1. GILLETTE’S 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 product—safety razor
Company’s 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: R & D Facilities: -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 Company’s 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 campaigns—free razors
Catchphrase: “The best a man can get.”
Able to reverse the trend—SUCCESS!

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 consumer’s opinions of our brand image?

19. Marketing Research Problem
To determine the consumer’s opinions regarding the quality of products over their prices.
To determine the impact of Gillette’s competition on its sales.
To determine the wants and needs of consumers using Gillette’s 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 women’s 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 again—RISK
Caution: resulted in loss of market share in the 1980s for Gillette

23. Gillette Marketing Spending
Jan. 30, 2003
24% 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
Freerazor.com 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 Gillette’s 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 competitor’s
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