declared as May 16, 1908. All three trademarks for the Gillette diamond are listed as expired.
Marketing Strategy
9.4.1. Segmentation
In the shaving cream/foam/gel market there exist different categories of customers who have different needs and are willing to pay different amount for the product that meets their demand. Introduction of shaving cream would help Gillette identify the needs of the customers and take advantage of the segment which has not yet been targeted by the company. Price sensitivity, importance of attributes, point of purchase decision makers and customers influenced by additional features are the factors on which we will segment the shaving cream market.
Segment One-> is most price sensitive and values additional features the least. This segment has one third of our sample size. As Gillette is a premium brand which focuses on differentiating its products from the competitors and upgrading the customers in the value chain, targeting this segment will not be a strategically appropriate decision.
Segment Two-> is more influenced by attributes of the products and is not a price sensitive segment. Gillette through its shaving gel and foam series is currently catering to this segment. This segment has more than one fourth of the survey sample.
Segment three-> is concerned about the attributes, additional features as well as price. This segment comprised of more than forty percent of the survey sample. Gillette through its shaving cream can enter this segment.
9.4.2. Positioning
Market research
Market research results have been analyzed in section 7 of the report. The following conclusions from the survey helps us in identifying the positioning of the Gillette shaving cream:
Target market:- The target market has been identified as the customers who are concerned about the attributes of the shaving cream but are not willing to shift from the current price band to a higher price band.
Competitor Brands:- The competitor brands have been discussed in section 5. The Gillette Shaving Cream will be competing with brands like Old Spice and Denim.
Choice Criteria:- As per our findings (Section 7.4.3) the 4 factors on grouping attributes post factor analysis that contribute to the shaving cream/foam/gel purchase decision are:
Factor 1 Product attributes (Fragrance, Brand Name, Foam Formation, Antiseptic Attributes and Ease of Use)
Factor 2 Price Sensitivity (Price, It keeps my Skin Soft And Offers/Discounts)
Factor 3 Point of Purchase (Availability in Stores and Stylish Package Design)
Factor 4 Additional Features (Color of Shaving cream/gel/foam and Ingredients)
Customer Evaluation:- Perceptual maps in the section 10.21 shows how the customers evaluate Gillette with respect to competitive brands.
The customers surveyed in Indore found Gillette to be significant along both factor 1 and factor 3 giving it an image of high quality brand with attractive packaging and best availability.
Old Spice and Denim are its closest competitors in factor one and two respectively.
Gillette lags behind all its competitors in factor 2 which includes price and offers.
In factor 3, additional features, all companies have below satisfaction level performance which implies that the variants introduced in the market for shaving cream/gel/foam are not able to satisfy the demand of the consumers.
Positioning Strategy The present perception of the brands between factors one and two is shown below. Gillette shaving cream needs to position itself above Old Spice and Denim in order to attract the target segment.
9.4.3. Real Positioning
In the survey conducted, Gillette had the top of the mind recall of 57%. This shows that Gillette has an excellent real positioning in the men‟s grooming market and Gillette shaving cream can leverage this positioning in the target market.
9.4.4. Psychological Positioning
Gillette shaving cream will primarily alter the attributes importance in the target segment by increasing the importance of attributes like brand name, foam formation etc and decreasing the importance of price. This will be consistent with its strategy of moving the customers up the value chain.
9.5. Marketing Mix
9.5.1. Product and Service
Customer value hierarchy chart in the 4 P‟s analysis shows that Gillette products (7‟ O clock) is currently fulfilling only the core and basic needs to some extent. Further, it alsoIIM Indore Group 6 Section B
shows that Gillette does not have any product fulfilling the basic needs and expected needs of the consumers. Thus, our new product will cater to these needs. Further, since, our new product will target the third cluster; it has to be very strong on attributes. Again, additional features need to be there to satisfy the basic and expected needs of the people. Our new product will have superior fragrance and higher antiseptic attributes. Further, initially, the product shall be launched with variants like lemon and musk. The new Gillette Cream would target the basic and core product consumers where Gillette has no presence so far. So, the customer values promised and delivered would also be different from that of the premium segment. The focus would be to indianise the product. This is important because we have to reach a larger, price sensitive, not so loyal segment of the market. So far, Gillette has only followed a dumping strategy in India with very little customization. For our new product, this strategy would not work well. The customer values to be promised and delivered by the new GILLETTE Shaving Cream are: Functional value: The utilitarian/functional promise would be “ The best possible shave from the best Shaving cream”. The existing price range in the market for a 70 g shaving cream is Rs 25 (Godrej) to Rs 45 (Old Spice). We would price our Cream at Rs 40 which is below that of Old Spice and Denim (Rs 43). We would also promise the basic attributes ( soft on skin, lather etc.) . Social Value: The espoused social value would be from the angle that everyone in the family and society have an instant respect and admiration for the clean shaven Gillette man. Emotional value: The emotional value promised is of great importance for a commoditized product like a shaving cream. The espoused value would be the charming yet masculine Gillette man who is attractive to all the people including women.
Epistemic value:
The novelty value should be such that it must entice only the cream users, not our gel/foam users. Hence, we must tell about how good a cream it is and the active ingredients involved in the product. Conditional Value: The best possible start for the day would be the conditional value. The value communicated should be of a confident, satisfied, charged up young Indian for the day‟s grind. COMMUNICATION OF VALUE: We would adopt a push cum pull strategy to communicate the above values. Our ads would involve a sturdy, tough, smart Indian and project him as the Gillette man (much like the Marlboro man). The focus would be on the shaving cream though we will also co-advertise Gillette Razors.
9.5.2. Pricing
The customers in the target cluster are not very price sensitive. The customers in the cluster prefer brands like Axe and Denim which lie in the price range of Rs 43-45 for a 70ml pack. However, since Gillette is perceived as an expensive brand as compared to its competitors, we plan to price our new product slightly cheaper than these brands. As per our analysis, Gillette should charge a price of Rs 42 for 70ml pack.
9.5.3. Promotion
Since we see a great opportunity for Gillette in the Shaving cream category, we recommend an aggressive promotional campaign for the new product. Our promotion would adopt a push cum pull strategy.
Push Approach: The product would be pilot tested in Indore itself where we have performed our market research. We would offer a 20g tube of the Gillette Shaving Cream free with every Gillette Presto( Priced at Rs 17) and 30g with Gillette Vector ( Priced slightly at above Rs 50). The selling price of the tube being Rs 40 and the margin at 25%, we would incur around Rs 8 for the 20g tube and Rs 12 for the 30g tube. The increase in sales of the razors would be a good indication of the interest shown by the consumers in the new shaving cream. This promotional strategy might also give Gillette consumers who want to upgrade themselves to the premium shaving cream category from the regular category. The level of success of the pilot project would help us in modifying the product for the national launch. Pull Approach: So far, Gillette has always shown ads which are futuristic in nature ( Shaving with Mach 3 on a space shuttle is an example). But the advertisements for the shaving cream have to be Indianised. This is the biggest challenge for Gillette which has so far treated the Indian market as a dumping ground for its outdated products in the US. Our advertisement has to entice the target consumer - the aspiring consumer who comes from the middle and lower middle class and gives importance to attributes but is also price sensitive. Our target consumer is widespread throughout the country- rural, urban(including Tier 2 and Tier 3 cities) and rurban. The ads have to appeal to the customer values mentioned above.
Series Tube Shave Gel Variants, namely Sensitive Skin and Moisturising to suit different skin types. 2005- The company‟s parent company Gillette, USA was acquired by the Procter & Gamble Company, USA worldwide through merger in October 2005. In India, the company while continuing as a separate legal entity, will also, be part of the Procter & Gamble company, USA. The company has started the process of transition from its current distributor structure to the P&G Distributors
10.2. SWOT ANALYSIS
Strengths Strong brand equity Gillette‟s portfolio contains well established brands such as Gillette and Braun, Oral-B line and Duracell. It eases the introduction of new products, as consumers are already well acquainted with the names and more receptive to promises of improved user experiences. The strength and quality image of these brands allows the company to charge higher prices and achieve high margins. Market Leadership The company‟s product are well known with a reputation of quality are also market leader in their respective segment. Well Diversified portfolio Gillette has a well-diversified portfolio in terms of product diversification and market diversification. Diversification of this nature helps the company avoid the risk of overdependence on any one source for its revenue stream. Weakness
Profitability highly dependent on core business
Gillette‟s profitability is highly reliant on the performance of its razors and blades business. A substantial portion of its revenues come from this sector. Any downturn in the sector or in Gillette‟s competitive position within it could have a serious negative effect on the company. Over-reliance on a single customer Wal-Mart Stores is Gillette‟s major customer. With a large part of its revenues originating from a single costumer, the company is at risk of adversely affecting its business, operating results and financial condition if its strategic relationship with Wal-Mart Stores is terminated for any reason. Opportunities New product launches Gillette is known for constantly introducing new products in the market with better technology and performance. This new product launches will help the company to gain competitive advantage over its competitors. Price increases in premium shaving segments Gillette has been increasing the price of its razors and blades at an average rate of around 4% per year over the last ten years. This price increase will help the company to accumulate more profits from the present level of sales. Growth potential for battery business in China The Chinese battery market is a large and fast-growing market. Gillette has acquired a majority interest in the Fujian Nanping Nanfu Battery Company. This has resulted to significantly improve the performance of the company‟s overall battery business and will have its impact on the future performance of the company.
Threats
Imitations / disposables are a threat to the Mach3 offering Gillette‟s ability to sustain a price premium and earn an attractive return on its extensive investment three-blade platform is threatened by the numerous imitators of the Mach3/Mach3 Turbo franchise, including disposables and private label systems, and even including Gillette‟s own three-blade disposable. This numerous imitations are threat to the company in the long term as they going to reduce the sales of the original products. Pressure on pricing power Gillette‟s pricing power is being further eroded by channel migration and increasing consumer resistance to paying significantly higher prices for innovation. Pricing power is key to revenue growth in a mature category especially when Gillette‟s strategy has historically been to drive revenue growth per consumer and not volume growth. Competitive environment Gillette faces intense competition in most markets. Its products compete with widely advertised, well-known, branded products, as well as private label products, which typically are sold at lower prices. The company‟s survival depends upon its ability to adopt itself in this kind of competitive environment.
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