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GILLETTE:BETTER SHAVE,

BIGGER SHARE

A MARKETING STUDY

Akshay Berry (6)


Anshul Sood (10)
C.V.R. Shekhar (14)
Deepika Mittal (15)
Ivan Passanah ( )

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ACKNOWLEDGEMENTS

The following project “GILLETTE: BETTER VALUE,


BETTER SHARE” and the customer survey were
successfully completed under the guidance of Prof S K Jain,
Lecturer, Delhi School of Economics. His guidance and
efforts were vital for the completion of the project for which
we are thankful. The cooperation and support extended by the
Gillette management also merits special mention. We also
thank our friends for their valuable and insightful suggestions,
comments and criticism. All the people who filled up the
questionnaire also deserve to be appreciated for their help,
cooperation and sometimes patience.

Thank you,

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INDEX

Page
1) Objectives ……………………………………………………….. 5
2) Company Profile …………………………………………………. 6
3) Market Environment ………………………………………………..
12
a) Overview
b) Michael Porters Five Force Model
4) Competition ………. …………………………………………………
21
5) Analysis of Marketing Strategies ……………………………………
24
a) Brief Overview
b) Perceptual Map
c) Market Segmentation
d) Target Markets
e) Positioning
6) Marketing Mix ………… ………………………………………………
40
7) Product Strategy ………………………………………………………
43
a) Five Product Levels
b) Product Classification
c) Packaging and Labelling
d) Product Innovation: R&D
8) Pricing Strategy………………………………………………………….
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a) The Nine Price Quality Strategies
b) Pricing Process
c) Selecting the Pricing Objective
d) Demand Analysis
e) Product Mix Pricing
f) How Gillette prices its products
g) Gillette Price Chart
9) Place Strategy …………………………………………………………
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a) Distribution Network

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b) Gillette Distribution Network
10) Promotion Strategy ……………………………………………………
63
a) Gillette strategy
11) Market Strategy ………………………………………………………
68
a) The BCG Matrix
b) The Gillette Razors BCG Matrix
12) Consumer Analysis ……………………………………………………
74
13) Distribution Analysis …………………………………………………
81
14) Recommendations …………………………………………………….
82
15) Bibliography
Appendix ……………………………………………………
91
16) Questionnaires
17) Company Checklist ……………………………………………………
92
18) Company Contacts ……………………………………………………
95

“In the grooming business, the great majority of male Gillette


shavers in developing markets use double-edge blades. The first
step up the performance/price ladder for these consumers is to
advance to Gillette twin-blade shaving systems or disposable
razors. In more developed markets, the movement may be entirely
within the systems category, as consumers’ trade up from twin-
blade to triple-blade shaving.”
-
www.gillette.com

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OBJECTIVES

• To study the shaving razors market


scenario in India.

• To suggest ways to convert double-edge


users to Gillette twin-blade users vis-à-vis
Presto and Vector Plus.

• To find ways to upgrade existing Gillette


users up the value chain.

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COMPANY

PROFILE

“In the more than 100 years since the Company was founded, Gillette
has gained, held and strengthened leadership positions through the
Company's strategy of managing its business with a long-term, global
perspective.”

COMPANY HISTORY:

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King C Gillette established The Gillette Company (Gillette) in 1901 in
Boston. In 1903, Gillette produced its first razor. A year later, it obtained a patent
on the razor. Gillette showed its strong commitment to international expansion by
establishing a sales office in London and a manufacturing site in Paris, as early as
in 1905.

During the 1920s and 1930s, Gillette continued its efforts to expand market share
both at home and abroad. It also expanded its product line, introducing the
Brushless Shaving Cream in 1936 and the Kumpakt electric razor in 1938.

World War I came as a boon to Gillette, which supplied 3.5 million safety razors
and 36 million blades to the US armed forces.

During World War II in 1942, the War Production Board ordered Gillette to
dedicate its entire razor production and most of the blade production to the defence
forces. Gillette found itself in a comfortable situation where demand outstripped
supply. By the end of the war, servicemen had been issued 12.5 million razors and
more than 1.5 billion blades.

In 1948, Gillette acquired Toni Company which supplied personal grooming kits
for women. In 1950, Gillette began television advertising in a big way. The
company introduced a foamy shaving cream in 1953. Two years later, Gillette
moved into another new business, acquiring the Papermate Pen Company.

In 1967, Gillette again diversified, acquiring Braun AG, a German manufacturer of


small electrical appliances.

Gillette made an important move in 1984, when it acquired Oral B laboratories, a


leading toothbrush manufacturer in the US. Gillette used its global reach to put
Oral B in markets where entry was difficult on its own.

Gillette continued with its acquisition moves, buying Waterman, a leading


manufacturer of premium writing instruments, based in France. By the mid 1980s,
Gillette was operating five major businesses - blades and razors, toiletries and
cosmetics, stationery products, Braun appliances and Oral-B dental products.

In 1993, Gillette strengthened its position in the writing instruments business by


acquiring the Parker Pen Company (Parker). In 1996, Gillette diversified yet again,
acquiring Duracell International, the world's leading manufacturer of alkaline
batteries.
In the late 1990s, Gillette’s profitability has been under pressure. Due to the Asian
currency crisis, dollar profits in many overseas markets have shrunk considerably.
The company’s heavy investment of around $1 billion in the triple blade Mach-3

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has also had its impact. During 1998 and 1999, Gillette missed most of its
quarterly sales and profit targets.

Currently, Gillette consists of three operating groups: Global Business


Management, Commercial Operations (Western Hemisphere) and Commercial
Operations (Eastern Hemisphere). The Global Business Management Group has
worldwide responsibility for R&D, manufacturing and strategic marketing of all
products. Commercial operations (Western Hemisphere) looks after trade
marketing and sales for all the products in North America and South America.
Commercial Operations (Eastern Hemisphere) has similar responsibilities for other
countries in the world.

GILLETTE IN ASIA
In the 1980s, Gillette began to make rapid inroads into Asian markets. By 1982,
Gillette had set up subsidiaries in Japan, New Zealand and the Philippines. In
addition, the company had established small marketing operations in Hong Kong,
Singapore and Taiwan. A joint venture became operational in China in 1983.
Gillette expanded its base in India and also started operations in Thailand and
Egypt.

GILLETTE: THE INDIA CHAPTER


Gillette entered India in 1984, with a 24% stake in Indian Shaving Products Ltd
(ISPL), a company it promoted jointly with the local Poddar Group. Later, it
increased its stake to 51%. The company has two arms in India, ISPL and
Wilkinson Sword, which it acquired in 1995. Gillette has set up a manufacturing
facility at Bhiwadi in Rajasthan. Recently, the company has indicated that it will
increase the capacity of its double edge blade unit to 700 million blades from the
current 340 million blades and disposable blades from 105 million to 140 million.
Gillette's distribution network currently controls 2000 distributors and 400,000
outlets all over India

The company's decisions over the past one year — to divest its electric gadget and
home appliances business under the Braun brand name, and its low-end battery
business under Geep, are aimed at focusing better on its core business — shaving
products. Female shaving products, in slow growth mode all these years, too have
been put on the backburner.

Year Event

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1984 Company Incorporated in Rajasthan ,jointly promoted by House of
Poddar Enterprises(HOPE) and Gillette , USA
1986 Gillette takes over Sharpedge Ltd
1987 New twin blade shaving system called 7 O'Clock Ejtek P II
introduced.
1989 Diversification into shaving preparations and launching of premium
quality 7 O'Clock Ejtek shaving brush
1990 Launch of two new products namely 7 O'Clock Ejtek P II shaving
system with a metal spine and a shave cream in three variants
1991 Sabre Pens Ltd., Sheen Dental Products Ltd., Klosershav Products
Ltd., and Vanity Cosmetic Ltd., are wholly owned subsidiaries of the
Company
1993 Commence of launch of Gillette Shaving products in India with the
launch of Gillette Presto Readyshaver
1995 Launch of another Readyshaver under the Brand name of 7 O'Clock
Ready II. The Company also launched under a distribution
arrangement tooth brushes under the well known international brand
name Oral-B.
1996 Launch of "Gillette Sensor & Sensor Excel" shaving systems
Company introduces “Gillette Aerosol" shaving cream.
1997 Indian Shaving Products Ltd (ISPL) and Duracell India Pvt Ltd are
merging their respective Ltd and marketing networks.
Indian Shaving Products Ltd will be distributing the Duracell range of
batteries through its own sales and distribution network
1998 Company enters the ladies personal care segment with the launch of
the Gillette Sensor Excel for women
1999 Launch of Gillette "Mach-III", the three-blade razor

2000 Company approves amalgamation of Duracell (India) Pvt. Ltd. and


Wilkinson Sword India Ltd. with the company
2003 Gillette India awards its creative account to Ogilvy and Mather
following a global re-alignment of ad agencies
Gillette identifies the double edged blade segment as its growth
market driver.
2004 Gillette India Ltd launches battery-powered toothbrush, 'Cross Action
Power'
Gillette ropes in Beckham to promote its products
Gillette India announces launch of new generation triple blade shaving

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system Mach3Turbo

GILLETTE: MISSION AND VALUES


OUR VISION:

The Gillette Company’s Vision is to build Total Brand Value by innovating to


deliver consumer value and customer leadership faster, better and more completely
than our competition. This Vision is supported by two fundamental principles that
provide the foundation for all of our activities: Organizational Excellence and Core
Values.

ORGANIZATIONAL EXCELLENCE:

Attaining our Vision requires superior and continually improving performance in


every area and at every level of the organization.

Our performance will be guided by a clear and concise strategic statement for each
business unit and by an ongoing Quest for Excellence within all operational and
staff functions.

This Quest for Excellence requires hiring, developing and retaining a diverse
workforce of the highest caliber. To support this Quest, each function employs
metrics to define, and implements processes to achieve, world-class status.

CORE VALUES:
As we work toward our Vision, three core Values define the way we operate:

ACHIEVMENT

We are dedicated to the highest standards of achievement in all areas of our


business. We strive to consistently exceed the expectations of both external and
internal customers

INTEGRITY

Mutual respect and ethical behavior are the basis for our relationships with
colleagues, customers and the community. Fair practice is the hallmark of the
Company.

COLLABORATION

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We work closely together as one global team to improve the way we do business
every day. We communicate openly and establish clear accountability for making
decisions, identifying issues and solutions, and maximizing business opportunities.

GILLETTE: THE PRODUCT BASKET

Alkaline Batteries Duracell


Blades & Razors Gillette, Mach 3, Sensor, Atra, Trac, Custom plus,
Good News, Agility.
Oral Care Oral-B
Small appliances Braun
Stationery Products Parker, Paper Mate, Watermen, Liquid Paper, Dryline

Toiletries Gillette, Right Guard, Soft & Dri,


Dry Idea, Satin Care

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MARKET
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ENVIRONMENT

Why Study Market Environment?

Conceptually, all of marketing is based on the idea that you must thoroughly know
the environment in which your business operates in order to successfully promote
and sell your product or service.

You may have developed a unique business idea, but why do you believe your idea
will be successful? Is it based upon discussion of the idea or presentation of a
prototype product or plan to friends and associates? If your business has been
operating for a while, you've probably thought about branching out with new

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product lines, side businesses, or additional locations. How can you be sure the
odds are with you as you pursue new directions?

Ultimately,

• Your idea must fulfill a need for your buyers and


• Must do so in a way that's somehow superior to the competition, however
you define it.

If you want to be sure that your idea will do these two crucial things, you need to
know as much as you can about the following:

• The marketing environment (Porters Five Force Model)


• Your competitors (Competitors Analysis)
• Marketing strategy (Perceptual Map)
• Your target buyers (Segmentation, Target markets and Positioning)
• Future market growth (BCG Matrix)

The Environment in India:


Gillette's experience in India indicates the type of challenges that the company
faces in emerging markets. India is the largest blade market in the world in volume,
though not in value terms. The Indian company, Harbans Lal Malhotra & Sons
(Malhotras), is the second largest blade maker in the world after Gillette. For long,
this company has enjoyed a monopoly and indeed been accused of many restrictive
trade practices.

Gillette entered India in 1984, with a 24 per cent stake in Indian Shaving Products
Ltd (ISPL), a company it promoted jointly with the local Poddar Group. Later, it
increased its stake to 51 per cent. The company has two arms in India, ISPL and
Wilkinson Sword, which it acquired in 1995. Gillette has set up a manufacturing
facility at Bhiwadi in Rajasthan. . Gillette's distribution network currently controls
2000 distributors and 400,000 outlets all over India.

The Indian Blade Market:

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The Indian blade market consists of four broad segments

1) Flat blades
2) Disposables
3) Twin blades
4) Triple blades.

With this understanding of the basic classification of the Indian blade market, let us
now see the tools that help a company, in general, and also us in understanding the
environment.

TOOLS:
As stated above, a very important tool of studying the environment in any industry
is the Porters Five Force Model explained below:

MICHAEL.E. PORTERS 5 FORCE MODEL

1. Introduction:

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The model of the Five Competitive Forces was developed by Michael E. Porter in
his book “Competitive Strategy: Techniques for Analyzing Industries and
Competitors” in 1980. Since that time it has become an important tool for
analyzing an organizations industry structure in strategic processes.

Porter’s model is based on the insight that a corporate strategy should meet the
opportunities and threats in the organizations external environment. Especially,
competitive strategy should base on and understanding of industry structures and
the way they change.

Porter has identified five competitive forces that shape every industry and every
market. These forces determine the intensity of competition and hence the
profitability and attractiveness of an industry. The objective of corporate strategy
should be to modify these competitive forces in a way that improves the position of
the organization. Porter’s model supports analysis of the driving forces in an
industry. Based on the information derived from the Five Forces Analysis,
management can decide how to influence or to exploit particular characteristics of
their industry.

2. The Five Competitive Forces:

The Five Competitive Forces are typically described as follows:

1) The threat of entry by new competitors.


2) The intensity of rivalry among existing competitors.
3) Pressure from substitute products.
4) The bargaining power of buyers.
5) The bargaining power of suppliers

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Bargaining Power of Suppliers

The term 'suppliers' comprises all sources for inputs that are needed in order to
provide goods or services.

Supplier bargaining power is likely to be high when:

• The market is dominated by a few large suppliers rather than a


fragmented source of supply,
• There are no substitutes for the particular input,
• The suppliers customers are fragmented, so their bargaining power is
low,
• The switching costs from one supplier to another are high,

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• There is the possibility of the supplier integrating forwards in order to
obtain higher prices and margins. This threat is especially high when
• The buying industry has a higher profitability than the supplying
industry,
•  Forward integration provides economies of scale for the supplier,
• The buying industry hinders the supplying industry in their
development (e.g. reluctance to accept new releases of products),
• The buying industry has low barriers to entry.

In such situations, the buying industry often faces a high pressure on margins from
their suppliers. The relationship to powerful suppliers can potentially reduce
strategic options for the organization.

THE GILLETTE CASE:

It is indeed enjoying greater supplier power due to its sole presence in the
organized, premium technology shaving razors market in India. Also there are no
close substitutes to their razors. The only substitutes in terms of the product per se
are in fact very poor on the technology and quality fronts. For example: there are
several twin blade razors in the market but none would match the superior
technology of a sensor excel, or the triple blade offering by Super-Max 3 is in no
comparison with the Mach 3. So in reality there are no potential threats.

Bargaining Power of Customers:

Similarly, the bargaining power of customers determines how much customers can
impose pressure on margins and volumes.

Customers bargaining power is likely to be high when

• They buy large volumes, there is a concentration of buyers,


• The supplying industry comprises a large number of small operators
• The supplying industry operates with high fixed costs,
• The product is undifferentiated and can be replaces by substitutes,
• Switching to an alternative product is relatively simple and is not
related to
high costs

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• Customers have low margins and are price-sensitive,
• Customers could produce the product themselves,
• The product is not of strategic importance for the customer,
• The customer knows about the production costs of the product
• There is the possibility for the customer integrating backwards.

THE GILLETTE CASE:

The buyers as a result are not very powerful as there are no close substitutes, they
buy in small numbers, switching to an alternate product is not easy (as one
cartridge does not fit another razor, and also because once an investment is made
on a premium Gillette razor, it is difficult for the consumer to leave it as such and
move on to another razor), and customers of Mach 3 razors (executive class which
comprises a sufficient market) are not price sensitive. However, the only thing the
customer can do is to revert to lower versions by compromising on technology or
switch over to barber shaving.

Threat of New Entrants:

The competition in an industry will be the higher; the easier it is for other
companies to enter this industry. In such a situation, new entrants could change
major determinants of the market environment (e.g. market shares, prices, customer
loyalty) at any time. There is always a latent pressure for reaction and adjustment
for existing players in this industry.

The threat of new entries will depend on the extent to which there are barriers to
entry. These are typically

• Economies of scale (minimum size requirements for profitable


operations),
• High initial investments and fixed costs,
• Cost advantages of existing players due to experience curve effects of
operation with fully depreciated assets,
• Brand loyalty of customers
• Protected intellectual property like patents, licenses etc,

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• Scarcity of important resources, e.g. qualified expert staff
• Access to raw materials is controlled by existing players,
• Distribution channels are controlled by existing players,
• Existing players have close customer relations, e.g. from long-term
service contracts,
• High switching costs for customers
• Legislation and government action

THE GILLETTE CASE:

The Indian shaving razor market is completely dominated by Gillette. Any new
entrants should very carefully launch themselves because they would be directly
pitting against a monopolist kind of market giant. Also the barriers to entry are not
many except minimum size requirements for economies of scale, high initial
investments and above all the retaliation by Gillette which could be anything.

However, there is news that the American Safety Razor would be soon entering the
Indian market. We can only wait and watch what would happen then.

2.4 Threat of Substitutes:

A threat from substitutes exists if there are alternative products with lower prices of
better performance parameters for the same purpose. They could potentially attract
a significant proportion of market volume and hence reduce the potential sales
volume for existing players. This category also relates to complementary products.

Similarly to the threat of new entrants, the treat of substitutes is determined by


factors like

• Brand loyalty of customers,


• Close customer relationships,
• Switching costs for customers,
• The relative price for performance of substitutes,
• Current trends.

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THE GILLETTE CASE:

As of date there are no close substitutes to any of the Gillette razors. The only close
substitute could be the American Safety Razor entering the Indian market soon. But
then again that would depend on the marketing strategies of the company.

Competitive Rivalry between Existing Players:

This force describes the intensity of competition between existing players


(companies) in an industry. High competitive pressure results in pressure on prices,
margins, and hence, on profitability for every single company in the industry.

Competition between existing players is likely to be high when

• There are many players of about the same size,


• Players have similar strategies
• There is not much differentiation between players and their
products, hence, there is much price competition
• Low market growth rates (growth of a particular company is possible only
at the expense of a competitor),
• Barriers for exit are high (e.g. expensive and highly specialized
equipment).

THE GILLETTE CASE:

There is virtually no competition in most of the segments except in the flat blades
segment, low income segment, traditional double edged users ( laggards), and
technology-illiterates.

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THE COMPETITORS

In the flat blade segment, which is also the cheapest, Malhotra dominates the
market. In the mid and high-end segments, Gillette has been the clear leader in
terms of new product introduction and branding. The Gillette brand has a high
recall and is associated with quality, precision and technology. From time to
time there have been rumours about the possibility of Gillette buying
out the Malhotras.

Overall Blade Market – In Terms Of Value (Rs 600 crore)

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Source: AC Nielson-ORG MARG
Survey

Another issue which Gillette has to immediately address is penetrating the huge
barbers' market, which consists predominantly of flat blades. Gillette's new
launches in the flat blades segment, like Gillette Diamond and Gillette Platinum
have been priced four to five times higher than the offerings of competitors

Gillette's experience in India indicates the type of challenges that the company
faces in emerging markets. India is the largest blade market in the world in volume,
though not in value terms. The Indian company, Harbans Lal Malhotra & Sons
(Malhotra), is the second largest blade maker in the world after Gillette. For long,
this company has enjoyed a monopoly and indeed been accused of many restrictive
trade practices

However in the twin and triple blade segment, Gillette has undoubtedly been a
market leader with effectively no competition at all, both in volume as well as
value terms.

Twin Blade Market in India (Rs 168 crore)

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80

70

60

50

40

30

20

10

GILLETTE OTHERS

Source: AC Nielson-ORG MARG Survey

Tomorrow’s Threat:
As seen below from the news archives, there could be a clash of two titans in the
near future with the entry of another American giant into the much desired Indian
market.

indiainfoline.com

ASRC eager to drive growth from Indian


market
New Delhi: American Safety Razor Company (ASRC), the $240-million global
shaving products major, is betting on India as a key growth market for the
company. With the company already having a significant presence in the North
American and Western

European markets, it is now making inroads into the Asian one and has identified
India as a focus market.

However, ASRC will not follow the same distribution strategy as it does in the
Western markets. The company is a leading provider of in-store brands globally,

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supplying to retail majors such as Carrefour and Wal Mart. It also has its own
brands, with the most popular one being Personna. In India, however, the company
has inked a distribution tie-up with local firm, RP Electronics and rolled out blades
and razors under the Glide brand.

Though ASRC has not set any time-bound volume targets for its products in India,
the company is optimistic about the growth being seen in the market. As disposable
incomes in the country rise, it expects more people to upgrade from double-edged
blades to disposable. Interestingly, the market for shaving products in India holds
more potential than the Chinese one. The reason lies in the fact that the
consumption of blades per person in India is higher than in China, with Indian
males being more hirsute. Also, despite the market being captured by the dominant
leader Gillette, ASRC is hopeful that its value for money proposition (good quality
and lesser prices) will help it connect with the Indian masses. Glide products are
priced from Rs 10 (for the disposable) to Rs 110 (for the systems).

http://economictimes.indiatimes.com/articleshow/575888.cms

American Safety Razor to enter local


markets
The world's third largest shaving products maker, the American Safety Razor
(ASRCL), is planning to spread its wings in India through a distribution tie-up with
the Salora group. The Indian shaving products market, so far dominated by the
House of Malhotras and Gillette, will see a third large player for the first time
The $279m company has a large repertoire, but at the moment, it wants to focus on
disposables and shaving systems priced 15-25% cheaper than that of Gillette
At a later stage it also plans to bring in double edge razor blades with a “superior
technology” to take on House of Malhotra that virtually controls that segment

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ANALYSING

MARKETING

STRATEGIES

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A BRIEF OVERVIEW:

DEFINITION:

Market strategy is defined as an action plan for influencing customer choices and
obtaining a market share. Market strategy should entice customers to buy the
product or service. Market strategy encompasses customer perception of the
relationship between price and quality.

Market strategy also includes the distribution channels for the product, pricing and
terms of sale, promotion and advertising plan, marketing budgets, inventory
selection and management, visual merchandising, customer relations and an
evaluation of the marketing strategy.

WHY IS IT USED?

The marketing strategy provides information on what the market will be (retail,
wholesale) and what specific customer groups will be targeted, what will be sold,
where it will be sold, and how wide the area of distribution will be.

TOOLS:

Since a marketing strategy is the heart of any business entity, there are some tools
or concepts in this regard developed by the marketing experts and followed by
hundreds of companies the world over. The major tools of studying the marketing
strategies are:

1) Perceptual Map
2) The BCG Matrix

Now let us see how a perceptual map is useful (the other two strategies are
explained at a later stage).

THE PERCEPTUAL MAP

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Perceptual Mapping is a useful statistical technique that provides an overview of
how customers perceive the different products in a market including each product's
relative strengths and weaknesses. A perceptual map summarizes the image of
several products on many different attributes in one graph, providing a very useful
overview of customer's perceptions of the market.

Whilst it has been criticized for oversimplifying what can be sometimes be


complex commercial problems, the two-dimensional Perceptual Map has become a
particularly useful vehicle for management to draw attention to an emerging market
opportunity, a new strategic direction, or a changing market condition.

THE CUSTOMER MATRIX:

The 'Customer Matrix' example illustrated below was developed by Cliff Bowman,
Professor of Business Strategy at Cranfield School of Management. A proactive
supplier will always consider how to maintain initiative within the market. A useful
starting point is to consider competitive position as a perceptual map in which
'Perceived Price' is plotted against 'Perceived Use Value'. If the supplier determines
that his solution is 'average' when compared to the competition, the alternative
courses of action are:

• To achieve the status of lowest cost producer and offer lower prices than the
competition - i.e. move West. Here Bowman sites the work of Porter, and
emphasises the need for all organisations to become low cost (if not lowest
cost) producers so that at the very least market fluctuations can be
accommodated.
• To move North by adding Perceived Use Value. Here Bowman is at pains
to point out that market segmentation plays a critical role in determining
what customers do actually value and that any advantage must be
sustainable.

Bowman then goes on to explore the interactive nature of these axes. For example
an increased share obtained by adding value can result (through economies of
scale) in lowest cost producer status. The move North West - sequentially adding
Perceived Use Value and cutting price - may offer the company the best strategy to
tackle the market and offer global potential, but the company must be nimble in
order to maintain its competitive position.

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THE GILLETTE CASE:

With this understanding of what a perceptual map is, let us now see how the
Gillette razors appear on the map:

Gillette razors Vs Competitors: A Perceptual Map:

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RAZORS PRICE QUALITY
GILLETTE:
Mach 3 high high
Sensor excel high neutral
Vector Plus low high
Presto high high

COMPETITORS:
Gallant low neutral
Super max 3 high low
Laser low low

And now let us represent the perceptions of Gillette razors using the customer
matrix, by taking perceived price and perceived value as the two axes:

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THE GILLETTE RAZORS – PERCEPTUAL
MAP

VECTOR PLUS
MACH 3
SENSOR EXCEL

PRESTO

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MARKET SEGMENTATION

DEFINITION:

Market segmentation is dividing a larger market into submarkets based upon


different needs or product preferences. These common characteristics allow
developing a standardized marketing mix for all customers in a particular segment.

NEED FOR SEGMENTATION:

Segmentation needs to be undertaken for the following reasons:

• Better serving customers needs and wants


• Higher Profits
• Opportunities for Growth
• Sustainable customer relationships in all phases of customer life cycle
• Targeted communication
• Stimulating Innovation
• Stimulating Innovation
• Higher Market Shares

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For segmentation to be effective, the following criteria should be kept in mind:

• Feasibility: Having in place a marketing program for each segment and


drawing advantages from that.
• Distinguishing ability: market segments have to be diverse enough to show
different reactions to different marketing mixes.
• Accessibility: The segment has to be accessible and servable for the
organization.
• Relevance: The size and profit potential of a market segment have to be
large enough to economically justify separate marketing activities for
this segment.
• Measurability: It has to be possible to determine the values of the variables
used for segmentation with justifiable efforts.

The traditional variables for segmentation are as follows:

Geographic:

• Land or region
• Rural or metropolitan area

Demographic:

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• Age, sex, marital status
• Income, occupation, education
• Religion, nationality, ethnical group

Psychographic:

• Social status
• Lifestyle-type
• Personal type

Behavioral:

• Intensity of product use


• Brand loyalty
• User behaviors

Marketers have to choose those variables that are relevant for segmenting the
market for a particular product. The basic rule is to focus on a limited number of
important variables.

THE GILLETTE CASE:

A simple classification of market segments on the basis of the above would be as


follows:

35
BENEFIT DEMOGRAPHICS BEHAVIOURISTICS PSYCHOGRAPHICS FAVOURED
SEGMENTS BRANDS

Quality of Executives, Regular and heavy High autonomy Gillette


shave working men users Value oriented

Convenience Employees Regular and heavy Hedonistic Gillette


users High self-involvement

Technology/ Teens/youth, mid- First time users, High sociability, Gillette


fashion level executives appearance conscious active

Price Low income, Laggards, non- Hypochondriac Local players


Consciousness illiterates, unaware regulars conservative
of technology

TARGET MARKETS

DEFINITION:
Once market has been divided into segments, a process of identifying market
segment opportunities (basis the attractiveness of the segment and the company’s
resources and objectives) takes place.

TYPES OF TARGETING:

Single Segment Concentration

M1 M2 M3

36
X

Selective Specialization
M1 M2 M3
X X
X

Product Specialization

M1 M2 M3

X X X

Market Specialization
M1 M2 M3
X
X
X

Full Market coverage


M1 M2 M3
X X X
X X X
X X X

37
THE GILLETTE CASE:

The approach of Gillette to market segmentation is in line with the above


mentioned. Gillette follows a strategy known as Geoclustering which involves
combining several variables in order to define better –defined target groups. This is
thus a multi attribute segmentation technique.

Primarily, Gillette has identified gender, age, income, occupation, generation


(demographic variables) and lifestyles (psycho graphic variable) as a cluster in an
attempt to more precisely define its market segments.

The Selective specialization pattern would apply to Gillette as explained:

Low High

M1 M2 M3
P1 MACH 3
TURBO
P2 MACH 3
P3 SENSOR
EXCEL
P4 VECTOR
PLUS

Gillette defines

38
M1 comprising of those group of male customers who are either in their twenties or
early thirties, have a high disposable income (if student, then those who spend
comfortably), are salaried, belong to the current generation and maintain
lifestyles that have a bearing on their buying behaviour.
M3 on the other hand would comprise of such male customers who are in their late
thirties or above, do not have a very high disposable income, and are not very
conscious of their looks or the status value of the products they buy.
M2 would comprise of customers who lie between these two customer groups.
PI Product 1
P2 Product 2
P3 Product 3

Segment-by-Segment Invasion Plans

The core philosophy behind this concept is to enter the market segment by segment
without revealing one’s total expansion plans so that competitors are caught
unawares as to the segment into which the firm will move in next.

THE GILLETTE CASE


Gillette has also followed a similar strategy in the India market.

Conventional Ready Shaving Premium Shaving


Shaving
C5
Triple Blade
C2 C4
Twin Blade
C3
Double Edge / Flat C1

39
Blades

THE SEQUENCE OF EVENTS:

1986 (C1): Company manufactures two types of blades, the premium 7 O'Clock
Ejtek Super Platinum and the stainless brand 7 O'Clock Ejtek Super Stainless

1993 (C2): Company commences the launch of Gillette Shaving products in India
with the launch of Gillette Presto Readyshaver.

1995 (C3): Company launches another Readyshaver under the Brand name of 7
O'Clock Ready II

1996 (C4): The Company successfully launches "Gillette Sensor & Sensor Excell"
shaving systems

1998 (C5): Company announces launch of new generation triple blade shaving
system Mach3Turbo

POSITIONING

WHY POSITIONING?

In today’s world of strategy convergence (undifferentiated strategies), pursuing a


meaningful and relevant positioning & differentiation has become imperative for
every company in order to give the customer a reason to demand their products.

Jack trout says, “While positioning begins with the product, the concept really is
about positioning that product in the mind of the customer in an over
communicated environment. The advertiser should present a simplified message
and make that message consistent with what the consumer already believes by
focusing on the perceptions of the consumer rather than on the reality of the
product.
The best way to get into the mind of the consumer is to b the first
Gillette has always been on its toes when it comes to introducing latest technology
products and has thus reaped the benefits of being the first entrant, the latest being
the introduction of mach3 turbo in India and mach 3---- abroad

40
According to Al Ries and Jack Trout, “The Fathers of Positioning” a Market
Leader should:
• Not boast about being number one.
• If the firm does so, the consumers may feel that the company is insecure in
its position if
• It must reinforce this by saying so
• Can adopt multi-brand strategy i.e. introduce multiple brands rather than
changing existing ones that hold leadership positions. It is often easier and
cheaper to introduce a new brand rather than change the positioning of an
existing brand. Ries & trout call this Single Position Strategy, because
each brand occupies a single, unchanging position in the minds of the
consumer
• Must be willing to embrace change rather than resist it.

THE GILLETTE CASE:

Gillette as a market leader has been careful not to boast about its position. Also it
has always introduced new brands to target different market segments (presto for
lower end, mach3 for upper end etc.) instead of bringing about changes in any one
particular razor to maintain the distinct image of each of its razor in the mind of the
customer.

Positioning, as Philip Kotler defines, is the act of designing the company’s offering
and image to occupy a distinctive place in the mind of the target market i.e. create a
customer focused value proposition, a cogent reason why the target market should
buy the product.

In the words of Jan Welborn Nicholas, the most successful entrepreneurs learn to
transform their passion into position.

Positioning is a Perceptual Location. It's where your product or service fits into
the marketplace. Effective positioning puts you first in line in the minds of
potential customers.
That's why it's so important for entrepreneurs to transform their passion into a
market position. If you don't define your product or service, a competitor will do it
for you. Your position in the market place evolves from the defining characteristics
of your product.

41
THE ELEMENTS OF POSITIONING:

The primary elements of positioning are:

• Pricing. Is your product a luxury item, somewhere in the middle, or cheap,


cheap, cheap.
• Quality. Total quality is a much used and abused phrase. But is your
product well produced? What controls are in place to assure consistency?
Do you back your quality claim with customer-friendly guarantees,
warranties, and return policies?
• Service. Do you offer the added value of customer service and support? Is
your product customized and personalized?
• Distribution. How do customers obtain your product? The channel or
distribution is part of positioning.
• Packaging. Packaging makes a strong statement. Make sure it's delivering
the message you intend.

Positioning is your competitive strategy. What's the one thing you do best? What's
unique about your product or service? Identify your strongest strength and use it to
position your product.

THE GILLETTE CASE:

For Gillette their strength lies in the superior quality of their razors ,all of which
are imported from the US (untouched by hand),except for presto and they have
used this strength wisely to position their product over the years. Unquestionable
quality of Gillette products has been the most important factor in making it a
market leader.

VALUE DISCIPLINES:

Micheal Treacy and Fred Wiersema proposed a positioning frame work called
“Value Disciplines”

Within its industry a firm could aspire to be:

42
• Product leader – advancing on technological frontier
• Operationally excellent firm – highly reliable performance
• Customer intimate firm – high responsiveness in meeting individual
customer needs

THE GILLETTE CASE:

Through our research and analysis, it is evident that Gillette has acquired the status
of the first two disciplines but needs to work on achieving a minimum performance
level in the third as well.

THE UNIQUE SELLING PROPOSITION:

According to Rosser Reeves every company should develop a “Unique Selling


Proposition (USP) or promote only one central benefit of the product which makes
communication to target market easier; employees are clearer about what counts
and it is easier to align the whole organization with a central positioning. But
nowadays marketers feel that double positioning may be more distinctive i.e. the
co. can cash in two benefits at the same time.

THE GILLETTE CASE:

In our case Gillette has been able to cash on the ‘sata – sat’ philosophy or in other
words a razor which gives u the smoothest shave in least possible time without any
compromise on their quality.

POSITIONING ERRORS:

Kotler points out that a company must avoid four major positioning errors:

1) Under positioning: buyers only have a vague idea of the brand


2) Over positioning: buyers have too narrow image of the brand

43
3) Confused positioning: buyers have a confused image of the brand
(company makes too many claims about the product or changes brand
positioning frequently)
4) Doubtful positioning: buyers do not believe the claims the brand makes.

THE GILLETTE CASE:

With respect to avoiding confused positioning Gillette has been successful. Gillette
has traditionally been positioned as a premium, high quality product. Thus even
though the company has acquired 7’o clock ,Wilkinson & Wilman ( gradually
eliminating competition) it has carefully distanced itself from these lower segment
brands to avoid confusion among the buyers about Gillette’s image.

POSITIONING POSSIBILITIES:

Also a company can choose from different positioning possibilities.

a) Attribute positioning: positioning itself on a particular attributes- size/number


of years of existence
b) Benefit positioning: product is positioned as a leader in certain benefit
c) Use/application positioning: position the product as best for some
use/application
d) User positioning: position the product as best for some user group
e) Competitor positioning: the prod claims to b better in some way than a named
competitor
f) Product category positioning: product is positioned as leader in certain product
category
g) Quality/price positioning: product is positioned as offering the best value

THE GILLETTE CASE:

Here Gillette has traditionally focused on

• Application positioning-best for the finest shave


• Quality positioning- unquestionable quality (imported razors)
THE MARKETING MIX

44
WHAT IS A MARKETING MIX?

The term was coined by Neil H. Borden in his article 'The Concept of the
Marketing Mix' in 1965.

The 'marketing mix' is probably the most famous phrase in marketing. The
elements are the marketing 'tactics'. Also known as the 'Four Ps', the marketing
mix elements are price, place, product, and promotion.

Some commentators will increase the mix to the 'five Ps', to include people. Others
will increase the mix to 'Seven Ps', to include physical evidence (such as
uniforms, facilities, or livery) and process (i.e. the whole customer experience e.g.
a visit the Disney World).

The concept is simple. Think about another common mix - a cake mix. All cakes
contain eggs, butter, flour, and sugar. However, you can alter the final cake by
altering the amounts of mix elements contained in it. So for a sweet cake add more
sugar! It is the same with the marketing mix. The offer you make to you customer
can be altered by varying the mix elements. So for a high profile brand increase the
focus on promotion and desensitize the weight given to price.

Essentials of marketing mix:

Product: Defines the characteristics of your product or service that meets the
needs of your customers.
Price: Decide on a pricing strategy - do not let it just happen! Even if you
decide not to charge for a service (a loss leader), you must realise that
this is a conscious decision and forms part of the pricing strategy.
Promotion: This includes all the weapons in the marketing armoury - advertising,
selling, sales promotions, Public Relations, etc.
Place (or Some of the revolutions in marketing have come about by changing
route of this P. Think of telephone insurance and the internet! A bit of lateral
distribution): thinking here might reap rewards for your business.

Now these can be viewed in a graphical representation:

45
46
A marketing mix is a combining of these four variables in a way that will meet or
exceed organizational objectives. A separate marketing mix is usually crafted for
each product offering. When constructing the mix, marketers must always be
thinking of who their target market are. Mix coherency refers to how well the
components of the mix blend together. A strategy of selling expensive luxury
products in discount stores has poor coherency between distribution and product
offering.

In the long term, all four of the mix variables can be changed, but in the short term
it is difficult to modify the product or the distribution channel. Therefore in the
short term, marketers are limited to working with only half their tool kit. This
limitation underscores the importance of long term strategic planning.

With this simple understanding of what a marketing mix means and to what extent
it can in fact affect a company’s sustenance in an industry, let us now see how each
of these four factors influence the company and what the respective strategies are
that the Gillette company is taking.

47
PRODUCT

STRATEGY

48
THE PRODUCT
A product is anything that can be offered to a market for attention, acquisition, use
or consumption. The primary purpose of a product is to satisfy a want or a need.

Each product can be seen through product levels, with each level adding more
value to the product. Initially, Kotler had proposed three product levels.

The Three Level Classifications:

Augmented
Product
Packaging
Design
Core
Produ
Technology Brand
ct
Core
Benefit
Actual
Product

THE GILLETTE CASE:

• The core product would be the quality of shave


• The actual product would comprise of the razor designed so as to give a
comfortable grip and packed in an appealing manner.
• The augmented product would include the superior technology that
Gillette shaving products are known for and the reliability that comes
with the Gillette brand name.

The Five Level Classifications:

49
Kotler has now revised this to a five product level. At the heart of it lies the core
product, next the basic product followed by the expected product and augmented
product. The potential product would lie in the outermost circle.

Potential Product

Augmented Product

Expected Product

Basic
Product

Core
Product

THE GILLETTE CASE:

• Core Product: Quality of Shave


• Basic Product: Razor with comfortable grip, well packed
• Expected Product: Blades that do not give cuts or rashes on skin
• Augmented Product: Razor with lubrastrip indicating when the blade
needs to be replaced, the anti-clogging push-clean technology, etc.
• Potential Product: product customization could be one new
development.

50
PRODUCT CLASSIFICATION
Products may be classified on the following basis:

1) Durability and Tangibility

• Durable Goods
• Non durable Goods
• Services

2) Consumer Goods Classification

• Convenience Goods:
• These include those goods which are purchased
frequently, immediately and with minimum
effort. These are available at multiple purchase
locations.
• Shopping Products
• These are bought less frequently. The consumer
makes the purchase decision only after gathering
sufficient product information. The potential buyer
typically compares the product with that of
competition on the basis of price, style and quality
before making the purchase decision.
• Specialty Goods
• Such goods require a special purchasing effort.
They are known for their unique characteristics
and are available at select locations.
• Unsought Goods
• These include goods that the consumers do not
want to normally think about. These goods require
advertising and personal selling effort.

3) Industrial Goods Classification


These are classified in terms of how they enter the production process and their
relative costliness.

• Material & parts : goods that enter the manufacturer’s product


completely.
• Capital Goods : long lasting goods that facilitate developing the finished
product.

51
• Supplied & Business Services : Short lasting goods and services that
facilitate developing or managing the finished product.

The Gillette Case

Gillette shaving products meet the attributes of convenience goods as

• They are purchased frequently and with the minimum of effort.


• Buying is on a regular basis
• There are multiple purchase locations for the product.

Further within this category, Gillette shaving products can be further classified
as Staple Goods.

52
PACKAGING AND LABELLING

WHAT IS PACKAGING?

Packaging comprises of all activities of designing and producing the container for
the product.

This container may include up to three levels of material:

• Primary Package : Tetra pack, bottle, sachet, etc


• Secondary Package : cardboard box, etc
• Shipping Package : Cartons, etc

WHY PACKAGING?

Packaging has been getting increasing focus as a marketing tool for the following
reasons:

• They promote Company and /or Brand Image


• It is an opportunity to incorporate innovative features which can bring added
convenience to the consumer and in turn higher profits to the producer.
• With rising incomes, consumers increasingly are willing to pay a little more
for the appearance and prestige of well – designed packages.

DECISIONS INVOLVED:

The following decisions are involved in the process of coming out with an effective
package

53
1) Identifying what the primary purpose of the package is.
2) Choosing the right colour, which is in line with the product ?
3) Amount of text to be written
4) Size, shape and materials to be used.

LABELLING:

Once the packaging decision is taken, it needs to go through engineering tests to


ensure the effectiveness/robustness of the package under normal conditions. This is
followed by testing it at the dealer/intermediary and consumer level. Finally,
labeling is done to identify, describe and promote the product.

Packaging and labelling therefore is an important element and can not be ignored
while formulating the product strategy.

The Gillette Case:

However, for a product like Gillette shaving razors, it does not play a very
significant role. A customer who buys a Gillette shaving product does not consider
the package an important enough factor which would influence his buying
behaviour. Labeling does have some significance for a product associated primarily
with quality, like Gillette razors. Therefore, while Gillette’s consumers do not base
their buying decision on the basis of the packaging, their comfort levels would be
influenced by the labelling.

54
RESEARCH AND DEVELOPMENT

“Gillette holds its edge by endlessly searching for a better shave.”


- Wall Street journal, December 10, 1992.

Let us now go through the company’s constant focus towards research and
development since its inception.

At the last turn of the century, King Gillette founded what would become a
corporate giant, based on a simple yet essential invention: the safety razor
with disposable blades.

THE DISPOSABLE:

One morning in 1895, Gillette, now living in Boston, had a revelation: if he could
put a sharp edge on a small square of sheet steel, he could market a safety razor
blade that could be thrown away when it grew dull, and readily replaced. Gillette
visited metallurgists at MIT, who assured him his idea was impossible. It took
Gillette six years to find an engineer, William Emery Nickerson (an MIT-trained
inventor), who could produce the blade Gillette wanted.

THE ‘T’-SHAPED RAZOR:

55
The 'T'-shaped razor with disposable double-edged blades, has been one of the
dominant razor shapes since its initial introduction at the turn of the century. The
blades are the only ones with two cutting edges, which doubles the amount of
shaving which can be done by a single blade. Moreover, the blades are intended to
be immediately disposable.

THE TWIN BLADE SHAVING:

Shaving with the double edged blades has its own drawbacks – it requires men to
normally shave twice and even more to get a smooth close shave. These type of
razors had a complex securing/detaching mechanism and various other not required
design materials and stylistic components, manufacturers came up with the new
technology of twin edged razors –which were of both disposable kind and ones
which came with a replaceable cartridge. This product became an instant hit as it
was very easy to handle and also gave a closer shave with less irritation and cuts.
Gillette has the Sensor Excel and Presto razors in this category.

APPLYING R & D - PRODUCT INNOVATION

Gillette constantly believes in providing its customers improved variants.


Following are some of the features that the company has added to its products:

• The lubrastrip-– a blue stripe that indicates when to change over to a new
cartridge
• The push-clean technology-prevents clogging of hair in between the
blades by using the twin instruments of spacer and button.
• The moisturizer strip-moisturizes the skin while we shave and we get a
clean shave without rashes.
• The platinum blade-superior metal for safety and better shave
• The pivoting head- flexible head to run freely on the facial curvatures.

VECTOR PLUS- A CASE STUDY


The company realized that in India people have different shaving habits i.e. low
shaving frequency, tough beard etc., and also the customer complained of hair
clogging in the twin edged razor. Another problem specific to the Indian conditions
was the lack of running water. It adapted its designing to meet Indian requirements
and presented Gillette Vector Plus, an anti-clogging twin blade system with a

56
contemporary look that offers a smooth, close, safe and convenient shaving
experience at an affordable price.

The noticeable superior performance of Vector Plus over double edge, and also
other twin blade razors comes from superior “rust-free” twin blades with
lubrastrip and pivoting head, while the Push button cleaning mechanism
provides anti-clogging facility.

According to Regional Business Director Manoj Kumar, "Gillette Vector Plus has
been created keeping in mind the shaving habits of a large number of Indian
consumers, especially those who use double-edge blades. Infrequent shaving leads
to longer stubble/hair and that coupled with use of still water leads to clogging of
twin blades for people who shave infrequently. Gillette Vector Plus with 2 Gillette
blades and a unique push clean button has been designed to address this and offer
the consumers a smooth and close shave."

Now read this to believe:

“We bleed so that you can get a good


shave at home.”
-A Gillette Employee.

At Gillette 200 volunteers from various departments come to work


unshaven each day, troop to the second floor of company’s South
Boston manufacturing and research plant, and enter small booths
with a sink and a mirror. There they take instructions from technicians
on the other side of the small window as to which razor, shaving
cream, or after shave to use, and then they fill out questionnaires.
This practice helps Gillette to constantly improve their products and
also reflects upon the company’s commitment to providing quality
products.

57
This commitment of the employees of the Gillette company sums up the amount of
effort Gillette puts in constant research and development to provide its customers
with a better product for a safer, closer shave.

PRICING
58
STRATEGY

THE 9 PRICE-QUALITY STRATEGIES:

INTRODUCTION

• We need to set price when we have a new product, or when we enter a new
market with an existing product
• How? Need to decide what position you want your product to be in
• Philip Kotler identified 9 price-quality strategies

HIGH PRICE LOW


PRICE

59
PREMIUM HIGH VALUE SUPER VALUE
HIGH
QUALITY

OVER MID VALUE GOOD VALUE


CHARGING

RIP-OFF FALSE ECONOMY


LOW ECONOMY
QUALITY

THE PRICING PROCESS:

1) Set Pricing Objectives


2) Analyze demand
3) Estimating costs
4) Draw conclusions from competitive intelligence
5) Select pricing strategy appropriate to the political, social, legal and
economical environment
6) Determine specific prices

SELECTING THE PRICING OBJECTIVE


Possible Pricing Objectives

1) Profit objectives e.g.


a) Targeted profit return
2) Volume objectives e.g.
a) Dollar or unit sales growth
b) Market share growth
3) Other objectives e.g.
a) Match competitors’ price
b) Non-price competition

60
DEMAND ANALYSIS:
The demand analysis sums the reactions of many individuals who have different
price sensitivities. The first step in estimating demand is to understand what affects
price sensitivity. Nagle identified 9 factors:

1) Unique-value effect
2) Substitute-awareness effect
3) Difficult-comparison effect
4) Total-expenditure effect
5) End-benefit effect
6) Shared-cost effect
7) Sunk-investment effect
8) Price-quality effect
9) Inventory effect

PRODUCT MIX PRICING:


The pricing must be modified when it is a part of the product mix. The types are:

• Penetration pricing: Where the organisation sets a low price to increase


sales and market share.
• Skimming pricing: The organisation sets an initial high price and then
slowly lowers the price to make the product available to a wider market.
The objective is to skim profits of the market layer by layer.
• Competition pricing: Setting a price in comparison with competitors.
• Product Line Pricing: Pricing different products within the same product
range at different price points. An example would be a video manufacturer
offering different video recorders with different features at different prices.
The greater the features and the benefit obtained the greater the consumer
will pay. This form of price discrimination assists the company in
maximizing turnover and profits.
• Bundle Pricing: The organization bundles a group of products at a reduced
price. Gillette does follow this practice of bundling its shaving accessories
together and offer it as a value pack.
• Psychological pricing: The seller here will consider the psychology of
price and the positioning of price within the market place. The seller will
therefore charge 99p instead £1 or $199 instead of $200

61
• Premium pricing: The price set is high to reflect the exclusiveness of the
product. An example of products using this strategy would be Harrods, first
class airline services, Porsche etc.
• Optional pricing: The organisation sells optional extras along with the
product to maximise its turnover. This strategy is used commonly within the
car industry.

THE GILLETTE CASE:


With all the above tools and directions for pricing, Gillette India ltd. prices its
products by taking into account the nine price-quality objectives and also the
pricing objectives. After a detailed analysis of the above guidelines, it has been
consciously using premium pricing for some products and average pricing for
some. It strives for profits, market share and eventually ends up the market leader.

• The price cut offer on vector plus was to take on the smuggled versions that
had entered the Indian market.

• The hike in the price of presto from Rs 12 to Rs 15 was to induce the


customer to move on to vector plus.

It doesn’t need to follow all the 6 steps of pricing as it is a market leader with no
potential threats. Some steps are redundant. It follows the following steps:

1) Set Pricing Objectives


2) Analyze demand
3) Estimating costs
4) Determine specific prices

Its strategies are very much evident from the following price chart of all the
Gillette razors and blades.

62
THE GILLETTE PRICE CHART

Triple Blade Shaving System

Razor + 1 2 4 8 cartridges
cartridge cartridges cartridges
Mach 3 235.00 158.00 305.00 585.00
Mach 3 395.00 200.00 380.00 695.00
Turbo

Double Blade Shaving System

Razor + 1 2 4 8 cartridges
cartridge cartridges cartridges

Vector 29.00 35.00 65.00***


Plus
Sensor 125.00 55.00* 240.00 485.00
Excel
7’o clock P 56.00 80.00**
II
*1 piece only, packs of 2 not available
**pack of 5 cartridges
*** pack of 6 cartridges is for Rs. 65.00

63
Disposable Shaving Systems

Variant Price (Rs.)


Presto 15.00

7 O’clock 12.00

64
PLACE

STRATEGY

65
Definition:
A place strategy refers to how an organization will distribute the product or service
they are offering to the end user. The organization must distribute the product to the
user at the right place at the right time. Efficient and effective distribution is
important if the organization is to meet its overall marketing objectives. If the
organization underestimates demand and customers cannot purchase products,
because of it profitability will be affected.

What channel of distribution to use?


Two types of channel of distribution methods are available. Indirect distribution
involves distributing your product by the use of an intermediary. Direct distribution
involves distributing direct from a manufacturer to the consumer, for example, Dell
Computers. Clearly direct distribution gives a manufacturer complete control over
their product.

Indirect Distribution Direct Distribution

Distribution Strategies:
Depending on the type of product being distributed there are three common
distribution strategies available:

66
1. Intensive distribution: Used commonly to distribute low priced or impulse
purchase products eg chocolates, soft drinks.

2. Exclusive distribution: Involves limiting distribution to a single outlet. The


product is usually highly priced, and requires the intermediary to place much detail
in its sell. An example of would be the sale of vehicles through exclusive dealers.

3. Selective Distribution: A small number of retail outlets are chosen to distribute


the product. Selective distribution is common with products such as computers,
televisions household appliances, where consumers are willing to shop around and
where manufacturers want a large geographical spread.

If a manufacturer decides to adopt an exclusive or selective strategy they should


select a intermediary which has experience of handling similar products, credible
and is known by the target audience.

THE GILLETTE CASE:

The appointment of distributors is handled by Gillette India directly. In NCR


region, a separate well-defined area is allocated to each distributor.
The distributor appoints the EFF (Effective Field force). This comprises a team of
5-6 people who work directly under the distributor and are paid by him (and not the
company).

The broad structure in the distribution network is as follows :

Assistant Sales Manager (ASM)

Territory Sales Manager (TSM)

Distributor

EFF

The goods are stored at depots before they move into the hands of the distributor.
The ASM and TSI are on company payroll.

The Territory Sales Manager prepares the TMR (Total Market Report) detailing
important variables like market share, growth trends, etc for the area under him.
Also, it is the TSI who communicates schemes and benefits rolled out by the

67
company to the distributor who in turn informs his EFF. The TSI meets distributors
on a monthly basis for periodic review. The TSI is responsible for the
targets/performance of the area under him and he is expected to communicate
actual results back to the company on a regular basis.

In NCR Region, the margin being given at the retail level is 12%. One distributor
has approximately 1100 shops under him. There are around 15-20 distributors in
Delhi. The distribution is monitored basis off take and the distributor’s (or
distributor’s appointed person) frequency of visiting the retail outlet is keeping in
view the availability of ready stock. In Delhi, sale of goods to the retailer takes
place on both a cash as well as credit basis. The distribution chain in Delhi is
known to be smooth and without bottlenecks with ABSOLUTELY NO
PROBLEMS being reported with regard to handling and acquiring stocks. On an
average, a retail unit stocks the maximum number of Prestos, in relation to Vector
Plus and Mach 3

DISPLAY:

The company has developed innovative display units for both smaller kirana and
bigger supermarkets. It seeks to increase sales through

1) Increased range - increase in the number of SKU’s (Stock Keeping Units)

2) Deepening the impact of a Gillette wall – the height at which the wall is
displayed should at the eye level of the customer.

3) Depth – ensuring availability of product range at the retail outlet

The company does not interfere in any manner as far as the putting up of Gillette
walls in shops is concerned i.e. it is entirely at the discretion of the retailer. For
more sophisticated outlets, racks are used designed in ways such that they take up
minimum space

For the high-end products, the move is from hanging cards to a grooming center
where the entire grooming regime is brought together.

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PROMOTION

STRATEGY

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WHY PROMOTION?
Promotion keeps the product in the minds of the customer and helps stimulate
demand for the product

PROMOTION STRATEGIES:
A successful product or service means nothing unless the benefit of such a service
can be communicated clearly to the target market. An organizations promotional
strategy can consist of:

• Advertising: Is any non personal paid form of communication using any


form of mass media. Companies can run the same advertising campaigns
used in the home market or change them for each local market. Broadly a
company can choose from three different advertising strategies.

The company can use the same ad everywhere (across different regions and
countries), varying only the language, name, colors etc.

It can use the same theme globally but adapt the copy to each local market.

The third approach consists of developing a global pool of ads, from which
each country selects the most appropriate one.

• Public relations: Involves developing positive relationships with the


organisation media public. The art of good public relations is not only to
obtain favorable publicity within the media, but it is also involves being
able to handle successfully negative attention.
• Sales promotion: Commonly used to obtain an increase in sales short term.
Could involve using money off coupons or special offers.
• Personal selling: Selling a product service one to one.
• Direct Mail: Is the sending of publicity material to a named person within
an organisation. There has been a massive growth in direct mail campaigns
over the last 5 years. Spending on direct mail now amounts to £18 bn a year

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representing 11.8% of advertising expenditure ( Source: Royal Mail
2000). Organisations can pay thousands of pounds for databases, which
contain names and addresses of potential customers. Direct mail allows an
organisation to use their resources more effectively by allowing them to
send publicity material to a named person within their target segment. By
personalising advertising, response rates increase thus increasing the chance
of improving sales.

THE GILLETTE CASE:

TV/Radio – Gillette has an extensive advertisement campaign being run on


television.
The company uses a mix strategy for its ad campaigns for different products. It has
adopted the first approach for mach3 & mach3 turbo ads wherein it uses a
standardized ad across all countries , only making changes in the language, colors
etc. For the lower segment razors like vector plus & presto it retains the global
theme but adapts it to local market needs.

The advertisement for each product has been developed keeping in mind a specific
section of the market. For E.g. Vector plus ad campaign targeted towards middle
income group has that specific backdrop in the ad. Whereas Gillette Mach 3, a high
end product, has a campaign portraying foreign models to cash in on the tendency
of the Indians that anything associated with foreigners is of good quality and meant
for the higher class. The vector plus ad also comes during the telecast of cricket
matches in the form of “push clean facts- factual information of the game.” (The
name push clean actually stands for the push-clean technology)

Print – This medium is mainly used by Gillette to spread awareness of their cents-
off deals i.e. their reduced price packs and banded packs. Several ads are flashed in
daily newspapers and magazines to advertise these schemes.

Internet- The Gillette website is excellent and there are dedicated websites for
their new products which present the product and related information in a very nice
manner.
However the company does not have a India specific website which we believe the
company can develop as an additional promotional tool.
Also the company can try and inform people about the new technology in shaving
and about the right way to get a smoother shave, through the use of direct mails and

71
pop up ads. SMS can also be a very handy tool to spread awareness about discounts
and other promotional schemes.

Movie/Soaps- This is another avenue Gillette can explore and reap great benefits
from. As we know movies have great influence on not only youth but among all
ages .So Gillette can have tie-ups with movie/producers and can show use of
Gillette products in the same. This can also be a very handy tool to reach the less
educated and lower income groups. Gillette has already associated itself with the
Hollywood movie iRobot, we suggest them to try something similar here.

Based on consumer survey we found that the ad- recall is very less and also the ad
is not having a great impact on the people. Therefore we suggest that Gillette ropes
in a Bollywood star or a cricketer for its advertisements which have not only a
greater impact but also help the ad recall and retention.

Sales Promotion:

It consists of diverse collection of incentive tools , mostly short term , designed to


stimulate quicker or greater purchase of products or services by consumers or the
trade .

Sales promotion includes tools for:

1) Consumer promotion –. In this kind of promotion, ‘Reduced price packs’


are offered in which single package is sold at reduced price. ‘Banded
packs’ of two related products sold at lower price than sum total of the two
are also offered. ‘Premiums’ are also offered i.e. a free gift is given with the
product.

2) Trade promotion - Price-off i.e. a straight discount off the list price on
each case purchased during a stated time period .The other are allowances
which include advertising allowance that compensates the retailers for
advertising the manufacturers’ product and also a display allowance that
compensates them for carrying a special product display.

3) Business and sales force promotion - This includes participation in trade


shows and conventions, sales contests which aim at the sales force or
dealers to increase their sales result over a stated period. Other method is
‘Specialty Advertising’ in which low cost items bearing the company’s
name and address are given to prospects and customers.

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THE GILLETTE CASE:
• Consumer promotion - Gillette offers Price Packs (cents-off deals) i.e.
offers to consumers’ savings of the regular price of the products flagged on
the label or package. When shaving gel for example is given free with mach
3 turbo it is called a CP Offer - Consumer Promotion Offer.

• Trade promotion - Gillette, at present as found in our survey is not much


into using trade promotion tools.

• Business and sales force promotion - The sales force (EFF) is given an
additional incentive for the sales achieved by them over & above their
target. This is paid as a percentage of the additional sales achieved.
However, the company was unwilling to disclose the exact percentage to us.

The company works on a slab system wherein the incentive payout increases
with higher sales achieved. The company follows a 'Points System’ for the EFF
i.e. targets are given in terms of points/time period. Higher points are earned by
the EFF individual for selling a higher variant

MARKET
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STRATEGY

The Boston Consulting Group (BCG)


matrix

It is a simple tool for assessing a company's position relative to others in terms of


its product range. It is a 2x2 matrix plotting market share against market growth.

History of the BCG Matrix


 1960’s – diversification of businesses
 Need for universal management tool
 First implementation in 1969 by Boston Consulting Group

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Why use it?
The BCG matrix helps a company think about the portfolio of products and
services which it offers and make decisions about which it should keep, which it
should let go and which it should invest further in.

When is it used?
It is used in initial audit discussions to identify “product development
opportunities.”

The company then plots its products on the matrix — for example a product in a
fast growing market in which it has a low share would appear in the top left hand
area, whilst one in which it had a high market share but where the market was
growing slowly would appear in the bottom right.

How to use a BCG matrix?


Key Assumptions of BCG Matrix

• Stable cost/price relationship (Not valid if the firm is pricing on projected


lower average unit costs in the future)
• Market leader influences the average costs
• Profit margin is a function of market share (This ignores profitable niches)

BCG Matrix Format


 Vertical Axis = Relative Market Growth
 Split at 10% by a horizontal line
 Horizontal Axis = Relative Market Share
 Split at 1x by a vertical line

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WHAT IT MEANS:

To help the analysis and stimulate the subsequent discussion the BCG model offers
four descriptions of the product/market combinations which might be found:

Stars represent those products or services which the company has a high share of
the market and the market is growing. They should be invested in further to
maintain the growth.

Cash cows represent those products in which the company has a high market share
but where the market is mature and slow growing or even declining. These
products should be 'milked' to provide cash for investments in future product areas.

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Dogs are products where the company has low market share and where the market
itself is not growing. These should be dropped from the portfolio to release funds
for investment in more attractive opportunities.

Question marks are those products in which the company ahs low share but where
the market is beginning to take off or has significant growth potential. They need to
be watched closely and investment maintained to keep a presence since they could
become tomorrow's starts — but equally the commitment should not be too high
since they could also turn out to be tomorrow's dogs!

THE GILLETTE RAZORS BCG MATRIX


With the study of the BCG Matrix, we have tried to apply this concept to this
project of ours. We have analyzed the razor market and then placed the various
razors and blades of Gillette in the relevant quadrants.

MACH 3, PRESTO SENSOR EXCEL, STERLING,


VECTOR PLUS

WILKINSON BLADES P II, WILMAN RAZORS


7 O ‘CLOCK BLADES

Analysis:
The reasons for placing the product portfolio in the above manner is as follows:

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DOGS: 7 O’ CLOCK P II AND WILMAN RAZORS

Here we have considered Wilman razors and the 7 O’Clock razor P II because
Wilman razors are losing market share very rapidly while the 7 O’Clock razors are
too expensive for their segmentation. Consider this: the P II, which is a twin razor
costs Rs.85 while a Vector Plus costs only Rs.29, which also has several added
features like superior technology, imported blades, anti-hair clogging mechanism,
etc. As a result, they have a low market share as well as low market growth, as the
complete eradication of double edged shaving pattern is one of the primary
objectives of Gillette

QUESTION MARKS: SENSOR EXCEL, VECTOR PLUS AND STERLING

Here we put sensor excel because it has been losing its market share due to its
pricing close to that of Mach 3 . A Sensor Excel would initially cost Rs.125 and it
successively boils down to Rs.3 per shave (price per shave), which is the same for
that of Mach 3 (which however costs Rs.235 initially). People actually are tending
to buy either vector plus or Mach 3 as a result of which Sensor Excel is becoming
redundant. Vector Plus is one product with tremendous potential for market growth,
since it combines superior technology, great looks, attractive and competitive price
and above all the Gillette tag. Then we have the Sterling, the double-edged razor
which may not have much growth in the future, which also doesn’t gel with the
company’s objectives but then it is the only such product in the company’s product
basket. There still are some customers who use only double-edged razors and are
also specific about the 7 o’ clock brand.

STARS: MACH 3 AND PRESTO

Here we placed Mach 3 and Presto because they have a high market share as well
as market growth. Presto would never decline in sales because the market for a
disposable razor always exists due to its simple characteristic of ready to use and
throw. Mach 3, the premium product of the company has also been a huge success
amongst its segmented markets of youth and executives and its demand is only
growing. So the company has in fact launched more innovations or developments
of the basic product like Mach 3 Power and Mach 3 Turbo.

CASH COWS: WILKINSON AND 7 O’ CLOCK BLADES (FLAT BLADES)

The reason for putting them here is that they currently enjoy both high market share
as well as market growth. But now there could be slow growth or even decline in
this segment due to decline in double-edged razors ( if the company succeeds in its
objective), so these products should be 'milked' to provide cash for investments in
future product areas.

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Evaluation of BCG Matrix: Pros
 Simple and rapid
 Solid basis for decision-making
 Good measurability of market share and growth
 Provides information about efficient resource allocation within the
organization
 Generator for strategic options

Evaluation of BCG Matrix: Cons


 Oversimplifies complex decisions
 Only 2 factors considered = creates risk
 Uncertainty in market and SBU definition
 Only considers current businessesà no dynamics
 Does not recognize possible synergies between SBUs
 Can fall prey to the “GIGO” syndrome

Conclusion
As long as management understands that the BCG Growth/Share Matrix generates
options which require further analysis and validation, this tool can greatly enhance
strategic decision making

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CONSUMER

ANALYSIS

80
On the basis of our questionnaire and consumer survey, we found the following:

BRAND RECALL:

FREQUENCY OF SHAVE:

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PLACE OF PURCHASE:

82

once in 3
THE REASONS FOR CHOOSING A PARTICULAR RAZORS

100
c
90

83

80
Impact of Promotions

15%
Yes
No
21%
64% May be

Ad Recall

29%
Yes
No
71%

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7 O'clock : A Gillette product?

33%
Yes
No
67%

WILKINSON: A GILLETTE PRODUCT?

85
Analysis of the consumer questionnaires

Post completing the survey , we got down to the task of analyzing the data that we
got . This was important for us to try and understand the shaving market scenario,
consumer behaviour and consumer perception about Gillette.

Frequency of Shave
Of the sample of 200 that we surveyed we found that while 31% of the respondents
shaved on a daily basis, 28% of the respondents shaved every alternate day. Also,
slightly over one third (34%) were only shaving once in 3-4 days.

Therefore, 62% of the respondents (34+28) was not shaving on a daily basis. Our
findings corroborate the fact that shaving frequency in India is low and shaving
conditions relatively tough.

Brand Recall
This was the first question that we put to our respondents. Also, to try and gauge
their natural response , we did not provide them with options.

Upon consolidation of survey results, we find that an overwhelming 84% of those


surveyed mentioned Gillette as the brand they associate with shaving.

Place of Purchase
Since shaving products would fall under the category of convenience goods being
bought on a regular basis, we wanted to find out the place from which the buyer
was making the purchase.

We found that more than half(56%) of those surveyed were making the purchase
from locality stores and 22% were making their purchases from Departmental
stores.

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Reasons for choosing a particular razor
100 respondents mentioned quality of shave as the primary attribute that they
consider when they make their buying decision. Another 52 respondents based their
decision on

the ‘convenience of shave’ while 48 respondents considered factors other than


quality and convenience behind their purchase decision.

Impact of Promotions
64% of the respondents said that they would respond favourably to promotional
schemes brought out by the company. However, 21% said that any such
promotional schemes would not influence their buying behaviour and the
remaining 15% were not sure.

Ad Recall
More than two third of the respondents were unable to recollect seeing a Gillette ad
indicating below average ad recall for Gillette shaving products. Others who did
recollect could primarily recall their Sata Sat ad.

• 7 O’clock and Wilkinson as Gillette brands

This was the last question that we put to our respondents. A majority of
them(around two third) were unaware that 7 O’clock and Wilkinson
were actually under the Gillette umbrella and perceived them as brands
of competition.

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Analysis of interaction with the distributors &
the retailers

In our study, we interacted with both the distributors as well as the


retailers and we found that:

• Both the distributors & the retailers were well stocked with Gillette shaving
products- both in terms of quantity and range of products. Therefore,
availability of the product is not a problem. Whereas it was not the same
with competitive products like Supermax, 365 that are not readily available
at all retail outlets.

• The distributors supply both in cash & credit terms to the retailer.

• The frequency of supplies from the distributors to their respective retailers


is different in different cases. in some the retailer receives the supplies on
need as basis, others receive it according to a pre-determined time frame of
a every 3 days(for outlets in big shopping malls, departmental stores) week,
fortnightly.

• Neither the retailer nor the distributors face any problem of defective items
or any other complaints from the end user.

• The retailers receive a margin of 12 % on all Gillette products ( with the


exception of vector plus, on which the margin is only 10%) as compared to
24-25% margin on competitive products.(house of Malhotras & local
players)

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• There are no formal feedback forms that the company circulates but any
problem is carefully handled. Also the option of online booking for these
agents is not available as of now.

• In the words of one of the distributor (merchandiser)

“ Gillette is very professional in its approach as far as distribution is concerned.


House of Malhotras is a ‘Lala company’. Their attitude towards the retailer is a
take it or leave it kind of attitude.”

RECOMMENDATIONS

A set of recommendations have been developed for Gillette India keeping the
following factors have been in mind

à Consistency: We have tried to ensure that we do not lose focus


of the outlined objectives.
à Viability: We have tried to come up with suggestions which are
cost effective, practical and can be implemented by the company.
à Market Realities: The Indian shaving market has a lower
shaving frequency and relatively poor shaving conditions.

We recommend that the company could adopt the following strategies.

Gillette walls – Going beyond the shop


These have been put up by Gillette as a strategy behind cash counters in large shops and
departmental shops to promote impulse buying.

Both the designing of the wall and the placing of the razors/cartridges is done in
such a manner so as to capture the customer’s attention and ‘push him’ into buying

89
the product (Gillette is known for pressure selling since it deals in premium
products).

It is suggested that

1) These be put up in new places beyond shops eg college canteens and


cafeterias, coffee bars, cinemas & multiplexes. The company can display
the entire range or a particular price range of products that it offers
depending upon target market visiting these places.eg: college canteen-
presto, vector plus

2) These walls are designed aesthetically and have a particular theme that goes with the
area where the walls are being put up. Eg. A wall in a college canteen would have
bright vibrant colours and photographs of college goers as this would appeal more
to a College going market.

Gillette Gift Packs


These are currently available in the market. However, the company normally promotes them
and tries to increase off take during the festive season. We suggest that the company could
target the following new segments

1) The Corporate Gift Market – Gillette products are known to be premium products
and the company enjoys a good brand image in the market. Therefore, there is potential to
make inroads here. (Though it would be imperative that the company brings out smart and
well designed cases that would make it a decent gift item for a corporate gift.)
2) Wedding Gift market – This will require attractive packaging. A mirror can also be
included on the inside flap of the case. Also, keeping in view the nature of the occasion,
some perfume etc might have to be included as a part of the gift pack as simply giving a
razor along with cartridges may convey the wrong message.
3) Birthday Gifts – The company can promote Mach 3/Mach 3 Turbo as the best gift
that a friend / family member can give to a teenager who has just started shaving.
4) Valentine gifts – this particular day has gained a lot of importance in the past few
years thanks to excessive commercialization. Gillette can cash on this day too by coming out
with attractive gift packs during this time with special focus on mach3 /mach3 turbo

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Warranty Card
Gillette products are of supreme quality. The company does not suffer from a problem of
goods returns of defective pieces from vendors. However, to increase the perceived value of
the product in the mind of the customer; the company could provide a warranty card along
with its premium end products – Mach 3 and Mach 3 turbo. Since Gillette offers unmatched
product quality, the cost implications of product replacement would be minimal.

Further, Gillette could do product differentiation by offering different warranty periods for
different cartridge packs (2-4-8). Therefore, a pack of 8 cartridges would have maximum
warranty while a pack of 2 cartridges would cover a lesser period for defects.

Also, during the consumer survey we realized that there is a problem of counterfeit Gillette
products in the market.

To counter this, the company could start putting holograms on its products which will

a) Help consumers differentiate between counterfeit and genuine Gillette products.


b) Establishes “trust” in the company products in the minds of the consumer

The Mach 3 experience


We recommend that Gillette should position its premium Mach 3 product as a superior
shaving experience rather than ‘just a shaving product’. Since, we came across quite a few
consumers who perceive mach 3 to be an expensive product; the company should position it
as a product bundle. The following add-ons can be included.

1) Razor Stand for washroom – Gillette Mach 3 and Mach 3 turbo packs should be
accompanied with a plastic stand that can be placed on the washroom wall next to the mirror.
This would lead to added convenience for the user. A holder can be provided which could
be used for keeping the razor along with other toiletries like tooth brush, tooth paste etc.

2) Travel Pouch for razor: it has been seen that most people face a problem in keeping
their razor safely when travelling (in a way that does not damage the blade). Thus the
company can provide a small (plastic/Rexene/polyester) pouch with mach3/mach3 turbo
purchases or with a bulk (3-4) purchase of presto (as many people use presto while travelling
rather than their normal Gillette razor)

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3) Warranty card – As mentioned above, this could be included for all Mach 3 and
Mach 3 razors and cartridges. It gives the buyer, especially those who perceive the product
to be expensive a sense of value for money.

4) Information Leaflet – A leaflet could be included as a part of the pack which would
include the following information
• How to use Mach 3 – the ideal way
• Cleaning your Mach 3 (tips like use of hot water is better than cold water)
• The ideal shave /tips on shaving

5) Satisfaction survey relating to the user’s experience with Mach 3 could be included
as a tear sheet which consumers could send back to the company. It has two advantages
• It gives valuable data to the company of what Mach 3 users think about and expect
from the product
• It makes the customer feel special.

Gillette Shopping Card


Gillette could actually come up with the idea of launching a “Gillette shopping card” , one
for supermarkets and another for locality stores.

In up-market departmental stores/supermarkets:

• This would be exactly like a credit card minus the magnetic strip i.e. just like the
Planet-M card, or the Ebony card. The card can be initially given with the purchase of a
MACH 3 razor or the gift pack. When a customer makes a purchase, he automatically gets
some points, which can be later redeemed for any product at the store, instead of just Gillette
products. Also the card holders would be entitled for events like lucky draws, donor passes
to musical events, tickets to a newly released cinema, discounts in select eating joints and
shopping malls for transactions above a certain amount, even grocery items, etc.

• Another way of getting a shopping card is to tie up with supermarkets and


shopping malls, like Ebony, Big Bazaar, Giant, Nanz, etc. that have their own shopping
cards. In this type of agreement, whenever a person buys a Gillette product, he would be
given more points in addition to the normal points system followed by the store, which could
be redeemed for any purchases from the store.

Advantages:

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• The incentive of redeeming points would surely induce the customer to buy
Gillette products.

• Since the range of products is better displayed in a supermarket, a customer may


be influenced to buy other Gillette products also; maybe even a higher version of the razor
he usually buys.

• The store would also be benefited as more customers would now be motivated
to buy their Gillette products from them rather that a kirana store.

In locality stores:

It would be issued at select merchant establishments that stock Gillette products. The
cards would be for different pre approved values of 500/-, 1000/, 2000/- , carry a certain
validity period and be used for purchasing Gillette products within that validity period.
In case the total purchase value is less than the card value the customer would be
reimbursed the remaining amount in cash. At the time when the customer purchases the
card he would be entitled to certain sops like movie tickets, free passes to music
concerts, lucky draws etc.
The merchant would be paid the cash value of the card upon depositing the same with
the company.

Benefits:

• The company is getting the consumer’s commitment beforehand to make Gillette


purchases in the coming future.

• Privileged Gillette consumers would be eligible for attractive offers. They would feel
different from users of other brands.

• The maximum benefits would be tagged with the highest value card. The nature of
the benefits that would come with the card would be as mentioned before.

Youth
In our consumer survey, we realized that a majority of the respondents who were
between 18-25 years of age were using Gillette because of a “sense of pride” apart from
its ‘Brand value’. Gillette we believe stands to gain if it positions itself as the ‘Brand of
the youth’. It can do this in two ways.

• College Festivals

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Since the scope of our project is limited to NCR, we recommend that the company
associates itself with festivals and other events carrying mass appeal in Delhi
University ,Indraprastha University, IIT, DCE,etc.

• The Gillette card

The youth is the segment that is most attracted to a concept like a shopping card, either
exclusively for Gillette or one combined with a store. They are, in fact, the most
impulsive customers who would be influenced by add-ons like entry to musical shows,
movies, etc.

Pitching retailer against retailer


We questioned even some retailers during the course of our project. Upon enquiry, we found
out that competitors were giving a higher margin to the retailer than Gillette. The retailer is a
very crucial element in the distribution strategy. He even plays a vital role in shaping the
image of a product, which means he cannot be neglected for long. In spite of this, they do
not have specific targets. Therefore, the company can actually fix incentive based targets.

The company could have a concept of monthly / quarterly lucky draw for retailers
exceeding their targets and could keep a holiday package or high value consumer
durable as the prize for the winner of the draw.

R & D : Giving a Technical push


At present along with the Malhotras, there are a number of local players in the market selling
twin blade razors. Even though Gillette is the market leader there still is scope for them to
increase their market share further. One way of doing this is to constantly come up with
newer versions or products.

Gillette could also work on coming with special razors

• For trimming corn and callous in the feet


• To prevent skin irritation caused by shaving (people with sensitive skin)
• Single blade disposable (or non-disposable) for the more price conscious.

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.

Strong Advertising Pitch

Gillette has traditionally been using foreign models in its Mach3 ad campaigns & for its
other products like vector plus, presto they have not used any specific Indian brand
ambassador. Therefore, the amount of mind share that the ad is able to capture is on the
lower side. (this is backed by our survey ).

It is suggested that the company uses an Indian model or actor or sports person to cash in on
his appeal to promote its range of shaving razors.

Through our survey, we were able to narrow down on 4 choices: Sharukh Khan,
Fardeen Khan, John Abraham and Sachin Tendulkar.

We believe that John Abraham would be best suited for a Gillette shaving range ad
campaign because he generally remains unshaven and has that image in the public mind.
Therefore a clean shaven John Abraham will have a lasting impact in the consumer’s mind.

Also, all Gillette products except for Presto are manufactured outside India. The fact that
none of their products (except Presto) are touched by a human hand is an additional selling
point for the company and should be highlighted in a subtle manner in the advertisements.
We found consumers lacked awareness of this fact and were impressed when they were told
about this during the course of our survey.

The company can make use of the latest ad medium of SMS. The huge spurt in cell phone
usage can be wisely tapped by Gillette for reaching its customers. Since this medium maybe
costly so the company can use it for communicating offers and discounts on its products if
not for general advertising .e.g. communicating the latest price cut on vector plus

Guerilla warfare
The company could occasionally take on its competitors completely by surprise by coming
out with new and innovative Ideas.

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Some possible strategies could be:

• Vector plus free with purchases of INR 500 and above at select grocery /
departmental stores
• Presto free with purchases of INR 200/250 and above at select grocery / departmental
stores
This would be in the nature of a limited period offer.

The above strategy can be extremely successful in penetrating those households (through
the housewife) wherein the males of the household are loyal customers of another brand for
years & no sales pitch or salesman can change their preference except maybe a experimental
use of the free product.

The Barber Shop


3.9 billion blades are consumed annually in India, a third of which sits in
barbershops. So technically, 50 per cent of the shaving population goes to barber
shops.
Therefore Gillette could develop a strategy wherein its sales force specifically
targets people frequenting barbershops.

The primary challenge in this regard is the cost per shave, which is much lower for
a conventional double edge razor than for even the lowest variant of twin blade
(Presto). It is not feasible to try and upgrade a price sensitive consumer in this
segment.

We therefore suggest the following

1) Bulk Deals of Gillette 7’o Clock, Wilman & Wilkinson with Barbers :

The three come closest in the Gillette product chain to the low cost products of
House of Malhotras. Barbers can be convinced & financially motivated to move
from either unbranded blades or from competition to these basis the following
strengths:

a) Demand is inelastic. The barber will always have a steady flow of


customers. He can therefore afford to make bulk purchases (if given proper
incentives).

b) A blade is a durable product. Bulk Purchases made can be stored with ease.

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A barber provides numerous services apart from shaving like hair cuts, head
massage, etc .customers waiting for their turn typically watch TV or flip through
magazines. we suggest that the barbers could be given incentives to stock some of
Gillette’s razors & other products to attract the attention of waiting customers.
This exercise may induce self shavers to make on the spot purchases and saloon
shavers to try out new products

2) Making /Production of Shingle outside shops:

We suggest that Gillette starts a scheme wherein it makes the shingle carrying the
name of the barbers shop. While it would produce these for the barber at a
subsidized cost (i.e. less than what the barber would incur by getting it made
himself), approximately a 10% strip at the bottom would be dedicated to the
Gillette name and punch line.

RAM LAL AND SONS

GILLETTE- THE BEST A MAN CAN GET

This would help promote brand recall among consumers frequenting the shop and increases
the possibility of them moving from barber shaving to self shaving. Since such an activity is
not in line with Gillette’s core competence, it could be outsourced to a third party.

3) Shaving Mugs & Brushes at Barber shop carrying Gillette name

It is suggested that Gillette could offer free shaving mugs and brushes to barbers who enter
into Bulk deal contracts with it. These would have ’Gillette’ along with its punch line
embossed on them. A consumer typically sits for 10-15 minutes in a fixed position while
getting a shave done. Since the consumer is not in a position to move/undertake any other
activity during that time; we believe that this becomes a good strategy to get him thinking
about Gillette- capturing his attention span. We further believe that this would definitely
prompt a one time purchase of Gillette shaving products and may push the customer in the
medium to long term towards self shaving.

97
BIBLIOGRAPHY

Porter, E Michael, Competitive Strategy: Techniques for Analyzing Industries and


competitors,1970.
Kotler, Philip Marketing Management, chapters 3,5,6,8,9 and 13, the millennium edition,
2000.
Ries, Al and Trout, Jack, The 22 Immutable Laws Of Marketing
Ries, Al and Trout, Jack, Positioning, (few specific points)

http://economictimes.indiatimes.com/articleshow/796982.cms
http://economictimes.indiatimes.com/articleshow/761804.cms-
http://economictimes.indiatimes.com/articleshow/757445.cms
http://economictimes.indiatimes.com/articleshow/756896.cms
http://economictimes.indiatimes.com/articleshow/705603.cms
http://economictimes.indiatimes.com/articleshow/758829.cms
http://economictimes.indiatimes.com/articleshow/665732.cms
http://economictimes.indiatimes.com/articleshow/653580.cms
http://economictimes.indiatimes.com/articleshow/648475.cms
http://economictimes.indiatimes.com/articleshow/628507.cms
http://economictimes.indiatimes.com/articleshow/575888.cms
http://economictimes.indiatimes.com/articleshow/553014.cms

http://202.87.40.171/comp/CompanyIndex.asp
http://202.87.40.171/comp/ChairSpeech.asp
http://202.87.40.171/comp/News.asp
http://syndication.indiatimes.com/articleshow.cms?msid=19996485
http://www.valuenotes.com/krc/apr2001.asp?ArtCd=27039
http://www.mouthshut.com/readreview/31405-1.html
http://tss.indiatimes.com/sampet-mkting.htm
http://economictimes.indiatimes.com/cms.dll/articleshow?msid=185104
http://www.hindu.com/2003/10/30/stories/2003103001791603.htm
http://www.bcg.com/publications/publication_view.jsp?pubID=451&language=English

98
APPENDIX
AND
ANNEXURES

THE CONSUMER QUESTIONNAIRE:

Name:
Age:
Address:
Monthly Income/Expenses Groups:
o Up to Rs 5,000
o Above Rs 5,000 to Rs 10,000
o Above Rs 10,000 to Rs 15,000
o Above Rs 15,000 to Rs 20,000
o Above Rs 20,000

99
1 What brand do you associate with shaving razors/cartridges ?
_______________________________________________
1. From where is the razor/blade/cartridge generally purchased?
 Departmental store
 Chemist
 Grocery
 Gift Shops
 Locality store
 Other: _____________

2. Which razor do you use?


 Disposable
 Double Edged
 Twin Blade
 Triple Edged

( QUESTIONS IF RESPONDENT IS A DOUBLE EDGE


USER )

1 How often do you shave?


 Daily
 Every alternate day
 Once in 3- 4 days
 Once a week
 Fortnightly

2 Which blade do you use?


 Laser
 Topaz
 Supermax
 7’o clock
 Wilkinson

3) Reasons for your choice-


a) ( try and gauge natural response without giving options i.e.
impromptu )
_________________________________________________
b) (give attributes and ask them to rank their preference in case
respondent opts for more than one choice)
 dad or peer has been using it
 convenience of use
 quality of shave
 use of less shaving cream and/or water

100
 price

4) Have you faced any problems while using a Double edged razor?
 Problem of cuts
 Time consuming
 Maintenance and handling

5) Have you ever tried a twin blade razor?


If yes, why did you switch back to double-
edge________________________
if no, reason for not trying
______________________________________

( QUESTIONS FOR TWIN/TRIPLE/DISPOSABLE RAZOR USER )

1. How often do you shave?


 Daily
 Every alternate day
 Once every 3-4 days
 Once a week
 Fortnightly

2. Reasons for your choice-

a) ( try and gauge natural response without giving options i.e.


impromptu )
________________________________________________
b) (give attributes and ask them to rank their preference in case
respondent opts for more than one choice)

 dad or peer has been using it


 convenience of use
 quality of shave
 use of less shaving cream and/or water
 price

3) Problems faced if any in twin edged?


 Cuts
 time consuming
 maintenance and handling
 clogging of hair
 hard shave

101
4) Have you ever used a double edged razor?
If yes, reasons for shifting to twin edged
________________________________________________________________
___

5) Which razor /cartridge do you use?


Razor : Gillette / 7 o clock / Wilkinson / Wilman / Gallant
Cartridge: Gillette / 7 o clock / Wilkinson / Wilman / Gallant

6) If Gillette then which?


 Presto
 7oclock
 Vector
 Sensor Excel
 Mach3
 Mach3 turbo

(For respondents who have never used Gillette or have moved


away from it after using it)

1) Have you ever used a Gillette razor?


Yes- Why did you switch over to ____________________________
no---reasons? ____________________________________
a) unaware
b) associate it as a product of upper segment
c) problem in availability
d) price (if yes-are you aware that Gillette imports razors- if no
then ask—does this knowledge change your perception?)

3) Which of the following attributes do you associate with Gillette; how do


you rate them

PARAMETRES strongly agree agree disagree strongly disagree


Value for money
Technology
Safety
Quality of shave
Sense of pride

3) Do you recall any ad of Gillette?


If yes, What do you like in the ad? _________________________________

102
What do you think was the intended message?________________________
Suggest a possible brand ambassador for Gillette.______________________

4) Is your buying behaviour affected when Gillette comes out with promotional
schemes .
(price discounts, one cartridge free with 4,etc)
 Yes
 No
 Maybe

5) Did you know that 7’o clock and Wilkinson sword are actually Gillette
products?

103
THE RETAILER QUESTIONNAIRE:

1. Name :

2. Address:

3. What are the different shaving products you deal in?


__________________________________________________________________
______
___________________________________________________________________
___

4. Which all Gillette products do you deal in?

 Razors
 Shaving Gel / foam
 After Shave Gel
 After shave lotion
 Cartridges
 Deodorant

5. Which Gillette razors and cartridges do you deal in?

RAZORS CARTRIDGES MARGINS


Presto
Vector Plus
Sensor Excel
Mach 3
Mach 3 Turbo

6. What is the form of purchase?


 Cash
 Credit
 Both Combined
 Any other ____________

104
7. Please give details of retailers you supply to

Location Number

8. What is the basis of delivery?


 Fixed / pre determined
If yes, please specify
o Weekly
o Fortnightly
o Monthly
 As and when the retailer orders

9. From where do they obtain the stocks?


 Directly from the company
 C&F agents
 Others

10. Any problems faced in purchasing of stocks? Were they properly handled?
__________________________________________________________________
___________________________________________________________________
___________

11. What is the form of sale?


 Cash
 Credit
 Both combined
 Others

12. If the form is credit, then is there any scope for sales returns?
___________________________________________________________________
___________________________________________________________________
__________

13. Is there provision for online booking?

105
 Yes
 No

14. Is there any provision for Vendor feedback?


 Yes
 No

15. What are the competitive / other brands that you deal in?

RAZOR CARTRIDGES MARGIN ON RAZORS

16. How would you compare Gillette with others on the following parameters :

GILLETTE OTHERS
Margin on razor
Schemes to dealers
Delivery system
Convenience
Dealing with co./agents
Payment systems
Handling of stocks
Handling/solving
problems/queries
Efficiency-online booking

106
COMPANY CHECKLISTS

• Reasons for hike in price of Presto from Rs 7.5 to Rs 12 to Rs


15.

• Gillette ad strategy and why the company continues to


pursue it despite poor ad recall.

• Reasons for advertising only at the time of new product


launches and price cuts and not on a regular basis otherwise

• Reasons for not projecting Wilman and Wilkinson as


products from the Gillette stable despite acquisition of ISPL

• Cost to company of a Gillette wall

• Payment made to retailer for putting a Gillette wall in his


outlet.

• Reasons for not playing upon the fact (in ads) that all Gillette
shaving razors (except Presto) are imported and not locally
manufactured.

107
COMPANY CONTACTS AND OTHER SOURCES

108
Inbox : Read Mail [ Back to Inbox ]
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109
"akshay berry" <akshay_berry@rediffmail.com>

To: rishi.dhingra@gillette.com

cc:
Subject: Marketing Project on Gillette shaving range

30 Aug 2004 13:22

Dear Sir

We are students of Delhi School of Economics ( Master in International


Business ) and are doing a marketing project on Gillette's range of shaving
razors.

The thrust of the project is to try and upgrade double edge users (who
comprise 90% of the market) to twin blade systems and also to upgrade
existing Gillette users up the value chain.

We also intend to do some surveys at the level of the consumer and retailer
and would be glad to provide data or any other information collected, if
required by you.

Request you to kindly give us an appointment / direct us to the concerned


person who could guide us/provide some data in this regard.

We would be highly obliged and would not take too much of your valuable
time.

Our group comprises of 5 students C V R Shekhar, Deepika Mittal, Anshul


Sood, Ivan Passanah and myself.

Thanks & Regards


Akshay Berry
MIB 1st Semester

Original Message --

From: Rishi Dhingra <Rishi_Dhingra@gillette.com>


To: "akshay berry" <akshay_berry@rediffmail.com>, “shekhar”
shekharcvr@yahoo.com , “deepika” deepikamittal19@yahoo.co.in ,“anshul”

110
anshulsood@hotmail.com , “ivan” ivan83@rediffmail.com
Cc: Himava Nath <Himava_Nath@gillette.com>
Subject: Re: Marketing Project on Gillette shaving range

Forwarded Message [ Save to my Yahoo! Briefcase | Download File ]


Subject: Re: Marketing Project on Gillette shaving range

"akshay berry" akshay_berry@rediffmail.com, , “shekhar” shekharcvr@yahoo.com , “deepika”


deepikamittal19@yahoo.co.in ,
To:
“anshul” anshulsood@hotmail.com , “ivan” ivan83@rediffmail.com

CC: "Himava Nath" <Himava_Nath@gillette.com>

From: "Rishi Dhingra" <Rishi_Dhingra@gillette.com>

Plain Text Attachment [ Download File | Save to my Yahoo! Briefcase ]

Dear Akshay, Shekhar, Deepika, Anshul and Ivan

You could get in touch with Himava Nath at the Gillette India
office
and he
could potentially share with you whatever is "non confidential"
stuff.

Regards,

Rishi Dhingra,
Business Manager, Grooming
AMEE Group
Tel : 44(00)20 8847 7258
Fax: 44(00)20 8847 8800
email: rishi_dhingra@gillette.com

111
-- Original Message --

From: Valerie_Ducasse@gillette.com
To: akshay_berry@rediffmail.com
Subject: Re: 4311623A

Forwarded Message [ Save to my Yahoo! Briefcase | Download File ]


From: Valerie_Ducasse@gillette.com

To: akshay_berry@rediffmail.com

Subject: Re: 4311623A

Plain Text Attachment [ Download File | Save to my Yahoo! Briefcase ]

September 14, 2004

Mr Berry,

Thanks for visiting our website! We have forwarded your email to


the
Gillette office in your country. You should receive a local
response
within 15 business days. If you do not get a reply, please let me
know.
Thanks again for visiting our site and for your comments!

Valerie D.
Consumer Service Associate
4311623A

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