''& Razor Sharp

Edge Over !ts Competition

Overview
Background info on Cillette
Problems/Solutions company faced
Current info/issues
Background !nformation
Founded in 1301
Flagship product-safety razor
Company's strengths:
Focus on scientific knowledge/studies
!nnovative products
Largescale manufacturing capability
Useful products sold at fair price
Sales in 2000: $3.3 billion
Clobal Company
Strategy: To manage its business with
a longterm, global perspective"
Over 1 billion people interact with a
Cillette product every day
anufacturing operations located in 23
countries
Distribution in 200+ countries
40,000+ employees
anufacturing Locations
United States:
Andover, A
Chicago, !L
Cleveland, TN
!owa City, !A
La Crange, CA
Lancaster, SC
Lexington, NC
South Boston, A
European Locations
anufacturing Sites:
Belgium
Czech Republic
France
Cermany
!reland
Poland
Russia
Spain
England
R S D Facilities:
Cermany, Spain, England
ision Statement
To build TOTAL BRAND ALUE by innovating
to deliver consumer value and customer
leadership faster, better, and more
completely than our competition."
Fundamental Principles:
Organizational Excellence
Superior performance at every level
Core alues
Achievement, !ntegrity, Collaboration
Products Overview:
Worldwide leader in 12 major consumer
product categories
Focus on continual development of new
products
Currently introduces 20+ new products
per year
Three Core Businesses
Cillette is the undisputed global leader in:
Crooming
Portable Power
Oral Care
Crooming Products
World leader in male
and female grooming
products
Blades, razors
Wet, dry
700 million consumers
use Cillette razor blades
Shaving preparations
and aftershaves
Portable Power
Duracellmost popular
brand of alkaline
batteries in the world
Offers strategic power
consulting services to
leading electronic
device manufacturers
Oral Care
Company's fastest
growing business
OralB brand holds
#1 position globally
in manual and
power toothbrushes
Facts
3 core businesses provide:
80 sales
30 profits
These core brands are the strength of Cillette Co.
Cillette ach3
Cillette for Women enus
Right Cuard
Duracell CopperTop
OralB
Braun OralB
Braun
Problem Background
1380s: Consumers chose inexpensive
disposable razors
Cillette helped to foster trend:
Focus on price, not quality
Results:
Disposable razor market inc. by 60
Loss of quality image, loss of profits
*Cillette taught consumers the best razor was the
cheapest one!
Use of arketing Research
Focus groups and surveys revealed:
Cillette must reform its approach by:
Emphasizing quality and brand equity
Discontinuing use of disposable razor ads
Developing new products
Results of R
!nc. investments in research and
development
Sensor, Sensor Excel, ach !!!, enus
Direct mail campaigns-free razors
Catchphrase: The best a man can get."
Able to reverse the trend-SUCCESS!
Role of arketing Research
Told Cillette that it could change its
former price approach to the market by
emphasizing quality and brand equity as
well as introducing new products.
anagement Decision Problem
What should Cillette do to change the
trend of our 109.:ing 8ity in the
market?
What should Cillette do to increase
consumer's opinions of our b9.n1
im.g?
arketing Research Problem
To determine the consumer's opinions
regarding the quality of products over
their prices.
To determine the impact of Cillette's
competition on its sales.
To determine the wants and needs of
consumers using Cillette's various
shaving products.
Research Question and
Hypotheses
Are consumers more price conscious or brand
loyal?
H1: Price is most important to consumers.
H2: Price is not most important to consumers.
H3: Brand loyalty is most important to
consumers.
H4: Brand loyalty is not most important to
consumers.
Current !ssues facing Cillette
Razor Wars
Feb. 24, 2003
Cillette, Bic, Schick
Launch new razors in men and women's
disposable lines
Ex. Schick razordispenses shave gel for women
Ex. CillettePink Passion enus
arketing efforts total $120 million combined
Ad campaigns launched this month
Note
!ncreased attention for disposable
razors again-R!SK
Caution: resulted in loss of market
share in the 1380s for Cillette
Cillette arketing Spending
]an. 30, 2003
24 increase in ad spending (fourth
quarter)
2002: Clobal ad spending rose 12
$6S0 million
New Challenges
]an. 30, 2003
Battery rival Energizer to acquire Schick
brand of razors
Energizer to invest $330 million
Result: Aggressive marketing wars?
Renegade Web Site
Freerazor.com via mass emails offers free Cillette
ach3 Turbo and enus razors
Also automatically enrolls customers to receive 8
replacement blades every two months (isleading)
Uses photos of Cillette products and copy similar to
Cillette's ads
Cillette uncertain of legal implications (all terms
spelled out)
Feb. 11, 2003
Duracell
]an. 13, 2003
Cut price of AA and AAA batteries by
13
Prompted to reduce price gap with
competitors
Energizer, Rayovac
Concerned with competitor's
heavy promotional activity
Ethics
April 14, 2003
Cillette exec (Cino Deluca) arrested on 1S counts of
mail and wire fraud and 1 count of money laundering
pleaded not guilty
Scheme: demanded kickbacks from S promotional
and marketing vendors
Allegedly received $600,000 in kickbacks
$260,000 Arizona condo, $32,000 home addition, vacations
and cruises, $22S,000 wired to a Swiss bank account
Ordered his staff to select certain vendors despite
their quality problems
Questions and Answers
The End