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GILLETTES Razor Sharp Edge Over Its Competition. Overview Background info on Gillette Problems/Solutions company faced Current info/issues.

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Presentation on theme: "GILLETTES Razor Sharp Edge Over Its Competition. Overview Background info on Gillette Problems/Solutions company faced Current info/issues."— Presentation transcript:

1 GILLETTES Razor Sharp Edge Over Its Competition

2 Overview Background info on Gillette Problems/Solutions company faced Current info/issues

3 Background Information Founded in 1901 Flagship productsafety razor Companys strengths: Focus on scientific knowledge/studies Innovative products Large-scale manufacturing capability Useful products sold at fair price Sales in 2000: $9.3 billion

4 Global Company Strategy: To manage its business with a long-term, global perspective Over 1 billion people interact with a Gillette product every day Manufacturing operations located in 23 countries Distribution in 200+ countries 40,000+ employees

5 Manufacturing Locations United States: -Andover, MA -Chicago, IL -Cleveland, TN -Iowa City, IA -La Grange, GA -Lancaster, SC -Lexington, NC -South Boston, MA

6 European Locations Manufacturing Sites: -Belgium -Czech Republic -France -Germany -Ireland -Poland -Russia -Spain -England R & D Facilities: Germany, Spain, England

7 Vision Statement To build TOTAL BRAND VALUE by innovating to deliver consumer value and customer leadership faster, better, and more completely than our competition. Fundamental Principles: Organizational Excellence Superior performance at every level Core Values Achievement, Integrity, Collaboration

8 Products Overview: Worldwide leader in 12 major consumer product categories Focus on continual development of new products Currently introduces 20+ new products per year

9 Three Core Businesses Gillette is the undisputed global leader in: Grooming Portable Power Oral Care

10 Grooming Products World leader in male and female grooming products Blades, razors Wet, dry 700 million consumers use Gillette razor blades Shaving preparations and after-shaves

11 Portable Power Duracell-most popular brand of alkaline batteries in the world Offers strategic power- consulting services to leading electronic device manufacturers

12 Oral Care Companys fastest growing business Oral-B brand holds #1 position globally in manual and power toothbrushes

13 Facts 3 core businesses provide: 80% sales 90% profits These core brands are the strength of Gillette Co. Gillette Mach3 Gillette for Women Venus Right Guard Duracell CopperTop Oral-B Braun Oral-B Braun

14 Problem Background 1980s: Consumers chose inexpensive disposable razors Gillette helped to foster trend: Focus on price, not quality Results: Disposable razor market inc. by 60% Loss of quality image, loss of profits *Gillette taught consumers the best razor was the cheapest one!

15 Use of Marketing Research Focus groups and surveys revealed: Gillette must reform its approach by: Emphasizing quality and brand equity Discontinuing use of disposable razor ads Developing new products

16 Results of MR Inc. investments in research and development Sensor, Sensor Excel, Mach III, Venus Direct mail campaignsfree razors Catchphrase: The best a man can get. Able to reverse the trendSUCCESS!

17 Role of Marketing Research Told Gillette that it could change its former price approach to the market by emphasizing quality and brand equity as well as introducing new products.

18 Management Decision Problem What should Gillette do to change the trend of our decreasing equity in the market? What should Gillette do to increase consumers opinions of our brand image?

19 Marketing Research Problem To determine the consumers opinions regarding the quality of products over their prices. To determine the impact of Gillettes competition on its sales. To determine the wants and needs of consumers using Gillettes various shaving products.

20 Research Question and Hypotheses Are consumers more price conscious or brand loyal? H1: Price is most important to consumers. H2: Price is not most important to consumers. H3: Brand loyalty is most important to consumers. H4: Brand loyalty is not most important to consumers.

21 Current Issues facing Gillette Razor Wars Feb. 24, 2003 Gillette, Bic, Schick Launch new razors in men and womens disposable lines Ex. Schick razor-dispenses shave gel for women Ex. Gillette-Pink Passion Venus Marketing efforts total $120 million combined Ad campaigns launched this month

22 Note Increased attention for disposable razors againRISK Caution: resulted in loss of market share in the 1980s for Gillette

23 Gillette Marketing Spending Jan. 30, % increase in ad spending (fourth quarter) 2002: Global ad spending rose 12%-- $650 million

24 New Challenges Jan. 30, 2003 Battery rival Energizer to acquire Schick brand of razors Energizer to invest $930 million Result: Aggressive marketing wars?

25 Renegade Web Site via mass s offers free Gillette Mach3 Turbo and Venus razors Also automatically enrolls customers to receive 8 replacement blades every two months (Misleading) Uses photos of Gillette products and copy similar to Gillettes ads Gillette uncertain of legal implications (all terms spelled out) Feb. 11, 2003

26 Duracell Jan. 13, 2003 Cut price of AA and AAA batteries by 13% Prompted to reduce price gap with competitors Energizer, Rayovac Concerned with competitors heavy promotional activity

27 Ethics April 14, 2003 Gillette exec (Gino Deluca) arrested on 15 counts of mail and wire fraud and 1 count of money laundering pleaded not guilty Scheme: demanded kickbacks from 5 promotional and marketing vendors Allegedly received $600,000 in kickbacks $260,000 Arizona condo, $32,000 home addition, vacations and cruises, $225,000 wired to a Swiss bank account Ordered his staff to select certain vendors despite their quality problems

28 Questions and Answers The End

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