Strategic Marketing Gillete

TABLE OF CONTENTS

1 EXECUTIVE SUMMARY 3 -4

2 SITUATIONAL ANALYSIS 5

2.1 PESTE ANALYSIS 5

2.2 SWOT ANALYSIS 6 -7

3 MARKET SEGMENT 8

4 ALTERNATIVE MARKETING STRATEGIES 9

4.1 MASS MARKETING 9

4.2 DIFFERENTIATED MARKETING 9

5 SELECTED MARKETING STRATEGY 9

5.1 PRICING STRATEGY 11

5.2 PROMOTION 12 -14

5.3 PLACE 14 - 15

5.4 PRODUCT 15

6 TIMELINE OF ACTION DEVELOPMENT Ñ--щ»~! ©|Ґј©wÑ'q®Ð¡Ð*ТЎC -17

7 CONCLUSION 17 -18

8 BIBLIOGRAPHY 19

1 EXECUTIVE SUMMARY

After the acquisition of P&G and Gillette in Oct 2005, Gillette GBU (Global Business Unit) had become one of the billion dollar brand under the P&G Personal & Beauty category. Together, they can offer many new benefits and solutions for clients all over the world. Now, more than ever before, consumers have a greater range of innovative products to choose from.

Fusion Power is the latest razor developed by Gillette in 2005. It has been designed with a feature of manual or battery power, on the front ÐŽV 5 blade shaving surface technology and the back ÐŽV 1 precision trimmer blade. The most advanced laser welding technology was employed to obtain the optimum standard for speed, precision and cleanliness.

The launch of Fusion Power is already imminent, despite internal split of views to this new product with such a premium pricing. The following message should be well-communicated by senior management of P&G - Gillette to all staff across the company.

„P The vision and objectives of the company.

ÐŽV Consistency

ÐŽV Reliable long term performance

ÐŽV Sustainable Growth

„P The benefits of launching Fusion Power versus drawbacks.

„P The need for the new plants in Boston and Poland, and their establishment schedule.

Issue calls for attention is the efficiency of product development and innovation. Lead time should be shortened and a clear schedule and deadline need to be set for every product launch. Any slippage of deadline should be explained. They would help reduce the threat of competitor imitation.

2. SITUATIONAL ANALYSIS

2.1 PESTE Analysis

Political Aspect

To the disadvantage of Gillette, the antitrust laws discouraged aggressive patent enforcement which in turn indirectly drove competitors like Schick to imitate GilletteÐŽ¦s product. This significantly shortened the first mover lead in launching a new product.

Economic Aspect

After the war in Iraq and the terrorist attack ÐŽ§911ЎЁ, oil prices, valuable metals and material were sky high and pushed up operating costs of most industries. Prices of by-products such as plastics were also affected.

Sociological Aspect

With the rise in living standard and educational level, people became more concern about their appearances, especially in developing countries such as the former Soviet Union and China. To men, shaving has become a daily necessity; and to women, shaving was one of the essential steps in their pursuit of beauty. However, the decision of selecting a shaver tends to be perceived as low involvement by most people.

Technological Aspect

The basic equation of profit (or loss) is the difference between revenue and cost. Either pushing up revenue or lowering cost would have a positive impact on the bottom line. Here technology advancement comes into play, amongst other factors. For the razor industry, the ability to meet the standards of precision and cleanliness is crucial is gaining customer satisfaction. On the other hand, the ability to mass-produce the products would reflect on their production cost. The technological advancement, such as, the adoption of laser in manufacturing industries, has facilitated better quality, mass-produced products.

Environmental Aspect

In the year 1990, environmental protection was not as hot a topic as in today. PeopleÐŽ¦s degree of acceptance to disposable products grew due to the convenience gained. However, there is a new movement that people are much more aware of the damage of disposable items can do to the environment. PeopleÐŽ¦s is slowly changing and asking for more environmental friendly solution.

2.2 SWOT Analysis

Strengths

Gillette has been well-known for its brand and its market leadership in the shaver industry. In 2000, it had 63% of the US market share in dollar terms, and had been consistently exceeding 60% for the past thirty years, leaving its competitors far behind.

Gillette has its own R&D teams, one located in Reading, England and the other in Boston. The in-house teams enable Gillette to have dedicated and focused effort in designing new products and improving existing products. The responsiveness of the teams was demonstrated in the launch of Good News! in 1976, for competing with BICÐŽ¦s single-blade disposable razor launched in 1975. The most successful three thin blades in the history are the Mach3 in 1998 which was named winner of the American Marketing.

Weaknesses

It has already been evidenced that customers were switching from cartridges to disposables within Gillette. The fear of cannibalization has created tension among different teams in the company, as in the case of Atra, Trac II and GilletteÐŽ¦s Good News! as opposed to Mach3 and Mach3 Turbo causing split views and less co-operative attitude.

It has taken Gillette more than 5 years to develop Fusion Power. To the rapidly changing demand of customer, it