About Gillette: The Company was established in 1901 by King C. Gillette in Boston. It introduced its first razor in 1903. By 1905 Gillette started its international expansion by starting companies in London and Paris. It introduced its first shaving cream in 1936 and first electric razor in 1938. The World War I and II benefited Gillette tremendously. All its supplies were consumed by defence forces. Gillette then moved on growth path by acquiring companies. It acquired Braun AG in 1967, a small appliance manufacturer. In 1984 it acquired Oral-B providing a push to brand. By this time Gillette was diversified in business and was working in 5 different industries. In the late 1990s due to Asian currency crisis Gillette profitability shrunk with company missing all its revenue guidelines. As of today Gillette is comprised of 3 groups: Global Business management group, Commercial operations (Eastern and Western). The first group deals with R&D and manufacturing of all products. The other two groups handle sales and marketing across the world.
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Product Description: Gillette is a market leader in shaving gels market. “Gillette Series” is a collection of shaving gels and foams sold as one sub-brand. Gillette series has 6 different gels being sold under it. Gillette Series Sensitive Skin shaving gel is the most prominent product in this range. All these gels variants are in the premium segment. Sensitive skin shaving gel is the entry level gel from Gillette.
The Gillette Series Sensitive Skin shaving gel has been developed as a technologically-advanced personal care product for men. It has been developed for men whose skins are allergic or sensitive to razor’s action. They resist shaving as it leaves their skin burning and with a lot of cuts and rashes.
The gel is intended to make shaving easy for them by virtue of its triple protective formula.
It has aloe in it and some mild fragrance.
High grade lubricants, including Glycerin and Silica, hydrate to enhance razor gliding and deliver a comfortable shave.
Its anti-friction technology saves from cuts and burning sensation.
Gillette shaving gels’ packaging is done tastefully. It appeals to customers and conveys the feeling of a quality product inside. Gillette sells sensitive shaving gel in tubes and canisters. The shelf life of canisters is more, they hold more quantity, are easy to carry, and they cost more too.
Target Market
Gillette’s product range caters to men’s personal grooming market. Their shaving gel products are meant for men who attach importance to personal grooming and skin maintenance. This customer segment is willing to pay premium price for good products that are meant for personal grooming.
Market Segmentation: The market for shaving product is a competitive one. So within this market Gillette needs to identify the segments and promote sensitive shaving gel to them. These segments can be selected on the basis demographics i.e. executives, young working men, and teenagers. These users want quality products for convenience and better shave. The behaviouristic segmentation can be used to target people who shave regularly. Psychographics segmentation can help identify appearance conscious, socializing males as another potential segment.
Target Market: The target market for Gillette Series Sensitive shaving gel is divided in to two categories. First category is the urban, modern, appearance conscious male population in the age group of 20-45 years. Men with sensitive skins are special focus area of the product development team. The name of the product highlights the product specialization to this category of customers. Gillette Series Sensitive Shaving gel targets the customer by highlighting the product capabilities of providing a smooth shave without nicks and redness. It also provides appealing look and feel to the packaging of its shaving gel. This also appeals to young people.
Second category is shaving cream and foam users. Since this is the entry level shaving gel from Gillette, so by pricing it competitively Gillette also attempts to capture the shaving cream users’ market to enticing them to move over to gel. In the advertisements it has tried to highlight the benefits of gel over cream and foam to increase its market base. Owing to this a number of men have now moved to gel permanently.
Positioning: Gillette has always brought new products to cater to various market segments instead of changing a specific shaving gel repeatedly. Gillette’s strength lies in the superior quality of their shaving gels. It promotes each shaving gel as a distinct product to the customer. They use this strategy to position each shaving gel at different podium in the market. This smart positioning strategy helps them cover the width of market and become a market leader.
Product Strategy
Gillette has been credited as a pioneer in shaving products. Over the years it has brought superior products that have ushered new avenues in the shaving market. At the core of Gillette’s product strategy and development sits the idea of staying ahead in the competition. They achieve this by introducing a wide array of products to capture the width of market while also maintaining technological superiority. Gillette has 700 million loyal customers in 200 countries across the world.
Gillette Series alone has 6 types shaving gels under its brand. There are some other gels too that Gillette sells but not under Gillette series. This product strategy of having products at all the positions definitely help in capturing market share. Gillette Series has been credited with introducing Shaving gel with Aloe in it. It also has products that are rich in Vitamin E to help the skin conditioning or products that are pure and natural with no scent or harmful chemicals in it.
Gillette depends on Shaving Gels oriented product strategy because:
They provide better lubrication than creams.
€ The minerals and vitamins, e.g. vitamin E or aloe, are easy to mix in gels rather than creams or foams. It also helps in retaining their natural semi liquid state.
Product Levels: Kotler had proposed three product levels. Each product can be seen through these levels. Each of these levels enhances the value proposition to the product. The Gillette case is mapped and explained in the light of this.
Augmented: Superior technology of Gillette products and reliability of the brand
Core product: would be quality of lubrication and smooth shave
Actual: High lubrication shaving gel for sensitive skin
Packaging Design
Product classification: Gillette sensitive shaving gel meets the attributes of convenience goods such as
They are purchased frequently with minimum effort.
Buying is on a regular basis
There are multiple purchase locations for the product.
Packaging and Labelling: Gels are sold in pressurised canisters as it reduces spill chances and provides easy portability. It is more important for technical reasons rather than appealing to customers. Labelling is important for a product associated with quality such as Gillette sensitive shaving gel. So Gillette’s users may not be influenced by packaging much but labelling would assure them about the genuineness and details of a products.
Pricing Strategy
At the introduction of a new product in the market any organization needs to figure out at what price it will launch the product. The price is a factor of input costs, demand, competition, self perception, and companies’ strategy of product positioning. The pricing strategy also needs to include the price and quality strategy matrix as proposed by Philip Kotler.
Philip Kotler identified 9 price quality strategies
High Price Low Price
High Quality
Low Quality
Premium
High Value
Super Value
Over Charging
Mid Value
Good Value
Rip-Off
False Economy
Economy
There are three categories of pricing objectives and to achieve these objectives there are different strategies namely
Profit Oriented
Profit maximization
Satisfactory Profits
Target return on investment
Sales Oriented
Market share
Sales maximization
Status Quo
Match competitor’s price
Maintain same price
Gillette uses these nine price quality objectives to set prices for its products. It pricing strategy is also governed by the pricing objectives and the positioning it wants for its product. For technologically advanced and new products it uses premium pricing. For products meant to capture market share it uses average pricing. Thus it follows different pricing objectives for different offerings and it is true for all of its product range e.g. for Gillette Hydra gel it is using profit oriented objective with Target ROI as strategy.
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For the product under review i.e. Gillette series sensitive skin shaving gel the pricing objective used by Gillette is Sales Oriented and the strategy to achieve this objective is Market share. This is the entry level shaving gel from Gillette but quality wise it targets the broadest customer segment. Most men complain of skin irritation after shave and this one promises to alleviate this issue. The pricing-quality mix also helps in winning new entrants as customers.
Gillette sensitive shaving gel Price/Quality
High Price
Gillette Fusion Hydra Gel
Nivea Sensitive Shave gel
L’oreal Anti Irritation gel
Gillette Sensitive Skin shave gel
High Quality
Low Quality
Low Price
On the above map a comparison of various products offered in the sensitive skin shaving gels range has been done. They are compared on the dimensions of price and quality. It can be seen that the Gillette series sensitive shaving gel is a value offering as its least expensive among the group while on the quality dimension is very close to L’oreal and Nivea’s offering. The high sales volume of Gillette’s sensitive shaving gel clearly indicates that it is considered a good value for money by customers. The Gillette’s own hydra gel is most expensive and best quality product in the market.
Clinique M Shave Aloe Gel
High Price
Gillette sensitive shaving gel Price/Attribute
L’oreal Anti Irritation gel
Gillette sensitive shave gel
High Point of Purchase (Company owned Stores, neighbourhood stores, multi brand retails)
Low Point of Purchase (Company owned Stores)
Low Price
Gillette’s primary target market is busy executives in urban cities. They prefer easy availability of the products. In the above map we can see the Clinique’s shave gel is not only expensive but hardly available too. This type of pricing-availability pattern can hardly achieve big market cap. On the contrary Gillette is the most easily available shaving gel. Gillette’s main customer Walmart is the world’s biggest retailer and it provides wide exposure to the product. Besides that this product can be found with ease in neighbourhood stores too. L’oreal is expensive than Gillette and not as easily available.
Promotion Strategy
The promotional strategy requires a business to strategise how it plans to reach and communicate to the target market segments. Promotions are nothing but conveying your messages about the product. A business needs to outline what is great about it communications and what isn’t.
As part of promotional strategy Gillette has world’s leading athletes promoting its products. Athletes are inspirational figures. A lot of people aspire to be like them. The strategy is to sxxconvey to audience that successful, healthy and good looking people uses Gillette products. Another aspect of this strategy is that the athletes that Gillette has hired are from different sports. This gains relevance in the wake of the fact that Gillette is a global brand and in different countries different sports’ heroes are revered. For example in India they have Rahul Dravid as brand ambassador while in Australia they have Michael Clarke. For Europe they have Roger Federer. This gives width to their promotional schemes target audience.
As part of Gillette’s promotional strategy they use the following tools to keep reminding customers of their new products.
Direct Marketing: They run advertisements on television featuring leading athletes promoting their shaving products. Gillette’s website is very customer friendly. It hosts a lot of videos on how to use their products besides highlighting the benefits of features in them. It major advantages are deep penetration and wide audience base. The target market for Gillette is net savvy population so it is easy to reach them and get their feedbacks.
Advertisements: Gillette uses men’s fashion magazines to promote their offerings. The key advantage of this that the target market’s fashion conscious segment will be able to see the product’s offerings and features.
Sales Promotion: Gillette usually runs sales promotion schemes all the year. At times they give bundled products at discounts or extra gel per canister or free promotional products to popularize new products. The main advantage of this strategy is that the young customers’ base feels good as they get more for the same amount. For new products it gives customers a chance to experience new technology shaving goods free of cost which later helps them to make informed buying decisions.
Public Relations: Gillette’s PR efforts are an important pillar of its promotional strategy. It is conscious of its social image and reputation. As part of its Public Relations it removed Tiger Woods as brand ambassador when his extra marital affairs’ news broke out. Gillette had to pay heavily in case it decided to prematurely exit the agreement with the golfer. It still went ahead and terminated the deal. This was a very important decision on Gillette’s part as it decided to stand by the cultural ethos of its customers and their families.
Market Mix
Product
Gillette Series sensitive shave gel is meant to target a new segment. It has to demonstrate what is being promoted. The additional features like soothing affect need to be there to satisfy the basic need of the consumer. The sensitive shave gel should have anti inflammatory property, mild fragrance and antiseptic properties. The sensitive shaving gels market is new and this will be Gillette first venture in this area. The customers’ expectations in this area are different from a premium segment’s customer. This product is intended to reach a larger, price conscious, vacillating segment of the market. Gillette thus far has done little or no customization. For the Gillette sensitive shave gel, this strategy would not work well and it needs to understand the mindset of the target market.
Pricing
Gillette should adopt Value based pricing strategy. It is because the shaving gel is a highly competitive market with a lot of cheap local imitation challenging Gillette. Value based Pricing will help win more customers by offering a quality product at a reasonable price. It doesn’t mean in any way that less prices will induce more sales. It is about designing and developing the product with an attempt to keep costs under control while maintaining the quality. Localization of development helps in achieving this. Gillette has done this in razor market also.
Place
Gillette biggest customer is Walmart. This much dependency on a single customer is not good for business. Gillette should diversify the selling channels. It should use online sales activities. The target market for Gillette sensitive shave gel is young, educated people. They spend a lot of time online and prefer to shop from the comfort of home. Gillette should allow people to buy online or order online and get delivery at home or a nearby store. Besides it is easy to educate them about the product when they are shopping online. The product type is not having any bearing of size, material as in case of shoes and clothes. This makes it an ideal item for online buying.
Promotion
To promote sensitive shave gel Gillette should use promotional videos on youtube explaining the benefits of the product, provide fashion salons promotional packs so that they can let customers test it, should setup kiosks to provide customers free samples. These will cause product awareness in target customers. Gillette ambassadors should be involved in promoting sensitive shave gel as much as they do for the razors. Educating the target market about the product is the core area that needs to be covered. Direct marketing and sales promotion are best suited for newly launched products.
Recommendations
Conclusion
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