The Gillette® Fusion® ProGlide™ Power Razor is Gillette’s most advanced blade ever. Thinner, finer blades* with a low-resistance coating glide effortlessly through hair for less tug and pull, providing incredible comfort, even if you shave every day.

Try Gillette Fusion ProGlide today; after one shave, you’ll stop shaving and start gliding

Company profile

Gillette India Limited (GIL) is one of India's well-known FMCG Companies that has in its portfolio GILLETTE MACH 3 TURBO, ORAL-B and DURACELL - world's leading brands and has carved a reputation for delivering high quality, value-added products to meet the needs of consumers.

COMPANY HISTORY:

Incorporated in the year 1985 as Indian Shaving Products Limited, now Gillette India Limited, its products speak for themselves. The company is always been known for the strength of its brands, and always continues to penetrate deeper into the hearts of Indian Consumers.

In the year 1990-91, the company launched two products, first was 7 0'Clock EJTEK PII Shaving System and second was shaving cream with three variants. This was the First time that a shaving cream was introduced in Indian markets with special features.

In the Year 1991-92, the company launched new technology Gillette products.

In the year 1992-93, the company launched the first advanced shaving product under the Gillette brand name Gillette Presto ready shaver all over India. The company earned distinction of being included for the first time in the top 100 companies in India, in terms of Market capitalization as published in Business today.

In the year 1993-94, with the launch of Gillette Presto Ready shaver in February 1993, the company commenced the launch of Gillette Shaving Products in India.

In the year 1995-96, launch of 7 0'Clock Ready II ready shave and relaunch of shave cream in two variants, further strengthened the Brand name. During the year the company also launched under a distribution arrangement tooth brushes under a well known international brand name Oral-B, which met good success.

In the year 1996-97, the company launched the latest state-of-the-art Gillette Sensor Excel shaving systems which met excellent consumer response. With the launch of these various products, the portfolio of Gillette branded products has increased significantly.

In the year 1997, the company launched World renounced Gillette Sensor Excel for Women shaving system, which met great response. It also launched Gillette Shave foam which was met with good consumer response.

In the year 1998, the company successfully launched the Gillette Series range comprising Shave gel, Shave Foam, After Shave Splashes, Conditioners and Deodorants, thereby making it the premier male grooming company

In the year 1999, the company introduced Gillette Series shave gel tube and Gillette Sensor Excel single cartridge pack. Also successfully launched Cool wave and Wild Rain range of personal grooming products under the Gillette series line. In the First month of new Millennium, the company launched Gillette Mach 3.

In the year 2000, the company launched successfully Gillette Sensor Excel for women grooming category, and also launched Pacific Light. It also launched Geep Laserlite, a Sport flashlight. Company successfully consolidated Duracell and Wilkinson business to leverage distribution strengths with mega displays and sales promotion.

In the year 2001, the company launched the Gillette Series Arctic Ice Line of products during the first half and undertook a series of very successful consumer promotions across product lines. It also launched the Gillette Series Satin Care for Women Wild Berry Line, the Cool Blue Mach 3 and Gillette Centennial Packs during the course of the year. Gillette India was ranked amongst the Top Ten Best Employers of India in Best Employers of India conducted by Hewitt Associates and Business Today magazine.

In the year 2002, this was the year of turnaround for the company. In the first Quarter of 2003 unveiled a whole new range of premium displays and POS of Duracell to establish leadership in Alkaline batteries segment. The company made history by bringing the FIFA World Cup Champions Trophy to India for the first time.

In the year 2003, Company successfully relaunched Gillette Foam in 4 Variants .Duracell also launched its Ultra M 3 AA batteries, which was well received by consumers. Oral Care launched Power Oral Care brushes, which were well received in the market. Towards the End of 2003, Company launched Gillette Vector Plus.

In the year 2004, the Company launched Storm Force, a revolutionary after shave splash and New Ultra Comfort Shaving Gel .In the fourth Quarter, Company launched two new Gillette Series Tube Shave Gel variants, namely for Sensitive skin and Moisturizing, to suit different skin types.

In the year 2005, Company launched ?New Improved Gillette Vector Plus featuring all new contemporary look. The Gillette Company, USA was acquired worldwide through merger in October, 2005 by Procter& Gamble Company, USA creating the largest Consumer products Company in the World.

In the year 2006-2007, Company launched Gillette Presto Plus for more discerning consumers. Oral B brand launched Oral B Vision and Kid in Premium Market Segment.

In the year 2007-2008, Company launched The Gillette Winners program that had sports legends Roger Federer, Thierry Henry and Tiger Woods and Rahul Dravid. An innovative program "Free Dental Check up" was organized to enable consumers to benefit from expertise of professional dentists at no cost. Oral-B brand launched a new variant "Shiny Clean" targeted at the value segment.

Brands

Adds

Corporate social responsibility

P&G launches SHIKSHA'08

You can now help educate more Underprivileged children via simple brand choices.P&G committs Rs. 1 crore. to its partner CRY, which will be allocated to projects focused on enabling the child's right to education. Project Shiksha is part of P&G's global philanthropy program P&G Live, Learn and Thrive that focuses on the development of children in need across the globe, with Education of Children via Shiksha being the priority in India. Till Date, Shiksha has set 67,000 children across 435 communities on the path to the right to education with a donation of over Rs.4 crore.

Hyderabad, Andhra Pradesh, April 14, 2008 /India PRwire/ -- ‘P&G announces Shiksha’ school

eduction program of underprivileged children in India. After helping lead over 67,000 children on

the path of education over the last 4 years, Procter & Gamble in partnership with Child Rights

and You is back again with SHIKSHA 2008.

India has the world’s largest number of children out of school. Every child in India has the right

to free, quality education, but still approximately one out of every two children, (close to 200

million) do not go to school. Even as the economy continues to grow at a fast pace, statistics

indicate that there are many challenges like poverty that will need to be taken in stride if this

growth is to be sustained. In an attempt to make a difference is when Procter & Gamble in

partnership with Child Rights and You, launched Shiksha, a National Consumer Movement now

running in its 4th year.

Shiksha, P&G’s Corporate Social Responsibility Program makes it easy for all consumers to

help educate underprivileged children by simply buying any of P&G’s large packs of Tide, Ariel,

Pantene, Olay, H&S, Rejoice, Vicks VapoRub, Whisper, Gillette Mach 3 Turbo, Gillette Series,

Oral B, Duracell or Pampers in the months of April, May & June ‘08. With a motto of ‘Padhega

India, Badhega India’ Shiksha believes that the secret to a Brighter India lies in the quality

education of our children. In this endeavour with us to bring Shiksha to life is key NGO partner

CRY.

Project Shiksha is a national consumer program that allows consumers to participate in a

national effort to support the education of underprivileged children in India via simple brand

choices. However, Irrespective of sales, P&G has committed a minimum of Rs. 1 cr. to its

partner CRY, which will be allocated to projects focused on enabling the child’s right to

education.

Project Shiksha is part of P&G’s global philanthropy program P&G Live, Learn and Thrive that

focuses on the development of children in need across the globe, with Education of Children via

Shiksha being the priority in India. Till Date, Shiksha has set 67,000 children across 435

communities on the path to the right to education with a donation of over Rs.4 crore. With the

help of CRY, the Shiksha projects include ones that work with the State Education Departments

to re-look at existing education policies; create awareness to build more schools with better

infrastructure and basic amenities like water, electricity, health; enroll more children into formal

schools and promotion of retention in schools; and build all-round development of children.

Informing about Shiksha, Shantanu Khosla, Managing Director, P&G India said, "As the

economy grows at 8-10% levels, we need to ensure that we lay down a strong foundation for

this growth to continue by investing in our future generation. In that context, education becomes

a fundamental issue that needs to be addressed. P&G globally is committed to the cause of

development of children in need via its corporate cause P&G Live, Learn, Thrive and Shiksha is

our response to the situation in India. Shiksha is unique because it empowers the consumer to

make a difference simply by choosing to buy quality products from P&G. Shiksha is not just an

initiative of one corporate and an NGO but a passion we as an organization strongly believe in.

‘Padhega India’ Tabhi tho ‘Badhega India’."

Irwin Fernandes, Director Western Region, Child Rights and You said, "The financial support

P&G, its media partners and consumers provide to CRY’s work is invaluable. Even more critical,

however, is the awareness of child rights that Shiksha helps create and the avenues it provides

for each of us to bring about change with social justice. India will only achieve her true potential,

when we make child rights our topmost national priority. To do this we have to go beyond

schemes and programs to address the real obstacles to growth – caste, class, gender and

governance. P&G’s choice to go beyond tokenism, to partner CRY and take the challenging

route is truly inspiring. I urge every Indian citizen to stand up for child rights.

Shiksha Supporter and Award Winning Actress Kajol said, "Shiksha, education, is one of the

most critical factors deciding the choices that life offers to a child. However, millions of children

in this country today are being deprived of this very important opportunity because quality

education is only possible when every child has adequate nutrition, proper healthcare, can live

in safe surroundings, is free to study, rest and play, and doesn’t have to work for a living. I

support project Shiksha in its endeavours to make a difference.

Shiksha Supporter and Veteran Actress Sharmila Tagore said, "I believe education plays a

fundamental role in shaping a citizen and leads the country to greater heights. In that sense,

education can be the foundation for an India we seek today where every child explores his or

her full potential and has the right to do so. Therefore, it is heartening to know that people like

you helped support the education of 67000 children last year. I urge people across India to

participate in Shiksha and make a tangible difference to the lives of the little ones."

Shiksha supported projects in 2006 – 2007. 1. JAAG (Mumbai, Ratnagiri, and Raigad,

Maharashtra), 2.Lokhit Samajik Vikas Sanstha (Osmanabad, Maharashta), 3. The Association

of People with Disability (Kolar, Karnataka), 4.Adhar (Bolangir, Orissa), 5.Mandra LC (Purulia,

WB), 6. Paridhi (Bihar), 7. Judav (Madhupur, Jharkhand), 8.Jan Shikshan Kendra (UP), 9. Jan

Mitra Nyas (Varanasi, UP), 10.Hanuman Van Vikas (Udaipur, Rajasthan), 11.Doaba Vikas

Evam Utthan Samiti (Kaushambi, U.P.

1. JAAG (Mumbai, Ratnagiri, and Raigad, Maharashtra), 2.Lokhit Samajik Vikas Sanstha

(Osmanabad, Maharashta), 3. The Association of People with Disability (Kolar, Karnataka),

4.Adhar (Bolangir, Orissa), 5.Mandra LC (Purulia, WB), 6. Paridhi (Bihar), 7. Judav (Madhupur,

Jharkhand), 8.Jan Shikshan Kendra (UP), 9. Jan Mitra Nyas (Varanasi, UP), 10.Hanuman Van

Vikas (Udaipur, Rajasthan), 11.Doaba Vikas Evam Utthan Samiti (Kaushambi, U.P)‘P&G

announces Shiksha’ school eduction program of underprivileged children in India. After helping

lead over 67,000 children on the path of education over the last 4 years, Procter & Gamble in

partnership with Child Rights and You is back again with SHIKSHA 2008

Gillette Children's Specialty Healthcare is an independent, not-for-profit hospital located in St. Paul, Minnesota, with clinics in Duluth, Burnsville, Maple Grove, Minnetonka, and services for adult patients at our St.Paul - Phalen Clinic. Gillette is internationally renowned for a level of pediatric expertise that distinguishes us from many health care organizations

Gillette Children's Specialty Healthcare

St. Paul Campus

o 183 - Administration Building

St. Paul - Phalen Clinic 

Brainerd Lakes Clinic

Burnsville Clinic

Duluth Clinic

Maple Grove Clinic

Minnetonka Clinic

Willmar Clinic

Gillette brands

Gillette is a brand of Procter & Gamble currently used for safety razors, among other personal care products. Based in Boston, Massachusetts, it is one of several brands originally owned by The Gillette Company, a leading global supplier of products under various brands, which was acquired by P&G in 2005. Their slogan is "The Best a Man Can Get". The original Gillette Company was founded by King Camp Gillette in 1895 as a safety razor manufacturer.

On October 1, 2005, Procter & Gamble finalized its purchase of The Gillette Company. As a result of this merger, the Gillette Company no longer exists. Its last day of market trading—symbol G on the New York Stock Exchange—was September 30, 2005. The merger created the world's largest personal care and household products company. In addition to Gillette, the company marketed under Braun, Duracell and Oral-B, among others, which have also been maintained by P&G.

The Gillette Company's assets were initially incorporated into a P&G unit known internally as "Global Gillette". In July 2007, Global Gillette was dissolved and incorporated into Procter & Gamble's other two main divisions, Procter & Gamble Beauty and Procter & Gamble Household Care. Gillette's brands and products were divided between the two accordingly.

Safety razors A safety razor is a razor that protects the skin from all but the very edge of the blade. These razors eliminate the possibility of serious injury, which makes them more forgiving than a straight razor.

History

Before the first safety razor

Before the invention of the first safety razor, most men used a straight razor. These razors are available from several different manufacturers; but they are not very popular, because they require more skill and attention to use properly

Invention

The first safety razor was invented in the late 18th century by a Frenchman, Jean-Jacques Perret, who was inspired by the joiner's plane. As an expert on the subject, he also wrote a book called Pogonotomy or the Art of Learning to Shave Oneself. In the late 1820s, a similar razor was made in Sheffield, England. From the 1870s, a single-edge blade, mounted on a hoe-shaped handle, was available in Britain and Germany. One of the rarest[citation needed] European razors was made by "Comfort"[1] and, while this was not a true safety razor, it remains a landmark in razor design.[citation needed] None of these razors is considered a true safety razor.

Described as a razor in which "a small blade is held in a suitable frame and provided with a guard to prevent the edge of the razor from cutting into the skin", the first American safety razor was patented in 1888 by the Kampfe Brothers.[2] The new razor featured a wire skin-guard along the razor’s edge. Only one edge of the blade is used to shave, and it must be removed often for sharpening.

World War I

During World War I, Gillette worked out a deal with the U.S. Armed Forces to provide Gillette safety razors and blades to every enlisted man or officer on his way to Europe as part of his standard-issue gear. By the end of the war, some 3.5 million razors and 32 million blades were put into military hands, thereby converting a substantial portion of young men to the Gillette safety razor.

Switch to stainless steel

Gillette TV advertisement from the 1950's showing a man shaving.

Gillette manufactured carbon steel blades until the 1960s. These rusted quickly and required the user to change blades frequently. In 1965, the British company Wilkinson Sword began to sell blades made of stainless steel, which did not rust and could be used repeatedly until blunt. Wilkinson quickly captured the British and European markets, and Gillette was forced to switch its production lines to stainless steel to compete. Today, almost all razor blades are stainless steel. The carbon-steel blade remains available; its modern version does not rust if it is rinsed in alcohol after each shave. Because Gillette held the patent for the stainless blades but had not acted on it, the company was accused of exploiting customers by forcing them to buy the rust-prone blade.[3]

Single-edge razors

A less common variety of the safety razor is the single-edge razor. This razor is so named because the blades have a single edge rather than double edges. These razors, although not in use as much as they were in the 20th century, are still available worldwide. The most common of the single-edge razors were made by the American Safety Razor Company under the name Ever-Ready using its "'Radio' Blades"; the company also produced a shaving brush, which it called "The Honest Brush". Another was the Gem Safety Razor Company under the name "Gem Damaskeene Razor". It is possible to use common hardware-store blades for shaving, although most shavers use blades that are made specifically for shaving.

Modern safety razors

Double-edged safety razors

A traditional double-edged razor blade, with its typical recognizable shape

Until the early 1970s, most safety razors were manufactured to accept a single, disposable razor blade. These blades were manufactured with either one or two sharpened edges, depending upon the design of the razor. This style of razor is made by a number of companies such as Merkur, Treet, Weishi, and Parker. The blades are still being made today in a wide variety of countries including the USA, Israel, Russia, Korea, Japan, and Egypt. Some of the brand names include Merkur, Feather, Racer, Bigben, Lord, Treet and Bic.

Availability today

The 1961 Gillette Adjustable razor (commonly called the "Fatboy")

Single blade razors new and old are actively traded through auction sites and some shavers prefer them. Single-blade safety razors come in a variety of configurations including the classic sandwich type, adjustable, and the Twist to Open (TTO) model. The sandwich type has a head that may be unscrewed from the body of the razor and disassembled for inserting a new blade. Adjustables may also be sandwich type, but typically have a ring below the head of the razor that may be adjusted to allow for greater or lesser blade exposure, which affects the level of aggressiveness of the shave. TTO razors require the user to twist a knob at the bottom to open butterfly doors where the blade is. Two popular TTO razors are the Gillette Super Speed and Schick Krona. Safety razor blades are available from a variety of makers throughout the globe including the American Safety Razor Company (ASRCO), Merkur, Derby, Feather, Bic, Dorco, Treet, Croma, Lord, and Gillette.

Cartridges introduced

An innovation was the replaceable blade cartridge containing the blade which reduced the risk of the user receiving a cut from the unprotected blades used up until then. These took the form of a cartridge, with the blade fixed within a plastic enclosure of the type still in use today. In 1965 Gillette introduced the Techmatic razor which utilized a cartridge with a steel strip that could be wound forward to expose a fresh section of new blade.

Twin blades

Circa 1971, Gillette introduced the Trac II, designed by Francis Dorion, which was the first mass-produced multi-blade razor available in the United States. Rather than accepting standard razor blades, this razor was fitted with a proprietary disposable blade cartridge containing two separate blades. The claim is that research shows that twin blades give a closer shave than single, because of hysteresis — the first blade tends to pull the hair, and the hair is unable to retract into the skin before the second blade cuts it, resulting in a closer shave. Whether, or the degree to which this works, is debatable.[4]

By controlling patents on the Trac II razor, Gillette was able to assure repeat sales of its multi-blade cartridges for use in its razor. This was a natural extension of the razor-and-blades sales philosophy. Gillette was able to sell these cartridges at a higher price than the single blades, leading to higher profits. Competitors Schick and ASRCO were quick to follow this change, introducing their own multi-blade razors.

Gillette subsequently introduced the Atra twin-blade razors (known as Contour in many parts of the world), which featured a pivoting razor head that the company claimed would more closely follow the shape of the face. The Trac II Plus and Atra Plus blades introduced later incorporated a "lubricating strip".

Gillette followed the Atra system with the Sensor system, which featured twin blades that were individually spring-loaded to adjust to the contours of the face. The Sensor system was later modified as the SensorExcel system.

Disposable razor

The next innovation came with the introduction of the Bic disposable razor in 1974. Instead of being a razor with a disposable blade, the entire razor was manufactured to be disposable. Gillette's response was the Good News disposable razor which was launched on the US market in 1976 before the Bic disposable was made available on that market.[5] Shortly thereafter, Gillette modified the Good News construction to add an aloe strip above the razor, resulting in the Good News Plus. The purported benefit of the aloe strip is to ease any discomfort felt on the face while shaving. Plastic disposable razors and razors with replaceable disposable blade attachments, often with two or three cutting edges (but sometimes with four and as of recently, five cutting edges), are in common use today.

3- and 4-blade cartridges introduced

Gillette introduced the first triple-blade cartridge razor, the Mach3, in 1998, and later upgraded the Sensor system by adding a third blade to create Sensor3. This escalated the "arms race" with rival Schick/Wilkinson Sword. The marketing competition for blades in a cartridge has been parodied since the 1970s. The debut episode of Saturday Night Live in 1975 included a parody advertisement for the Triple Trac Razor, shortly after the first two-blade cartridge for men's razors was advertised. In 2004, a satirical article in The Onion entitled "Fuck Everything, We're Doing Five Blades" predicted the release of five-blade cartridges,[6] two years before their commercial introduction.[7]

Schick/Wilkinson responded to the Mach3 with the Quattro, the first four-blade cartridge razor. These innovations are marketed with the message that they help consumers achieve the best shave as easily as possible. Another impetus for the sale of multiple-blade cartridges is that they have high profit margins.[8] With manufacturers frequently updating their shaving systems, consumers can become locked into buying their proprietary cartridges, for as long as the manufacturer continues to make them. Subsequent to introducing the higher-priced Mach3 in 1998, Gillette's blade sales realized a 50% increase, and profits increased in an otherwise mature market.[8]

Recent developments

Gillette Fusion razor cartridge.

The latest razor introduced by Gillette is the Gillette Fusion brand shaving system, which utilizes a five-blade cartridge razor with an additional single blade for trimming. An entire line of shaving products were introduced as part of the Fusion brand system.

Gillette has also produced powered variants of the Mach3 (M3Power, M3Power Nitro) and Fusion (Fusion Power and Fusion Power Phantom) razors. These razors accept a single AAA battery which is used to produce vibration in the razor. This action, as advertised by Gillette, was intended to raise hair up and away from the skin prior to being cut. These claims were ruled in court as "unsubstantiated and inaccurate."[9] Schick also offers a powered version of their Quattro product called the Schick Quattro Power.

In 2008 British company King of Shaves launched in the United Kingdom the 4-blade Azor, a so-called "hybrid synergy system razor" that they claimed to shave as close as rival products. The Azor uses a much simpler two-shot construction method than other system safety razors and the handle is made in the UK. The Azor has a flexible hinge instead of a pivoting head used by other razors. King of Shaves claimed that the number of blades is not strictly important, it is the sharpness and cleanliness of the blades that is important to getting a close shave. The Azor has now been launched in the USA at Duane Reade.

As of January 2011, the Dutch supermarket chain Albert Heijn sells, under its store brand, six-blades razor cartridges.

Difference between men's and women's razors

Woman's razor with disposable blades

Razors are generally marketed in men's and women's versions; the exact difference between the two varies from color only for most disposable razors to completely different design principles. By and large, men's and women's razor blades and disposable razors are interchangeable; however, there is sometimes a difference in ergonomics; women's razors either have a longer handle for longer reach or a paddle-shaped handle to allow for a lengthwise grip. Specialized handle designs also exist, for shaving such areas as the underarms or the bikini line.

Newer products

Trac II was the world's first two-blade razor, debuting in 1971. Gillette claimed that the second blade cut the number of strokes required and reduced facial irritation.

o Trac II Plus is an identical model but adds a lubricating strip at the top of the blade. The blades and handles are interchangeable.

The European versions of the Trac II and Trac II Plus are known as the GII and GII Plus respectively.

Atra (known as the Contour, "Slalom" in some markets) was introduced in 1977 and was the first razor to feature a pivoting head, which Gillette claimed made it easier for men to shave their necks.

o Atra Plus featured a lubricating strip, dubbed Lubra-Soft.

Gillette Sensor debuted in 1990, and was the first razor to have spring-loaded blades. Gillette claimed that the blades receded into the cartridge head, when they make contact with skin, helping to prevent cuts and allowing for a closer shave. The **Sensor for Women was released around the same time and is nearly identical, but has a wider cartridge head.

o Sensor Excel was released in 1995. This featured "Microfins," a piece of rubber with slits at the bottom of the cartridge and Gillette claimed this helped to raise facial hairs, making for a closer shave.

Sensor 3, has three blades instead of two. All Sensor handles can use all Sensor cartridges. The Sensor range remains in production Good News! was the first disposable, double-blade razor, released in 1976. The Good News! came in three forms: the "original", the "Good News! Plus", which included a lubricating strip, and the "Good News! Pivot Plus", which featured a lubricating strip as well as a pivoting head.

Blue II is a line of disposable razors. In Latin America, it is marketed as the Prestobarba.

Blue 3 is a line of three-blade razor, cheaper version of Sensor 3 (Sensor compatible). Available also in disposable variant.

Mach3 The first three-blade razor, introduced in 1998, which Gillette claims reduces irritation and requires fewer strokes. It claimed five improved microfins, improved spring blades, and a pivoting head with greater flexibility than previous Gillette products. It used a blue lubrication strip that faded as the razor was used to encourage users to change their blades more frequently. The Mach3 razor and blades are the best selling razor of all time.[

o Mach3 disposable. The above with a different plastic handle.o Mach3 Turbo had ten microfins as opposed to the five on the original, a new grip

and claims improved lubrication and "anti-friction" blades. All Mach3 blades are interchangeable between the three products in the range, so it is possible to use the Mach3 Turbo blades on a Mach3 razor.

Mach3 Turbo Champion has a slightly different handle design.o M3Power is a battery-powered version of the Mach3 Turbo razor which can also

be used with the power switched off. The blades differ from Mach3 Turbo in having what Gillette says is a new blade coating which it describes as "PowerGlide". The lubrication and microfins are identical to Mach3Turbo. The Mach 3 Power Nitro has a slightly different handle design.

Venus is a female version of the Mach 3. Mach 3 blades can attach to a Venus handle and vice versa.

o Venus Divine is a female version of the Mach3 Turbo.o Venus Vibrance is a female version of the M3Power. Venus blades are

interchangeable across the line.o Venus Embrace is a female version of the Fusion and is also marketed towards

cyclists.

o Venus Breeze is a three-blade razor with shave gel bars built into the head of the razor. Another version of the Breeze, the Venus Spa Breeze, is essentially the same as the Breeze, but with a white tea scent to the shave gel bars. [1]

o Venus ProSkin MoistureRich, launched in January 2011 in the United States, is an updated version of the Breeze, featuring MoistureRich shave gel bars that are enhanced with a triple blend of body butters. [2]

The Gillette Fusion Power

Gillette Fusion is a five-bladed razor released in 2006. The Fusion has five blades on the front, and a single sixth blade on the rear for precision trimming.

o Gillette Fusion Power is a motorized version of the Fusion. The Fusion Power is battery powered and emits "micropulses" that are claimed to increase razor glide.[3]

o Fusion Power Phantom The Fusion Power Phantom (Stealth in UK) were released in February 2007. It features a redesigned handle and a darker color scheme than the original.[4]

o Fusion Power Phenom was released in February 2008. It has a new blue and silver color scheme.[5]

o Fusion ProGlide was released on June 6, 2010 in North America. It claims to have re-engineered blades with edges that are thinner than Fusion. They are finished with low-resistance coating, which are claimed to allow the blades to glide more easily through hair. [6]

o Fusion Power Cool White

2

ACKNOWLEDGEMENTSThe following project “GILLETTE: BETTER VALUE,BETTER SHARE” and the customer survey weresuccessfully completed under the guidance of Prof S K Jain,Lecturer, Delhi School of Economics. His guidance andefforts were vital for the completion of the project for whichwe are thankful. The cooperation and support extended by theGillette management also merits special mention. We alsothank our friends for their valuable and insightful suggestions,comments and criticism. All the people who filled up thequestionnaire also deserve to be appreciated for their help,cooperation and sometimes patience.Thank you,

3

INDEXPage1) Objectives ……………………………………………………….. 52) Company Profile …………………………………………………. 63) Market Environment ………………………………………………..12a) Overviewb) Michael Porters Five Force Model4) Competition ………. …………………………………………………215) Analysis of Marketing Strategies ……………………………………24a) Brief Overviewb) Perceptual Mapc) Market Segmentationd) Target Marketse) Positioning6) Marketing Mix ………… ………………………………………………407) Product Strategy ………………………………………………………43a) Five Product Levelsb) Product Classificationc) Packaging and Labellingd) Product Innovation: R&D8) Pricing Strategy………………………………………………………….53a) The Nine Price Quality Strategiesb) Pricing Processc) Selecting the Pricing Objectived) Demand Analysise) Product Mix Pricingf) How Gillette prices its productsg) Gillette Price Chart9) Place Strategy …………………………………………………………59a) Distribution Network4b) Gillette Distribution Network10) Promotion Strategy ……………………………………………………63a) Gillette strategy11)Market Strategy ………………………………………………………68

a) The BCG Matrixb) The Gillette Razors BCG Matrix12)Consumer Analysis ……………………………………………………7413)Distribution Analysis …………………………………………………8114)Recommendations …………………………………………………….8215) BibliographyAppendix ……………………………………………………9116)Questionnaires17)Company Checklist ……………………………………………………9218)Company Contacts ……………………………………………………95“In the grooming business, the great majority of male Gilletteshavers in developing markets use double-edge blades. The firststep up the performance/price ladder for these consumers is toadvance to Gillette twin-blade shaving systems or disposablerazors. In more developed markets, the movement may be entirelywithin the systems category, as consumers’ trade up from twinbladeto triple-blade shaving.”-www.gillette.com5

OBJECTIVESTo study the shaving razors marketscenario in India.To suggest ways to convert double-edgeusers to Gillette twin-blade users vis-à-visPresto and Vector Plus.

To find ways to upgrade existing Gilletteusers up the value chain.6

COMPANYPROFILE“In the more than 100 years since the Company was founded, Gillettehas gained, held and strengthened leadership positions through theCompany's strategy of managing its business with a long-term, globalperspective.”COMPANY HISTORY:7King C Gillette established The Gillette Company (Gillette) in 1901 inBoston. In 1903, Gillette produced its first razor. A year later, it obtained a patenton the razor. Gillette showed its strong commitment to international expansion byestablishing a sales office in London and a manufacturing site in Paris, as early asin 1905.During the 1920s and 1930s, Gillette continued its efforts to expand market shareboth at home and abroad. It also expanded its product line, introducing theBrushless 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 razorsand 36 million blades to the US armed forces.During World War II in 1942, the War Production Board ordered Gillette todedicate its entire razor production and most of the blade production to the defenceforces. 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 andmore than 1.5 billion blades.In 1948, Gillette acquired Toni Company which supplied personal grooming kitsfor women. In 1950, Gillette began television advertising in a big way. Thecompany introduced a foamy shaving cream in 1953. Two years later, Gillettemoved into another new business, acquiring the Papermate Pen Company.In 1967, Gillette again diversified, acquiring Braun AG, a German manufacturer ofsmall electrical appliances.Gillette made an important move in 1984, when it acquired Oral B laboratories, aleading toothbrush manufacturer in the US. Gillette used its global reach to putOral B in markets where entry was difficult on its own.Gillette continued with its acquisition moves, buying Waterman, a leadingmanufacturer of premium writing instruments, based in France. By the mid 1980s,Gillette was operating five major businesses - blades and razors, toiletries andcosmetics, stationery products, Braun appliances and Oral-B dental products.In 1993, Gillette strengthened its position in the writing instruments business byacquiring the Parker Pen Company (Parker). In 1996, Gillette diversified yet again,acquiring Duracell International, the world's leading manufacturer of alkalinebatteries.In the late 1990s, Gillette’s profitability has been under pressure. Due to the Asiancurrency crisis, dollar profits in many overseas markets have shrunk considerably.The company’s heavy investment of around $1 billion in the triple blade Mach-38has also had its impact. During 1998 and 1999, Gillette missed most of itsquarterly sales and profit targets.Currently, Gillette consists of three operating groups: Global BusinessManagement, Commercial Operations (Western Hemisphere) and CommercialOperations (Eastern Hemisphere). The Global Business Management Group hasworldwide responsibility for R&D, manufacturing and strategic marketing of allproducts. 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 othercountries in the world.

GILLETTE IN ASIAIn 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. Inaddition, 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 andEgypt.

GILLETTE: THE INDIA CHAPTERGillette 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, itincreased its stake to 51%. The company has two arms in India, ISPL andWilkinson Sword, which it acquired in 1995. Gillette has set up a manufacturingfacility at Bhiwadi in Rajasthan. Recently, the company has indicated that it willincrease the capacity of its double edge blade unit to 700 million blades from thecurrent 340 million blades and disposable blades from 105 million to 140 million.Gillette's distribution network currently controls 2000 distributors and 400,000outlets all over IndiaThe company's decisions over the past one year — to divest its electric gadget andhome appliances business under the Braun brand name, and its low-end batterybusiness under Geep, are aimed at focusing better on its core business — shavingproducts. Female shaving products, in slow growth mode all these years, too havebeen put on the backburner.Year Event91984 Company Incorporated in Rajasthan ,jointly promoted by House ofPoddar Enterprises(HOPE) and Gillette , USA1986 Gillette takes over Sharpedge Ltd

1987 New twin blade shaving system called 7 O'Clock Ejtek P IIintroduced.1989 Diversification into shaving preparations and launching of premiumquality 7 O'Clock Ejtek shaving brush1990 Launch of two new products namely 7 O'Clock Ejtek P II shavingsystem with a metal spine and a shave cream in three variants1991 Sabre Pens Ltd., Sheen Dental Products Ltd., Klosershav ProductsLtd., and Vanity Cosmetic Ltd., are wholly owned subsidiaries of theCompany1993 Commence of launch of Gillette Shaving products in India with thelaunch of Gillette Presto Readyshaver1995 Launch of another Readyshaver under the Brand name of 7 O'ClockReady II. The Company also launched under a distributionarrangement tooth brushes under the well known international brandname Oral-B.1996 Launch of "Gillette Sensor & Sensor Excel" shaving systemsCompany introduces “Gillette Aerosol" shaving cream.1997 Indian Shaving Products Ltd (ISPL) and Duracell India Pvt Ltd aremerging their respective Ltd and marketing networks.Indian Shaving Products Ltd will be distributing the Duracell range ofbatteries through its own sales and distribution network1998 Company enters the ladies personal care segment with the launch ofthe Gillette Sensor Excel for women1999 Launch of Gillette "Mach-III", the three-blade razor2000 Company approves amalgamation of Duracell (India) Pvt. Ltd. andWilkinson Sword India Ltd. with the company2003 Gillette India awards its creative account to Ogilvy and Matherfollowing a global re-alignment of ad agenciesGillette identifies the double edged blade segment as its growthmarket driver.2004 Gillette India Ltd launches battery-powered toothbrush, 'Cross ActionPower'Gillette ropes in Beckham to promote its productsGillette India announces launch of new generation triple blade shaving10system Mach3Turbo

GILLETTE: MISSION AND VALUESOUR VISION:The Gillette Company’s Vision is to build Total Brand Value by innovating todeliver consumer value and customer leadership faster, better and more completelythan our competition. This Vision is supported by two fundamental principles thatprovide the foundation for all of our activities: Organizational Excellence and Core

Values.ORGANIZATIONAL EXCELLENCE:Attaining our Vision requires superior and continually improving performance inevery area and at every level of the organization.Our performance will be guided by a clear and concise strategic statement for eachbusiness unit and by an ongoing Quest for Excellence within all operational andstaff functions.This Quest for Excellence requires hiring, developing and retaining a diverseworkforce of the highest caliber. To support this Quest, each function employsmetrics 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:ACHIEVMENTWe are dedicated to the highest standards of achievement in all areas of ourbusiness. We strive to consistently exceed the expectations of both external andinternal customersINTEGRITYMutual respect and ethical behavior are the basis for our relationships withcolleagues, customers and the community. Fair practice is the hallmark of theCompany.COLLABORATION11We work closely together as one global team to improve the way we do businessevery day. We communicate openly and establish clear accountability for makingdecisions, identifying issues and solutions, and maximizing business opportunities.

GILLETTE: THE PRODUCT BASKETAlkaline Batteries DuracellBlades & Razors Gillette, Mach 3, Sensor, Atra, Trac, Custom plus,Good News, Agility.Oral Care Oral-BSmall appliances BraunStationery Products Parker, Paper Mate, Watermen, Liquid Paper, DrylineToiletries Gillette, Right Guard, Soft & Dri,Dry Idea, Satin Care12

MARKET13

ENVIRONMENTWhy Study Market Environment?Conceptually, all of marketing is based on the idea that you must thoroughly knowthe environment in which your business operates in order to successfully promoteand sell your product or service.You may have developed a unique business idea, but why do you believe your ideawill be successful? Is it based upon discussion of the idea or presentation of aprototype product or plan to friends and associates? If your business has beenoperating for a while, you've probably thought about branching out with new14product lines, side businesses, or additional locations. How can you be sure theodds are with you as you pursue new directions?Ultimately,Your idea must fulfill a need for your buyers andMust do so in a way that's somehow superior to the competition, howeveryou define it.If you want to be sure that your idea will do these two crucial things, you need toknow 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 companyfaces 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 restrictivetrade practices.Gillette entered India in 1984, with a 24 per cent stake in Indian Shaving ProductsLtd (ISPL), a company it promoted jointly with the local Poddar Group. Later, itincreased its stake to 51 per cent. The company has two arms in India, ISPL andWilkinson Sword, which it acquired in 1995. Gillette has set up a manufacturingfacility at Bhiwadi in Rajasthan. . Gillette's distribution network currently controls2000 distributors and 400,000 outlets all over India.

The Indian Blade Market:15The Indian blade market consists of four broad segments1) Flat blades2) Disposables3) Twin blades4) Triple blades.With this understanding of the basic classification of the Indian blade market, let usnow see the tools that help a company, in general, and also us in understanding theenvironment.

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

MICHAEL.E. PORTERS 5 FORCE MODEL1. Introduction:16The model of the Five Competitive Forces was developed by Michael E. Porter inhis book “Competitive Strategy: Techniques for Analyzing Industries andCompetitors” in 1980. Since that time it has become an important tool foranalyzing an organizations industry structure in strategic processes.Porter’s model is based on the insight that a corporate strategy should meet theopportunities and threats in the organizations external environment. Especially,

competitive strategy should base on and understanding of industry structures andthe way they change.Porter has identified five competitive forces that shape every industry and everymarket. These forces determine the intensity of competition and hence theprofitability and attractiveness of an industry. The objective of corporate strategyshould be to modify these competitive forces in a way that improves the position ofthe organization. Porter’s model supports analysis of the driving forces in anindustry. Based on the information derived from the Five Forces Analysis,management can decide how to influence or to exploit particular characteristics oftheir 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 suppliers17Bargaining Power of SuppliersThe term 'suppliers' comprises all sources for inputs that are needed in order toprovide goods or services.Supplier bargaining power is likely to be high when:The market is dominated by a few large suppliers rather than afragmented source of supply,There are no substitutes for the particular input,The suppliers customers are fragmented, so their bargaining power islow,The switching costs from one supplier to another are high,18There is the possibility of the supplier integrating forwards in order toobtain higher prices and margins. This threat is especially high whenThe buying industry has a higher profitability than the supplyingindustry, Forward integration provides economies of scale for the supplier,The buying industry hinders the supplying industry in theirdevelopment (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 reducestrategic options for the organization.THE GILLETTE CASE:It is indeed enjoying greater supplier power due to its sole presence in theorganized, premium technology shaving razors market in India. Also there are noclose substitutes to their razors. The only substitutes in terms of the product per seare in fact very poor on the technology and quality fronts. For example: there areseveral twin blade razors in the market but none would match the superiortechnology of a sensor excel, or the triple blade offering by Super-Max 3 is in nocomparison 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 canimpose pressure on margins and volumes.Customers bargaining power is likely to be high whenThey buy large volumes, there is a concentration of buyers,The supplying industry comprises a large number of small operatorsThe 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 notrelated tohigh costs19Customers 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 productThere 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, theybuy in small numbers, switching to an alternate product is not easy (as onecartridge does not fit another razor, and also because once an investment is madeon a premium Gillette razor, it is difficult for the consumer to leave it as such andmove on to another razor), and customers of Mach 3 razors (executive class whichcomprises a sufficient market) are not price sensitive. However, the only thing thecustomer 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 othercompanies to enter this industry. In such a situation, new entrants could changemajor determinants of the market environment (e.g. market shares, prices, customerloyalty) at any time. There is always a latent pressure for reaction and adjustmentfor existing players in this industry.The threat of new entries will depend on the extent to which there are barriers toentry. These are typicallyEconomies of scale (minimum size requirements for profitableoperations),High initial investments and fixed costs,Cost advantages of existing players due to experience curve effects ofoperation with fully depreciated assets,Brand loyalty of customersProtected intellectual property like patents, licenses etc,20Scarcity of important resources, e.g. qualified expert staffAccess 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-termservice contracts,High switching costs for customersLegislation and government actionTHE GILLETTE CASE:The Indian shaving razor market is completely dominated by Gillette. Any newentrants should very carefully launch themselves because they would be directlypitting against a monopolist kind of market giant. Also the barriers to entry are notmany except minimum size requirements for economies of scale, high initialinvestments and above all the retaliation by Gillette which could be anything.However, there is news that the American Safety Razor would be soon entering theIndian 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 ofbetter performance parameters for the same purpose. They could potentially attract

a significant proportion of market volume and hence reduce the potential salesvolume for existing players. This category also relates to complementary products.Similarly to the threat of new entrants, the treat of substitutes is determined byfactors likeBrand loyalty of customers,Close customer relationships,Switching costs for customers,The relative price for performance of substitutes,Current trends.21THE GILLETTE CASE:As of date there are no close substitutes to any of the Gillette razors. The only closesubstitute could be the American Safety Razor entering the Indian market soon. Butthen 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 whenThere are many players of about the same size,Players have similar strategiesThere is not much differentiation between players and theirproducts, hence, there is much price competitionLow market growth rates (growth of a particular company is possible onlyat the expense of a competitor),Barriers for exit are high (e.g. expensive and highly specializedequipment).THE GILLETTE CASE:There is virtually no competition in most of the segments except in the flat bladessegment, low income segment, traditional double edged users ( laggards), andtechnology-illiterates.22

THE COMPETITORSIn the flat blade segment, which is also the cheapest, Malhotra dominates themarket. 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 highrecall and is associated with quality, precision and technology. From time totime there have been rumours about the possibility of Gillette buyingout the Malhotras.Overall Blade Market – In Terms Of Value (Rs 600 crore)23Source: AC Nielson-ORG MARGSurveyAnother issue which Gillette has to immediately address is penetrating the hugebarbers' market, which consists predominantly of flat blades. Gillette's newlaunches in the flat blades segment, like Gillette Diamond and Gillette Platinumhave been priced four to five times higher than the offerings of competitorsGillette's experience in India indicates the type of challenges that the companyfaces 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 restrictivetrade practicesHowever in the twin and triple blade segment, Gillette has undoubtedly been amarket leader with effectively no competition at all, both in volume as well asvalue terms.

Twin Blade Market in India (Rs 168 crore)24Source: AC Nielson-ORG MARG Survey

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

ASRC eager to drive growth from IndianmarketNew Delhi: American Safety Razor Company (ASRC), the $240-million globalshaving products major, is betting on India as a key growth market for thecompany. With the company already having a significant presence in the NorthAmerican and WesternEuropean markets, it is now making inroads into the Asian one and has identifiedIndia as a focus market.However, ASRC will not follow the same distribution strategy as it does in theWestern markets. The company is a leading provider of in-store brands globally,2501020304050607080

GILLETTE OTHERS

supplying to retail majors such as Carrefour and Wal Mart. It also has its ownbrands, with the most popular one being Personna. In India, however, the companyhas inked a distribution tie-up with local firm, RP Electronics and rolled out bladesand 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 disposableincomes in the country rise, it expects more people to upgrade from double-edgedblades to disposable. Interestingly, the market for shaving products in India holdsmore potential than the Chinese one. The reason lies in the fact that theconsumption of blades per person in India is higher than in China, with Indianmales being more hirsute. Also, despite the market being captured by the dominantleader Gillette, ASRC is hopeful that its value for money proposition (good qualityand lesser prices) will help it connect with the Indian masses. Glide products arepriced from Rs 10 (for the disposable) to Rs 110 (for the systems).http://economictimes.indiatimes.com/articleshow/575888.cms

American Safety Razor to enter localmarkets

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 withthe Salora group. The Indian shaving products market, so far dominated by theHouse of Malhotras and Gillette, will see a third large player for the first timeThe $279m company has a large repertoire, but at the moment, it wants to focus ondisposables and shaving systems priced 15-25% cheaper than that of GilletteAt a later stage it also plans to bring in double edge razor blades with a “superiortechnology” to take on House of Malhotra that virtually controls that segment26

ANALYSINGMARKETINGSTRATEGIES27

A BRIEF OVERVIEW:DEFINITION:Market strategy is defined as an action plan for influencing customer choices andobtaining a market share. Market strategy should entice customers to buy theproduct or service. Market strategy encompasses customer perception of therelationship between price and quality.Market strategy also includes the distribution channels for the product, pricing andterms of sale, promotion and advertising plan, marketing budgets, inventoryselection and management, visual merchandising, customer relations and anevaluation 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 toolsor concepts in this regard developed by the marketing experts and followed byhundreds of companies the world over. The major tools of studying the marketingstrategies are:1) Perceptual Map2) The BCG MatrixNow let us see how a perceptual map is useful (the other two strategies areexplained at a later stage).

THE PERCEPTUAL MAP28Perceptual Mapping is a useful statistical technique that provides an overview ofhow customers perceive the different products in a market including each product'srelative strengths and weaknesses. A perceptual map summarizes the image ofseveral products on many different attributes in one graph, providing a very usefuloverview of customer's perceptions of the market.Whilst it has been criticized for oversimplifying what can be sometimes becomplex commercial problems, the two-dimensional Perceptual Map has become aparticularly useful vehicle for management to draw attention to an emerging marketopportunity, 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 proactivesupplier will always consider how to maintain initiative within the market. A usefulstarting point is to consider competitive position as a perceptual map in which'Perceived Price' is plotted against 'Perceived Use Value'. If the supplier determinesthat his solution is 'average' when compared to the competition, the alternativecourses of action are:

To achieve the status of lowest cost producer and offer lower prices than thecompetition - i.e. move West. Here Bowman sites the work of Porter, andemphasises the need for all organisations to become low cost (if not lowestcost) producers so that at the very least market fluctuations can beaccommodated.To move North by adding Perceived Use Value. Here Bowman is at painsto point out that market segmentation plays a critical role in determiningwhat customers do actually value and that any advantage must besustainable.Bowman then goes on to explore the interactive nature of these axes. For examplean increased share obtained by adding value can result (through economies ofscale) in lowest cost producer status. The move North West - sequentially addingPerceived Use Value and cutting price - may offer the company the best strategy totackle the market and offer global potential, but the company must be nimble inorder to maintain its competitive position.29

THE GILLETTE CASE:With this understanding of what a perceptual map is, let us now see how theGillette razors appear on the map:Gillette razors Vs Competitors: A Perceptual Map:30And now let us represent the perceptions of Gillette razors using the customermatrix, by taking perceived price and perceived value as the two axes:RAZORS PRICE QUALITYGILLETTE:Mach 3 high highSensor excel high neutralVector Plus low highPresto high highCOMPETITORS:Gallant low neutralSuper max 3 high lowLaser low low31

THE GILLETTE RAZORS – PERCEPTUALMAP32

VECTOR PLUSSENSOR EXCELPRESTOMACH 3

MARKET SEGMENTATIONDEFINITION:Market segmentation is dividing a larger market into submarkets based upondifferent needs or product preferences. These common characteristics allowdeveloping 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 wantsHigher ProfitsOpportunities for GrowthSustainable customer relationships in all phases of customer life cycleTargeted communicationStimulating InnovationStimulating InnovationHigher Market Shares33For segmentation to be effective, the following criteria should be kept in mind:Feasibility: Having in place a marketing program for each segment anddrawing advantages from that.Distinguishing ability: market segments have to be diverse enough to showdifferent reactions to different marketing mixes.Accessibility: The segment has to be accessible and servable for theorganization.Relevance: The size and profit potential of a market segment have to belarge enough to economically justify separate marketing activities forthis segment.Measurability: It has to be possible to determine the values of the variablesused for segmentation with justifiable efforts.The traditional variables for segmentation are as follows:Geographic:Land or regionRural or metropolitan areaDemographic:34Age, sex, marital statusIncome, occupation, education

Religion, nationality, ethnical groupPsychographic:Social statusLifestyle-typePersonal typeBehavioral:Intensity of product useBrand loyaltyUser behaviorsMarketers have to choose those variables that are relevant for segmenting themarket for a particular product. The basic rule is to focus on a limited number ofimportant variables.THE GILLETTE CASE:A simple classification of market segments on the basis of the above would be asfollows:35

TARGET MARKETSDEFINITION:Once market has been divided into segments, a process of identifying marketsegment opportunities (basis the attractiveness of the segment and the company’sresources and objectives) takes place.TYPES OF TARGETING:Single Segment ConcentrationM1 M2 M3BENEFITSEGMENTSDEMOGRAPHICS BEHAVIOURISTICS PSYCHOGRAPHICS FAVOUREDBRANDSQuality ofshaveExecutives,working menRegular and heavyusersHigh autonomyValue orientedGilletteConvenience Employees Regular and heavyusers

HedonisticHigh self-involvementGilletteTechnology/fashionTeens/youth, midlevelexecutivesFirst time users,appearance consciousHigh sociability,activeGillettePriceConsciousnessLow income,illiterates, unawareof technologyLaggards, nonregularsHypochondriacconservativeLocal players36XSelective SpecializationM1 M2 M3X XXProduct SpecializationM1 M2 M3X X XMarket SpecializationM1 M2 M3XXXFull Market coverageM1 M2 M3X X XX X XX X X37THE GILLETTE CASE:The approach of Gillette to market segmentation is in line with the above

mentioned. Gillette follows a strategy known as Geoclustering which involvescombining several variables in order to define better –defined target groups. This isthus 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 anattempt to more precisely define its market segments.The Selective specialization pattern would apply to Gillette as explained:Low HighGillette definesM1 M2 M3P1 MACH 3TURBOP2 MACH 3P3 SENSOREXCELP4 VECTORPLUS38M1 comprising of those group of male customers who are either in their twenties orearly thirties, have a high disposable income (if student, then those who spendcomfortably), are salaried, belong to the current generation and maintainlifestyles that have a bearing on their buying behaviour.M3 on the other hand would comprise of such male customers who are in their latethirties or above, do not have a very high disposable income, and are not veryconscious 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 1P2 Product 2P3 Product 3

Segment-by-Segment Invasion PlansThe core philosophy behind this concept is to enter the market segment by segmentwithout revealing one’s total expansion plans so that competitors are caughtunawares as to the segment into which the firm will move in next.THE GILLETTE CASEGillette has also followed a similar strategy in the India market.ConventionalShaving

Ready Shaving Premium ShavingTriple BladeC5Twin BladeC2 C4Double Edge / Flat C1C339BladesTHE SEQUENCE OF EVENTS:1986 (C1): Company manufactures two types of blades, the premium 7 O'ClockEjtek Super Platinum and the stainless brand 7 O'Clock Ejtek Super Stainless1993 (C2): Company commences the launch of Gillette Shaving products in Indiawith the launch of Gillette Presto Readyshaver.1995 (C3): Company launches another Readyshaver under the Brand name of 7O'Clock Ready II1996 (C4): The Company successfully launches "Gillette Sensor & Sensor Excell"shaving systems1998 (C5): Company announces launch of new generation triple blade shavingsystem Mach3Turbo

POSITIONINGWHY POSITIONING?In today’s world of strategy convergence (undifferentiated strategies), pursuing ameaningful and relevant positioning & differentiation has become imperative forevery 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 isabout positioning that product in the mind of the customer in an overcommunicated environment. The advertiser should present a simplified messageand make that message consistent with what the consumer already believes byfocusing on the perceptions of the consumer rather than on the reality of theproduct.The best way to get into the mind of the consumer is to b the firstGillette 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 beingthe introduction of mach3 turbo in India and mach 3---- abroad40According to Al Ries and Jack Trout, “The Fathers of Positioning” a MarketLeader should:Not boast about being number one.If the firm does so, the consumers may feel that the company is insecure inits position ifIt must reinforce this by saying soCan adopt multi-brand strategy i.e. introduce multiple brands rather thanchanging existing ones that hold leadership positions. It is often easier andcheaper to introduce a new brand rather than change the positioning of anexisting brand. Ries & trout call this Single Position Strategy, becauseeach brand occupies a single, unchanging position in the minds of theconsumerMust 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 ithas always introduced new brands to target different market segments (presto forlower end, mach3 for upper end etc.) instead of bringing about changes in any oneparticular razor to maintain the distinct image of each of its razor in the mind of thecustomer.Positioning, as Philip Kotler defines, is the act of designing the company’s offeringand image to occupy a distinctive place in the mind of the target market i.e. create acustomer focused value proposition, a cogent reason why the target market shouldbuy the product.In the words of Jan Welborn Nicholas, the most successful entrepreneurs learn totransform their passion into position.Positioning is a Perceptual Location. It's where your product or service fits intothe marketplace. Effective positioning puts you first in line in the minds ofpotential customers.That's why it's so important for entrepreneurs to transform their passion into amarket 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 characteristicsof your product.41THE 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 yourproduct 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? Isyour product customized and personalized?Distribution. How do customers obtain your product? The channel ordistribution is part of positioning.Packaging. Packaging makes a strong statement. Make sure it's deliveringthe message you intend.Positioning is your competitive strategy. What's the one thing you do best? What'sunique about your product or service? Identify your strongest strength and use it toposition your product.THE GILLETTE CASE:For Gillette their strength lies in the superior quality of their razors ,all of whichare imported from the US (untouched by hand),except for presto and they haveused this strength wisely to position their product over the years. Unquestionablequality of Gillette products has been the most important factor in making it amarket 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:42Product leader – advancing on technological frontierOperationally excellent firm – highly reliable performanceCustomer intimate firm – high responsiveness in meeting individualcustomer needsTHE 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 performancelevel in the third as well.THE UNIQUE SELLING PROPOSITION:According to Rosser Reeves every company should develop a “Unique SellingProposition (USP) or promote only one central benefit of the product which makescommunication to target market easier; employees are clearer about what countsand it is easier to align the whole organization with a central positioning. Butnowadays marketers feel that double positioning may be more distinctive i.e. theco. 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 otherwords a razor which gives u the smoothest shave in least possible time without anycompromise on their quality.POSITIONING ERRORS:Kotler points out that a company must avoid four major positioning errors:1) Under positionin g : buyers only have a vague idea of the brand2) Over positioning : buyers have too narrow image of the brand433) Confused positionin g : buyers have a confused image of the brand(company makes too many claims about the product or changes brandpositioning 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. Gillettehas traditionally been positioned as a premium, high quality product. Thus eventhough the company has acquired 7’o clock ,Wilkinson & Wilman ( graduallyeliminating competition) it has carefully distanced itself from these lower segmentbrands 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/numberof years of existenceb) Benefit positioning: product is positioned as a leader in certain benefit

c) Use/application positioning: position the product as best for someuse/applicationd) User positioning: position the product as best for some user groupe) Competitor positioning: the prod claims to b better in some way than a namedcompetitorf) Product category positioning: product is positioned as leader in certain productcategoryg) Quality/price positioning: product is positioned as offering the best valueTHE GILLETTE CASE:Here Gillette has traditionally focused onApplication positioning-best for the finest shaveQuality positioning- unquestionable quality (imported razors)

THE MARKETING MIX44WHAT IS A MARKETING MIX?The term was coined by Neil H. Borden in his article 'The Concept of theMarketing Mix' in 1965.The 'marketing mix' is probably the most famous phrase in marketing. Theelements are the marketing 'tactics'. Also known as the 'Four Ps', the marketingmix elements are price, place, product, and promotion.Some commentators will increase the mix to the 'five Ps', to include people. Otherswill increase the mix to 'Seven Ps', to include physical evidence (such asuniforms, 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 cakescontain eggs, butter, flour, and sugar. However, you can alter the final cake byaltering the amounts of mix elements contained in it. So for a sweet cake add moresugar! It is the same with the marketing mix. The offer you make to you customercan be altered by varying the mix elements. So for a high profile brand increase thefocus on promotion and desensitize the weight given to price.

Essentials of marketing mix:Product: Defines the characteristics of your product or service that meets theneeds of your customers.

Price: Decide on a pricing strategy - do not let it just happen! Even if youdecide not to charge for a service (a loss leader), you must realise thatthis 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 (orroute ofdistribution):Some of the revolutions in marketing have come about by changingthis P. Think of telephone insurance and the internet! A bit of lateralthinking here might reap rewards for your business.Now these can be viewed in a graphical representation:4546A marketing mix is a combining of these four variables in a way that will meet orexceed organizational objectives. A separate marketing mix is usually crafted foreach product offering. When constructing the mix, marketers must always bethinking of who their target market are. Mix coherency refers to how well thecomponents of the mix blend together. A strategy of selling expensive luxuryproducts in discount stores has poor coherency between distribution and productoffering.In the long term, all four of the mix variables can be changed, but in the short termit is difficult to modify the product or the distribution channel. Therefore in theshort term, marketers are limited to working with only half their tool kit. Thislimitation underscores the importance of long term strategic planning.With this simple understanding of what a marketing mix means and to what extentit can in fact affect a company’s sustenance in an industry, let us now see how eachof these four factors influence the company and what the respective strategies arethat the Gillette company is taking.47

PRODUCT

STRATEGY48

THE PRODUCTA product is anything that can be offered to a market for attention, acquisition, useor 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 morevalue to the product. Initially, Kotler had proposed three product levels.

The Three Level Classifications:AugmentedProductCoreProductActualProductTHE GILLETTE CASE:The core product would be the quality of shaveThe actual product would comprise of the razor designed so as to give acomfortable grip and packed in an appealing manner.The augmented product would include the superior technology thatGillette shaving products are known for and the reliability that comeswith the Gillette brand name.

The Five Level Classifications:49Technology BrandPackagingDesignCoreBenefitKotler has now revised this to a five product level. At the heart of it lies the coreproduct, next the basic product followed by the expected product and augmentedproduct. The potential product would lie in the outermost circle.Potential ProductAugmented ProductExpected Product

BasicProductCoreProductTHE GILLETTE CASE:Core Product: Quality of ShaveBasic Product: Razor with comfortable grip, well packedExpected Product: Blades that do not give cuts or rashes on skinAugmented Product: Razor with lubrastrip indicating when the bladeneeds to be replaced, the anti-clogging push-clean technology, etc.Potential Product: product customization could be one newdevelopment.50

PRODUCT CLASSIFICATIONProducts may be classified on the following basis:1) Durability and TangibilityDurable GoodsNon durable GoodsServices2) Consumer Goods ClassificationConvenience Goods:These include those goods which are purchasedfrequently, immediately and with minimumeffort. These are available at multiple purchaselocations.Shopping ProductsThese are bought less frequently. The consumermakes the purchase decision only after gatheringsufficient product information. The potential buyertypically compares the product with that ofcompetition on the basis of price, style and qualitybefore making the purchase decision.Specialty GoodsSuch goods require a special purchasing effort.They are known for their unique characteristicsand are available at select locations.Unsought GoodsThese include goods that the consumers do notwant to normally think about. These goods requireadvertising and personal selling effort.3) Industrial Goods ClassificationThese are classified in terms of how they enter the production process and theirrelative costliness.

Material & parts : goods that enter the manufacturer’s productcompletely.Capital Goods : long lasting goods that facilitate developing the finishedproduct.51Supplied & Business Services : Short lasting goods and services thatfacilitate developing or managing the finished product.The Gillette CaseGillette shaving products meet the attributes of convenience goods asThey are purchased frequently and with the minimum of effort.Buying is on a regular basisThere are multiple purchase locations for the product.Further within this category, Gillette shaving products can be further classifiedas Staple Goods.52

PACKAGING AND LABELLINGWHAT IS PACKAGING?Packaging comprises of all activities of designing and producing the container forthe product.This container may include up to three levels of material:Primary Package : Tetra pack, bottle, sachet, etcSecondary Package : cardboard box, etcShipping Package : Cartons, etcWHY PACKAGING?Packaging has been getting increasing focus as a marketing tool for the followingreasons:They promote Company and /or Brand ImageIt is an opportunity to incorporate innovative features which can bring addedconvenience to the consumer and in turn higher profits to the producer.With rising incomes, consumers increasingly are willing to pay a little morefor the appearance and prestige of well – designed packages.DECISIONS INVOLVED:The following decisions are involved in the process of coming out with an effectivepackage531) 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 written4) Size, shape and materials to be used.

LABELLING:Once the packaging decision is taken, it needs to go through engineering tests toensure the effectiveness/robustness of the package under normal conditions. This isfollowed 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 ignoredwhile formulating the product strategy.

The Gillette Case:However, for a product like Gillette shaving razors, it does not play a verysignificant role. A customer who buys a Gillette shaving product does not considerthe package an important enough factor which would influence his buyingbehaviour. Labeling does have some significance for a product associated primarilywith quality, like Gillette razors. Therefore, while Gillette’s consumers do not basetheir buying decision on the basis of the packaging, their comfort levels would beinfluenced 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 anddevelopment since its inception.At the last turn of the century, King Gillette founded what would become acorporate giant, based on a simple yet essential invention: the safety razorwith disposable blades.THE DISPOSABLE:One morning in 1895, Gillette, now living in Boston, had a revelation: if he couldput a sharp edge on a small square of sheet steel, he could market a safety razorblade that could be thrown away when it grew dull, and readily replaced. Gillettevisited metallurgists at MIT, who assured him his idea was impossible. It tookGillette six years to find an engineer, William Emery Nickerson (an MIT-trainedinventor), who could produce the blade Gillette wanted.THE ‘T’-SHAPED RAZOR:

55The 'T'-shaped razor with disposable double-edged blades, has been one of thedominant razor shapes since its initial introduction at the turn of the century. Theblades are the only ones with two cutting edges, which doubles the amount ofshaving which can be done by a single blade. Moreover, the blades are intended tobe immediately disposable.THE TWIN BLADE SHAVING:Shaving with the double edged blades has its own drawbacks – it requires men tonormally shave twice and even more to get a smooth close shave. These type ofrazors had a complex securing/detaching mechanism and various other not requireddesign materials and stylistic components, manufacturers came up with the newtechnology of twin edged razors –which were of both disposable kind and oneswhich came with a replaceable cartridge. This product became an instant hit as itwas 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 INNOVATIONGillette 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 newcartridgeThe push-clean technology-prevents clogging of hair in between theblades by using the twin instruments of spacer and button.The moisturizer strip-moisturizes the skin while we shave and we get aclean shave without rashes.The platinum blade-superior metal for safety and better shaveThe pivoting head- flexible head to run freely on the facial curvatures.

VECTOR PLUS- A CASE STUDYThe company realized that in India people have different shaving habits i.e. lowshaving frequency, tough beard etc., and also the customer complained of hairclogging 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 requirementsand presented Gillette Vector Plus, an anti-clogging twin blade system with a56contemporary look that offers a smooth, close, safe and convenient shavingexperience at an affordable price.The noticeable superior performance of Vector Plus over double edge, and alsoother twin blade razors comes from superior “rust-free” twin blades withlubrastrip and pivoting head, while the Push button cleaning mechanismprovides anti-clogging facility.According to Regional Business Director Manoj Kumar, "Gillette Vector Plus hasbeen created keeping in mind the shaving habits of a large number of Indianconsumers, especially those who use double-edge blades. Infrequent shaving leadsto longer stubble/hair and that coupled with use of still water leads to clogging oftwin blades for people who shave infrequently. Gillette Vector Plus with 2 Gilletteblades and a unique push clean button has been designed to address this and offerthe consumers a smooth and close shave."Now read this to believe:

“We bleed so that you can get a goodshave at home.”-A Gillette Employee.At Gillette 200 volunteers from various departments come to workunshaven each day, troop to the second floor of company’s SouthBoston manufacturing and research plant, and enter small boothswith a sink and a mirror. There they take instructions from technicianson the other side of the small window as to which razor, shavingcream, or after shave to use, and then they fill out questionnaires.This practice helps Gillette to constantly improve their products andalso reflects upon the company’s commitment to providing qualityproducts.57This commitment of the employees of the Gillette company sums up the amount of

effort Gillette puts in constant research and development to provide its customerswith a better product for a safer, closer shave.

PRICING58

STRATEGYTHE 9 PRICE-QUALITY STRATEGIES:INTRODUCTIONWe need to set price when we have a new product, or when we enter a newmarket with an existing productHow? Need to decide what position you want your product to be inPhilip Kotler identified 9 price-quality strategiesHIGH PRICE LOWPRICE59HIGHQUALITYLOWQUALITY

THE PRICING PROCESS:1) Set Pricing Objectives2) Analyze demand3) Estimating costs4) Draw conclusions from competitive intelligence5) Select pricing strategy appropriate to the political, social, legal andeconomical environment6) Determine specific prices

SELECTING THE PRICING OBJECTIVEPossible Pricing Objectives1) Profit objectives e.g.a) Targeted profit return2) Volume objectives e.g.a) Dollar or unit sales growthb) Market share growth3) Other objectives e.g.a) Match competitors’ priceb) Non-price competitionPREMIUM HIGH VALUE SUPER VALUEOVER

CHARGINGMID VALUE GOOD VALUERIP-OFF FALSEECONOMYECONOMY60

DEMAND ANALYSIS:The demand analysis sums the reactions of many individuals who have differentprice sensitivities. The first step in estimating demand is to understand what affectsprice sensitivity. Nagle identified 9 factors:1) Unique-value effect2) Substitute-awareness effect3) Difficult-comparison effect4) Total-expenditure effect5) End-benefit effect6) Shared-cost effect7) Sunk-investment effect8) Price-quality effect9) 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 increasesales and market share.Skimming pricing: The organisation sets an initial high price and thenslowly 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 productrange at different price points. An example would be a video manufactureroffering different video recorders with different features at different prices.The greater the features and the benefit obtained the greater the consumerwill pay. This form of price discrimination assists the company inmaximizing turnover and profits.Bundle Pricing: The organization bundles a group of products at a reducedprice. Gillette does follow this practice of bundling its shaving accessoriestogether and offer it as a value pack.Psychological pricing: The seller here will consider the psychology ofprice and the positioning of price within the market place. The seller willtherefore charge 99p instead £1 or $199 instead of $20061Premium pricing: The price set is high to reflect the exclusiveness of the

product. An example of products using this strategy would be Harrods, firstclass airline services, Porsche etc.Optional pricing: The organisation sells optional extras along with theproduct to maximise its turnover. This strategy is used commonly within thecar industry.

THE GILLETTE CASE:With all the above tools and directions for pricing, Gillette India ltd. prices itsproducts by taking into account the nine price-quality objectives and also thepricing objectives. After a detailed analysis of the above guidelines, it has beenconsciously using premium pricing for some products and average pricing forsome. 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 thathad entered the Indian market.The hike in the price of presto from Rs 12 to Rs 15 was to induce thecustomer 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 nopotential threats. Some steps are redundant. It follows the following steps:1) Set Pricing Objectives2) Analyze demand3) Estimating costs4) Determine specific pricesIts strategies are very much evident from the following price chart of all theGillette razors and blades.62

THE GILLETTE PRICE CHARTTriple Blade Shaving SystemRazor + 1cartridge2cartridges4cartridges8 cartridgesMach 3 235.00 158.00 305.00 585.00Mach 3Turbo395.00 200.00 380.00 695.00Double Blade Shaving SystemRazor + 1

cartridge2cartridges4cartridges8 cartridgesVectorPlus29.00 35.00 65.00***

SensorExcel125.00 55.00* 240.00 485.00

7’o clock PII56.00 80.00**

*1 piece only, packs of 2 not available

**pack of 5 cartridges*** pack of 6 cartridges is for Rs. 65.0063Disposable Shaving SystemsVariant Price (Rs.)Presto 15.007 O’clock 12.0064

PLACESTRATEGY65

Definition:A place strategy refers to how an organization will distribute the product or servicethey are offering to the end user. The organization must distribute the product to theuser at the right place at the right time. Efficient and effective distribution isimportant 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 distributioninvolves distributing your product by the use of an intermediary. Direct distributioninvolves distributing direct from a manufacturer to the consumer, for example, DellComputers. Clearly direct distribution gives a manufacturer complete control overtheir product.Indirect Distribution Direct Distribution

Distribution Strategies:Depending on the type of product being distributed there are three commondistribution strategies available:661. Intensive distribution: Used commonly to distribute low priced or impulsepurchase products eg chocolates, soft drinks.2. Exclusive distribution: Involves limiting distribution to a single outlet. Theproduct is usually highly priced, and requires the intermediary to place much detailin 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 distributethe product. Selective distribution is common with products such as computers,televisions household appliances, where consumers are willing to shop around andwhere manufacturers want a large geographical spread.If a manufacturer decides to adopt an exclusive or selective strategy they shouldselect a intermediary which has experience of handling similar products, credibleand is known by the target audience.

THE GILLETTE CASE:The appointment of distributors is handled by Gillette India directly. In NCRregion, 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 thecompany).The broad structure in the distribution network is as follows :Assistant Sales Manager (ASM)Territory Sales Manager (TSM)DistributorEFFThe 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) detailingimportant 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 the67company to the distributor who in turn informs his EFF. The TSI meets distributorson a monthly basis for periodic review. The TSI is responsible for thetargets/performance of the area under him and he is expected to communicateactual results back to the company on a regular basis.In NCR Region, the margin being given at the retail level is 12%. One distributorhas approximately 1100 shops under him. There are around 15-20 distributors inDelhi. The distribution is monitored basis off take and the distributor’s (ordistributor’s appointed person) frequency of visiting the retail outlet is keeping inview the availability of ready stock. In Delhi, sale of goods to the retailer takesplace on both a cash as well as credit basis. The distribution chain in Delhi isknown to be smooth and without bottlenecks with ABSOLUTELY NOPROBLEMS being reported with regard to handling and acquiring stocks. On anaverage, a retail unit stocks the maximum number of Prestos, in relation to VectorPlus and Mach 3DISPLAY:The company has developed innovative display units for both smaller kirana andbigger supermarkets. It seeks to increase sales through1) 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 isdisplayed should at the eye level of the customer.3) Depth – ensuring availability of product range at the retail outletThe company does not interfere in any manner as far as the putting up of Gillettewalls in shops is concerned i.e. it is entirely at the discretion of the retailer. Formore sophisticated outlets, racks are used designed in ways such that they take upminimum spaceFor the high-end products, the move is from hanging cards to a grooming centerwhere the entire grooming regime is brought together.68

PROMOTIONSTRATEGY69

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

PROMOTION STRATEGIES:A successful product or service means nothing unless the benefit of such a servicecan be communicated clearly to the target market. An organizations promotionalstrategy can consist of:Advertising: Is any non personal paid form of communication using anyform of mass media. Companies can run the same advertising campaignsused in the home market or change them for each local market. Broadly acompany can choose from three different advertising strategies.The company can use the same ad everywhere (across different regions andcountries), 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 whicheach country selects the most appropriate one.Public relations: Involves developing positive relationships with theorganisation media public. The art of good public relations is not only to

obtain favorable publicity within the media, but it is also involves beingable 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 withinan organisation. There has been a massive growth in direct mail campaignsover the last 5 years. Spending on direct mail now amounts to £18 bn a year70representing 11.8% of advertising expenditure ( Source: Royal Mail2000). Organisations can pay thousands of pounds for databases, whichcontain names and addresses of potential customers. Direct mail allows anorganisation to use their resources more effectively by allowing them tosend publicity material to a named person within their target segment. Bypersonalising advertising, response rates increase thus increasing the chanceof improving sales.THE GILLETTE CASE:TV/Radio – Gillette has an extensive advertisement campaign being run ontelevision.The company uses a mix strategy for its ad campaigns for different products. It hasadopted the first approach for mach3 & mach3 turbo ads wherein it uses astandardized ad across all countries , only making changes in the language, colorsetc. For the lower segment razors like vector plus & presto it retains the globaltheme but adapts it to local market needs.The advertisement for each product has been developed keeping in mind a specificsection of the market. For E.g. Vector plus ad campaign targeted towards middleincome group has that specific backdrop in the ad. Whereas Gillette Mach 3, a highend product, has a campaign portraying foreign models to cash in on the tendencyof the Indians that anything associated with foreigners is of good quality and meantfor the higher class. The vector plus ad also comes during the telecast of cricketmatches in the form of “push clean facts- factual information of the game.” (Thename push clean actually stands for the push-clean technology)Print – This medium is mainly used by Gillette to spread awareness of their centsoff

deals i.e. their reduced price packs and banded packs. Several ads are flashed indaily newspapers and magazines to advertise these schemes.Internet- The Gillette website is excellent and there are dedicated websites fortheir new products which present the product and related information in a very nicemanner.However the company does not have a India specific website which we believe thecompany can develop as an additional promotional tool.Also the company can try and inform people about the new technology in shavingand about the right way to get a smoother shave, through the use of direct mails and71pop up ads. SMS can also be a very handy tool to spread awareness about discountsand other promotional schemes.Movie/Soaps- This is another avenue Gillette can explore and reap great benefitsfrom. As we know movies have great influence on not only youth but among allages .So Gillette can have tie-ups with movie/producers and can show use ofGillette products in the same. This can also be a very handy tool to reach the lesseducated and lower income groups. Gillette has already associated itself with theHollywood 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 adis not having a great impact on the people. Therefore we suggest that Gillette ropesin a Bollywood star or a cricketer for its advertisements which have not only agreater impact but also help the ad recall and retention.

Sales Promotion:It consists of diverse collection of incentive tools , mostly short term , designed tostimulate quicker or greater purchase of products or services by consumers or thetrade .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 twoare also offered. ‘Premiums’ are also offered i.e. a free gift is given with theproduct.2) Trade promotion - Price-off i.e. a straight discount off the list price oneach case purchased during a stated time period .The other are allowanceswhich include advertising allowance that compensates the retailers foradvertising the manufacturers’ product and also a display allowance thatcompensates them for carrying a special product display.3) Business and sales force promotion - This includes participation in tradeshows and conventions, sales contests which aim at the sales force ordealers to increase their sales result over a stated period. Other method is‘Specialty Advertising’ in which low cost items bearing the company’sname and address are given to prospects and customers.72

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 onthe label or package. When shaving gel for example is given free with mach3 turbo it is called a CP Offer - Consumer Promotion Offer.Trade promotion - Gillette, at present as found in our survey is not muchinto using trade promotion tools.Business and sales force promotion - The sales force (EFF) is given anadditional incentive for the sales achieved by them over & above theirtarget. 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 increaseswith higher sales achieved. The company follows a 'Points System’ for the EFFi.e. targets are given in terms of points/time period. Higher points are earned bythe EFF individual for selling a higher variant

MARKET73

STRATEGYThe Boston Consulting Group (BCG)matrix

It is a simple tool for assessing a company's position relative to others in terms ofits 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 Group74

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

When is it used?It is used in initial audit discussions to identify “product developmentopportunities.”The company then plots its products on the matrix — for example a product in afast growing market in which it has a low share would appear in the top left handarea, whilst one in which it had a high market share but where the market wasgrowing slowly would appear in the bottom right.

How to use a BCG matrix?Key Assumptions of BCG MatrixStable cost/price relationship (Not valid if the firm is pricing on projectedlower average unit costs in the future)Market leader influences the average costsProfit 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 line75WHAT IT MEANS:To help the analysis and stimulate the subsequent discussion the BCG model offersfour descriptions of the product/market combinations which might be found:Stars represent those products or services which the company has a high share ofthe market and the market is growing. They should be invested in further tomaintain the growth.

Cash cows represent those products in which the company has a high market sharebut where the market is mature and slow growing or even declining. Theseproducts should be 'milked' to provide cash for investments in future product areas.76Dogs are products where the company has low market share and where the marketitself is not growing. These should be dropped from the portfolio to release fundsfor investment in more attractive opportunities.Questi on marks are those products in which the company ahs low share but wherethe market is beginning to take off or has significant growth potential. They need tobe watched closely and investment maintained to keep a presence since they couldbecome tomorrow's starts — but equally the commitment should not be too highsince they could also turn out to be tomorrow's dogs!

THE GILLETTE RAZORS BCG MATRIXWith the study of the BCG Matrix, we have tried to apply this concept to thisproject of ours. We have analyzed the razor market and then placed the variousrazors and blades of Gillette in the relevant quadrants.

Analysis:The reasons for placing the product portfolio in the above manner is as follows:77WILKINSON BLADES P II, WILMAN RAZORS7 O ‘CLOCK BLADESMACH 3, PRESTO SENSOR EXCEL, STERLING,VECTOR PLUSDOGS: 7 O’ CLOCK P II AND WILMAN RAZORSHere we have considered Wilman razors and the 7 O’Clock razor P II becauseWilman razors are losing market share very rapidly while the 7 O’Clock razors aretoo expensive for their segmentation. Consider this: the P II, which is a twin razorcosts Rs.85 while a Vector Plus costs only Rs.29, which also has several addedfeatures 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 primaryobjectives of GilletteQUESTION MARKS: SENSOR EXCEL, VECTOR PLUS AND STERLINGHere we put sensor excel because it has been losing its market share due to itspricing close to that of Mach 3 . A Sensor Excel would initially cost Rs.125 and itsuccessively boils down to Rs.3 per shave (price per shave), which is the same forthat of Mach 3 (which however costs Rs.235 initially). People actually are tendingto buy either vector plus or Mach 3 as a result of which Sensor Excel is becomingredundant. Vector Plus is one product with tremendous potential for market growth,since it combines superior technology, great looks, attractive and competitive priceand above all the Gillette tag. Then we have the Sterling, the double-edged razorwhich may not have much growth in the future, which also doesn’t gel with thecompany’s objectives but then it is the only such product in the company’s productbasket. There still are some customers who use only double-edged razors and arealso specific about the 7 o’ clock brand.STARS: MACH 3 AND PRESTOHere we placed Mach 3 and Presto because they have a high market share as wellas market growth. Presto would never decline in sales because the market for adisposable razor always exists due to its simple characteristic of ready to use andthrow. Mach 3, the premium product of the company has also been a huge successamongst its segmented markets of youth and executives and its demand is onlygrowing. So the company has in fact launched more innovations or developmentsof 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 shareas 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 itsobjective), so these products should be 'milked' to provide cash for investments infuture product areas.78

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 theorganization 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 businesses à no dynamics Does not recognize possible synergies between SBUs Can fall prey to the “GIGO” syndrome

ConclusionAs long as management understands that the BCG Growth/Share Matrix generatesoptions which require further analysis and validation, this tool can greatly enhancestrategic decision making79

CONSUMERANALYSIS80On the basis of our questionnaire and consumer survey, we found the following:BRAND RECALL:FREQUENCY OF SHAVE:81

once in 3-PLACE

OF PURCHASE:82THE REASONS FOR CHOOSING A PARTICULAR RAZORS

convinience809010083Impact of Promotions64%21%15%YesNoMay beAd Recall29%71%

YesNo847 O'clock : A Gillette product?33%67%YesNo

WILKINSON: A GILLETTE PRODUCT?85

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

Frequency of ShaveOf the sample of 200 that we surveyed we found that while 31% of the respondentsshaved 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. Ourfindings corroborate the fact that shaving frequency in India is low and shavingconditions relatively tough.

Brand RecallThis was the first question that we put to our respondents. Also, to try and gaugetheir natural response , we did not provide them with options.Upon consolidation of survey results, we find that an overwhelming 84% of thosesurveyed mentioned Gillette as the brand they associate with shaving.

Place of PurchaseSince shaving products would fall under the category of convenience goods beingbought on a regular basis, we wanted to find out the place from which the buyerwas making the purchase.We found that more than half(56%) of those surveyed were making the purchasefrom locality stores and 22% were making their purchases from Departmentalstores.

86

Reasons for choosing a particular razor100 respondents mentioned quality of shave as the primary attribute that theyconsider when they make their buying decision. Another 52 respondents based theirdecision onthe ‘convenience of shave’ while 48 respondents considered factors other thanquality and convenience behind their purchase decision.

Impact of Promotions64% of the respondents said that they would respond favourably to promotionalschemes brought out by the company. However, 21% said that any suchpromotional schemes would not influence their buying behaviour and theremaining 15% were not sure.

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

7 O’clock and Wilkinson as Gillette brand sThis was the last question that we put to our respondents. A majority ofthem(around two third) were unaware that 7 O’clock and Wilkinsonwere actually under the Gillette umbrella and perceived them as brandsof competition.87

Analysis of interaction with the distributors &the retailersIn our study, we interacted with both the distributors as well as theretailers and we found that:Both the distributors & the retailers were well stocked with Gillette shavingproducts- both in terms of quantity and range of products. Therefore,availability of the product is not a problem. Whereas it was not the samewith competitive products like Supermax, 365 that are not readily availableat all retail outlets.The distributors supply both in cash & credit terms to the retailer.

The frequency of supplies from the distributors to their respective retailersis different in different cases. in some the retailer receives the supplies onneed as basis, others receive it according to a pre-determined time frame ofa every 3 days(for outlets in big shopping malls, departmental stores) week,fortnightly.Neither the retailer nor the distributors face any problem of defective itemsor any other complaints from the end user.The retailers receive a margin of 12 % on all Gillette products ( with theexception of vector plus, on which the margin is only 10%) as compared to24-25% margin on competitive products.(house of Malhotras & localplayers)88There are no formal feedback forms that the company circulates but anyproblem is carefully handled. Also the option of online booking for theseagents 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 atake it or leave it kind of attitude.”

RECOMMENDATIONSA set of recommendations have been developed for Gillette India keeping thefollowing 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 shopThese have been put up by Gillette as a strategy behind cash counters in large shops anddepartmental shops to promote impulse buying.Both the designing of the wall and the placing of the razors/cartridges is done insuch a manner so as to capture the customer’s attention and ‘push him’ into buying89the product (Gillette is known for pressure selling since it deals in premiumproducts).It is suggested that1) These be put up in new places beyond shops eg college canteens and

cafeterias, coffee bars, cinemas & multiplexes. The company can displaythe entire range or a particular price range of products that it offersdepending upon target market visiting these places.eg: college canteenpresto,vector plus2) These walls are designed aesthetically and have a particular theme that goes with thearea where the walls are being put up. Eg. A wall in a college canteen would havebright vibrant colours and photographs of college goers as this would appeal moreto a College going market.

Gillette Gift PacksThese are currently available in the market. However, the company normally promotes themand tries to increase off take during the festive season. We suggest that the company couldtarget the following new segments1) The Corporate Gift Market – Gillette products are known to be premium productsand the company enjoys a good brand image in the market. Therefore, there is potential tomake inroads here. (Though it would be imperative that the company brings out smart andwell 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 beincluded 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 arazor along with cartridges may convey the wrong message.3) Birthday Gifts – The company can promote Mach 3/Mach 3 Turbo as the best giftthat 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 fewyears thanks to excessive commercialization. Gillette can cash on this day too by coming outwith attractive gift packs during this time with special focus on mach3 /mach3 turbo90

Warranty Card

Gillette products are of supreme quality. The company does not suffer from a problem ofgoods returns of defective pieces from vendors. However, to increase the perceived value ofthe product in the mind of the customer; the company could provide a warranty card alongwith its premium end products – Mach 3 and Mach 3 turbo. Since Gillette offers unmatchedproduct quality, the cost implications of product replacement would be minimal.Further, Gillette could do product differentiation by offering different warranty periods fordifferent cartridge packs (2-4-8). Therefore, a pack of 8 cartridges would have maximumwarranty 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 Gilletteproducts in the market.To counter this, the company could start putting holograms on its products which willa) 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 experienceWe recommend that Gillette should position its premium Mach 3 product as a superiorshaving experience rather than ‘just a shaving product’. Since, we came across quite a fewconsumers who perceive mach 3 to be an expensive product; the company should position itas a product bundle. The following add-ons can be included.1) Razor Stand for washroom – Gillette Mach 3 and Mach 3 turbo packs should beaccompanied 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 couldbe 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 keepingtheir razor safely when travelling (in a way that does not damage the blade). Thus thecompany 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 travellingrather than their normal Gillette razor)913) Warranty card – As mentioned above, this could be included for all Mach 3 andMach 3 razors and cartridges. It gives the buyer, especially those who perceive the productto be expensive a sense of value for money.4) Information Leaflet – A leaflet could be included as a part of the pack which wouldinclude the following informationHow to use Mach 3 – the ideal wayCleaning your Mach 3 (tips like use of hot water is better than cold water)The ideal shave /tips on shaving5) Satisfaction survey relating to the user’s experience with Mach 3 could be includedas a tear sheet which consumers could send back to the company. It has two advantagesIt gives valuable data to the company of what Mach 3 users think about and expectfrom the productIt makes the customer feel special.

Gillette Shopping CardGillette could actually come up with the idea of launching a “Gillette shopping card” , onefor 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 thePlanet-M card, or the Ebony card. The card can be initially given with the purchase of aMACH 3 razor or the gift pack. When a customer makes a purchase, he automatically getssome points, which can be later redeemed for any product at the store, instead of just Gilletteproducts. Also the card holders would be entitled for events like lucky draws, donor passesto musical events, tickets to a newly released cinema, discounts in select eating joints andshopping malls for transactions above a certain amount, even grocery items, etc.Another way of getting a shopping card is to tie up with supermarkets andshopping 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 begiven more points in addition to the normal points system followed by the store, which couldbe redeemed for any purchases from the store.Advantages:92The incentive of redeeming points would surely induce the customer to buyGillette products.Since the range of products is better displayed in a supermarket, a customer maybe influenced to buy other Gillette products also; maybe even a higher version of the razorhe usually buys.The store would also be benefited as more customers would now be motivatedto 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. Thecards would be for different pre approved values of 500/-, 1000/, 2000/- , carry a certainvalidity 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 bereimbursed the remaining amount in cash. At the time when the customer purchases thecard he would be entitled to certain sops like movie tickets, free passes to musicconcerts, lucky draws etc.The merchant would be paid the cash value of the card upon depositing the same withthe company.Benefit s :The company is getting the consumer’s commitment beforehand to make Gillettepurchases in the coming future.Privileged Gillette consumers would be eligible for attractive offers. They would feeldifferent from users of other brands.The maximum benefits would be tagged with the highest value card. The nature ofthe 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 werebetween 18-25 years of age were using Gillette because of a “sense of pride” apart fromits ‘Brand value’. Gillette we believe stands to gain if it positions itself as the ‘Brand ofthe youth’. It can do this in two ways.College Festivals93Since the scope of our project is limited to NCR, we recommend that the companyassociates itself with festivals and other events carrying mass appeal in DelhiUniversity ,Indraprastha University, IIT, DCE,etc.The Gillette cardThe youth is the segment that is most attracted to a concept like a shopping card, eitherexclusively for Gillette or one combined with a store. They are, in fact, the mostimpulsive customers who would be influenced by add-ons like entry to musical shows,movies, etc.

Pitching retailer against retailerWe questioned even some retailers during the course of our project. Upon enquiry, we foundout that competitors were giving a higher margin to the retailer than Gillette. The retailer is avery crucial element in the distribution strategy. He even plays a vital role in shaping theimage of a product, which means he cannot be neglected for long. In spite of this, they donot have specific targets. Therefore, the company can actually fix incentive based targets.The company could have a concept of monthly / quarterly lucky draw for retailersexceeding their targets and could keep a holiday package or high value consumerdurable as the prize for the winner of the draw.

R & D : Giving a Technical pushAt present along with the Malhotras, there are a number of local players in the market sellingtwin blade razors. Even though Gillette is the market leader there still is scope for them toincrease their market share further. One way of doing this is to constantly come up withnewer versions or products.

Gillette could also work on coming with special razorsFor trimming corn and callous in the feetTo prevent skin irritation caused by shaving (people with sensitive skin)Single blade disposable (or non-disposable) for the more price conscious.94.

Strong Advertising PitchGillette has traditionally been using foreign models in its Mach3 ad campaigns & for itsother products like vector plus, presto they have not used any specific Indian brandambassador. Therefore, the amount of mind share that the ad is able to capture is on thelower 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 onhis 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 adcampaign 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 thatnone of their products (except Presto) are touched by a human hand is an additional sellingpoint 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 toldabout this during the course of our survey.The company can make use of the latest ad medium of SMS. The huge spurt in cell phoneusage can be wisely tapped by Gillette for reaching its customers. Since this medium maybecostly so the company can use it for communicating offers and discounts on its products ifnot 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 comingout with new and innovative Ideas.95Some possible strategies could be:Vector plus free with purchases of INR 500 and above at select grocery /departmental storesPresto free with purchases of INR 200/250 and above at select grocery / departmentalstoresThis would be in the nature of a limited period offer.The above strategy can be extremely successful in penetrating those households (throughthe housewife) wherein the males of the household are loyal customers of another brand foryears & no sales pitch or salesman can change their preference except maybe a experimentaluse of the free product.

The Barber Shop3.9 billion blades are consumed annually in India, a third of which sits inbarbershops. So technically, 50 per cent of the shaving population goes to barbershops.Therefore Gillette could develop a strategy wherein its sales force specificallytargets people frequenting barbershops.The primary challenge in this regard is the cost per shave, which is much lower fora 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 thissegment.We therefore suggest the following1) 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 ofHouse of Malhotras. Barbers can be convinced & financially motivated to movefrom either unbranded blades or from competition to these basis the followingstrengths:a) Demand is inelastic. The barber will always have a steady flow ofcustomers. He can therefore afford to make bulk purchases (if given properincentives).

b) A blade is a durable product. Bulk Purchases made can be stored with ease.96A barber provides numerous services apart from shaving like hair cuts, headmassage, etc .customers waiting for their turn typically watch TV or flip throughmagazines. we suggest that the barbers could be given incentives to stock some ofGillette’s razors & other products to attract the attention of waiting customers.This exercise may induce self shavers to make on the spot purchases and saloonshavers to try out new products2) Making /Production of Shingle outside shops:We suggest that Gillette starts a scheme wherein it makes the shingle carrying thename of the barbers shop. While it would produce these for the barber at asubsidized cost (i.e. less than what the barber would incur by getting it madehimself), approximately a 10% strip at the bottom would be dedicated to theGillette name and punch line.This would help promote brand recall among consumers frequenting the shop and increasesthe possibility of them moving from barber shaving to self shaving. Since such an activity isnot in line with Gillette’s core competence, it could be outsourced to a third party.3) Shaving Mugs & Brushes at Barber shop carrying Gillette nameIt is suggested that Gillette could offer free shaving mugs and brushes to barbers who enterinto Bulk deal contracts with it. These would have ’Gillette’ along with its punch lineembossed on them. A consumer typically sits for 10-15 minutes in a fixed position whilegetting a shave done. Since the consumer is not in a position to move/undertake any otheractivity during that time; we believe that this becomes a good strategy to get him thinkingabout Gillette- capturing his attention span. We further believe that this would definitelyprompt a one time purchase of Gillette shaving products and may push the customer in themedium to long term towards self shaving.97RAM LAL AND SONSGILLETTE- THE BEST A MAN CAN GET

BIBLIOGRAPHYPorter, E Michael, Competitive Strategy: Techniques for Analyzing Industries andcompetitors,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 MarketingRies, Al and Trout, Jack, Positioning, (few specific points)http://economictimes.indiatimes.com/articleshow/796982.cmshttp://economictimes.indiatimes.com/articleshow/761804.cmshttp://economictimes.indiatimes.com/articleshow/757445.cmshttp://economictimes.indiatimes.com/articleshow/756896.cmshttp://economictimes.indiatimes.com/articleshow/705603.cmshttp://economictimes.indiatimes.com/articleshow/758829.cmshttp://economictimes.indiatimes.com/articleshow/665732.cmshttp://economictimes.indiatimes.com/articleshow/653580.cmshttp://economictimes.indiatimes.com/articleshow/648475.cmshttp://economictimes.indiatimes.com/articleshow/628507.cmshttp://economictimes.indiatimes.com/articleshow/575888.cmshttp://economictimes.indiatimes.com/articleshow/553014.cmshttp://202.87.40.171/comp/CompanyIndex.asphttp://202.87.40.171/comp/ChairSpeech.asphttp://202.87.40.171/comp/News.asphttp://syndication.indiatimes.com/articleshow.cms?msid=19996485http://www.valuenotes.com/krc/apr2001.asp?ArtCd=27039http://www.mouthshut.com/readreview/31405-1.htmlhttp://tss.indiatimes.com/sampet-mkting.htmhttp://economictimes.indiatimes.com/cms.dll/articleshow?msid=185104http://www.hindu.com/2003/10/30/stories/2003103001791603.htmhttp://www.bcg.com/publications/publication_view.jsp?pubID=451&language=English98

APPENDIXANDANNEXURESTHE CONSUMER QUESTIONNAIRE:Name:

Age:Address:Monthly Income/Expenses Groups:o Up to Rs 5,000o Above Rs 5,000 to Rs 10,000o Above Rs 10,000 to Rs 15,000o Above Rs 15,000 to Rs 20,000o Above Rs 20,000991 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 EDGEUSER )1 How often do you shave? Daily Every alternate day Once in 3- 4 days Once a week Fortnightly2 Which blade do you use? Laser Topaz Supermax 7’o clock Wilkinson3) Reasons for your choicea)( try and gauge natural response without giving options i.e.impromptu )_________________________________________________b) (give attributes and ask them to rank their preference in caserespondent 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 water100 price4) Have you faced any problems while using a Double edged razor? Problem of cuts Time consuming Maintenance and handling5) Have you ever tried a twin blade razor?If yes, why did you switch back to doubleedge________________________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 Fortnightly2. Reasons for your choicea)( try and gauge natural response without giving options i.e.impromptu )________________________________________________b) (give attributes and ask them to rank their preference in caserespondent 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 price3) Problems faced if any in twin edged? Cuts time consuming maintenance and handling clogging of hair hard shave1014) 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 / GallantCartridge: Gillette / 7 o clock / Wilkinson / Wilman / Gallant6) If Gillette then which? Presto

7oclock Vector Sensor Excel Mach3 Mach3 turbo(For respondents who have never used Gillette or have movedaway from it after using it)1) Have you ever used a Gillette razor?Yes- Why did you switch over to ____________________________no---reasons? ____________________________________a) unawareb) associate it as a product of upper segmentc) problem in availabilityd) price (if yes-are you aware that Gillette imports razors- if nothen ask—does this knowledge change your perception?)3) Which of the following attributes do you associate with Gillette; how doyou rate themPARAMETRES strongly agree agree disagree strongly disagreeValue for moneyTechnologySafetyQuality of shaveSense of pride3) Do you recall any ad of Gillette?If yes, What do you like in the ad? _________________________________102What 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 promotionalschemes .(price discounts, one cartridge free with 4,etc) Yes No Maybe5) Did you know that 7’o clock and Wilkinson sword are actually Gilletteproducts?103THE 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 Deodorant5. Which Gillette razors and cartridges do you deal in?RAZORS CARTRIDGES MARGINSPrestoVector PlusSensor ExcelMach 3Mach 3 Turbo6. What is the form of purchase? Cash Credit Both Combined Any other ____________1047. Please give details of retailers you supply toLocation Number8. What is the basis of delivery? Fixed / pre determinedIf yes, please specifyo Weeklyo Fortnightlyo Monthly As and when the retailer orders9. From where do they obtain the stocks? Directly from the company C&F agents Others10. Any problems faced in purchasing of stocks? Were they properly handled?________________________________________________________________________________________________________________________________________________11. What is the form of sale? Cash Credit Both combined Others12. If the form is credit, then is there any scope for sales returns?

________________________________________________________________________________________________________________________________________________13. Is there provision for online booking?105 Yes No14. Is there any provision for Vendor feedback? Yes No15. What are the competitive / other brands that you deal in?RAZOR CARTRIDGES MARGIN ON RAZORS16. How would you compare Gillette with others on the following parameters :GILLETTE OTHERSMargin on razorSchemes to dealersDelivery systemConvenienceDealing with co./agentsPayment systemsHandling of stocksHandling/solvingproblems/queriesEfficiency-online booking106

COMPANY CHECKLISTSReasons for hike in price of Presto from Rs 7.5 to Rs 12 to Rs15.Gillette ad strategy and why the company continues topursue it despite poor ad recall.Reasons for advertising only at the time of new productlaunches and price cuts and not on a regular basis otherwiseReasons for not projecting Wilman and Wilkinson asproducts from the Gillette stable despite acquisition of ISPLCost to company of a Gillette wallPayment made to retailer for putting a Gillette wall in hisoutlet.

Reasons for not playing upon the fact (in ads) that all Gilletteshaving razors (except Presto) are imported and not locallymanufactured.107

COMPANY CONTACTS AND OTHER SOURCES108

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109"akshay berry" <akshay_berry@rediffmail.com>To: rishi.dhingra@gillette.comcc:Subject: Marketing Project on Gillette shaving range30 Aug 2004 13:22Dear SirWe are students of Delhi School of Economics ( Master in InternationalBusiness ) and are doing a marketing project on Gillette's range of shavingrazors.The thrust of the project is to try and upgrade double edge users (whocomprise 90% of the market) to twin blade systems and also to upgradeexisting Gillette users up the value chain.We also intend to do some surveys at the level of the consumer and retailerand would be glad to provide data or any other information collected, ifrequired by you.Request you to kindly give us an appointment / direct us to the concernedperson who could guide us/provide some data in this regard.We would be highly obliged and would not take too much of your valuabletime.Our group comprises of 5 students C V R Shekhar, Deepika Mittal, AnshulSood, Ivan Passanah and myself.Thanks & RegardsAkshay BerryMIB 1st SemesterOriginal 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”110anshulsood@hotmail.com , “ivan” ivan83@rediffmail.comCc: Himava Nath <Himava_Nath@gillette.com>

Subject: Re: Marketing Project on Gillette shaving rangeForwarded Message [ Save to my Yahoo! Briefcase | Download File ]Subject: Re: Marketing Project on Gillette shaving rangeTo:"akshay berry" akshay_berry@rediffmail.com, , “shekhar” shekharcvr@yahoo.com , “deepika”deepikamittal19@yahoo.co.in ,“anshul” anshulsood@hotmail.com , “ivan” ivan83@rediffmail.comCC: "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 IvanYou could get in touch with Himava Nath at the Gillette Indiaofficeand hecould potentially share with you whatever is "non confidential"stuff.Regards,Rishi Dhingra,Business Manager, GroomingAMEE GroupTel : 44(00)20 8847 7258Fax: 44(00)20 8847 8800email: rishi_dhingra@gillette.com111-- Original Message --From: Valerie_Ducasse@gillette.comTo: akshay_berry@rediffmail.comSubject: Re: 4311623AForwarded Message [ Save to my Yahoo! Briefcase | Download File ]From: Valerie_Ducasse@gillette.comTo: akshay_berry@rediffmail.comSubject: Re: 4311623APlain Text Attachment [ Download File | Save to my Yahoo! Briefcase ]September 14, 2004Mr Berry,Thanks for visiting our website! We have forwarded your email totheGillette office in your country. You should receive a localresponsewithin 15 business days. If you do not get a reply, please let meknow.Thanks again for visiting our site and for your comments!Valerie D.Consumer Service Associate4311623AThe HTML graphics in this message have been displayed. [Edit Preferences - What'sThis?]Delete Reply Forward Spam Move...112

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1. EXECUTIVE SUMMARY 2. INTRODUCTION OF PROJECT 3. HISTORY OF GILLETTE 3.1. FOUNDATION OF GILLETTE INDIA 3.2. GILLETTE’S STRATEGY IN INDIA 3.3. SALES 3.4. STRUCTURE 3.5. PRODUCT DETAILS 4. ANALYSIS OF GILLETTE 4.1. FINANCIAL ANALYSIS 4.2. VISION AND FUTURE GROWTH 4.3. EXTERNAL FORCES 5. PERSONAL GROOMING INDUSTRY – AN OUTLOOK 5.1. INDUSTRY ANALYSIS 5.2. COMPETITOR ANALYSIS 5.2.1. COLGATE-PALMOLIVE 5.2.2. PROCTOR & GAMBLE 5.3. HLL 5.4. GODREJ 5.5. FA 5.6. OTHER BRANDS 6. GILLETTE SHAVING CREAM DIVISION

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6.1. PRODUCT 6.1.1. GILLETTE PRODUCTS IN THE SHAVING CREAM/GEL/FOAM DEPARTMENT 6.1.2. GILLETTE’S RANGE OF SHAVING GELS AND FOAMS 6.2. GILLETTE SHAVING GEL - AN INSIGHT 6.3. PRICE 6.4. PLACE 6.5. PROMOTION 7. MARKET RESEARCH 7.1. RESEARCH PURPOSE 7.1.1. PROBLEM OR OPPORTUNITY 7.2. RESEARCH OBJECTIVE 7.2.1. RESEARCH QUESTION 7.2.2. RESEARCH BOUNDARIES 7.3. RESEARCH DESIGN 7.3.1. RESEARCH APPROACH 7.3.2. RESEARCH TACTICS 7.4. IMPLEMENTATION 7.4.1. DATA COLLECTION - PHASE 1: 7.4.2. PHASE 2: FINAL SURVEY 7.4.3. DATA PROCESSING 7.5. RECOMMENDATION AND CONCLUSION 7.5.1. PLAYING WITH THE PLC: 7.5.2. LAUNCH GILLETTE SHAVING CREAM 7.5.3. PROMOTION 7.5.4. SALES AND MARKETING 7.5.5. CONTINUE WITH UPGRADATION 8. FUTURE CHALLENGES 9. MARKETING PLAN FOR SHAVING CREAM

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20 20 20 22 24 25 26 28 28 28 28 28 28 29 29 31 31 31 32 32 36 36 37 37 38 38 40 41

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9.1. MARKETING AUDIT 9.1.1. INDUSTRY OUTLOOK 9.1.2. GILLETTE’S CURRENT POSITION (WHERE WE ARE AND WHERE WE ARE HEADING??) 9.1.3. FUTURE OUTLOOK WITH SHAVING CREAM (WHERE WE WILL HEAD?) 9.2. MARKETING MISSION 9.2.1. TARGET CUSTOMERS AND THEIR NEEDS 9.2.2. MARKETING OBJECTIVES 9.3. STRATEGIC PRIORITIES 9.4. MARKETING STRATEGY 9.4.1. SEGMENTATION 9.4.2. POSITIONING 9.4.3. REAL POSITIONING 9.4.4. PSYCHOLOGICAL POSITIONING 9.5. MARKETING MIX 9.5.1. PRODUCT AND SERVICE 9.5.2. PRICING 9.5.3. PROMOTION 10. APPENDIX 10.1. GILLETTE- TIMELINE 10.2. SWOT ANALYSIS 10.3. ORGANIZATIONAL STRUCTURE 10.4. PRODUCT PORTFOLIO 10.5. FINANCIAL ANALYSIS 10.5.1. SHARE HOLDING PATTERN 10.5.2. PROFIT & LOSS ANALYSIS 10.5.3. BALANCE SHEET ANALYSIS 10.5.4. CASH FLOW ANALYSIS 10.5.5. COMPARATIVE ANALYSIS 10.5.6. VALUATION 10.6. COMPETITOR’S ANALYSIS

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41 41 41 42 42 42 42 42 43 43 44 46 46 46 46 48 48 50 50 52 54 56 57 57 57 61 63 64 65 67

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10.6.1. COLGATE PALMOLIVE 10.6.2. PROCTOR & GAMBLE 10.6.3. HLL 10.6.4. GODREJ 10.6.5. OTHER COMPETITORS 10.7. CUSTOMER SURVEY QUESTIONNAIRE 10.8. FOCUS GROUP DISCUSSION FORMAT 10.9. AGE PROFILE OF SAMPLE POPULATION 10.10. SHAVING PRODUCT PREFERENCE 10.11. PLACE OF BUYING 10.12. RECALL PATTERN 10.13. USER PREFERENCE 10.14. BRAND SATISFACTION OF GILLETTE 10.15. BRAND LOYALTY IN SHAVING CREAM/GEL/FOAM MARKET 10.16. PRICE SENSITIVITY IN SHAVING CREAM/GEL/FOAM MARKET 10.17. FISHBEIN ANALYSIS 10.18. BRAND PREFERENCE BASED ON INDIVIDUAL ATTITUDE SCORE 10.19. AVERAGE ATTITUDE PERCEPTION SCORE OF EACH BRAND 10.20. FACTOR ANALYSIS 10.21. PERCEPTUAL MAPPING 10.22. CLUSTER ANALYSIS

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67 67 68 68 69 70 75 79 79 80 80 81 81 81 82 83 83 84 84 87 90

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1.

Executive Summary

Gillette has been the leading brand in men‟s grooming industry in India and across the globe. Gillette with its wide range of products caters to the premium segment of the men‟s grooming market. Gillette faces intense competition in the shaving preparations market (shaving gel/foam/cream) whereas the competition in the razor market is not that intense. With the intense competition Gillette has to cater to the various needs of the consumers. This project aims at identifying the problems faced by Gillette in the shaving preparation market. Through the project we have found an opportunity for Gillette India in the shaving cream segment which is the biggest segment in Indian shaving preparation market and Gillette has no presence in it. The research we conducted also supports this fact. We have suggested a marketing plan for Gillette Shaving Cream along with other suggestions for Gillette to face the competition in the near future and the long run.

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2.

Introduction of project

The objective of the study is to understand the consumer attitude and buying behavior for Gillette Shaving Gel And Foam. To understand the former part, we created a focused group questionnaire and conducted a focused Group Discussion (FGD) on Shaving Cream, gel and foam. We analyzed the questionnaire and the FGD to create an extensive questionnaire understanding the buying behavior of consumers of Gillette Shaving gel/foam and other brands. We had a Fishbein analysis done on the 84 respondents from Indore to identify how much of buying intension is due to attributes and how much due to influence by referrals. We further extended the study to understand the perceptual mapping of brands. Our analysis has revealed that the consumer is satisfied with the brand Gillette and its attributes. However Gillette has not performed well with the customers who are slightly price sensitive. This following detailed analysis is presented in our assignment.

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3.

3.1.

History of Gillette

Foundation of Gillette India

Gillette India was incorporated on 9th February 1984 at Rajasthan. House of Poddar Enterprise (HOPE) and Gillette Company, U.S.A. (Gillette), promoted it. Gillette India manufactures and markets Gillette Grooming Products and distributes Oral – B and Duracell products. More than 60 % of the products sold in India are locally manufactured by Gillette India. Parent company Gillette (Refer Time Line, section 10.1) owns a majority stake in Gillette India. Company entered into a foreign collaboration agreement with HOPE for setting up of a company for the manufacture of stainless steel razor blades in which Gillette agreed to subscribe 24% of the equity capital. This agreement provided technical collaboration by Gillette over the full range of technical know-how and technical assistance for the manufacture of razor blades, razors and shaving systems. In 1985, the company came out with an IPO for raising Rs 26 million to fund the setting up of its plant at Bhiwadi in Rajasthan. Company placed a plant for the manufacture in the first phase, 200 million stainless steel razor blades per annum in the starting. Blades manufactured by the Company were of two types, the premium 7 O'Clock, Ejtek Super Platinum and the stainless brand 7 O'Clock Ejtek Super Stainless. Company took over Sharpedge Ltd., by acquiring the entire share capital of that company. Company also merged Duracell (India) Pvt. Ltd. and Wilkinson Sword India Ltd. with the company. Company introduced new twin blade shaving system called 7 O'Clock Ejtek P II with platinum enriched edges in 1987 and changed the shaving system in the India. Sabre Pens Ltd., Sheen Dental Products Ltd., Klosershav Products Ltd., and Vanity Cosmetic Ltd., are wholly owned subsidiaries of the Company. During the mid-nineties, the company's product range widened with new products being introduced in the market namely, Gillette Presto ready shaver, 7O'Clock Ready-II shaver, Gillette Sensor Excel shaving system, Gillette shave gel, conditioners, deodorants, etc. It also started distributing Oral B toothbrushes, Duracell range of batteries and Luxor and Parker pens. Gillette enhanced its range in men‟s shaving products, it has also entered the women's shaving product segment. In

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1998, the company decided that it would use Gillette as its pre-eminent brand placing it ahead of the 7O'Clock brand.

3.2.

Gillette’s Strategy in India

The Indian shaving products market is characterized by a 97% share of double-edged blades - a business dominated by the Malhotras, with brands like Topaz and Panama. Instead of going head-on against them in this highly price-sensitive market, ISPL has chosen to focus on premium products. The strategy has been to bring more people into the twin-edged segment, and then gradually move them towards even more premium products. Also, by segmenting the market with offerings at different price points - 7 O'Clock, Sensor and Mach III, ISPL offers a continuing upgrade path for users.

3.3.

Sales

Gillette India's sales jumped 106 per cent to Rs 516.80 crores after the addition of new businesses from the merged companies. But operating profit margins of the merged entity has dropped to 12.9 per cent in 2000, from 19.3 per cent in 1999. As a result, Gillette India's operating profits rose by a lower 38 per cent to Rs 67.16 crore. This suggests that the merging companies have far lower levels of profitability than Gillette India. Presently Gillette India Ltd today announced 36.6 per cent higher net profit at Rs 61.22 crores for the 12 months ended December 31, 2004 on 9.73 per cent growth in sales at Rs 446.57 crores.

3.4.

Structure

Post Gillette P&G merger, Gillette has adopted the organisation structure of P&G 2006 onwards and effective July 1,06 relocated its headquarters from Gurgaon to P&G Plaza in Mumbai, which will house all P&G subsidiaries in India. P&Gs organizational structure is broadly divided into three heads: GBU(Global Business Unit), MDO(Market Development Organization)and GBS(Global Business Services).Gillette moved from business units based on geographic regions to GBUs based on product lines. MDOs develop market strategies to build business based on local knowledge and GBS bring

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together business activities such as accounting, human resource systems, order management and information technology, thus making it cost-effective. The present structure of P&G is shown in the section 10.3.

3.5.

Product Details

Company Manufacture stainless steel razor blades. Gillette India has a wider portfolio of core business of shaving products sold under Gillette, 7‟0 Clock and Wilkinson brands, Battery and flashlights business and oral care products (Oral B). Company has strong presence in shaving razor blades market. It has the premium quality 7 O'Clock Ejtek shaving brush, 7 O'Clock Ejtek P II shaving system with a metal spine and a shave cream in three variants, Gillette Presto Readyshaver, Readyshaver under the Brand 7 O'Clock Ready II, tooth brushes under the well known international brand name Oral-B, Gillette Sensor & Sensor Excel shaving systems which met with an excellent consumer and trade response, Gillette Shave Foam, Gillette Aerosol" shaving cream, new generation triple blade shaving system Mach3Turbo etc. Company also entered into ladies personal care segment with the launch of the Gillette Sensor Excel for women. Company has strong diversified portfolio to increase its male personal products coverage. Company has tied up with Rediff-on-the-Net e-commerce to market its product and increase its customer base.(Section 10.4 for product line)

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4.

4.1.

Analysis of Gillette

Financial Analysis

Since its entry into India market in 1984, Gillette has been following a strategy of inorganic growth by acquiring domestic companies in oral care, battery, blades and razors and stationery business. The company witnessed tremendous growth during the later half of 1990s. Net sales increased from Rs 107 crores in 1997 to Rs 477 crores in 2000 representing a growth rate (CAGR) of 45 %. Similarly, CAGR for net profits over the same period was over 50%. However, operating margin declined from 19.8% in 1997 to 14.0% in 2000. This further declined to less than 1% in the year 2001. Further, negative sales growth and increased expenses led to a net loss of Rs 28 crores in 2001. This poor financial performance forced the company to undertake a major restructuring program. Over the next 2 years, Gillette concentrated on reducing overheads and better working capital management to increase profitability. As a result of its restructuring program, the company reported net profit of Rs 44.82 crores in 2003. Since then, company has been growing at a steady rate which has resulted in increased valuation of the company.

4.2.

Vision and Future Growth

The company‟s vision is to build total brand value by innovating to deliver consumer value and customer relationship faster, better and more effectively than its competitors. This vision statement has led to the development and introduction of various newer products especially in male grooming division and adoption of a more customer oriented approach. Restructuring in 2002-03 brought about a major

shift in the future strategy of the company. The company decided to disassociate itself from non-profitable and nonstrategic businesses to focus on profitable businesses. It started focusing on the

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grooming and oral care business and exited the battery (except Duracell) and household appliances activities. Gillette currently, is the market leader in the male grooming division and is expanding very aggressively into female grooming business through introduction of products such as wet shaving products and hair expiation devices. The company is also focusing on exploring ways to capture the expanding oral care segment in the near future. Oral care segment contributed approximately 13% of company‟s revenues in 2006 as against only 7% a year ago. (Section 10.5 for Financial Analysis)

4.3.

External Forces

The external environmental factors in terms of increasing purchasing power of the Indian consumers and a high level of interest in personal grooming amongst Indian men and a strong focus of the company to create awareness for technologically advanced products have resulted in signs of growth in the triple blade and twin blade systems. In 2004, Gillette came up with new and improved products like Mach3 Turbo and New Vector Plus to cater to the increasing needs of this section of the market. Further, penetration of cable television into the smallest of Indian towns has led to an increased awareness of latest lifestyle trends and brands, which have become an aspiration for many consumers. This increased awareness coupled with the increase in disposable incomes has led to a desire to upgrade lifestyles through owning and using better quality brands. This increased demand has led to higher sales growth especially in personal grooming division. The Government's continued focus on liberalization; trade friendly policies and improvement in infrastructure have resulted in a steady inflow of global investments into the Indian market which has again resulted in higher income levels due to increased employment opportunities and sustained economic boom. Thus, it can be said that due to higher income elasticity of demand, demand for personal grooming products are expected to grow at a rate higher than the rise in income levels of people. However, since the market is still driven largely by price and

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not quality (typically in rural markets and smaller towns), consumers might not value the potential benefit of paying higher prices for better and safer products.

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5.

5.1.

Personal Grooming Industry – An Outlook

Industry Analysis

Due to increased awareness and rising income levels, the industry is expected to undergo a major shift from traditional double-edged razors segment to twin and triple blades razors segment. Razor blade market has tripled from Rs 2 billion in 1986 to Rs 6 billion in 2006. In value terms, in 2003, double-edged blades comprised 78%, systems 15% and disposables 7%. As per AC Nielsen/ORG's estimates, the domestic shaving preparations market in 2003 was pegged at Rs 1.5 billion. Within the industry, cosmetics and personal care industry has been growing at an average rate of 20 per cent for the last few years. However, current consumption is still below many countries in Asia which shows that there are further growth opportunities. In 2004, market size of men's personal care segment is estimated at approximately Rs 750 crores, with Gillette having the largest market share. Thus, the industry is growing at a decent rate but still is at an infant stage and this offers great opportunities to players like Gillette and Colgate Palmolive to expand their customer base to include higher number of lower middle class people and thereby increase their revenues and profitability.

5.2.

Competitor analysis

5.2.1. Colgate-Palmolive Colgate-Palmolive is one of the largest companies in the FMCG sector. The Company has launch of its International Palmolive Shave Gel and Palmolive Shave Foam in the year 2000, in response to growing consumer interest in skin conditioning benefits. The Chairman of Indian

Operations mentioned that the company‟s strategy for Personal Care is to remain in top niches. Every year, they intended to take 3-4 initiatives. Colpal has shaving products under the brand name Palmolive shaving cream. It has three variants in the shaving cream/gel/foam category. They are shown below:

IIM Indore Colgate-Palmolive‟s Shaving Cream/Gel/Foam:

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The Price of each of these products is mentioned with size of the pack in the table below Product Palmolive Lime Palmolive Moisturizer Palmolive Delux (Section 10.6.1) Weight (gms) 70 70 70 Price (Rs.) 37 39 39

5.2.2. Proctor & Gamble Proctor & Gamble, USA operates in India through three entities. 65% subsidiary Procter & Gamble Hygiene & Healthcare (PGHH), which is focused on Anticold (Vicks), and Feminine Hygiene (Whisper). In the shaving cream/gel/foam category it has a very strong brand in the market, Old Spice.

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Old Spice has products in each of the cream, gel and foam category. These three categories are shown in the form of a tree below. Proctor & Gamble‟s Shaving Cream/Gel/Foam:

The prices of Old Spice shaving cream, gel and foam products are mentioned in the table below: Product Old Spice Foam Old Spice Gel Old Spice Cream Quantity 200 ml 60 gm 70 gm Price (Rs.) 110 50 45

It can be observed from the table that even the Old Spice Cream is priced higher than the premium products of other competitive brands.(Section 10.6.2)

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5.3.

HLL

Hindustan Lever Limited, which is now called as Hindustan Unilever Limited, is a subsidiary of Unilever (USA). It is the largest FMCG company in India. It is also reputed to be the largest exporter of India. It‟s distribution network is very strong. It has over 2000 suppliers and associates and about 7000 redistribution stockists. With this massive distribution network in place, HLL enjoys commanding position in many FMCG products in Indian market. In the Shaving Cream/Gel/Foam category also HLL has two brands. Both of them are very strong brands in the Indian market. With the help of the its distribution system these brands have a deeper reach to the Indian consumers. These brands are shown in the tree below:

HLL‟s Shaving Cream/Gel/Foam:

The pricing of shaving products by HLL for both Axe and Denim is almost same. It is also very similar to that of Old Spice shaving cream. But HLL does not have any product in the gel or foam category to compete brands like Old Spice and Gillette.

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Product Axe Shaving Cream Denim Xclusive (Section 10.6.3)

Weight (gms) 70 70

Price (Rs.) 45 43

5.4.

Godrej

Godrej is a domestic brand of shaving cream and now it is looking to expand in the global market for hair color and shaving creams. It has two variants in the shaving cream category. They are Godrej Shaving Cream and Godrej Premium Shaving Cream. The price of these two is shown in the table below. One observation is that even the premium shaving cream from Godrej is priced quite below (44%) below the competitors products of same quantity. Product Godrej Shaving Cream Godrej Premium Shaving Cream (Section 10.6.4) Quantity 100 gms 70 gms Price (Rs.) 25 25

5.5.

Fa

Fa has two shaving cream products in the market. Fa is offering 30% extra shaving cream (21gms) with 70 gms pack. Both of its products are priced exactly the same. Product Fa Oceanic Fa Dynamic (Section 10.6.5) Quantity (gms) 70+21 70+21 Price (Rs.) 40 40

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5.6.

Other Brands

Other competitive brands like Dettol and Park Avenue are also there in the market scene. The price for their shaving cream product is mentioned below. These are not premium segment brands and were priced accordingly. Dettol cream which comes in 70 gms pack is currently offering 40% extra in its regular product for Rs. 37. Whereas Park Avenues shaving cream is sold in 70gms pack for the price of Rs 36. (Section 10.6.5)

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6.

6.1.

Gillette Shaving Cream Division

Product

Introduction Gillette has always remained the technological, market leader in the razor division of the men‟s grooming segment. Its‟ high brand awareness, market acceptance as a technological leader for hi-performance razors and high brand equity were compelling reasons to penetrate and develop the entire value chain of the men‟s grooming industry (razors, after shave and shaving gel/foam).

6.1.1. Gillette products in the shaving cream/gel/foam department Gillette has a range of shaving products for different types of skins and user requirements. However, Gillette has consciously not chosen to have shaving cream in its product line. Gillette worldwide and Gillette India have cited the following reasons for not launching a shaving cream and restricting itself to only shaving gel and foam: Technically speaking, gels offer more lubrication than that of creams. This means that gels have more anti-friction properties than creams. This enhances the effectiveness of the razor‟s glide on the skin. Weight-to-weight, gels are cheaper than creams. Gel, being a solid in a liquid, can include any additional ingredients like moisturizer, aloe vera, vitamin E etc. Foams have been pre-perfected with the optimum lather required for shaving and Gillette was already a market leader in the foam segment. The demand for foams was on the rise due to minimal effort required on the part of the consumer. 6.1.2. Gillette’s range of shaving gels and foams All of Gillette‟s shaving gel/foam products come under the brand name “Gillette Series”. All the 10 variants are in the premium segment. Gillette has virtually no presence in the basic and core product categories. Our analysis has shown us that

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shaving gel/foam is more commoditized in India and that 81% of the Indian consumers use cream and not gels or foam. Gillette in the customer value hierarchy: Green – Gillette Gel, POTENTIAL Moisturizing gel PRODUCT Conditioning Yellow – Gillette Foam Moisturizer

Sensitive EXPECTED PRODUCT Deep Cleansing Deep Cleeansing Gel BASIC PRODUCT

CORE PRODUCT

Ultra comfort Lemon Godrej V John Old Spice Denim Dettol

Pure

&

Sensitive

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The customer value hierarchy shows us clearly that Gillette has no product in the basic or core category which is dominated by the creams. This segment accounts for more than half the entire market. Following are the variants in the product width:

GILLETTE SERIES S. NO. 1 2 3 4 5 6 FOAM Foam Conditioning Foam Deep cleansing Foam Pure and Sensitive Foam Moisturizer Foam Senitive skin Foam Lemon GEL Gel Moisturizing Gel Sensitive Skin Gel Ultra Comfort

6.2.

Gillette Shaving Gel - an insight

The Gillette shaving gel/foam series has been developed as a technologically superior product. Gillette is the only company to have 10 product variants in this category. No other competitor has even more than 5 variants. So, Gillette has the deepest product line and the widest product width. Gillette Series has many firsts to its credit in the Indian market: First to introduce Shaving gel in the Indian market First to include ingredients like Aloe vera and Vitamin E in its gels and foams. First to introduce foams with no fragrance in “Pure and Sensitive”

Brand Development Index and Category Development Index Gillette has the highest brand equity in the men‟s grooming industry. The brand Gillette is more of a life style product than just a grooming product.

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High

Category Developme nt Index Low

Gillette Shaving gel/foam Low Brand Development Index Packaging With shaving cream/gel perceived as a commodity by the majority in India, the packaging, Point of purchase plat an important role in the consumer‟s mind while deciding which product to buy. The Gillette Series has been designed and packaged with a futuristic theme to communicate to the consumer the subtle message that only Gillette offers you the most advanced in shaving products. Gillette was the first in India to introduce gels in tubes. The shaving tube for GEL is very different in design. It is glossy and can rest on its cap unlike the competitor‟s tubes. The FOAM series comes in metallic cylinders. High

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6.3.

Price

Gillette has 10 product variants of shaving gel/foam for the Indian market. All the 10 products are in the premium category ranging from Rs 53 to Rs 210 for the minimum and maximum SKUs. Gillette has priced its shaving gel and foams well above the industry average. For instance, Gillette foam priced at Rs. 210 costs 60% more than OLD SPICE foam though Old Spice has the one of the best brand perceptions (and was the best in our survey). The pricing strategy suggests that Gillette is leveraging its customer loyalty ( i.e. the consumers who are brand loyal to Gillette razors). The following table shows the Gillette Series price for all the 10 product variants. We shall see the competitor‟s prices in detail in the competitor analysis. FOAM VARIANTS Conditioning Deep cleansing Pure Sensitive Moisturizer Senitive skin Lemon 200 200 200 120 120 120 QUANTITY (ml) 250 250 PRICE (Rs) 210 210 210

and 250

GEL VARIANTS Moisturizing Sensitive Skin Ultra Comfort

QUANTITY (gms) 60 + 20 60 + 20 60 + 20

PRICE (Rs) 53 53 53

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6.4.

Place

The distribution network of Gillette is very robust. They have P&G‟s distribution network in addition to Gillette India‟s existing one. The distribution network is a combination of own network and that of a franchisee. As of now, Gillette India has the same distributors in the 20 cities that P&G operates with. The distribution network follows a hub and spoke model. The hubs are the 20 cities. The spokes are the various Tier 2 and Tier 3 cities and towns around the major hub. These cities are managed by the exclusive distributors in those cities. Every city has only one franchisee distributor. These tier 2 and 3 cities (spokes)thus serve as a feeder market to the hubs. Each franchisee distributor has his own set of employees working for him. The distributor also manages his own fleet costs to supply to the retailers. There are no wholesalers. As told to us by the distributor in Indore, this is the hub and spoke model for the Mumbai hub: Indore

Dadra and Nagar Haveli Aurangabad MUMBAI (HUB) Pune Panaji The distribution network in Indore: Indore is a feeder market getting its feed from Mumbai. We went to the exclusive (franchisee)distributor in Indore. Indore‟s distributor is called Life Science Corporation near ADLABS Mall. This is their distribution network for Indore:

IIM Indore Distributor (1)

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Area Sales Manager (2)

Sales Representatives (4)

Fleet Drivers(4) The sales representatives go with the drivers to the various Retailers under their geographic span and take orders every week. The credit period offered is one week. So, for every week the order is taken and supplied, the amounts due for the previous week would be collected. The two sales managers have split the city into two parts for their span of control. They are in charge of the big retailers, super markets etc.

6.5.

Promotion

Gillette has made extensive promotion campaign for its razors in the Indian market and the world market. Roger Federer, Tiger Woods, David Beckham and Thierry Henry are a few of Gillette‟s global ambassadors called Gillette Champions. But for India Gillette does not have any brand ambassador as of yet though Irfan Pathan has done a couple of ads for Sensor Excel. But, for the shaving gel/foam there has not been much of advertisements. In fact, there is only one ad for Gillette Series Shaving Gel shown not too prominently. For the shaving gel/products, Gillette has co-advertised with its razors.

Bundling Bundling has always been the norm for Shaving cream/gel products. This is mostly due to the fact that shaving creams/gels are generally purchased together with

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razors/aftershaves. There is always at least one trade promotion across the 10 product variants of Gillette throughout the year. The trade promotions include 33% extra on many variants. When we went to Big Bazaar for price survey, we found that 4 of the 10 variants had the 33% free trade promotion. In addition to this, Shaving gels/foams have been bundled with Mach 3 Razors for a slightly higher price. The foams(the ones priced at Rs 210) bundle a Gillette Sensor Excel with them occasionally.

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7.

7.1.

Market Research

Research Purpose

7.1.1. Problem or opportunity Gauge brand recall for various shaving cream/gel/foam brands, specifically Gillette. Map the shaving cream/gel/foam market and competitive positioning within it. To understand the buying intention of Gillette shaving gel and foam users and analyze the effect of non-attribute factors To understand the brand loyalty of customers towards shaving cream/foam/gel Identify the parameters that play the most important role in a consumer‟s choice of buying shaving cream/gel/foam using Factor and Cluster analysis.

7.2.

Research Objective

7.2.1. Research Question What is the inter-brand recall of shaving cream/gel/foam brands and their existing image in the consumer‟s mind? What is the effect of non-attribute factors on the purchasing decision of Gillette shaving gel/foam? How strong is the brand loyalty of customers towards shaving cream/gel/foam? What are the factors that play the most important role in a consumer‟s choice of buying shaving cream/gel/foam?

7.2.2. Research Boundaries The research was conducted in Indore and the respondents were chosen on the basis of their usage of shaving cream/gel/foam.

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7.3.

Research Design

7.3.1. Research Approach

Exploratory Problem Research

Causes of the problem

Descriptive research

Causes of the problem Phase One -> Secondary Data The group in the initial phase of the project focused on secondary data collection. The data collection primarily focused on history of Gillette the financial results of Gillette, products of Gillette organizational structure the competitors in the market the strategy adopted by Gillette and its competitors in the market.

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The secondary data collected in the first phase of the project helped the group in getting better understanding of the shaving cream/gel/foam market and the various brands competing in this market.

Phase Two -> FGD After the secondary data collection was complete, two focused group discussions were done. A group of 3 people and a group of 6 people were used for the two FGDs. Through these FGDs, the various attributes that a person looks for in the shaving cream/gel/foam were listed down. FGDs also helped the group in understanding the buying behavior, the consumption pattern, the influencers etc which further helped in preparation of the questionnaire. Phase Three -> Questionnaire From the results of FGDs, a pilot questionnaire was formed. The purpose here was to get an accurate snapshot of particular aspect of the market environment hence the pilot study was a descriptive research that identified all possible problems and factors influencing buyer behavior. An analysis of the pilot questionnaire was done. From the analysis, the redundant variables, hard to analyze variables etc were removed so that people could easily fill in the questionnaire. After the pilot test, the final questionnaire was formed. The questionnaire was designed to capture both quantitative and qualitative information. The overall design of questionnaire has tried to capture data in the following areas: To answer the question of what are the predominant constituents of shaving cream/gel/foam consumers in terms of: Profile and age Buying Behavior and Decision-making process and to answer how Gillette compares with competition and what should it be targeting to be able to grow Relative importance of different attributes Brand awareness and preference Brand switching behavior/ Brand Loyalty

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7.3.2. Research Tactics Questionnaire (Refer section 10.7.) Sampling Plan

The theoretical population: All people aged 16-80 in Indore who have purchased shaving cream/gel/foam. Sampling Frame: Residential areas, malls, parlors, Restaurants are places where the respondents where drew our respondents were interviewed. Relevant Sample Size: 84

7.4.

Implementation

7.4.1. Data Collection - Phase 1: FGDs The FGDs were aimed at helping us to Define the target segments better Identify the important attributes that add in the target customers shaving experience The FGD questionnaire is given in section 10.8

A preliminary definition of main two segments is: Experimenters and Adopters (EA): This category of consumer comprises of males from the age group 16-30 years. These are the people who are willing to try new brands. These people are generally found to be taking more care than others in terms of grooming. These people want to make a style statement through the products they are using and hence are generally found using highly advertized products. They tend to prefer shopping centers with a wide variety. MHI: Rs 10,000/- to Rs 20,000/-.

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Suspicious Traditionalists (ST): These are men who are more traditional and not very much willing to try new brands. They are a slightly older age group (33-50 years) whose main concern is the safety and health of their skin. They also show a preference for herbal products or brands that have been present in the market place for many years and which they have already tried and tested. MHI criteria: Rs 5,000/- to Rs 20,000/-.

7.4.2. Phase 2: Final Survey The Final Survey helped us to collect data on Main influencers towards the purchase of Shaving Cream/Gel/Foam, Benefits that are most important for each segment of customers, Comparative brand and benefit perceptions, Trade-offs between price and quality, Preferred point of purchase, Consumer‟s position within the Needs Hierarchy Model (Awareness, Knowledge, Liking, Preference, Commitment and Conviction) with respect to own and competitive brands and consumer satisfaction.

7.4.3. Data Processing Age profile, product preference and place of purchase of the surveyed sample are mentioned in section 10.9, 10.10 and 10.11 respectively.

Data Analysis Brand Recall: A sample of customers, which is representative of the Indore population, was surveyed and the first unaided recall of the Shaving Cream/Gel/Foam brands by these customers was recorded. (Refer section 10.12)

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It was observed that Gillette Shaving Gel/ Foam had the highest brand recall amongst all the competing brand of shaving cream/gel/foam. This can be attributed to various reasons like brand perception, usage pattern, advertisement expenditure etc. some of which would be analyzed in the subsequent sections.

Buying Intention The survey administered had questions which measured the importance of various attributes like price, brand image, fragrance, offers & discounts of various shaving cream/gel/foam and specifically for Gillette shaving gel/foam.

Fishbein Analysis The survey also measured the attribute scores for other competing brands like Old Spice, Denim, Godrej, V-John and Dettol. Along with the data for Gillette, an average attribute score was computed across the 84 samples for each attribute for each of the shampoo brands. Fishbein analysis was performed by converting the Likert scale from 1 to 5 to -2 to 2. Consumer‟s attitude about each brand was calculated and plotted as shown below. (Section 10.17, 10.18, 10.19, 10.20)

Chart: Consumer attitude about each brand

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Clearly Old Spice had the highest consumer perception score followed by Gillette and Denim. But taking a look at individual consumer attitude score, we found that Gillette was prefferred by almost 40% of the people surveyed and Old Spice by 30%.

Factor Analysis A factor analysis was carried out to obtain the group of attributes which can be grouped together. Hence 4 factors were obtained as follows – Factor 1 Product attributes (Fragrance, Brand Name, Foam Formation, Antiseptic Attributes and Ease of Use) Factor 2 Price Sensitivity (Price, It keeps my Skin Soft And Offers/Discounts) Factor 3 Point of Purchase (Availability in Stores and Stylish Package Design) Factor 4 Additional Features (Color of Shaving cream/gel/foam and Ingredients)

Perceptual Maps Attribute scores were averaged under each factor for each of the Shaving cream/gel/foam. Then graphs were plotted (Refer section 10.21) for the perceptual map along the dimensions as shown.

Observations: In Indore, the surveyed samples perceive that Gillette primarily targets consumers which are more focused on the product attributes like brand, foam formation, ease of use etc whereas the perception of price sensitive consumer towards Gillette was found to be of an over priced brand. For price sensitive customers products like V-John, Godrej and Dettol were more satisfying than Gillette. The surveyed sample considered Gillette to have the best packaging among all the brands. This feature highlights the fact that point of purchase is an

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important selling point for the shaving cream/gel/foam market and Gillette has been outperforming the competitors. High satisfaction in the availability in stores further shows the robust distribution system that Gillette has put into place to cater to diversified markets. Although not much differentiation can be introduced in the product per se (low satisfaction scores for all brands), still Gillette is found to be seen as a brand which brings out products with new features like lemon, conditioner etc. Distance matrix analysis shows that the consumers are most satisfied with Gillette in all the cases except when the purchasing decision is based on price along with additional features.

Brand Loyalty The questionnaire had specific questions to measure the brand loyalty for the brand that the consumer was using at that point of time. From the graphs shown, it can be concluded that the Brand loyalty in the Shaving cream/gel/foam segment is only 57% where customers would stick to it irrespective of the availability in the place where they are accustomed to shop. This figure says that 57% of the customers would rather go to some other retailer in search for their preferred shaving cream/gel/foam brand than to buy some other brand from the same shop. Price sensitivity measured along the lines of a hypothetical price increase in their preferred shaving cream/gel/foam brand was around 43%. This figure indicates that 57% of the customers do not shift from their preferred brand to some other brand because of a price hike in their preferred brand, provided it‟s a reasonable price hike whereas 43% would move to some other brand. (Refer section 10.15.)

Cluster Analysis On the basis of the four factors identified through factor analysis, the group performed Cluster analysis for two, three and four clusters separately. This was done to identify a

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market segment which Gillette should focus on in the near future especially if it decides to launch a product in shaving cream category. 55% of the sample used shaving cream. Considering this to be a reasonable estimation of the real usage, the decision to enter the shaving cream market seems to be a lucrative option to explore. The output of cluster analysis is shown in section 10.22. Out of the three analysis performed the one with three clusters was giving the best representation of the segments in which the market can be divided. (Refer section 10.22) The population can be segmented into three segments on the basis of factors. Cluster 1 is most price sensitive and values additional features the least. This cluster comprised of one third of our sample size. As Gillette is a premium brand which focuses on differentiating its products from the competitors and upgrading the customers in the value chain. So targeting this cluster will not be a strategically appropriate decision. Cluster 2 is more influenced by attributes of the products and is not a price sensitive segment. Gillette through its shaving gel and foam series is currently catering to this segment. This segment comprised of more than one fourth of the survey sample. Cluster 3 is concerned about the attributes, additional features as well as price. This segment comprised of more than forty percent of the survey sample. Gillette can target this segment with the introduction of shaving cream which will be dealt with in the marketing plan of the report.

7.5.

Recommendation And Conclusion

7.5.1. PLAYING WITH THE PLC: Gillette has the widest product range and the deepest product line in the men‟s grooming market. This is a double edged sword because of the variety Gillette can offer and the cannibalization that can occur.

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Gillette ,with its 9 existing product variants and the new shaving cream, has to see that it can extend the product life cycle and the individual stages of each of the 10 products. For example, the regular foam and Gillette 7‟o clock regular razor are on the maturity/decline stagein the metropolitan cities. Without much effort, these products can be promoted aggressively in neighbouring countries like Bangladesh, Srilanka and states like Orissa, Bihar and the North East and can have a revitalization and an extended maturity phase. Having so many product variants would be an unbeatable advantage in upgrading the consumer throughout his lifetime and also making him brand loyal in the process

7.5.2. LAUNCH GILLETTE SHAVING CREAM This has been the main finding of our project. Our Fishbein analysis, perception mapping ,cluster and factor analyses support the idea. The potential is huge and the shaving cream can also be launched in other similar market demographies like Bangladesh, Pakistan, Nepal and Srilanka. By launching Gillette shaving Cream, Gillette would have a brand leader or a fighter brand in every stage of the customer value hierarchy. The shaving cream would have slightly stripped down attributes of the gel and foam variants. This is because we should entice only the existing cream consumers and not the gel/foam users.

7.5.3. PROMOTION One important finding of our FGDs and Consumer Survey was that not a single consumer was aware of the fact that Gillette has 9 variants in the shaving gel/foam category alone. This can be attributed to one or more of the following reasons: The brand equity of Gillette is very high (57% TOMR in our study). But the category development is pretty low.

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The consumers have low involvement and do not search for information. This implies that shaving cream/gel/foam is more of a commodity. Gillette has spent on advertisements only for the razors and not on shaving gel/foam or aftershaves. Hence the information available to public is limited.

To decommoditize the category, to increase customer loyalty and repeat purchase, promotions have to be done on a bigger scale than what is currently been done. The promotions should have more of a pull effect in the advertisements that communicate not just the price and offers/discounts but also the values, attributes which the consumer can relate to. In short, more information has to be communicated to the consumer through ads, trade promotions etc. Some initiatives by Gillette: ADVANTAGE GILLETTE: Three Gillette winners from India were sent to the finals of the 2006 Wimbledon GILLETTE GULLY CRICKET: Gillette cleverly combined cricket and youth in this version of street cricket in which the winners were awarded Rs 1 lakh.

7.5.4. SALES AND MARKETING Currently, Gillette India uses only the distribution network of P&G. P&G‟s sales and marketing knowledge can be utilized by Gillette to great extent in the future, especially in Srilanka, Bangladesh and Nepal.

7.5.5. CONTINUE WITH UPGRADATION Gillette has been very successful in its strategy of upgrading the consumer in the razor segment. Gillette has made sure that it makes its consumers move up the product chain by introducing new, technologically superior products and phasing their PLC very well. But sadly, this approach is missing in the shaving gel/foam segment. Though there are 9 variants, there has been no effort made to communicate to the consumer of the superior quality and attributes.

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Hence, we suggest that Gillette adopt its “upgrading the consumer” strategy for the shaving preparation segment also. This upgradation has 2 main advantages: We can fully leverage the Product life cycle and the individual phases of the products in different markets We can make the consumer loyal to the brand over his lifetime.

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8.

Future challenges

Introduce a product which would be designed specifically for Indian consumer and satisfy aspiration of youths. To match the increased demand patterns in the country. Launching of innovative products in regular and short intervals First and foremost, shaving cream accounts for roughly 80% of the market and Gillette has a very weak presence in the cream segment. It‟s only cream product “7‟o Clock Shaving cream” has been a big flop.

Gillette‟s‟ products are descending the customer value hierarchy from that of a potential product towards an expected product. Competitors like Denim, Axe are moving up the hierarchy. So, Gillette will find it tough to charge the premium it has till now charged.

It is also highly likely that Gillette may not fully absorb the consumers who upgrade from shaving cream to gel or foam. Hence, Gillette‟s market share might not grow as good as their competitor HLL and Old Spice.

Gillette‟s major challenge lies in entering the mass market through a shaving cream the way it successfully did with razors.

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9.

Marketing Plan for Shaving Cream

After conducting industry and competitor analysis of personal grooming industry and understanding the product portfolio of Gillette, the group came to the conclusion that Gillette should enter the shaving cream market more aggressively with a new brand immediately. Suggested below is the marketing plan for the introduction of the new product.

9.1.

Marketing Audit

9.1.1. Industry Outlook Shaving preparations and after-shaves market stood at Rs 125 crores in 2003. Considering a YOY growth of around 7%, the current market size is Rs 163 crores. In 2003, shaving creams constituted 81% of the market i.e. Rs 101 crores. Since, the market share of gel and foam products is increasing at a very rapid pace (from 10% in 2000 to 19% in 2003), we can say that the share of shaving cream in the entire market has fallen down to approximately 70%. Thus, the current market size of shaving cream in 2007 is around Rs 114 crores.

9.1.2. Gillette’s current position (Where we are and where we are

heading??)

In 2003, Gillette had 17% market share in the shaving preparations market which gives a turnover of approximately Rs 21 crores. Most of these sales were driven by gel and foam products. 7‟ O clock,

Gillette‟s only brand in the shaving cream market was not very successful and therefore, we can say that Rs 101 crores market remained tapped by the company. Even in 2003, the situation has not changed much. Although Gillette has been able to increase its share in gel and foam products, shaving cream market worth Rs 114 crores remain more or less untapped. Thus, to become a market leader in the entire shaving preparations market, Gillette can not continue to ignore the shaving creams market.

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9.1.3. Future Outlook with shaving cream (Where we will head?) The introduction of a shaving cream with improved attributes will directly compete with current products like Axe, Denim etc. This will enable the company to establish its hold over the Rs 114 crores shaving preparations market.

9.2.

Marketing Mission

9.2.1. Target Customers and their needs The primary customers of the company will be those belonging to cluster 3 (Refer Cluster Analysis for details). This cluster accounts for almost 40% of the entire market. These customers are concerned about the attribute and additional features besides price. The brands like Axe and Denim can be said to be catering to the needs of this cluster.

9.2.2. Marketing Objectives Gillette should target to capture around 6-8% of the entire shavings cream market which means revenue of approximately Rs 7-9 crores in the first year. There will not be any product cannibalization (with 7‟O clock) as both cater to different segments within the shaving preparations market.

9.3.

Strategic Priorities

This step involves portfolio analysis of company‟s products in the market. Company derives almost 80% of its revenues and 90% of its profits from Personal Grooming division. Within this particular division, majority of the sales come from its razors division. Gillette is an undisputed leader in this sub segment.

Similarly, company leads in the market for gel and foam products. Thus, Today’s business is driven by this two sub segments.

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In the future, Gillette still needs to concentrate on its two major sub segments for regular cash flows. However, the new product in the shavings cream market can also become tomorrow‟s breadwinner for the company. Oral Care business has shown volatile performance over the years and thereby, has led to irregular cash flows.

Gillette‟s portable power business has been facing stiff competition from the alkaline batteries in the market. This division grew by only 4% in terms of revenues in the year 2005-06. And in fact, there was decline in the profit figures from this division by approximately 60%. The company can consider divesting this segment to direct its investments to Oral Care and the new shavings cream product.

9.4.

Marketing Strategy

9.4.1. Segmentation In the shaving cream/foam/gel market there exist different categories of customers who have different needs and are willing to pay different amount for the product that meets their demand. Introduction of shaving cream would help Gillette identify the needs of the customers and take advantage of the segment which has not yet been targeted by the company. Price sensitivity, importance of attributes, point of purchase decision makers and customers influenced by additional features are the factors on which we will segment the shaving cream market. Segment One-> is most price sensitive and values additional features the least. This segment has one third of our sample size. As Gillette is a premium brand which focuses on differentiating its products from the competitors and upgrading the customers in the value chain, targeting this segment will not be a strategically appropriate decision. Segment Two-> is more influenced by attributes of the products and is not a price sensitive segment. Gillette through its shaving gel and foam series is

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currently catering to this segment. This segment has more than one fourth of the survey sample. Segment three-> is concerned about the attributes, additional features as well as price. This segment comprised of more than forty percent of the survey sample. Gillette through its shaving cream can enter this segment.

9.4.2. Positioning Market research Market research results have been analyzed in section 7 of the report. The following conclusions from the survey helps us in identifying the positioning of the Gillette shaving cream: Target market:- The target market has been identified as the customers who are concerned about the attributes of the shaving cream but are not willing to shift from the current price band to a higher price band. Competitor Brands:- The competitor brands have been discussed in section 5. The Gillette Shaving Cream will be competing with brands like Old Spice and Denim. Choice Criteria:- As per our findings (Section 7.4.3) the 4 factors on grouping attributes post factor analysis that contribute to the shaving cream/foam/gel purchase decision are: Factor 1 Product attributes (Fragrance, Brand Name, Foam Formation, Antiseptic Attributes and Ease of Use) Factor 2 Price Sensitivity (Price, It keeps my Skin Soft And Offers/Discounts) Factor 3 Point of Purchase (Availability in Stores and Stylish Package Design) Factor 4 Additional Features (Color of Shaving cream/gel/foam and Ingredients) Customer Evaluation:- Perceptual maps in the section 10.21 shows how the customers evaluate Gillette with respect to competitive brands.

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The customers surveyed in Indore found Gillette to be significant along both factor 1 and factor 3 giving it an image of high quality brand with attractive packaging and best availability.

Old Spice and Denim are its closest competitors in factor one and two respectively. Gillette lags behind all its competitors in factor 2 which includes price and offers. In factor 3, additional features, all companies have below satisfaction level performance which implies that the variants introduced in the market for shaving cream/gel/foam are not able to satisfy the demand of the consumers.

Positioning Strategy The present perception of the brands between factors one and two is shown below.

Gillette shaving cream needs to position itself above Old Spice and Denim in order to attract the target segment.

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9.4.3. Real Positioning In the survey conducted, Gillette had the top of the mind recall of 57%. This shows that Gillette has an excellent real positioning in the men‟s grooming market and Gillette shaving cream can leverage this positioning in the target market.

9.4.4. Psychological Positioning Gillette shaving cream will primarily alter the attributes importance in the target segment by increasing the importance of attributes like brand name, foam formation etc and decreasing the importance of price. This will be consistent with its strategy of moving the customers up the value chain.

9.5.

Marketing Mix

9.5.1. Product and Service Customer value hierarchy chart in the 4 P‟s analysis shows that Gillette products (7‟ O clock) is currently fulfilling only the core and basic needs to some extent. Further, it also

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shows that Gillette does not have any product fulfilling the basic needs and expected needs of the consumers. Thus, our new product will cater to these needs. Further, since, our new product will target the third cluster; it has to be very strong on attributes. Again, additional features need to be there to satisfy the basic and expected needs of the people. Our new product will have superior fragrance and higher antiseptic attributes. Further, initially, the product shall be launched with variants like lemon and musk. The new Gillette Cream would target the basic and core product consumers where Gillette has no presence so far. So, the customer values promised and delivered would also be different from that of the premium segment. The focus would be to indianise the product. This is important because we have to reach a larger, price sensitive, not so loyal segment of the market. So far, Gillette has only followed a dumping strategy in India with very little customization. For our new product, this strategy would not work well. The customer values to be promised and delivered by the new GILLETTE Shaving Cream are: Functional value: The utilitarian/functional promise would be “ The best possible shave from the best Shaving cream”. The existing price range in the market for a 70 g shaving cream is Rs 25 (Godrej) to Rs 45 (Old Spice). We would price our Cream at Rs 40 which is below that of Old Spice and Denim (Rs 43). We would also promise the basic attributes ( soft on skin, lather etc.) . Social Value: The espoused social value would be from the angle that everyone in the family and society have an instant respect and admiration for the clean shaven Gillette man. Emotional value: The emotional value promised is of great importance for a commoditized product like a shaving cream. The espoused value would be the charming yet masculine Gillette man who is attractive to all the people including women. Epistemic value:

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The novelty value should be such that it must entice only the cream users, not our gel/foam users. Hence, we must tell about how good a cream it is and the active ingredients involved in the product. Conditional Value: The best possible start for the day would be the conditional value. The value communicated should be of a confident, satisfied, charged up young Indian for the day‟s grind. COMMUNICATION OF VALUE: We would adopt a push cum pull strategy to communicate the above values. Our ads would involve a sturdy, tough, smart Indian and project him as the Gillette man (much like the Marlboro man). The focus would be on the shaving cream though we will also co-advertise Gillette Razors.

9.5.2. Pricing The customers in the target cluster are not very price sensitive. The customers in the cluster prefer brands like Axe and Denim which lie in the price range of Rs 43-45 for a 70ml pack. However, since Gillette is perceived as an expensive brand as compared to its competitors, we plan to price our new product slightly cheaper than these brands. As per our analysis, Gillette should charge a price of Rs 42 for 70ml pack.

9.5.3. Promotion Since we see a great opportunity for Gillette in the Shaving cream category, we recommend an aggressive promotional campaign for the new product. Our promotion would adopt a push cum pull strategy.

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The product would be pilot tested in Indore itself where we have performed our market research. We would offer a 20g tube of the Gillette Shaving Cream free with every Gillette Presto( Priced at Rs 17) and 30g with Gillette Vector ( Priced slightly at above Rs 50). The selling price of the tube being Rs 40 and the margin at 25%, we would incur around Rs 8 for the 20g tube and Rs 12 for the 30g tube. The increase in sales of the razors would be a good indication of the interest shown by the consumers in the new shaving cream. This promotional strategy might also give Gillette consumers who want to upgrade themselves to the premium shaving cream category from the regular category. The level of success of the pilot project would help us in modifying the product for the national launch. Pull Approach: So far, Gillette has always shown ads which are futuristic in nature ( Shaving with Mach 3 on a space shuttle is an example). But the advertisements for the shaving cream have to be Indianised. This is the biggest challenge for Gillette which has so far treated the Indian market as a dumping ground for its outdated products in the US. Our advertisement has to entice the target consumer - the aspiring consumer who comes from the middle and lower middle class and gives importance to attributes but is also price sensitive. Our target consumer is widespread throughout the country- rural, urban(including Tier 2 and Tier 3 cities) and rurban. The ads have to appeal to the customer values mentioned above.

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10.

Appendix

10.1. Gillette- Timeline

1895-In the United States, KING CAMP GILLETTE, a salesman for the Baltimore Seal Company, originates the idea for a new disposable razor blade. For the next six years, he will promote and sell this idea to backers and toolmakers in order to make his dream shaver a reality.

1901 -GILLETTE teams up with MIT engineer and machinist WILLIAM NICKERSON in Boston, Massachusetts. Together, they modify the safety razor by manufacturing a double-edged blade that is disposable and replaceable; it receives a U.S. patent this same year. This is a T-shaped razor which opens at the top so the user can insert a new blade after tossing out its dull, used predecessor. These blades are cut from a template, rather than forged

1903 - GILLETTE begins his legendary climb to the top as king of the U.S. shaving market, thanks to his shaver‟s high quality, low price affordability, and his keen approach to marketing. In 1903, his total sales were 51 razors and 168 blades.

1904 - GILLETTE'S total sales for the new state-of-the-art safety razor reach 90,000 razors and 123,000 blades.

1905 - GILLETTE opens his first overseas office, headquartered in London, England to market products in Europe 1910 - WILLIS G. SHOCKEY receives a U.S. patent for his WIND-UP SAFETY RAZOR, the forerunner of electric shavers. It has a wind-up-by-hand flywheel that operates for a limited amount of time.

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1914 - 1918: WORLD WAR I - GILLETTE works out a mega deal with the U.S. Armed Forces, which provides his safety razor and blades to every enlisted man or officer on their way to Europe as a regular part of their standard issue gear. This creates tremendous worldwide promotion and publicity opportunities for Gillette‟s company and products. 1960 - GILLETTE safety razors with long lasting stainless steel blades hit the U.S. market. Later, other inexpensive injector-type cartridges and disposable razors become available. 1960s -70s - DISPOSABLE RAZORS, which can neither be sharpened or replaced, hit the market for both men and women. They are to be used 2-3 times, then thrown away. Numerous manufacturers economically design them in simple shapes, which make them inexpensive to produce and sell. 1971 - GILLETTE begins to aggressively market a new twin-blade razor on a wide scale, even though there have been similar razors available since the 1930s. 1984- Gillette entered Indian market through a joint venture as a minority shareholder. 1986- Launched the 7‟o clock brand 1993- Launched the Presto readyshaver brand 2000- Launched the Mach-3 and women 2002- It gained more shares so that it had three fourth of the shares. During these two decades Gillette followed inorganic growth by acquiring domestic companies in oral care, battery, blades and razors and stationery business. 2004- The company launched the next generation triple blade shaving system, Gillette Mach Turbo, Gillette VectorPlus. Further in personal care segment the company has launched Storm Force after shave splash and New Ultra Comfort Shaving Gel & Gillette shaving gel, shaving foam and linen series for

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Series Tube Shave Gel Variants, namely Sensitive Skin and Moisturising to suit different skin types. 2005- The company‟s parent company Gillette, USA was acquired by the Procter & Gamble Company, USA worldwide through merger in October 2005. In India, the company while continuing as a separate legal entity, will also, be part of the Procter & Gamble company, USA. The company has started the process of transition from its current distributor structure to the P&G Distributors

10.2. SWOT ANALYSIS

Strengths Strong brand equity Gillette‟s portfolio contains well established brands such as Gillette and Braun, Oral-B line and Duracell. It eases the introduction of new products, as consumers are already well acquainted with the names and more receptive to promises of improved user experiences. The strength and quality image of these brands allows the company to charge higher prices and achieve high margins.

Market Leadership The company‟s product are well known with a reputation of quality are also market leader in their respective segment.

Well Diversified portfolio Gillette has a well-diversified portfolio in terms of product diversification and market diversification. Diversification of this nature helps the company avoid the risk of overdependence on any one source for its revenue stream.

Weakness Profitability highly dependent on core business

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Gillette‟s profitability is highly reliant on the performance of its razors and blades business. A substantial portion of its revenues come from this sector. Any downturn in the sector or in Gillette‟s competitive position within it could have a serious negative effect on the company.

Over-reliance on a single customer Wal-Mart Stores is Gillette‟s major customer. With a large part of its revenues originating from a single costumer, the company is at risk of adversely affecting its business, operating results and financial condition if its strategic relationship with WalMart Stores is terminated for any reason.

Opportunities New product launches Gillette is known for constantly introducing new products in the market with better technology and performance. This new product launches will help the company to gain competitive advantage over its competitors.

Price increases in premium shaving segments Gillette has been increasing the price of its razors and blades at an average rate of around 4% per year over the last ten years. This price increase will help the company to accumulate more profits from the present level of sales.

Growth potential for battery business in China The Chinese battery market is a large and fast-growing market. Gillette has acquired a majority interest in the Fujian Nanping Nanfu Battery Company. This has resulted to significantly improve the performance of the company‟s overall battery business and will have its impact on the future performance of the company.

Threats

IIM Indore Imitations / disposables are a threat to the Mach3 offering

Group 6 Section B

Gillette‟s ability to sustain a price premium and earn an attractive return on its extensive investment three-blade platform is threatened by the numerous imitators of the Mach3/Mach3 Turbo franchise, including disposables and private label systems, and even including Gillette‟s own three-blade disposable. This numerous imitations are threat to the company in the long term as they going to reduce the sales of the original products.

Pressure on pricing power Gillette‟s pricing power is being further eroded by channel migration and increasing consumer resistance to paying significantly higher prices for innovation. Pricing power is key to revenue growth in a mature category especially when Gillette‟s strategy has historically been to drive revenue growth per consumer and not volume growth.

Competitive environment Gillette faces intense competition in most markets. Its products compete with widely advertised, well-known, branded products, as well as private label products, which typically are sold at lower prices. The company‟s survival depends upon its ability to adopt itself in this kind of competitive environment.

10.3. Organizational Structure

Gillette India now has the organizational structure of P&G worldwide. The key elements are: 1. Global Business Units (GBU‟s)- build major global brands with robust business strategies. P&G moved from four business units based on geographical regions to seven business units based on global product lines. The various GBUs are: • Baby Care/Family Care • Beauty Care/Feminine Care • Fabric & Home Care

IIM Indore • Snacks & Beverage • Health Care

Group 6 Section B

2. Market Development Organizations (MDO) - build local understanding as a foundation for marketing campaigns. P&G has eight MDO. • North America • Asia/ India/ Australia • Northeast Asia • Greater China • Central-Eastern Europe/ Middle East/ Africa • Western Europe • Latin America 3. Global Business Service(GBS)- provide business technology and services that drive business success. Different GBS Centers are: • GBS Americas located in Costa Rica • GBS Asia located in Manila • GBS Europe, Middle East & Africa located in Newcastle

IIM Indore

Group 6 Section B

10.4. Product Portfolio

Gillette India has the following product lines: Double edge- 7‟o clock and Wilkinson sword Disposables-Wilkinson sword twin 2, Gillette presto Systems- PII, Sensor, Vector, Mach3 Shave prep- Gel and foams Batteries- Duracell Oral care- Oral B toothbrush

IIM Indore

Group 6 Section B

10.5. Financial Analysis

10.5.1.

Share holding pattern

10%

2%

Indian Promoters 47% Foreign Promoters Non- Institutional Investors Institutional Investors 41%

Chart 2: Break up of ownership in 2006

There has been a great shift in the shareholding pattern of the company since its entry into Indian market in 1984. Gillette entered India through a joint venture as a minority shareholder. Its share increased to around 75% in 2002. In 2006, almost 88% of the company was owned by the promoters (foreign and Indian). Out of the remaining 12%, 10% is owned by non-institutional investors and thus, only 2% lies in the hands of institutional investors.

10.5.2.

Profit & Loss Analysis

Net sales of the company grew at a CAGR of 45% during the period 1997-2000. After that there was a downfall in the company and for the first time, Gillette India ended the year with a net loss of around Rs 28 crores. This was primarily due to significant increase in employee cost and other miscellaneous expenses. In 2001, revenues declined to Rs 453 crores from Rs 477 crores a year earlier. Revenue figures further reduced by around 18% in 2002 to approximately Rs 385 crores. Although due to

IIM Indore

Group 6 Section B

restructuring, the damage was controlled to some extent in 2003, yet there was a further fall of 3% in the revenue figures. Since it‟s restructuring in 2003, company has recorded double digit growth rate in revenues. However, the growth rate was moderate in 2005 as compared to the figures in 2004.

Revenues 600 500 400 300 200 100 0 2000 2001 2002 2003 2004 2005 Revenues

Chart showing revenue figures over last 6 years

Revenue Growth 20.00% 15.00% 10.00% 5.00% 0.00% -5.00% -10.00% -15.00% -20.00% 2001 2002 2003 2004 2005 Revenue Growth

Chart showing Revenue growth over last 5 years

Despite higher revenue growth in late1990s, operating margin of the company declined from 20% in 1997 to 14% in 2000. Similarly, net profit margin almost remained constant at around 5% over the time period. The situation worsened further in 2001, and company reported a net loss of 6%.

IIM Indore

Group 6 Section B

In 2002, Gillette undertook restructuring initiatives and it took the company two years to revive its operations. In 2003, company recorded a net profit of Rs 44.82 crores. It entered into contracts with new suppliers for better raw material prices and also brought about a significant reduction in wastages. As a result of which, raw material cost as percentage of net sales declined from 46% in 2001 to 31% in 2003. Further, miscellaneous expenses reduced to just Rs 15.57 crores in 2003 from Rs 82.68 crores in 2001. The net profit margin increased to 12.45% in 2003 and the operating margins stood at 25.90%. Improved financial performance led to an increase of almost 120% increase in share prices over the year 2003.

30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% -5.00% -10.00% 2000 2001 2002 2003 2004 2005 Operating Margin Net Profit Margin

Chart showing profitability margins over last 6 years

Segmental Revenue Q2, Revenue Segment Grooming Portable Power 113.99 6.97 90.63 6.71 by Business 2006 Q2, 2005 % Change (YOY) 25.78% 3.87%

IIM Indore Oral Care Total 18.54 139.5 14.75 112.09

Group 6 Section B 25.69% 24.45%

EBIT Segment

by

Business

Grooming Portable Power

40.39 0.62

26.37 1.82

53.17% 65.93%

Oral Care

0.91

4.46

79.60%

Total

41.92

32.65

28.39%

EBIT Margins Grooming Portable Power Oral Care Table showing segmental performance 35.43% 8.90% 4.91% 29.10% 27.12% 30.24%

The above table clearly shows that major chunk of company‟s revenues and profits come from Personal Grooming segment. In Q2 2005, almost 80% of company‟s revenues and profits came from grooming division. Oral care contributed around 12% of the revenues and remaining came from portable power division (Duracell).

In Q2 2006, although oral care division witnessed a growth of 26% in terms of revenues, but the profit figures declined by almost 80%. This was primarily due to increased

IIM Indore

Group 6 Section B

competition leading to higher selling expenses. Thus, in this quarter, grooming division contributed more than 90% of operating profits.

10.5.3. Year

Balance Sheet Analysis

Debt Equity Ratio Fixed Ratio Assets Turnover

2000 2001 2002 2003 2004 2005

0.79 0.45 0.00 0.00 0.00 0.00

3.34 1.99 1.74 1.94 2.76 3.42

Table showing key ratios After restructuring its operations in 2002-03, company has adopted a zero debt policy. It has become an all equity firm with no reliance on debt. Thus, debt equity ratio of the company reduced to 0 from 2002 onwards from 0.45 in 2001. All the debt was paid off with the funds obtained from the parent company as capital grant. This way company reduced its financial risk to zero. Fixed Assets turnover ratio has also increased from 1.99 in 2001 to 3.42 in 2005. This shows that there has been improved and better utilization of company‟s fixed assets.

Ratios Net Profit Margin Assets Turnover ratio Leverage

2000 5.53% 1.12 1.79

2001 -6.13% 1.13 1.45

2002

2003

2004

2005

1.68% 12.45% 14.99% 15.09% 1.40 1.00 1.26 1.00 1.29 1.00 1.31 1.00

IIM Indore ROE 11.15% 10.07% Table showing DuPont Analysis

Group 6 Section B 2.35% 15.63% 19.33% 19.74%

From the table we can observe that, Return on Equity (ROE) of the company has increased from 10.07 % in 2001 to 19.74% in 2005. If we look at the three individual components of ROE, we can see that the fall in leverage has been very well compensated by an increase in profitability. Further, assets turnover ratio has remained almost constant over the years. This shows that the company is following a policy of increasing margins to maximize shareholder‟s wealth. During restructuring, company concentrated on reducing its working capital

requirements through efficient better inventory management and following a stringent credit policy. Gillette went for direct distribution model (Gillette- Distributor- Retailer) to reduce its investment in providing credit to retailers. Thus, the cash conversion cycle of the company reduced from 36 days in 2001 to almost 0 days in 2003. Working capital turnover ratio increased from 3.11 in 2001 to 3.93 in 2003 reflecting better working capital management by the company. However, in the subsequent years the ratio again declined due to higher cash balance maintained by the company. Further, reduced investment in debtors was compensated by an increase in loans & advances to suppliers. Thus, Gillette could not build on the benefits of restructuring in terms of better utilization of working capital.

Year

Working Capital Turnover Ratio

Current Ratio

Debtors Collection Period

Creditors Payment Period

Inventory Holding Period

Cash Conversion Cycle

2000 4.89 2.23 56 52 49 53

IIM Indore 2001 3.11 2002 3.75 2003 3.93 2004 2.66 2005 2.33 2.02 24 68 32 2.15 24 70 41 2.02 24 71 47 1.71 41 111 57 1.99 66 95 65

Group 6 Section B

36

(13) 0

(5)

(12)

Table showing Working Capital Management and Liquidity of Gillette

10.5.4.

Cash Flow Analysis

Cash flows in a company can be broadly divided into three areas:

Cash Flow from Operating Activities Cash flows from this segment have not seen any improved over the past four years despite a rise in revenues. In fact, cash flows have declined to Rs 76.58 crores in 2005 from a high of 124.44 crores in 2001.

Cash from Financing Activities Company has not issued any new equity over the last five years. During 2001, company paid off most its debt which has resulted in negative cash flows from this segment. Majority of the cash flows in this segment comprise of dividends paid by the company.

Cash from Investing Activities

IIM Indore

Group 6 Section B

Gillette has consistently incurred capital expenditure to purchase its fixed assets. Further, company has been consistently earning interests on its loans & advances which has resulted in positive cash flows in few of the years.

10.5.5.

Comparative Analysis

In the personal care segment, HLL is by far the largest player in the industry. But P&G Hygiene enjoys highest net profit margin of approximately 24% on a turnover of around Rs 520 crores. Gillette also has the reputation of high margin company in the industry. In the latest quarterly results, Gillette reported a margin of around 21% in this segment. It is followed by Colgate Palmolive (15%) and HLL (12%) and Reckitt Benckisire (11%). Companies Current Ratio Fixed Assets ROCE (%)

Turnover Ratio Hind. Lever Gillette India Johnson & Johns. P & G Hygiene 0.82 1.91 1.04 1.6 5.1 1.82 6.21 4.24 3.32 4.31 56.62 32.93 164.01 74.91 71.69 52.86

Colgate Palmolive 0.97 Industry Average 0.97

Table showing key ratios of Gillette and its competitors

The above table clearly shows that Gillette has a better short term solvency as compared to its competitors. It has a current ratio of 1.91 as against the industry average of 0.97. However, company has not been able to make the best utilization of its fixed assets. Therefore, it has fixed assets turnover ratio of 1.82 as against the industry average of 4.31. Similarly, Gillette has lower returns on its capital employed in the business.

IIM Indore 10.5.6.

Group 6 Section B

Valuation

The share of the company declined from Rs 700 in 2001 to Rs 317 in 2003 because of poor financial performance in terms of reduced revenue figures and margins. However, in 2003, the share price more than doubled to Rs 713.90 in Jan 2004. This was the result of increased profitability due to restructuring efforts done by the company. In the recent year, share prices have increased by around 20%. The market capitalization of the company has increased from Rs 845 crores in 2001 to Rs 2695 crores in 2007.

Year

Share Price

Market Capitalization (Rs crores)

1-Jan-01 699.95 1-Jan-02 269.00 1-Jan-03 317.00 1-Jan-04 713.90 1-Jan-05 699.95 1-Jan-06 735.00 1-Jan-07 869.95 2,695.19 2,802.74 2,392.11 2,205.20 2,292.22 1,022.51 845.06

Table showing share prices and market capitalization

IIM Indore Note: All prices are adjusted for bonus and rights issue

Group 6 Section B

In the recent years, company has adopted a liberal dividend policy. In 2005, company declared 100% dividends. Dividend Announcements Year End 2005 2004 2003 2002 2001 2000 1999 1998 32.59 27.7 27.7 8.96 7.33 4.88 3.86 2.83 Dividend Dividend (%) 100 85 85 27.5 22.5 15 30 22

Table showing Dividend announcement

IIM Indore

Group 6 Section B

10.6. Competitor’s Analysis

10.6.1.

Colgate Palmolive

Colgate-Palmolive has three products in the shaving cream/gel/foam segment. Palmolive shaving creams are enriched with revitalizing sea minerals, this rich formula refreshes and against irritation. They are formulated with soothing Aloe-Vera, this rich foam is mild on skin and helps guard against irritation. One variant is a creamy formula featuring palm extract to hydrate and moisturize skin. This cream in a long thin tube is very easy to use. As you just put onto your face and use your shaver and it will get all your stubbles of your face leaving it nice and smooth. skin protects razor

10.6.2.

Proctor & Gamble

Old Spice is one of the top brands across world in the shaving products category. In the shaving cream market it has a good hold over the perception of the consumers. It is recognized by its fragrance and is seen as a macho brand. It is has products in all the three categories (cream, gel and foam). Old Spice is also present in after shave market and its after shave product is very dominant in the market. It has a lot of products in the shaving products market. This also makes the brand much stronger than its competitor.

IIM Indore 10.6.3.

Group 6 Section B

HLL

Hindustan Lever Limited is the biggest player in the Indian FMCG market. It has two brands in the shaving cream segment. Axe and Denim. HLL has extended its brand „Axe‟ which is a success in the deodorant market to the shaving creams. The Axe shaving cream has very good awareness scores among the consumers. It comes in various fragrances, colors and its packaging also has many variants. Denim is another shaving cream from the house of HLL. This is almost in the same segment as that of Axe in terms of price and product attributes.

10.6.4.

Godrej

invested heavily for the expansion in this market. They have bought a shaving cream manufacturing and marketing company in South Africa and are looking forward to some other alliances for the presence in global market. The shaving cream from Godrej is among the lowest priced shaving cream in the market. It is targeting the price sensitive customer in the Indian market. But the quality of the product is satisfactory in spite of its near about

Godrej is the domestic brand of shaving cream for Indian market. Recently Godrej has

half the price than its competitors. Although, variants are few in terms of size, fragrance and packaging, it is still in the shopping list of many consumers.

IIM Indore 10.6.5.

Group 6 Section B

Other Competitors

Brands like Fa, Dettol and Park Avenue are also present in the market. Although they do not account for a very significant market share but then also the awareness of these brands is fair enough to consider them as competitors. Dettol is associated with antiseptic attributes and is quite popular with health conscious consumer. Other brands like Fa and Park Avenue focus on the regular consumer by portraying themselves as a sporty cool brand by associating with adventurous lifestyles.

IIM Indore

Group 6 Section B

10.7. Customer Survey Questionnaire

Customer Survey: Questionnaire

Name: Date: Name of interviewer: 1. What is your age? Less Than 18 18-23 years 23-28 years 28-45 years Greater Than 45

2. What is your occupation? Government Service Private Service Business Self-Employed Student Homemaker Others (please specify) __________

3. How often do you shave? Daily Alternate Days Twice a week Once a week At irregular intervals

IIM Indore 4. What type of shaving product do you prefer to buy? Shaving Cream Shaving Gel Shaving Foam

Group 6 Section B

5. Where do you generally buy the shaving cream/gel/foam? Grocery shop Super market/ Departmental stores Specialty Stores Chemist shop Any shop near by

Group 6 Section B

6. Which brands of shaving cream/foam/gel are you aware of? (Unaided recall)

a) Fa f) Denim k) V-John b) Old Spice g) Gillette l) 7 O‟Clock c) Palmolive h) Park Avenue m) Nivea d) Godrej i) Dettol e) Axe j) Blue Stratos

n) Others (Please specify)

7. Which brands of shaving cream/foam/gel are you aware of? (TOM – tick only one)

a) Fa f) Denim k) V-John b) Old Spice g) Gillette l) 7 O‟Clock c) Palmolive h) Park Avenue m) Nivea d) Godrej i) Dettol e) Axe j) Blue Stratos

n) Others (Please specify)

8. Which brands of shaving cream/foam/gel are you aware of? (Aided recall)

a) Fa f) Denim k) V-John b) Old Spice g) Gillette l) 7 O‟Clock c) Palmolive h) Park Avenue m) Nivea d) Godrej i) Dettol e) Axe j) Blue Stratos

n) Others (Please specify)

9. Which of the following brands do you use personally? (Tick only one)

a) Fa f) Denim k) V-John b) Old Spice g) Gillette l) 7 O‟Clock c) Palmolive h) Park Avenue m) Nivea d) Godrej i) Dettol e) Axe j) Blue Stratos

n) Others (Please specify)

10. Which of the following brands have you bought since the last six months?

a) Fa f) Denim k) V-John b) Old Spice g) Gillette l) 7 O‟Clock c) Palmolive h) Park Avenue m) Nivea d) Godrej i) Dettol e) Axe j) Blue Stratos

n) Others (Please specify)

11. Please rate the following sources of information according to the level of importance of each source (1 – Least Important; 5 – Most Important)

IIM Indore Friends Family Retailer Advertisements Packaging ___ ___ ___ ___ ___ ___

Group 6 Section B

Magazines or newspapers Saloons Any Other ___ ___

12. How satisfied are you with Gillette shaving foam/gel? (if used) Highly Satisfied Moderately Satisfied Neither satisfied nor dissatisfied Moderately Dissatisfied Highly dissatisfied

13. If your FIRST preference is not available then what do you do? Purchase some other brand from the same shop/ store. Purchase the same brand from some other store.

14. If the price of your most preferred brand increases what would you do? Shift to another brand Still buy the same brand

15. If you choose to shift then which Brand will you prefer? Page | 73

IIM Indore

a) Fa f) Denim k) V-John b) Old Spice g) Gillette l) 7 O‟Clock c) Palmolive h) Park Avenue m) Nivea d) Godrej i) Dettol

Group 6 Section B

e) Axe j) Blue Stratos

n) Others (Please specify)

16. Please rate the factors given below on scale of 1 – 5 based on the importance they hold for you in purchase decision of a shaving cream/foam/gel. (1 least important to 5 most important)

No Attributes / Benefits a b c d e f g h i j k l Price Availability in stores Fragrance Stylish package design Brand name Color of the shaving cream/foam/gel Foam formation Antiseptic attribute Ease of Use It keeps my skin soft Ingredients Offers/Discounts

Ratin g

17. Please rate the following brands on the scale of 1-5 for the attributes mentioned below i.e. write 5 if you feel the attribute is good enough to fully satisfy you and mark 1 if you feel the attribute could not satisfy you. (1 fully dissatisfied to 5 fully satisfied – Show cards with the ratings on them) Page | 74

IIM Indore

Group 6 Section B

Attributes / Benefits

1 No Old Spice 2

Brands

3 4 5 6 Brand Dettol Godrej Gillette Denim chosen in Q 9

a b c d e f g i j k l M

Price Availability in stores Fragrance Stylish package design Brand name Color of the shaving cream/foam/gel Foam formation Antiseptic attribute Ease of Use It keeps my skin soft Ingredients Offers/Discounts

10.8. Focus Group Discussion Format

Introduction Presentation of the Purpose Discussion of the procedure

FGD:

Focus Group Discussion

Page | 75

IIM Indore

Group 6 Section B

We conducted two FGDs for our product- Gillette Shaving gel/foam. We had also conducted interviews with barbers from the biggest salon in Rau. Focus Group 1: 3 college students from SGSITS Indore (Age : 18-22) Focus Group 2: 6 employees (managerial level) of ICICI Branch at M.G Road (Age : 2545). Following are the questions that helped us in moderating the entire discussion and the answers that majority in the group agreed to: 1) Type of shaving: cream/gel/foam FG 1: The college students now use gel and were using cream before FG 2: The office goers preferred foam for its ease of use and otherwise used cream/gel 2) What product first comes to your mind when I say Shaving cream? FG 1: The college goers were unanimous – Gillette FG 2: The older persons went for Godrej/ Palmolive and the three younger ones said Gillette. 3) Brands you are aware of? FG 1: came up with many brands, but not only the traditional ones. (Old Spice, Palmolive, Godrej, Axe, Denim, Gillette, Park Avenue, Dettol, V-John) FG 2: came up with many national brands ( Old Spice, Palmolive, Godrej, Gillette, Dettol) 4) How often do you shave? FG 1: Once or twice a week (no social compulsion, limited pocket money) FG 2: Every day 5) The reason for shaving?( official/social compulsions, like to be clean shaven) FG 1: a time for oneself, like shaving FG 2: mainly office and personal (read “wife”) compulsions, also do not like to be seen unshaven (amounts to being unclean) 6) Does the brand of the cream/gel really matter for shaving? FG 1: no. only gets the job done. (The group was loyal to the razor- Gillette) Page | 76 FG 2: not really. (This group too was loyal to the razor- Gillette)

IIM Indore

Group 6 Section B

7) Self shave or salon? why? FG 1: Self. Other brands, hygiene, have lots of time for self shave FG 2: Self. Hygiene, time factor, it is a time for one self. 8) Have you switched brands? FG 1: yes, quite frequently. FG 2: no. not very recently. (Just one person was into experimenting with new products every time he goes to buy shaving cream/gel/foam) 9) If so, why? FG 1:just to try out new brands. Offers. (Inference: They haven‟t settled to for a brand) FG 2: only sometimes. for a change or unsatisfied. More loyal to brands. 10) Where do you purchase? FG 1: the nearest place or Big Bazaar FG 2: with regular shopping 11) Currently which brand do you use? Are you satisfied? FG 1: Gillette, Cinthol, one used electric shaver FG 2: Gillette, Denim 12) Information search? FG 1: ads don‟t influence. Decision is made at the point of purchase FG 2: ads don‟t influence. Many times decision is made before coming to store. 13) Do you buy the product yourself or your family members buy it for you? FG 1: brand influenced by brother or father FG 2: self purchase 14) Have you seen an ad for shaving cream? FG 1:no, not really. Creams aren‟t as important as aftershave and razors. FG 2: Don‟t have time to watch television, especially ads. 15) What do you expect from a shave? (soft skin/get the job done/fragrance etc.) FG 1: smoothness, get the job done FG 2: get the job done, not harsh on skin 16) The attributes you look for in your shaving cream/gel/foam? Page | 77

IIM Indore

Group 6 Section B

The two groups together came up with 12 attributes after a few minutes. They had 4 attributes that overlapped as shown.

FG 1: Price Stylish package design Antiseptic attribute Color of the cream/foam/gel Lather formation Availability in stores Offers/Discounts Brand name FG 2: Ease of Use Keeps the skin soft Ingredients Fragrance Lather formation Availability in stores Offers/Discounts Brand name COMMON ATTRIBUTES: Lather formation, Availability in stores , Offers/Discounts, Brand name.

17) What do you expect from a shaving cream? FG 1: smooth shave FG 2: good lather, smooth and quick shave 18) Are you aware that weight to weight Gillette is costlier than all other brands? Page | 78

IIM Indore FG 1:yes FG 2:yes

Group 6 Section B

19) Do you know the difference in pricing of Gillette? FG 1:The group wasn‟t surprised with the price catalogue we provided FG 2: The group was surprised 20) Would you still keep buying Gillette even if the price was further raised? FG 1: Depends on the pocket money we get FG 2: Yes 21) What do you think of Gillette? FG 1: The best brand FG 2: Better compared to others 22) Why Gillette? FG 1: Good quality of shave FG 2: Better shaving experience, very satisfied.

10.9. Age Profile of Sample Population

10.10.

Shaving Product Preference

Page | 79

IIM Indore

Group 6 Section B

10.11.

Place of Buying

10.12.

Recall Pattern

77%

Unaided Recall of Gillette Brand

Top of Mind Recall of Gillette Brand 56% Page | 80

IIM Indore Aided Recall of Gillette Brand 89%

Group 6 Section B

10.13.

User Preference

10.14.

Brand Satisfaction of Gillette

10.15.

Brand Loyalty in Shaving Cream/Gel/Foam Market

If your FIRST preference is not available then what do you do? Option 1 Page | 81 Purchase some other brand from the same shop/ store

IIM Indore Option 2 Purchase the same brand from some other store

Group 6 Section B

10.16.

Price Sensitivity in Shaving Cream/Gel/Foam Market

If the price of your most preferred brand increases what would you do? (Q 14) Option 1 Option 2 Shift to another brand Still buy the same brand

Page | 82

IIM Indore

Group 6 Section B

10.17.

Fishbein Analysis

Fishbein Attitude Model

n

Ao =

biei

i=1

where, Ao = Attitude toward the object (brand) bi = belief about the brand‟s possession of the attribute ei = evaluation of the attribute as being good or bad n = there are a limited number (n) of attributes which the person will consider

10.18.

Brand Preference based on Individual Attitude score

Page | 83

IIM Indore

Group 6 Section B

10.19.

Average attitude perception score of each brand

10.20.

Factor Analysis

Total Variance Explained Initial Eigenvalues Total % of Variance 24.208 15.665 12.510 9.699 8.029 6.977 6.403 4.781 4.163 3.426 2.217 1.922 Cumulative % 24.208 39.873 52.383 62.082 70.111 77.088 83.491 88.272 92.435 95.861 98.078 100.000 Extraction Sums of Squared Loadings Total 2.905 1.880 1.501 1.164 % of Variance 24.208 15.665 12.510 9.699 Cumulative % 24.208 39.873 52.383 62.082

1 2 3 4 5 6 7 8 9 10 11 12

2.905 1.880 1.501 1.164 .963 .837 .768 .574 .500 .411 .266 .231

Extraction Method: Principal Component Analysis.

Page | 84

IIM Indore

Group 6 Section B

Component Matrix(a) Component 1 Price Availability in stores Fragrance Stylish package design Brand name Color of the shaving -.317 -.006 .549 .329 .653 .390 .744 .654 .742 .341 .153 .379 2 .654 .347 .086 -.144 -.011 -.589 -.084 -.026 .018 .677 .366 .596 3 .391 .429 .455 .628 .023 .065 .145 -.197 -.302 -.230 -.584 .113 4 -.048 -.049 .203 .373 -.448 .446 -.310 -.087 -.011 -.138 .597 .317

cream/foam/gel Foam formation Antiseptic attribute Ease of Use It keeps my skin soft Ingredients Offers/Discounts Extraction Method: Principal Component Analysis. a 4 components extracted.

Page | 85

IIM Indore

Group 6 Section B

Scree Plot

3.0

2.5

2.0

Eigenvalue

1.5

1.0

0.5

0.0 1 2 3 4 5 6 7 8 9 10 11 12

Component Number

Page | 86

IIM Indore

Group 6 Section B

10.21.

Perceptual mapping

Page | 87

IIM Indore

Group 6 Section B

Page | 88

IIM Indore

Group 6 Section B

Page | 89

IIM Indore

Group 6 Section B

10.22.

Cluster Analysis

Two Cluster Analysis

Final Cluster Centers Cluster 1 Attributes Price Sensitive Point of Purchase Additional Features 4.0 3.4 3 2.8 2 3.2 2.7 2 2.0

Number of Cases in each Cluster

Cluster

1 2

36.000 48.000 84.000 .000

Valid Missing

Three Cluster Analysis

Final Cluster Centers Cluster 1 Attributes Price Sensitive Point of Purchase Additional Features 2.9 3.4 2 1.8 2 4.1 1.8 2 2.3 3 3.7 2.8 3 2.8

Number of Cases in each Cluster

Page | 90

IIM Indore

Cluster 1 2 3 Valid Missing 28.000 22.000 34.000 84.000 .000

Group 6 Section B

Four Cluster Analysis

Final Cluster Centers Cluster 1 Attributes Price Sensitive Point of Purchase Additional Features 4.2 3.2 3 3.6 2 2.0 2.5 3 2.6 3 3.6 2.5 2 2.2 4 3.8 3.5 3 1.6

Number of Cases in each Cluster Cluster 1 2 3 4 Valid Missing 16.000 10.000 30.000 28.000 84.000 .000

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