Gillette - Why Innovation May Not Be Enough

Gillette

Why Innovation May Not Be Enough

Group 12

UM15052         Swastik Panigrahi

UM15034         Pratyusha Dash

UM15020              Gautami Pati

UM15036              Priya Ranjan Mohanty

Strategic Marketing

Xavier Institute of Management, Bhubaneswar

Executive Summary

Gillette is well known for its innovative products. The customers of Gillette see new products which are better than old ones every now and then. Gillette has a legacy of launching new products into market every 2 years. Experts say that the peak of product innovation happened in 2006 for Gillette with the introduction of Fusion-5 bladed razors. But, today the Gillette Company is facing a huge challenge as the customers are being apprehensive to buy the latest product. This poses a challenge for Gillette as it is unsure of how to make the next move. In the next segment we will address some of the questions that are related to the present situation of Gillette and will suggest some strategies that might be useful for the Gillette Company for shaping its future plans.

1. Evaluate product innovation at Gillette throughout its history. Has Gillette been a victim of its own success? Has product innovation in the wet shaving market come to an end? Explain.

Answer:

King Camp Gillette, who, at a very early age had learned the importance of self-sufficiency (having lost his family home in the Chicago fire of 1871), innovation and invention, founded Gillette in the year 1901. Gillette has been known for its innovation in product development and marketing strategy from the inception of the brand. It revolutionized the wet-shaving market throughout the world through continuous evolution in their product line over the years. In 1895, Gillette started its journey with the brilliant idea of a razor with a safe, inexpensive and disposable blade. However the innovative ‘Gillette Safety Razor’ was successfully developed in 1901 with the technical partnership of MIT graduate William Nickerson and it finally established the foundation for the Gillette Safety Razor Company. After gaining a fair share in the razor market, Gillette slowed down its product innovation and focused on extending its product line by acquiring existing product lines. After the acquisitions proved to be unsuccessful and Gillette finally faced some competition in 1962 by the introduction of the stainless steel blade by Wilkinson Sword, Gillette moved back to focusing on product development under the leadership of Ziegler. Gillette introduced the Cricket disposable lighters and Soft & Dry antiperspirant. Furthermore, it introduced the Gillette Track II razor which was a huge success and dominated the market for a long time.

Other successful product developments came under the leadership of Colman Mockler who implemented a lower cost strategy and focused on advertising and promotion. The most successful and innovative products were launched in this time starting from the Atra Razor, the Good News! Disposable Razor, and Daisy Razor for women. These products were innovative and had disposable blades and lubricating strips. Gillette then diversified into the personal care segment with the Aapri facial care products, Bare elegance Body Lotion, Mink Difference Hairspray, White Rain Hair care products, and Silkience shampoo and moisturizers. It further diversified its market with the introduction of Eraser Mate, erasable and disposable pens.

After the decline of Trac II and Atra market share during the Razor wars, Gillette came up with its Mach3 in 1998 which was recognized for its innovative design of blades on tiny springs. Subsequently the Mach3 Turbo and Venus series for women were launched which gained a lot of popularity and market share. The most memorable innovation happened in 2006 with the launch of Fusion- the world’s 1st 5+1 blade razor. In 2010, after realizing that men still experienced discomfort during and after shaving, Gillette introduced the Gillette Fusion ProGlide shaving system which was named the Best Razor of 2011 by Men’s Health Magazine.

In many ways Gillette has been a victim of its own success – although they were coming up with innovative products, they were "cannibalizing" their own successful products. While their new inventions drove up their sales, it often took away from the sales of its previous products and often was counter-productive in terms of market share. Gillette continued to diversify their product line, but was met with mixed success. It was at that time that Gillette gained even more dominance in its market as a result of their continuous product development. It began continuously attacking its own products. From the Trac II to Atra to Sensor to Mach3 to Fusion, Gillette kept on innovating and attacking its own products. The advertising of Mach3 , “The best a man can get” and “The world’s best shave” were misleading and led to trouble for Fusion as the critics pointed out and questioned why 5 blades were needed when Gillette had touted it’s 3 bladed mach3 to be “The best a man can get”.

Furthermore, Gillette found out that their products were treated as “novelty” products with very low loyalty and with a lack of staying power. The repurchase rate of razors was much more than cartridge refills.

We do not feel product innovation in the wet-shaving market has come to an end, however it has grown stagnant in the recent years. The five blade Fusion did nothing significantly different from their own Mach3 and Schick's Quattro. It also says something when introducing each new product, sales of the initial razor were higher than refill cartridges. People are eager to try to the new product, but may be they aren't pleased enough to buy refills, they like their old product better, or they felt they were too expensive to continue to use them.

Because razors and blades are in the maturity stage of their product life cycle, as a consequence, rather than focusing on producing a six or seven razor blade, Gillette’s focus should be on enhancing current products, developing complementary products, and strengthening the brand as a whole using its successful marketing strategy.

Question 2- What do you make of razor wars, first between Gillette and Schick, and now with online competitors? Does Gillette face a serious threat from competitive inroads? Explain.

Gillette released new razors in the market which were one better than the other. This was great for the loyal consumer base. However, the trouble with that is the fact that consumers were so interested in the new razors that the sale of the previous products declined. In 1990, Gillette introduced the Sensor which quickly dominated the market and as a result the sales soared globally. But this effectively shifted the consumer demand from Atra and Trac II-Gillette’s leading products. The same happened when the Sensor for women was introduced in 1996. Similarly the  Mach 3, a three-blade razor, introduced in 1998, was a major shift from the twin blade razor and was awarded for its innovative design.