Executive Summary

Gillette, a brand name that is known for top-notch marketing strategies based on product development and innovation thrives in a highly competitive market for razors and blades. Throughout the years the company gained its competitive edge by introducing new shaving technology in an industry where new entrants are less and intense rivalry against competitors is common. However, analysts believe that true high-tech innovation and rapid development by Gillette has been left behind decades ago as the company has not embraced new technology in over a decade especially when it comes to meaningful product innovation.

One of the major marketing strategies of the company includes focusing on sports as sports resonate well with the consumer niche for Gillette around the world. This is because, in virtually every market, sports sponsorship and marketing is considered as the best way to approach the customers. The current strategy of the company is centered upon product differentiation and the acquisition of market share. This means that instead of focusing on current high-tech innovation, Gillette focuses more on acquiring and diversifying existing product lines.

For succeeding in the future, Gillette needs to innovatively out-market the competition by creating such products that have innovations that are not considered trivial by the consumers. This is because product innovation for the wet-shaving market has long been underwhelmed and the introduction of five-blade Fusion is nothing but trivial when it comes to comparison with its competitors.

Situational Analysis- Analysis of Macro Environment

The external environment for Gillette consists of forces such as legal, technological, economic, political and social influences which can impact organizational activity. The PESTLE analysis for Gillette highlights that economic, socio-cultural and technological factors mainly impact the organizational performance and the presence of its products in the market (Hooley, 2017). The impact of these forces has been discussed in the table below using PESTLE analysis:

Table 1. PESTLE Analysis

* n/a: Not applicable – Not indicated in the case study

Situation Analysis- Analysis of Industry Competition and Competitors

The degree of market attractiveness, as well as industry competitive intensity, is going to be assessed using the Five Forces framework by Porter. Gillette has been in the industry for a long period of time and the industry is attractive now because there are new entrant barriers due to saturation within the market channelized by aggressive competition. However, there is a high intensity of rivalry as this leads to price wars, fluctuations due to innovative products and makes it more expensive for a company to maintain a large market share.

 There is a high cost of entry due to high market saturation which means that new entrants will have to face high competition and low sales which can eventually lead to bankruptcy. The mature nature of Gillette in the market makes it difficult for new entrants. Gillette has a market share of 12.8 billion dollars in the global market which means that it does not have any threat from new entrants however it does face high intensity from rivalry as many companies are now capturing more and more consumers by investing in innovative shaving technology.

Table 2. Porter’s Five Forces on Gillette

* n/a: No applicable – Not indicated in the case study

Competitor Analysis

Gillette’s biggest competitor is Schick because of its progressive geometry technology. Schick acquired market share through a four-bladed razor back in 2003. Gillette and Schick have been competing with each other for decades and in 2003, came face to face in a lawsuit for misleading customers.

Table 3. Competitor Analysis

* n/a: Not applicable – Not indicated in the case study

Situation Analysis- Analysis of Customers

Gillette’s primary customer segment includes male athletes as it markets most of its products at sports events such as NFL New England Patriots, World Cup, Soccer events, MLB, NASCAR, and Olympics. Gillette also targets women as it has the advanced Venus best for women that require good design.

Table 4. Customer Segmentation by Demographic

Internal Environment & SWOT Analysis

Porter’s Generic Strategic Type

Gillette uses a differentiation strategy by making different product lines more attractive to customers in comparison with competitors. For example, Gillette appealed to its female customers by winning 2010 Most Profitable Solution to a Business Problem award for the Venus razor for women (Hartline, 2013). The razor was catered to the needs of the women in such a way that it specifically differed in its offering from the ones before it due to its design. The previously existing razors were just prototypes of men’s razors colored in pink while the Venus razor enhances the shaving experience and expanded the market share for Gillette. This demonstrates that Gillette used a successful differentiation strategy by investing in product research, innovation, and development and by delivering a high-quality product for women.

Furthermore, Gillette used effective sales and marketing campaigns to implement the differentiation strategy. For example, in 2012, Gillette launched the Masters of Style campaign for its Fusion ProGlideStyler which starred three celebrities known for their facial hair. The Fusion ProGlide product was designed specifically to cater to complex facial hair styling which involved scissors, trimmers, and razors. P&G then used this product differentiation strategy to market other products such as ProGlide Clear Shave Gel in all in one styling toolkit.

SWOT Analysis

Gillette needs to invest more in research and development specifically for new shaving technologies. There is also a lack of product demand forecasting which leads to missed opportunities specifically in cultural trends. There is a need for innovative shaving technology to acquire a larger share in the global shaving market and for capturing the attention of consumers.

Table 5. SWOT Analysis

Evaluation of Current Strategies and Problem Statement

The current strategy of the company is centered upon product differentiation and acquisition of market share. This means that instead of focusing on current high-tech innovation, Gillette focuses more on acquiring and diversifying existing product lines. The company adopted the same strategy back in 1962 when the stainless steel blade was launched by Schick, the main competitor of Gillette.

 Gillette acquired much of the existing business of its competition and continued to diversify its product line while obtaining mixed success. Gillette thus became a victim to its own strategy of cannibalizing their products that were successful. The launch of Sensor Razor enhanced sales globally, heating up the internal competition. Gillette continued to venture into different product lines by continuously attacking its own products.

From Atra to Trac II, from Sensor to Fusion, Gillette kept on changing and attacking its products. This kind of marketing strategy did revolutionize the shaving market, however, it made Gillette a victim of its own success. This is because while the new product lines by the company enhanced the sales, they often took away the customers as well as sales of the previous products.

For example, Sensor, launched by Gillette in 1990 enhanced sales globally until 1993, when it was overthrown by Sensor Excel. Another competing product produced by the company includes Sensor for Women launched in 1992 and Sensor Excel for Women launched in 1996. The soaring sales of the Sensor line led to the decline of Trac II and Atra which belonged to the twin-blade shaving line. It should be noted that with the introduction of every new product line, consumers were more eager to get their hands on the new products and it might be the case that they are not pleased with the pricing of the existing product or some feature because of which they purchased the new products.

One of the major marketing strategies of the company includes focusing on sports as sports resonate well with the consumer niche for Gillette around the world. This is because, in virtually every market, sports sponsorship and marketing is considered as the best way to approach the customers.

Problem Statement

For succeeding in the future, Gillette needs to innovatively out-market the competition by creating such products that have innovations that are not considered trivial by the consumers. This is because product innovation for the wet-shaving market has long been underwhelmed and the introduction of five-blade Fusion is nothing but trivial when it comes to comparison with its competitors.

Alternative Strategies

Product Innovation through Research and Development

Gillette must invest in Research and Development as it plans on global expansion. Extensive R&D will enable the company to understand the influence of culture, religion, ethnicity, gender, etc. in shaving behavior. Internationally, about fifteen percent of men do not shave because of issues with the discomfort they face while shaving as they have sensitive skin; seven percent of men avoid shaving because of religious as well as cultural reasons while three percent of men simply do not care about shaving.

Thus by being aware of cultural as well as behavioral traits of the consumers the company can easily target, develop and innovate its products and in turn satisfy the customers. Similarly, when the patterns in women are seen, it can be observed that many women opt to not shave for cultural or religious reasons meanwhile some cultures are opting to turn towards shaving such as younger European women.

High-Tech Razors

Electric shavers happen to be around since the late 1930s. However, recently there has been advanced innovation such as foil razors that have perforated metal which covers the blade and rotary razors that have spinning blades. Gillette already incorporates the five-blade razors in its product line, however, its competitors have adopted technologies that are by a far top-notch when it comes to innovative sensor monitors or trimming blades that provide personalized shaving modes (Sands, 2019). Gillette lags behind its competitors when it comes to innovation specifically Sonic technology as well as AutoSensing motors. This kind of technology enables those with sensitive skin to shave dense surfaces on the face efficiently as it prioritizes gentleness over toughness with just a click.

Focus on Cross Promotion

Gillette happens to be heavily focused on men when it comes to promotions. It would be better if they change their market niche and advertise innovative products for the female sports team instead. Effective advertising tends to tap into the emotions of the viewers which means that it can compel them to take upon themselves the act of shaving. In the case of women’s shaving and razor industry, ad campaigns and products are tapped into emotions such as love, fear as well as shame to create demand for the product. The global women’s razor market from 2018 to 2024 is expected to grow at a CAGR of 4%. Moreover, the concept of gender neutrality in shaving products is a concept that should be promoted keeping in view the market trends. The majority of brands are jumping onto the diversity as well as inclusivity bandwagon and this is something Gillette should hop into as well.

Table 6. Evaluation and Justification of Strategies

References

Hartline, M. D. (2013). Case16: Gillette: Why Innovation May Not Be Enough.

Hooley, G. (2017). Marketing Strategy and Competitive Positioning. Pearson; 6 edition.

Sands, R. (2019). The Best Electric Razors of 2019. Retrieved from Forbes: https://www.forbes.com/sites/rogersands/2019/08/03/the-best-electric-razors-of-2019/#737b210011c4