Gillette: The Best Anyone Can Get
Team 2
Marketing 8030
07-20-2014
Summer 2014
Gillette: The Best Anyone Can Get
Executive Summary
Gillette is a multi-billion dollar company focused on
personal grooming products founded by King Gillette
in 1901. Now part of the Procter and Gamble family,
Gillette has consistently innovated its products to
maintain its place as the leader in its market
segment. Gillette is most identified with the slogan
“Gillette: the best a man can get.”
Gillette currently faces the struggle of how to
maintain competitive advantage in a mature market
without creating trivial and easily duplicated
innovations. An examination of Porter’s Five Forces
and a rigorous SWOT analysis has revealed that for
Gillette to continue to experience success in its
market segment, the best approach is to continue
with its innovative efforts, and to broaden its
marketing strategies to women in an effort to
become known as “Gillette: the best anyone can
get.”
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Gillette: The Best Anyone Can Get
Contents
Executive Summary......................................................... 1
Contents .......................................................................... 2
Company Overview ......................................................... 3
Situation Analysis ............................................................ 4
Problem Statement ......................................................... 5
Assumptions.................................................................... 6
SWOT Analysis ................................................................ 6
Porter’s 5 Forces in The Personal Grooming Market...... 7
Marketing Alternatives Considered ................................ 8
Decision Criteria ............................................................ 10
Decision Analysis MATRIX ............................................. 10
Recommendations ........................................................ 12
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Gillette: The Best Anyone Can Get
Company Overview
King Camp Gillette was born in Fond du Lac, Wisconsin in 1855. When he was 16, his family’s
home was destroyed in the Chicago fire of 1871. This
single event galvanized King Gillette to lead a life of selfsufficiency, innovation, and invention. Gillette’s work as a
travelling salesman led him to a colleague who firmly
implanted in his mind the paradigm that “the most
successful invention is one that can be purchased over
Figure 1: A Gillette Safety Razor
and over again by satisfied customers.” His initial razor invention was the “safety razor” (Figure
1) that had a reusable handle grip functioning as a blade mount and disposable blade as an
accessory. This was a significant and considerably safer improvement over the straight razor,
which was essentially a sharp knife (Figure 2).
The Gillette Safety Razor Company was established in
1901 with the successful implementation of the mass
produced “Safety Razor” and disposable blades.
Gillette did not have direct competitors in the
disposable razor market for 61 years until 1962 when
Wilkinson Sword introduced its stainless steel
Figure 2: Typical Straight Razor
disposable razor blades. Today, Gillette still maintains
dominant market share in the U.S. and across the globe
under the ownership of Proctor & Gamble. Gillette only has one serious competitor, Schick, for
its wet shaving products. There are other private brand competitors but they hold negligible
market shares. Up to the 1980’s, Gillette held 70% of the global market share for wet shaving
with roughly 5% decline through the end of this case study in 2009.
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Gillette: The Best Anyone Can Get
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Situation Analysis
Gillette is competing in a very mature wet shaving market segment that is characterized by low
innovation and very few competitors. The company only has one direct competitor, the Schick
Company, who has an estimated 17% global market share. It is estimated that 25% of people
that are of shaving age do not shave for reasons including cultural, religious, discomfort, or
personal preferences. 94% of women who shave prefer to shave with a disposable razor, and
they shave an average of 11 times a month. 84% of men who shave prefer to shave with a
disposable razor, and they shave an average of
22 times a month. While Gillette has had some
cannibalization of its product lines with the
advent of new products, they have been able to
continuously milk the cash cows even as new
entrants come to market.
Trivial innovation has been described by industry analysts as adding a 6th
or 7th blade to the existing design.
In the past, Gillette has demonstrated solid strength to combat competitive threats with
innovative designs for the disposable razor. However, most analysts now believe that the wet
shaving market has reached its peak ability to create meaningful innovations. Examples of trivial
innovations have been described by industry analysts as ‘adding a 6th or 7th blade to the existing
design’.
While Gillette is best known for its “Gillette, The best a man can get” tag line, the company has
been very adept at marketing and reaching a broad audience. Gillette does market to both men
and women but has a marketing emphasis in male dominated sports and activities.
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Gillette: The Best Anyone Can Get
Gillette’s wet shaving products are in a classic mature market and have an enviable position in
that market. However enviable, Gillette will have to take market share from Schick to grow
profits and maintain a competitive advantage.
Problem Statement
Gillette’s problem is defined as follows:
How can Gillette maintain competitive advantage in a mature market without creating
trivial innovations?
It is important to understand that competitive advantage is equated with increased market
share. Although this is quite a mature market (Gillette did not have competitors in disposable
wet shaving for 60 years and since then) its market share has only vacillated approximately 10
percent. Therefore, this market is still susceptible to rapid changes based on significant
innovation. While Gillette has cannibalized its own sales recently through trivial innovation,
there is opportunity for large market share gains with meaningful innovations. Analysts regard
their move to a five bladed Fusion system from the three bladed Mach-3 system as virtually
trivial and even mocked Gillette with their own tag line “I thought this was the best a man can
get?” Most analysts firmly agree that adding blades to the existing design would be a trivial and
inconsequential innovation.
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Gillette: The Best Anyone Can Get
Assumptions
An important assumption made in the analysis of this case is that Gillette cannot modify the
prices of its products without significantly impacting unit sales. If prices are raised, the company
runs the risk of alienating consumers and reducing profitability. If prices are lowered, new
consumers that are attracted by the decreased price cannot offset the reduced profitability. We
believe that Gillette has put a great deal of thought into their current pricing structure that
should not be altered.
The original case study was written during the recession in 2009. The analysis was made with
the assumption that the economy is in recovery in certain sectors including the wet shaving
market. Furthermore, analysis was made without additional research per instruction.
Identification of problems, alternatives, and recommendations were derived from the case
alone.
SWOT Analysis
The case demonstrates that Gillette’s strengths to date were their ability to innovate, capture
and hold dominant market share, very strong branding via successful marketing, the financial
backing of Proctor and Gamble, as well as their diversification into complimentary personal
grooming products. The
documented weaknesses in
the case include their recent
inability to create
substantial technological
improvements that are
difficult to copy. Most of
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Gillette: The Best Anyone Can Get
their primary product lines are also in the very mature stage of their life cycles. Gillette has
higher price points with a narrow segment focus since they market primarily to men.
Gillette has significant opportunities stemming from a rise in global demand for personal
grooming products, emerging global markets, the female market segment, and underserved
minor market segments. Significant threats facing Gillette include direct competition from The
Schick Company who holds approximately 15 to 17% of the wet shaving market at the time of
the case. Significant innovation from Schick could propel a rapid market share gain. Other
smaller threats are bad press from critics and consumer publications like Consumer Reports, the
depressed economy, the competitions’ pricing strategy, and consumer safety groups and
regulations.
Porter’s 5 Forces in The Personal Grooming Market
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Gillette: The Best Anyone Can Get
Modern business case analysis is no longer complete without an examination of Michael
Porter’s Five Forces Model
that some consider more
complete than a standard,
SWOT analysis. In Gillette’s
case, disregarding disruptive
technologies such as 3-D
printed shavers that do not
represent a revenue for any
company, the barriers to
entering into direct competition with Gillette are very high as the potential competitor would
have to invest heavily in manufacturing facilities, supply and distribution chains, as well as
significant marketing costs and relationships with large scale distribution outlets. Gillette does
enjoy significant power as a very large global procurer of steel and chemicals for plastics
extrusion for their shaving devices. This gives them the power to negotiate from a place of
strength with the suppliers. The weakness lies in the ease for customers to substitute Gillette’s
products with their competitor’s. Furthermore, large volume buyers such as Wal-Mart have
significant negotiating power. However, Gillette’s large sales volumes earn them preferential
perks and preferred placement in stores with large retailers such as Wal-Mart. While there is
significant rivalry in the wet shaving market, the competition is really between only two main
competitors of which Gillette has roughly seventy percent of the market share. This gives
Gillette a significant advantage in the rivalry.
Marketing Alternatives Considered
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Gillette: The Best Anyone Can Get
Given the SWOT analysis, Five
Porter’s Forces, assumptions,
situational analysis, and company
history, the best alternatives to
the problem statement are listed
in Figure 3. The first alternative is
the production of a serious,
patentable and not easy to
Figure 3: Solution alternatives to the problem statement
duplicate innovation that has been dubbed the “Lazer Razor”. The case demonstrates that
significant innovative breakthroughs attract purchasers.
Subscription service additions to deliver personal care products directly to the home on a
frequent basis will raise the bar of difficulty for customers to choose alternative personal care
products. Marketing to new target segments, particularly to women, is something that is
recommended. In most women’s sports, with few exceptions, ladies generally are bare legged
and frequently showing their armpits. This represents a significant opportunity for wet shaving
products to advertise at these venues. An alternative that should also be considered is
partnership with ventures in the travel industry such as cruise ships and hotels. Hotels provide
personal grooming items in most rooms and having entire chains provide Gillette products will
get the products into the hands of customers who may not choose Gillette products normally.
Furthermore, these products would be associated with hopefully a positive experience. Another
alternative worth consideration is the continued expansion of other related personal grooming
product lines that complement the wet shaving market such as lotions, creams, and body
washes.
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Gillette: The Best Anyone Can Get
Decision Criteria
The selected relevant decision criteria are outlined in Figure 4. Increased US market share and
increased global expansion are weighted most heavily as they represent the paths to capture a
larger market share. Brand equity is very important, and the Gillette brand is already well
established. The alternative solutions are weighted on their ability to further increase Gillette’s
brand equity and make it a bigger household name that it already is. One of Gillette’s greatest
strengths from the case study is its ability to cleverly market products to consumers, and to do
this successfully, they must be able to leverage their brand name.
Low investment cost and low
competitive threat are not
weighted as heavily. The wetshaving market segment
already has very low
competitive threats due to the
high barriers to entrance for
Figure 4: Decision Criteria Matrix
incoming competitors. The
strong financial support that Gillette enjoys as a member of the Procter & Gamble family can
allow them to embark on a moderate to high cost venture to garner fresh market share.
Decision Analysis Matrix
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Gillette: The Best Anyone Can Get
Figure 5 represents the results from the Decision Matrix. Under the “Increase U.S. market
share” criteria, it would appear from the significant ability of new innovation to swing
consumers that the Razor innovation is scored with a four assuming that the innovation is not
trivial. Gillette, as mentioned before is a marketing machine, earning a five in the market to
new segments category, as it is a core competency of the company. Expansion of personal
grooming products in related product lines of wet shaving also earned a four, as there seems to
be a significant market here, particularly to women. A subscription program and partnerships
with travel sites would
gather only moderate
gains.
The trend follows suit
with only slightly lower
scores when examined
in the global expansion
category. All
Figure 5: Decision Analysis Matrix
alternatives scored
well in increasing
brand equity;
however, the standout was the “marketing to new target segments” alternative. This stood out
as the idea of marketing to the female segment would gain great increases here. A subscription
service rated poorest in this category, as it likely would have only a moderate effect on brand
equity. Low investment cost scores were low as none of these are particularly low cost efforts.
The Razor innovation is the alternative category that stood out when considering low
competitive threat as all the other alternatives could be easier to duplicate. Patent protections
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Gillette: The Best Anyone Can Get
and complexity in design would make it more difficult for Schick to copy and infringe on a truly
innovative product.
Recommendations
Based on a thorough analysis of the case and the decision matrix, the recommended solution
alternative is for Gillette to broaden its marketing strategies and market to new under-explored
segments. To implement this recommendation, we suggest the following three steps.
First, Gillette should initiate a study to determine the most profitable market segments that can
be tapped successfully to increase market share. Second, Gillette should assemble a cross
functional marketing team (Customer Marketing, Marketing Communications, and Ad Agency)
to define the strategy to reach the target audience. Lastly, Gillette should Implement the
strategy and measure the results. This plays to the inherent strengths of Gillette to market very
effectively but expands beyond their core cash cow base of men without neglecting them. A
potential change in their household tag line from “Gillette, the best a man can get” to “Gillette,
the best anyone can get” would broaden the customer base by making Gillette a more inclusive
brand.
Because innovation is intrinsic to Gillette, to maintain long term competitive advantage, it is also
recommended that Gillette continues with its research and development efforts to create
groundbreaking innovations in the wet-shaving market.
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