Gillette has a razor sharp edge over its competitors

Founded in 1901, Gillette is the world leader in male grooming products. This category includes blades, razors and shaving preparations. Gillette also holds the number one position worldwide in selected female grooming products, such as wet-shaving products and hair epilating (hair removal) devices. The company is the world’s top seller of writing instruments and correction products, toothbrushes, and oral care appliances under the brands of Papermate, Waterman, Parker and, Oral-B. In addition, this company is the world leader in alkaline batteries with the Duracell brand.

Manufacturing operations are conducted at 57 facilities in 23 countries, and products are distributed in over 200 countries and territories around the world. Gillette’s sales in 2000 amounted to $9.3 billion. The company employs more than 40,000 people, and nearly three-quarters of them are outside the USA.

As shown by the above statistics Gillette is a very successful consumer products company. However, its current status was not achieved without some ups and downs along the way. In the late 1980s, Gillette found itself in the precarious position of being a victim of a market it helped create. In the 1970s and 1980s, inexpensive disposable razors became the razor of choice. Gillette helped to foster this by participating in a strategy that de-emphasized brand quality and focused on price. Marketing dollars went to promotions, not to its then premium shaving system, the Atra Plus. Gillette was guilty of teaching consumers how not to be loyal and how the best razor was the cheapest one at the moment. By employing this strategy, the disposable razor market grew to over 60%, of total razor sales. Gillette lost some of its quality image and saw its margins shrink, which led to three failed hostile takeover attempts.

Gillette managers were forced to examine their position in the market or risk losing control of their company. Gillette compiled and analyzed past sales information that uncovered the flaws in its marketing strategy. Marketing research in the form of focus groups and surveys revealed that Gillette could reform its approach to the market by reemphasizing quality and brand equity in the hopes of reversing the trend. To accomplish this, Gillette discontinued all advertising for its disposable razors and began to heavily market its shaving systems. This effort led to the well-known Gillette catchphrase, “the Best a Man can get”. Marketing research also revealed the critical importance of developing and introducing new products. Therefore, Gillette began making significant investments in reseach and development, developing new shaving systems over the coming years (Sensor, Sensor Excel, Mach III, Venus etc.). In addition to changing its advertising focus, Gillette has undertaken numerous direct mail campaigns giving away free razors in order to further develop its brands. Gillette believes that once men and women try its products and experience the superior quality they will be willing to pay the premium.

Through its refocused marketing strategy, Gillette was very successful at reversing the trend. Since the launch of its Sensor razor system, 10% of men switched from using disposable razors to refillable razors. This shift gave refillable razors over 50% of the entire razor market. Gillette has continued this aggressive approach to marketing the premium shaving systems and has become the clear market leader.

In addition to men’s and women’s razor markets, Gillette has refocused its marketing efforts in other personal care segments. In each one, the focus is on creating a distinctive brand and differentiating its products. Currently 1.2 billion people around the world use one or more of Gillette’s products. About 700 million consumers use Gillette razor blades. Across the consumer products industry, Gillette is considered to be one of the most effective companies at translating brand muscle into revenues and profits, with the likes of Coca-Cola and Proctor and Gamble.

Gillette’s success can be attributed to its willingness to rethink its overall strategy based on marketing research findings. By simply examining internal historical sales information, Gillette realized that the current trends would lead it further away from profit growth and closer to the inevitable hostile takeover. The changes made based on marketing research results throughout the past decade have made Gillette what it is today, much to the delight of its stockholders. The market value of Gillette’s outstanding stock increased from $6 billion to $45 billion from 1990 to 2004. In January 2005, it was announced that Proctor & Gamble would buy Gillette for $54 billion. Continued reliance on marketing research should help Gillette maintain a razor-sharp edge over its competitors.

1- Discuss the role of marketing research in determining consumer preferences for personal-care products.

2- What was the management-decision problem facing Gillette when it realized that its brand equity had eroded?

3- Define the marketing research problem corresponding to the management-decision problem you have identified in Question 2.

4- Develop a research question and a corresponding hypothesis about the role of brand loyalty and price in consumers’ selection of personal-care products.

Answer:

1- Discuss the role of marketing research in determining consumer preferences for personal-care products.

Generally, it is not an easy task to process the factors influencing the consumer to accept certain personal care and Cosmetics while assessing is multi-dimensional. Also, it is not always simple to establish the connection between the physiological perception and reaction of the consumer response of in case of personal care or cosmetic products, is not only based on sensory properties of the product and its physical status, but it is also associated with other factors like previous knowledge, previous experience, as well as, consumer attitudes and beliefs. In the present globalized scenario, the consumers today are much more demanding in terms of quality and safety, product labeling, determination of producers to implement certain health standards, etc.

Indian Cosmetic Companies: In Indian market there are some good companies manufacturing both personal care and cosmetics products which are Hindustan Unilever leads the companies which is followed by Godrej consumer care, Procter & Gamble, Emami, Dabur and Calvin Care etc. The researcher has conducted a comparative study of perception and consumers buying behavior regarding personal care products. Any study of consumer behavior is the most important factor for marketing of any goods and services. It is noted that the consumer behavior suggest how individual, groups and organization select, buy, use and dispose of goods, services, ideas or experience to satisfy their needs and wants. Thus, this kind of research offers clues for improving or introducing products or services, setting price, devising channels etc. Method The research was conducted by administering the structured questionnaire for collecting primary data and secondary data has been taken from internet, newspaper, magazines and companies web sites. The researcher has collected primary data through sample survey or census surveys from the selected malls and super markets. The sample design as simple random sampling and the universe is Visakhapatnam of India and the sample size is 150 customers randomly selected for the purpose of the study. The sampling unit is individual customers while the statistical tools used are bar charts and pie charts. Due to less availability of space for this research paper, the researcher has furnished only tables of the research instead of charts.

Objectives 1. To assess the consumer’s perception and buying behavior about cosmetic products as well as personal care products 2. To ascertain the demand of these cosmetic and personal care products within the given market under study 3. To analyze the market share with respect to the performance of some branded cosmetics and personal care products Findings 1. This research envisaged to know that the Customer like best quality product on any price in Visakhapatnam city of India 2. It was found that the word of mouth flow of information is better in most of the cosmetic as well as personal care brands 3. It was identified that in this market is the consumer is expecting some extra benefits like some gifts, quality and suitable pricing of these products. 4. The impact of advertising is reasonable in creating the product awareness or brand identification by the present as well as potential consumers of these products 5. The publicity campaign through road shows, newspaper and advertisement would be more suitable to attract the consumers and also there is a need of competitor study to devise suitable marketing strategies to predict the consumer attitudes as well as preferences for cosmetics as well as personal care products in this piece of research. Conclusion The researcher has finally concluded that the Indian Consumer is growing more and more brand conscious when it comes to purchasing cosmetics as well as personal care products. The companies need to focus on the form of advertising which plays the biggest role here is Word of mouth promotions are a key factor in a price sensitive economy like India. Some strategies like Visual Merchandising is important only at the stage of buying decision while searching and evaluating alternatives. The brand loyalty and customer satisfaction are highly influenced by the consumer attitudes, beliefs and perceptions play a key role purchase decision making. This has been proved in this piece of research in a limited area like Visakhapatnam city of India. However, the areas where marketers need to work upon to generate sales of their product, as personal care items involve extensive buying decisions. The research has made an effort to compare customer buying behavior with respect to Indian and International brands while assessing the consumer buying behavior. The consumers wanted quality product, good services, easy availability of product and better performance by the product. Therefore, we can conclude from our study that still more inclination is towards indigenous product. The researcher has appeal to the future researchers to conduct research in various neighboring cities in India in order to get more realistic and suitable results. So that the findings could be beneficial to the marketers who are selling cosmetic products as well as personal care products in the Indian market and could compete with international brands.

2] - What was the management-decision problem facing Gillette when it realized that its brand equity had eroded?

In the late 1980s, Gillette found itself in the precarious position of being a victim of a market it helped create. In the 1970s and 1980s, inexpensive disposable razors became the razor of choice. Gillette helped to foster this by participating in a strategy that de-emphasized brand quality and focused on price. Marketing dollars went to promotions, not to its then premium shaving system, the Atra Plus. Gillette was guilty of teaching consumers how not to be loyal and how the best razor was the cheapest one at the moment. By employing this strategy, the disposable razor market grew to over 60%, of total razor sales. Gillette lost some of its quality image and saw its margins shrink, which led to three failed hostile takeover attempts.

Gillette managers were forced to examine their position in the market or risk losing control of their company. Gillette compiled and analyzed past sales information that uncovered the flaws in its marketing strategy. Marketing research in the form of focus groups and surveys revealed that Gillette could reform its approach to the market by reemphasizing quality and brand equity in the hopes of reversing the trend. To accomplish this, Gillette discontinued all advertising for its disposable razors and began to heavily market its shaving systems. This effort led to the well-known Gillette catchphrase, “the Best a Man can get”. Marketing research also revealed the critical importance of developing and introducing new products. Therefore, Gillette began making significant investments in reseach and development, developing new shaving systems over the coming years (Sensor, Sensor Excel, Mach III, Venus etc.). In addition to changing its advertising focus, Gillette has undertaken numerous direct mail campaigns giving away free razors in order to further develop its brands. Gillette believes that once men and women try its products and experience the superior quality they will be willing to pay the premium.

3] - Define the marketing research problem corresponding to the management-decision problem you have identified in Question 2.

Through its refocused marketing strategy, Gillette was very successful at reversing the trend. Since the launch of its Sensor razor system, 10% of men switched from using disposable razors to refillable razors. This shift gave refillable razors over 50% of the entire razor market. Gillette has continued this aggressive approach to marketing the premium shaving systems and has become the clear market leader.

In addition to men’s and women’s razor markets, Gillette has refocused its marketing efforts in other personal care segments. In each one, the focus is on creating a distinctive brand and differentiating its products. Currently 1.2 billion people around the world use one or more of Gillette’s products. About 700 million consumers use Gillette razor blades. Across the consumer products industry, Gillette is considered to be one of the most effective companies at translating brand muscle into revenues and profits, with the likes of Coca-Cola and Proctor and Gamble.

Gillette’s success can be attributed to its willingness to rethink its overall strategy based on marketing research findings. By simply examining internal historical sales information, Gillette realized that the current trends would lead it further away from profit growth and closer to the inevitable hostile takeover. The changes made based on marketing research results throughout the past decade have made Gillette what it is today, much to the delight of its stockholders. The market value of Gillette’s outstanding stock increased from $6 billion to $45 billion from 1990 to 2004. In January 2005, it was announced that Proctor & Gamble would buy Gillette for $54 billion. Continued reliance on marketing research should help Gillette maintain a razor-sharp edge over its COMPETITORS.

4- Develop a research question and a corresponding hypothesis about the role of brand loyalty and price in consumers’ selection of personal-care products.

Research Questions

1. What is the socio-economic profile of cosmetic consumers? 2. What are the popular brands of cosmetics currently being used ? 3. What are the factors that affect the purchase of cosmetic products and how important they are in the purchasing decisions? 4. To what extent does the brand of the products influence buying behavior of female consumers?

Research Hypotheses

Examine the influence of each of the seven factors on brand loyalty. H1-0: There is no influence of product quality on purchase of cosmetic products H2-0: There is no influence of design or features on purchase of cosmetic products H3-0: There is no influence of brand name on purchase of cosmetic products H4-0: There is no influence of store environment on purchase of cosmetic products H5-0: There is no influence of service quality on purchase of cosmetic products H6-0: There is no influence of promotion on purchase of cosmetic products H7-0: There is no influence of price on purchase of cosmetic products