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How Gillette innovated and improved its market share in India - Business Today
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Sharp focus
This case study looks at how Gillette innovated by tailoring advertising and inventing a new product
development process to reflect local shaving habits.
By Gabriela Berner, Jade Chang, Marina Dunaeva,and Leonardo Scamazzo Delhi Edition:April 13, 2014
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Executive Summary: Traditionally, Gillette relied on extensive research and
development to create a single product for global distribution. The product was
supported by a marketing premise that it would be equally valuable to customers
globally. But Gillette set aside its global strategy in India and grew its market
share dramatically. This case study looks at how Gillette innovated by tailoring
advertising and inventing a new product development process to reflect local
shaving habits.
Gabriela Berner, Jade Chang, Marina Dunaeva, and Leonardo Scamazzo.
Although Gillette entered the Indian market in 1984 and launched its newest tripleblade system, Mach3 in 2004, sales were flat for a long time. The product did not go
through any changes and kept its key features - such as long lasting diamond-like
coating blades, 'PowerGlide' smoothness, ergonomic handles, pivoting precision
heads - and premium price, which was 10 times more than its two-blade
competitors.
Even though the target customers were professional men with higher disposable
incomes than the average Indian, the traditional, double-edged razor, could not be
dislodged. Indian men do not consider shaving a significant enough activity to
justify such a premium. Gillette's Mach3 value proposition was based on extensive
consumer research, which highlighted key concerns men had about shaving: it was
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How Gillette innovated and improved its market share in India - Business Today
time-consuming, caused skin irritation and was generally unpleasant. Mach3
promised "the closest shave ever in fewer strokes - with less irritation". Research
and development served as the key value network component supporting this value
proposition, as it was crucial to deliver the promised performance. Manufacturing,
distribution, marketing and advertising were geared for the global introduction
through increased production capacity and aligned promotional material.
With such indifference towards shaving, Gillette had to focus on changing the
consumer's attitude, leading to some creative marketing campaigns. For example,
the launch of the newest Gillette Mach3 in 2009 was supported by the 'Shave India
Movement 2009' campaign which included several initiatives. Gillette created the
platform 'India Votes... to shave or not' to support this campaign, which asked three
controversial questions: Are clean-shaven men more successful? Did the nation
prefer clean-shaven celebrities? And the big one: do women prefer clean-shaven
men? For two months, various media channels picked up on the campaign and ran
interviews, discussions, editorials and news stories, which triggered popular
interest. The main purpose was to create a debate around shaving.
The company created the Women Against Lazy Stubble (WALS) association, where
women were encouraged to ask their men to shave, capitalising on their role as
influencers of men in this aspect. Gillette recruited Bollywood celebrities such as
Arjun Rampal and Neha Dhupia to support the campaign. This innovative way of
marketing proved to be effective and as awareness grew, sales and market share
increased by 38 per cent and 35 per cent respectively.
Until 2010, Gillette India had been following a strategy of marketing cheaper-end
US-developed razors. However, low-income Indian customers who could not afford
Gillette's premium price relied on the outdated, but traditional, double-edged razor
shaving systems. An estimated 400 million customers not happy with existing
market offerings provided a promising growth opportunity for Gillette. Thus, it
focused on understanding its customers and the challenges they faced, which
required spending hours visiting and interviewing consumers in order to
understand the role of grooming in their lives and their needs.
The company realised that apart from affordability, customers also valued safety
and ease of use. Those customers' needs would not be satisfied by Gillette's existing
offering - most lacked running water, had to manage longer facial hair and sit on
the floor while shaving. Nor were they satisfied with the existing double-razor
solution as they caused frequent cuts.
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Once Gillette understood this consumer segment, the company created a new
customised product. Gillette Guard, the first product created just for the Indian
market, was introduced in October 2010. It was priced at just Rs15 per razor - less
than 35 cents and three per cent of the top-ofthe-range Fusion ProGlide price. At
Rs5 for a refill cartridge, Gillette Guard met customer expectations on safety and
ease of use.
Gillette made several changes to Gillette Guard from the traditional razor systems
produced in the developed world. Extra blades were eliminated. Gillette Guard's
single-blade system does not follow the trend of increasing the number of blades in
a razor made for developed countries. Design complexity was reduced. Gillette
Guard is a much simpler design with fewer parts to assemble during the
manufacturing process.
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Features such as easy-rinse cartridges and lightweight, ribbed handles were
designed. Easy-rinse cartridges help customers save water and ensure the blades
are clean, even if running water is not available. The new handle has a better grip,
making the experience easier and safer. Safety comb and hang hole in the handle
was introduced. Designing a safety comb tackles the problem of frequent cuts,
especially for men who are not daily shavers and deal with longer hair. The hang
hole was introduced as a response to less convenient conditions and to allow for
easy drying and storage.
The research and development process was reinvented to come up with the product
tailored to target customers' needs. Simplified design means 80 per cent fewer parts
are used in production compared to Gillette Vector. This helps cut manufacturing
costs to ensure that the low price does not interfere with the business model's
sustainability. Apart from research and development, Gillette also built Guard's
distribution network across millions of small local shops, where it was more likely
to reach its target customers, rather than bigger retail chains. This ensured a wide
distribution reach.
Unlike the heavy digital marketing strategies used in the developed world, the
campaign for promoting Gillette Guard was based on traditional advertisements
featuring Bollywood actors. Additionally, the success of changing Indian men's
shaving culture played a significant role in marketing Gillette Guard. As the first
product designed for men specifically in this market, Gillette Guard is touted as
"one of the most significant product launches in Gillette history".
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Gillette's success in India hinged on its capacity to innovate. Firstly, it used
innovative ways to communicate with its consumers in 2009 in order to attract a
once indifferent segment. Through a creative use of traditional ads and marketing
campaigns that supported the launch of the new Gillette Mach3, Gillette was able to
change consumers' indifference towards shaving and create a true momentum for
its products. In this way, Gillette shifted from a market-driven to a market-driving
approach.
Secondly, in 2010, Gillette did something the Harvard Business Review described
as "reverse innovation" to develop a product that would satisfy the needs of the
lower income customer. After failing to gain significant market share in India by
selling its lower and mid-tier American razors in different packaging, Gillette
adopted a different approach. It went back to the source by making significant
investments in market research to better understand the needs and preferences of
target consumers.
Gillette understood that Indian consumers' needs, culture and attitude towards
shaving were radically different from those of Western consumers. Rather than
lowering performance, Gillette kept the valued customer at the core of its strategy
and introduced an innovative value proposition for the value-for-money customer.
Moreover, Gillette was able to deliver its promise to customers by putting in place
an appropriate value network. In addition to a customised product, all the elements
of the business model were coherent with the value proposition and mutually
reinforcing.
Local manufacturing enabled Gillette to lower its cost structure and maintain low
prices. The distribution model, not based on few large retailers, but on millions of
local shops called kiranas, allowed Gillette to achieve a higher market penetration.
The Gillette Guard case in India is the typical success story suitable for a marketing
strategy book. However, there are some aspects of the strategy that appear to be
controversial. One is related to environmental sustainability. Guard uses disposable
cartridges which makes it not exactly an environmentally-friendly product.
Secondly, Gillette's business model in India shows some
weaknesses. Emerging markets such as India are known
for producing high volumes of generic products. Given
the low barriers to entry in the razor business, there are
some doubts about how Gillette will sustain its
competitive advantage. Innovative start-ups (e.g.
DollarShaveClub) are growing fast in the US by selling
simple twoblade razors online at a fraction of Gillette's
price. A lower price is made possible by a simple product
design and limited marketing and overhead costs. It is
possible a low-cost competitor will enter the Indian
market, challenging Gillette's market share.
To remain competitive, Gillette must keep the valued
customer at the core of its strategy and adapt its business
model accordingly.
A mistake that
multinationals
make is to push
global brands in a
one-size-fits-all
strategy. Gillette's
strategy of
spending time
and resources
understanding
Indian
consumers' needs
proved to be the
key to its success.
Other companies can learn from Gillette's case in India. A recurrent mistake that
multinationals make is to push global brands in a one-sizefits-all strategy. Gillette's
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How Gillette innovated and improved its market share in India - Business Today
strategy of spending time and resources understanding Indian consumers' needs
proved to be the key to its success. This understanding helped it innovate through
developing new products and creative communication ways to attract and engage
Indian consumers.
'Using social norms or evoking social issues
is a risky business'
It could have chosen to
inform people of the benefits
of shaving in general or of
using the Gillette product for
its benefits. Instead it chose
to evoke social norms: David
Faro, Associate Professor of
Marketing, London Business
School
How do you make a nation change its shaving
habits? The Gillette example shows some degree of
sophistication in understanding the way people
make decisions. Since the new product would entail
a change in habitual behaviour, ease was crucial.
We see this element feature in their product design
as well as in their choice of distribution channel. In
terms of advertising, Gillette could have chosen to
inform people of the benefits of shaving in general
or of using the Gillette product for its benefits.
Instead it chose to evoke social norms, taking into
account what we know about human behaviour.
Using social norms or evoking social issues is a
risky business and considered even more perilous when done by a “foreignâ
€​
player in the market. It requires a good understanding of the social context
and overriding of stereotypes. Coming from outside, we may see “localsâ€​
as
more homogenous than they might be. Lastly, it requires good execution.
Evoking social norms can easily end-up heavy-handed, and be perceived so,
especially when done by a foreign company.
An important element in the Gillette case is the customisation of the product to
local needs. This makes sense with several caveats. The changes are costly.
Therefore, there ought to be differences in local needs that are substantial
enough to warrant the change. Second, the size of the market should be big
enough to justify the effort. Lastly, the company should have the resources to
follow through the change. It should also take into account the risk that local
innovation can come at the expense of centralised innovation.
David Faro, Associate Professor of Marketing, London Business School
'Importing products and best trade practices
is not enough'
Gillette has been willing to
put in the hard work to
With 1.25 billion people and a lively economy, it is
sensible for companies to have India as part of any
global growth strategy. But successfully capturing
this growth is easier said than done. You cannot
dominate any consumer goods category in India
simply by importing products and best trade
practices from elsewhere. Gillette has been willing
to put in the hard work to understand India in all its
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understand India in all its
vastness and diversity, and
has, therefore, met with
success after 2009: Devendra
Chawla, CEO, Food Bazaar
vastness and diversity, and has, therefore, met with
success after 2009.
For years, marketing brains wondered why Indian
men stubbornly refused to ditch the humble double-edged blade for the
convenience of a system razor. The answer was easily available with the average
Indian consumer. But someone had to understand local nuance – like Indian
men in smaller towns sit on a floor with a cup and shave; and affordability was
an issue. And Gillette was willing to listen. Small touches like a textured handle
for a firm grip to deal with thicker-than-average hair and a hang hole for
convenient storage catered to unique Indian needs.
It is a clear case of a shift in MNC thinking from peddling their lowest-cost
products to understanding the Indian consumer. One of the world’s biggest
soap brands made a big mistake when it launched bathing gel, thinking the
consumer wanted to upgrade. However, it learnt lack of running water made
removal of gel harder and needed more buckets of water, leading to the failure
of the product. It’s a reminder of the importance of knowing local culture. I
am not surprised today two out of three razors sold in India are accounted by
Guard.
Devendra Chawla, CEO, Food Bazaar
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Tags: Gillette | Gillette Marketshare | Gillette In India | Gillette Innovation
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