:Why Innovation May Not Be

Enough?Group 12:

Gautami Pati (UM15020)Pratyusha Dash (UM15034)Priya Ranjan Mohanty (UM15036)Swastik Panigrahi (UM15052)

Case factsFounded by King Camp Gillette in 1901 as a Safety Razor maker.

Initial Product: A razor with Safe, Inexpensive & Disposable blade.

In 2005 Proctor & Gamble took over Gillette for 57 Bn. USD.

Market: Monopoly market till 1962. Now 69% Market share.Competition: When Wilkinson Sword Schick Company introduced stainless

steel blade, market share of gillete dropped to 49% for some time.

Gillette is known to introduce innovative products periodically which are

better than their ancestor products.

To increase their revenue and product offerings Gillette now focuses on

complete shower experience rather than only razors.

Product Innovation

Product Innovation

• Gillette continuously invaded the market of its own products. Gillette kept on innovating and killing the market of its previous products, even though there wasn’t too much pressure from the competition to innovate.

• While they were touted as innovative, they were also "cannibalizing" their own successful products repeatedly.

• While their new inventions drove up their sales, it often took away from the sales of its previous products and did not increase their market share to the desired levels.

Has Gillette been a victim of its own success?

Has product innovation in the wet-shaving market come to an end ?

• Innovation is an idea, practice or object that is perceived to be new by an individual.

• In this case Gillette has done nothing new, but add to the number of blades.

• Hence, they should now: Improve upon the current products Enhance brand loyalty and the brand

as a whole Developing Complementary Products

The Razor Wars› Cannibalized its own successful products

› Internal competition heated up as a result of the strategy of topping their own products

› A new and threatening competitor: Schick and the Quattro-the world’s first four bladed razor came into the market

The Razor Wars› Gillette and Quattro argued with each other

for illegally using “progressive geometry” technology and misleading slogans by Gillette

› Schick’s razors led to fall in Gillette’s market share.

› In 2006, Gillette made a comeback with the Fusion, a 5+1 blade razor.

› With some initial success, it eventually faced a downfall because of high price and lack of added benefits of the 5 bladed razor over Mach3

The Razor WarsOnline Competitors

› Some major competitors emerged in the online market

› Companies like Dollar Shave Club, 800Razors LLC, Harry’s Razor Co. etc. used online marketing and price differentiation to attract consumers

› With the high cost of Gillette razor and its cartridges, customer's started moving towards these market players where the value proposition for a shave is almost equal to Gillette but the prices are comparatively very low.

› Companies focusing on online selling are perceived to be less in product quality and price, rather their focus is more on service quality and ease of use for the customer

› Marketing plays an important role and Gillette’s marketing strategies are more successful than Schick’s

› Gillette has a chain of innovative products because of huge R & D investment which gives it a competitive advantage over Schick

› Good product quality and loyal customer base accompanied with global presence makes Gillette a powerful company to counter any significant move by the competitors

› In response to the recent change in consumer preferences and buying behavior, Gillette also launched its ecommerce initiative to offer its shaving products online

Does Gillette face a serious threat from competitive inroads?

› What actions would you recommend over the next five years that could help Gillette maintain its worldwide dominance in the shaving market?

› What specific program decisions would you recommend?

› Should Gillette be scared about its Pricing Strategy?

: Ways to go

ahead

Manscaping: Body RazorsWith the increasing acceptance of facial hair, Gillette could promote its existing range of Body Razors

VenusSince Gillette is a masculine brand, it can promote Venus to encourage women to use razors, alongside communicating the benefits of the same to get rid of the reservations

Acquisition of Organic BrandsThe Indian brand, Uustra, introduced organic shaving products, creams, oils for the beard and moustache. Gillette could plan on acquiring these brandsOffers with

introduction of new technologyWhen the 5 blade Fusion was introduced, the Mach 3 handle became obsolete. An attractive discount could be offered for the exchange of handles/razors

Blade Longevity over cost-addition featuresResearch suggests customers prefer blade longevity and price over other fancy features. Gillette should thus focus on value additon rather than cost addition

Endoresment by Professional CharactersSince office-goers shave often, they could use an iconic character such as Harvey Specter (Suits) to endorse Gillette products

: Ways to go ahead

: Ways to go ahead

Gillette Shave ClubAs a direct competition to Dollar ShaveClub, Gillette introduced this. They should promote it strongly among people willing for subscriptions. This gives them a scope for Customer Relationship Marketing

Seasonal DiscountsResearch suggests season acts as a deterrent for shaving. During off-peak seasons, promotions and discounts could help move sales. (Esp during No-Shave November and Don’t Shave December)

THANKS!Any questions?