A Marketing study of Gillette company

The History of Gillette company, its market environment in India, competitors and consumers. Analysing of targets and elements of marketing strategies and segmentation. Essentials of marketing mix. Feature of product, pricing and promotion strategies.

Рубрика Маркетинг, реклама и торговля
Вид курсовая работа
Язык английский
Дата добавления 15.05.2011
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GILLETTE:BETTER SHAVE, BIGGER SHARE

A MARKETING STUDY

Akshay Berry (6)

Anshul Sood (10)

C.V.R. Shekhar (14)

Deepika Mittal (15)

Ivan Passanah ( )

INDEX

1) Objectives

2) Company Profile

3) Market Environment

4) The Competitors

5) Analysing of Marketing Strategies

6) THE Marketing Mix

7) Product Strategy

8) Pricing Strategy

9) Place Strategy

10) Promotion Strategy

11) Market Strategy

12) Consumer Analysis

Recommendations

Bibliography

Appendix

“In the grooming business, the great majority of male Gillette shavers in developing markets use double-edge blades. The first step up the performance/price ladder for these consumers is to advance to Gillette twin-blade shaving systems or disposable razors. In more developed markets, the movement may be entirely within the systems category, as consumers' trade up from twin-blade to triple-blade shaving.”

-www.gillette.com

1. OBJECTIVES

To study the shaving razors market scenario in India.

To suggest ways to convert double-edge users to Gillette twin-blade users vis-аРазмещено на http://www.allbest.ru/

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-vis Presto and Vector Plus.

To find ways to upgrade existing Gillette users up the value chain.

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2. COMPANY PROFILE

“In the more than 100 years since the Company was founded, Gillette has gained, held and strengthened leadership positions through the Company's strategy of managing its business with a long-term, global perspective.”

COMPANY HISTORY:

King C Gillette established The Gillette Company (Gillette) in 1901 in Boston. In 1903, Gillette produced its first razor. A year later, it obtained a patent on the razor. Gillette showed its strong commitment to international expansion by establishing a sales office in London and a manufacturing site in Paris, as early as in 1905.

During the 1920s and 1930s, Gillette continued its efforts to expand market share both at home and abroad. It also expanded its product line, introducing the Brushless Shaving Cream in 1936 and the Kumpakt electric razor in 1938.

World War I came as a boon to Gillette, which supplied 3.5 million safety razors and 36 million blades to the US armed forces.

During World War II in 1942, the War Production Board ordered Gillette to dedicate its entire razor production and most of the blade production to the defence forces. Gillette found itself in a comfortable situation where demand outstripped supply. By the end of the war, servicemen had been issued 12.5 million razors and more than 1.5 billion blades.

In 1948, Gillette acquired Toni Company which supplied personal grooming kits for women. In 1950, Gillette began television advertising in a big way. The company introduced a foamy shaving cream in 1953. Two years later, Gillette moved into another new business, acquiring the Papermate Pen Company.

In 1967, Gillette again diversified, acquiring Braun AG, a German manufacturer of small electrical appliances.

Gillette made an important move in 1984, when it acquired Oral B laboratories, a leading toothbrush manufacturer in the US. Gillette used its global reach to put Oral B in markets where entry was difficult on its own.

Gillette continued with its acquisition moves, buying Waterman, a leading manufacturer of premium writing instruments, based in France. By the mid 1980s, Gillette was operating five major businesses - blades and razors, toiletries and cosmetics, stationery products, Braun appliances and Oral-B dental products.

In 1993, Gillette strengthened its position in the writing instruments business by acquiring the Parker Pen Company (Parker). In 1996, Gillette diversified yet again, acquiring Duracell International, the world's leading manufacturer of alkaline batteries.

In the late 1990s, Gillette's profitability has been under pressure. Due to the Asian currency crisis, dollar profits in many overseas markets have shrunk considerably. The company's heavy investment of around $1 billion in the triple blade Mach-3 has also had its impact. During 1998 and 1999, Gillette missed most of its quarterly sales and profit targets.

Currently, Gillette consists of three operating groups: Global Business Management, Commercial Operations (Western Hemisphere) and Commercial Operations (Eastern Hemisphere). The Global Business Management Group has worldwide responsibility for R&D, manufacturing and strategic marketing of all products. Commercial operations (Western Hemisphere) looks after trade marketing and sales for all the products in North America and South America. Commercial Operations (Eastern Hemisphere) has similar responsibilities for other countries in the world.

GILLETTE IN ASIA

In the 1980s, Gillette began to make rapid inroads into Asian markets. By 1982, Gillette had set up subsidiaries in Japan, New Zealand and the Philippines. In addition, the company had established small marketing operations in Hong Kong, Singapore and Taiwan. A joint venture became operational in China in 1983. Gillette expanded its base in India and also started operations in Thailand and Egypt.

GILLETTE: THE INDIA CHAPTER

Gillette entered India in 1984, with a 24% stake in Indian Shaving Products Ltd (ISPL), a company it promoted jointly with the local Poddar Group. Later, it increased its stake to 51%. The company has two arms in India, ISPL and Wilkinson Sword, which it acquired in 1995. Gillette has set up a manufacturing facility at Bhiwadi in Rajasthan. Recently, the company has indicated that it will increase the capacity of its double edge blade unit to 700 million blades from the current 340 million blades and disposable blades from 105 million to 140 million. Gillette's distribution network currently controls 2000 distributors and 400,000 outlets all over India

The company's decisions over the past one year -- to divest its electric gadget and home appliances business under the Braun brand name, and its low-end battery business under Geep, are aimed at focusing better on its core business -- shaving products. Female shaving products, in slow growth mode all these years, too have been put on the backburner.

Year

Event

1984

Company Incorporated in Rajasthan ,jointly promoted by House of Poddar Enterprises(HOPE) and Gillette , USA

1986

Gillette takes over Sharpedge Ltd

1987

New twin blade shaving system called 7 O'Clock Ejtek P II introduced.

1989

Diversification into shaving preparations and launching of premium quality 7 O'Clock Ejtek shaving brush

1990

Launch of two new products namely 7 O'Clock Ejtek P II shaving system with a metal spine and a shave cream in three variants

1991

Sabre Pens Ltd., Sheen Dental Products Ltd., Klosershav Products Ltd., and Vanity Cosmetic Ltd., are wholly owned subsidiaries of the Company

1993

Commence of launch of Gillette Shaving products in India with the launch of Gillette Presto Readyshaver

1995

Launch of another Readyshaver under the Brand name of 7 O'Clock Ready II. The Company also launched under a distribution arrangement tooth brushes under the well known international brand name Oral-B.

1996

Launch of "Gillette Sensor & Sensor Excel" shaving systems

Company introduces “Gillette Aerosol" shaving cream.

1997

Indian Shaving Products Ltd (ISPL) and Duracell India Pvt Ltd are merging their respective Ltd and marketing networks.

Indian Shaving Products Ltd will be distributing the Duracell range of batteries through its own sales and distribution network

1998

Company enters the ladies personal care segment with the launch of the Gillette Sensor Excel for women

1999

Launch of Gillette "Mach-III", the three-blade razor

2000

Company approves amalgamation of Duracell (India) Pvt. Ltd. and Wilkinson Sword India Ltd. with the company

2003

Gillette India awards its creative account to Ogilvy and Mather following a global re-alignment of ad agencies

Gillette identifies the double edged blade segment as its growth market driver.

2004

Gillette India Ltd launches battery-powered toothbrush, 'Cross Action Power'

Gillette ropes in Beckham to promote its products

Gillette India announces launch of new generation triple blade shaving system Mach3Turbo

GILLETTE: MISSION AND VALUES

OUR VISION:

The Gillette Company's Vision is to build Total Brand Value by innovating to deliver consumer value and customer leadership faster, better and more completely than our competition. This Vision is supported by two fundamental principles that provide the foundation for all of our activities: Organizational Excellence and Core Values.

ORGANIZATIONAL EXCELLENCE:

Attaining our Vision requires superior and continually improving performance in every area and at every level of the organization.

Our performance will be guided by a clear and concise strategic statement for each business unit and by an ongoing Quest for Excellence within all operational and staff functions.

This Quest for Excellence requires hiring, developing and retaining a diverse workforce of the highest caliber. To support this Quest, each function employs metrics to define, and implements processes to achieve, world-class status.

CORE VALUES:

As we work toward our Vision, three core Values define the way we operate:

ACHIEVMENT

We are dedicated to the highest standards of achievement in all areas of our business. We strive to consistently exceed the expectations of both external and internal customers

INTEGRITY

Mutual respect and ethical behavior are the basis for our relationships with colleagues, customers and the community. Fair practice is the hallmark of the Company.

COLLABORATION

We work closely together as one global team to improve the way we do business every day. We communicate openly and establish clear accountability for making decisions, identifying issues and solutions, and maximizing business opportunities.

GILLETTE: THE PRODUCT BASKET

Alkaline Batteries

Duracell

Blades & Razors

Gillette, Mach 3, Sensor, Atra, Trac, Custom plus, Good News, Agility.

Oral Care

Oral-B

Small appliances

Braun

Stationery Products

Parker, Paper Mate, Watermen, Liquid Paper, Dryline

Toiletries

Gillette, Right Guard, Soft & Dri, Dry Idea, Satin Care

3. MARKET ENVIRONMENT

Why Study Market Environment?

Conceptually, all of marketing is based on the idea that you must thoroughly know the environment in which your business operates in order to successfully promote and sell your product or service.

You may have developed a unique business idea, but why do you believe your idea will be successful? Is it based upon discussion of the idea or presentation of a prototype product or plan to friends and associates? If your business has been operating for a while, you've probably thought about branching out with new product lines, side businesses, or additional locations. How can you be sure the odds are with you as you pursue new directions?

Ultimately,

Your idea must fulfill a need for your buyers and

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Must do so in a way that's somehow superior to the competition, however you define it.

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If you want to be sure that your idea will do these two crucial things, you need to know as much as you can about the following:

The marketing environment (Porters Five Force Model)

Your competitors (Competitors Analysis)

Marketing strategy (Perceptual Map)

Your target buyers (Segmentation, Target markets and Positioning)

Future market growth (BCG Matrix)

The Environment in India:

Gillette's experience in India indicates the type of challenges that the company faces in emerging markets. India is the largest blade market in the world in volume, though not in value terms. The Indian company, Harbans Lal Malhotra & Sons (Malhotras), is the second largest blade maker in the world after Gillette. For long, this company has enjoyed a monopoly and indeed been accused of many restrictive trade practices.

Gillette entered India in 1984, with a 24 per cent stake in Indian Shaving Products Ltd (ISPL), a company it promoted jointly with the local Poddar Group. Later, it increased its stake to 51 per cent. The company has two arms in India, ISPL and Wilkinson Sword, which it acquired in 1995. Gillette has set up a manufacturing facility at Bhiwadi in Rajasthan. . Gillette's distribution network currently controls 2000 distributors and 400,000 outlets all over India.

The Indian Blade Market:

The Indian blade market consists of four broad segments

1) Flat blades

2) Disposables

3) Twin blades

4) Triple blades.

With this understanding of the basic classification of the Indian blade market, let us now see the tools that help a company, in general, and also us in understanding the environment.

TOOLS:

As stated above, a very important tool of studying the environment in any industry is the Porters Five Force Model explained below:

MICHAEL.E. PORTERS 5 FORCE MODEL

1. Introduction:

The model of the Five Competitive Forces was developed by Michael E. Porter in his book “Competitive Strategy: Techniques for Analyzing Industries and Competitors” in 1980. Since that time it has become an important tool for analyzing an organizations industry structure in strategic processes.

Porter's model is based on the insight that a corporate strategy should meet the opportunities and threats in the organizations external environment. Especially, competitive strategy should base on and understanding of industry structures and the way they change.

Porter has identified five competitive forces that shape every industry and every market. These forces determine the intensity of competition and hence the profitability and attractiveness of an industry. The objective of corporate strategy should be to modify these competitive forces in a way that improves the position of the organization. Porter's model supports analysis of the driving forces in an industry. Based on the information derived from the Five Forces Analysis, management can decide how to influence or to exploit particular characteristics of their industry.

2. The Five Competitive Forces:

The Five Competitive Forces are typically described as follows:

1) The threat of entry by new competitors.

2) The intensity of rivalry among existing competitors.

3) Pressure from substitute products.

4) The bargaining power of buyers.

5) The bargaining power of suppliers

2.1 Bargaining Power of Suppliers

The term 'suppliers' comprises all sources for inputs that are needed in order to provide goods or services.

Supplier bargaining power is likely to be high when:

The market is dominated by a few large suppliers rather than a fragmented source of supply,

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There are no substitutes for the particular input,

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The suppliers customers are fragmented, so their bargaining power is low,

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The switching costs from one supplier to another are high,

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There is the possibility of the supplier integrating forwards in order to obtain higher prices Размещено на http://www.allbest.ru/

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and margins. This threat is especially high when

The buying industry has a higher profitability than the supplying industry,

Forward integration provides Размещено на http://www.allbest.ru/

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economies of scale for the supplier,

The buying industry hinders the supplying industry in their development (e.g. reluctance Размещено на http://www.allbest.ru/

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to accept new releases of products),

The buying industry has low barriers to entry.

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In such situations, the buying industry often faces a high pressure on margins from their suppliers. The relationship to powerful suppliers can potentially reduce strategic options for the organization.

THE GILLETTE CASE:

It is indeed enjoying greater supplier power due to its sole presence in the organized, premium technology shaving razors market in India. Also there are no close substitutes to their razors. The only substitutes in terms of the product per se are in fact very poor on the technology and quality fronts. For example: there are several twin blade razors in the market but none would match the superior technology of a sensor excel, or the triple blade offering by Super-Max 3 is in no comparison with the Mach 3. So in reality there are no potential threats.

2.2 Bargaining Power of Customers:

Similarly, the bargaining power of customers determines how much customers can impose pressure on margins and volumes.

Customers bargaining power is likely to be high when

They buy large volumes, there is a concentration of buyers,

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The supplying industry comprises a large number of small operators

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The supplying industry operates with high fixed costs,

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The product is undifferentiated and can be replaces by substitutes,

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Switching to an alternative product is relatively simple and is not related to Размещено на http://www.allbest.ru/

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high costs

Customers have low margins and are price-sensitive,

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Customers could produce the product themselves,

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The product is not of strategic importance for the customer,

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The customer knows about the production costs of the product

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There is the possibility for the customer integrating backwards.

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THE GILLETTE CASE:

The buyers as a result are not very powerful as there are no close substitutes, they buy in small numbers, switching to an alternate product is not easy (as one cartridge does not fit another razor, and also because once an investment is made on a premium Gillette razor, it is difficult for the consumer to leave it as such and move on to another razor), and customers of Mach 3 razors (executive class which comprises a sufficient market) are not price sensitive. However, the only thing the customer can do is to revert to lower versions by compromising on technology or switch over to barber shaving.

2.3 Threat of New Entrants:

The competition in an industry will be the higher; the easier it is for other companies to enter this industry. In such a situation, new entrants could change major determinants of the market environment (e.g. market shares, prices, customer loyalty) at any time. There is always a latent pressure for reaction and adjustment for existing players in this industry.

The threat of new entries will depend on the extent to which there are barriers to entry. These are typically

Economies of scale (minimum size requirements for profitable operations),

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High initial investments and fixed costs,

Cost advantages of existing players due to experience curve effects of operation with fully depreciated assets,

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Brand loyalty of customers

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Protected intellectual property like patents, licenses etc,

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Access to raw materials is controlled by existing players,

Distribution channels are controlled by existing players,

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Existing players have close customer relations, e.g. from long-term service contracts,

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Legislation and government action

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THE GILLETTE CASE:

The Indian shaving razor market is completely dominated by Gillette. Any new entrants should very carefully launch themselves because they would be directly pitting against a monopolist kind of market giant. Also the barriers to entry are not many except minimum size requirements for economies of scale, high initial investments and above all the retaliation by Gillette which could be anything.

However, there is news that the American Safety Razor would be soon entering the Indian market. We can only wait and watch what would happen then.

2.4 Threat of Substitutes:

A threat from substitutes exists if there are alternative products with lower prices of better performance parameters for the same purpose. They could potentially attract a significant proportion of market volume and hence reduce the potential sales volume for existing players. This category also relates to complementary products.

Similarly to the threat of new entrants, the treat of substitutes is determined by factors like

Brand loyalty of customers,

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Close customer relationships,

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Switching costs for customers,

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The relative price for performance of substitutes,

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Current trends.

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THE GILLETTE CASE:

As of date there are no close substitutes to any of the Gillette razors. The only close substitute could be the American Safety Razor entering the Indian market soon. But then again that would depend on the marketing strategies of the company.

2.4 Competitive Rivalry between Existing Players:

This force describes the intensity of competition between existing players (companies) in an industry. High competitive pressure results in pressure on prices, margins, and hence, on profitability for every single company in the industry.

Competition between existing players is likely to be high when

There are many players of about the same size,

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Players have similar strategies

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There is not much differentiation between players and their products, hence, Размещено на http://www.allbest.ru/

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there is much price competition

Low market growth rates (growth of a particular company is possible only at Размещено на http://www.allbest.ru/

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the expense of a competitor),

Barriers for exit are high (e.g. expensive and highly specialized equipment).

THE GILLETTE CASE:

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There is virtually no competition in most of the segments except in the flat blades segment, low income segment, traditional double edged users ( laggards), and technology-illiterates.

4. THE COMPETITORS

In the flat blade segment, which is also the cheapest, Malhotra dominates the market. In the mid and high-end segments, Gillette has been the clear leader in terms of new product introduction and branding. The Gillette brand has a high recall and is associated with quality, precision and technology. From time to time there have been rumors about the possibility of Gillette buying out the Malhotras.

Overall Blade Market - In Terms Of Value (Rs 600 crore)

Source: AC Nielson-ORG MARG Survey

Another issue which Gillette has to immediately address is penetrating the huge barbers' market, which consists predominantly of flat blades. Gillette's new launches in the flat blades segment, like Gillette Diamond and Gillette Platinum have been priced four to five times higher than the offerings of competitors.

Gillette's experience in India indicates the type of challenges that the company faces in emerging markets. India is the largest blade market in the world in volume, though not in value terms. The Indian company, Harbans Lal Malhotra & Sons (Malhotra), is the second largest blade maker in the world after Gillette. For long, this company has enjoyed a monopoly and indeed been accused of many restrictive trade practices.

However in the twin and triple blade segment, Gillette has undoubtedly been a market leader with effectively no competition at all, both in volume as well as value terms.

Twin Blade Market in India (Rs 168 crore)

Source: AC Nielson-ORG MARG Survey

Tomorrow's Threat:

As seen below from the news archives, there could be a clash of two titans in the near future with the entry of another American giant into the much desired Indian market.

indiainfoline.com

ASRC eager to drive growth from Indian market

New Delhi: American Safety Razor Company (ASRC), the $240-million global shaving products major, is betting on India as a key growth market for the company. With the company already having a significant presence in the North American and Western

European markets, it is now making inroads into the Asian one and has identified India as a focus market.

However, ASRC will not follow the same distribution strategy as it does in the Western markets. The company is a leading provider of in-store brands globally, supplying to retail majors such as Carrefour and Wal Mart. It also has its own brands, with the most popular one being Personna. In India, however, the company has inked a distribution tie-up with local firm, RP Electronics and rolled out blades and razors under the Glide brand.

Though ASRC has not set any time-bound volume targets for its products in India, the company is optimistic about the growth being seen in the market. As disposable incomes in the country rise, it expects more people to upgrade from double-edged blades to disposable. Interestingly, the market for shaving products in India holds more potential than the Chinese one. The reason lies in the fact that the consumption of blades per person in India is higher than in China, with Indian males being more hirsute. Also, despite the market being captured by the dominant leader Gillette, ASRC is hopeful that its value for money proposition (good quality and lesser prices) will help it connect with the Indian masses. Glide products are priced from Rs 10 (for the disposable) to Rs 110 (for the systems).

http://economictimes.indiatimes.com/articleshow/575888.cms

American Safety Razor to enter local markets

The world's third largest shaving products maker, the American Safety Razor (ASRCL), is planning to spread its wings in India through a distribution tie-up with the Salora group. The Indian shaving products market, so far dominated by the House of Malhotras and Gillette, will see a third large player for the first time

The $279m company has a large repertoire, but at the moment, it wants to focus on disposables and shaving systems priced 15-25% cheaper than that of Gillette

At a later stage it also plans to bring in double edge razor blades with a “superior technology” to take on House of Malhotra that virtually controls that segment

5. ANALYSING OF MARKETING STRATEGIES

A BRIEF OVERVIEW:

DEFINITION:

Market strategy is defined as an action plan for influencing customer choices and obtaining a market share. Market strategy should entice customers to buy the product or service. Market strategy encompasses customer perception of the relationship between price and quality.

Market strategy also includes the distribution channels for the product, pricing and terms of sale, promotion and advertising plan, marketing budgets, inventory selection and management, visual merchandising, customer relations and an evaluation of the marketing strategy.

WHY IS IT USED?

The marketing strategy provides information on what the market will be (retail, wholesale) and what specific customer groups will be targeted, what will be sold, where it will be sold, and how wide the area of distribution will be.

TOOLS:

Since a marketing strategy is the heart of any business entity, there are some tools or concepts in this regard developed by the marketing experts and followed by hundreds of companies the world over. The major tools of studying the marketing strategies are:

1) Perceptual Map

2) The BCG Matrix

Now let us see how a perceptual map is useful (the other two strategies are explained at a later stage).

THE PERCEPTUAL MAP

Perceptual Mapping is a useful statistical technique that provides an overview of how customers perceive the different products in a market including each product's relative strengths and weaknesses. A perceptual map summarizes the image of several products on many different attributes in one graph, providing a very useful overview of customer's perceptions of the market.

Whilst it has been criticized for oversimplifying what can be sometimes be complex commercial problems, the two-dimensional Perceptual Map has become a particularly useful vehicle for management to draw attention to an emerging market opportunity, a new strategic direction, or a changing market condition.

THE CUSTOMER MATRIX:

The 'Customer Matrix' example illustrated below was developed by Cliff Bowman, Professor of Business Strategy at Cranfield School of Management. A proactive supplier will always consider how to maintain initiative within the market. A useful starting point is to consider competitive position as a perceptual map in which 'Perceived Price' is plotted against 'Perceived Use Value'. If the supplier determines that his solution is 'average' when compared to the competition, the alternative courses of action are:

To achieve the status of lowest cost producer and offer lower prices than the competition - i.e. move West. Here Bowman sites the work of Porter, and emphasizesРазмещено на http://www.allbest.ru/

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the need for all organizations to become low cost (if not lowest cost) producers so that at the very least market fluctuations can be accommodated.

To move North by adding Perceived Use Value. Here Bowman is at pains to point out that market segmentation plays a critical role in determining what customers do actually value and that any advantage must be sustainable.Размещено на http://www.allbest.ru/

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Bowman then goes on to explore the interactive nature of these axes. For example an increased share obtained by adding value can result (through economies of scale) in lowest cost producer status. The move North West - sequentially adding Perceived Use Value and cutting price - may offer the company the best strategy to tackle the market and offer global potential, but the company must be nimble in order to maintain its competitive position.

THE GILLETTE CASE:

With this understanding of what a perceptual map is, let us now see how the Gillette razors appear on the map:

Gillette razors Vs Competitors: A Perceptual Map:

RAZORS

PRICE

QUALITY

GILLETTE:

Mach 3

high

high

Sensor excel

high

neutral

Vector Plus

low

high

Presto

high

high

COMPETITORS:

Gallant

low

neutral

Super max 3

high

low

Laser

low

low

And now let us represent the perceptions of Gillette razors using the customer matrix, by taking perceived price and perceived value as the two axes:

THE GILLETTE RAZORS - PERCEPTUAL MAP

MARKET SEGMENTATION

DEFINITION:

Market segmentation is dividing a larger market into submarkets based upon different needs or product preferences. These common characteristics allow developing a standardized marketing mix for all customers in a particular segment.

NEED FOR SEGMENTATION:

Segmentation needs to be undertaken for the following reasons:

Better serving customers needs and wants

Higher Profits

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Opportunities for Growth

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Sustainable customer relationships in all phases of customer life cycle

Targeted communication

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Stimulating Innovation

Stimulating Innovation

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Higher Market Shares

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marketing strategy consumer promotion

For segmentation to be effective, the following criteria should be kept in mind:

Feasibility: Having in place a marketing program for each segment and drawing advantages from that.Размещено на http://www.allbest.ru/

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Distinguishing ability: market segments have to be diverse enough to show different reactions to different marketing mixes.

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Accessibility:Размещено на http://www.allbest.ru/

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The segment has to be accessible and servable for the organization.

Relevance:Размещено на http://www.allbest.ru/

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The size and profit potential of a market segment have to be large enough to economically justify separate marketing activities for this segment.

Measurability: It has to be possible to determine Размещено на http://www.allbest.ru/

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the values of the variables used for segmentation with justifiable efforts.

The traditional variables for segmentation are as follows:

Geographic:

Land or region

Rural or metropolitan area

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Demographic:

Age, sex, marital status

Income, occupation, educationРазмещено на http://www.allbest.ru/

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Religion, nationality, ethnical group

PsychographicРазмещено на http://www.allbest.ru/

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:

Social status

Lifestyle-type

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Personal type

BehavioralРазмещено на http://www.allbest.ru/

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:

Intensity of product use

Brand loyalty

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User behaviors

Marketers have to choose those variables that are relevant for segmenting the market for a paРазмещено на http://www.allbest.ru/

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rticular product. The basic rule is to focus on a limited number of important variables.

THE GILLETTE CASE:

A simple classification of market segments on the basis of the above would be as follows:

BENEFIT SEGMENTS

DEMOGRAPHICS

BEHAVIOURISTICS

PSYCHOGRAPHICS

FAVOURED BRANDS

Quality of shave

Executives, working men

Regular and heavy users

High autonomy

Value oriented

Gillette

Convenience

Employees

Regular and heavy users

Hedonistic

High self-involvement

Gillette

Technology/

fashion

Teens/youth, mid-level executives

First time users, appearance conscious

High sociability, active

Gillette

Price Consciousness

Low income, illiterates, unaware of technology

Laggards, non-regulars

Hypochondriac conservative

Local players

TARGET MARKETS

DEFINITION:

Once market has been divided into segments, a process of identifying market segment opportunities (basis the attractiveness of the segment and the company's resources and objectives) takes place.

TYPES OF TARGETING:

Single Segment Concentration

M1 M2 M3

X

Selective Specialization

M1 M2 M3

X

X

X

Product Specialization

M1 M2 M3

X

X

X

Market Specialization

M1 M2 M3

X

X

X

Full Market coverage

M1 M2 M3

X

X

X

X

X

X

X

X

X

THE GILLETTE CASE:

The approach of Gillette to market segmentation is in line with the above mentioned. Gillette follows a strategy known as Geoclustering which involves combining several variables in order to define better -defined target groups. This is thus a multi attribute segmentation technique.

Primarily, Gillette has identified gender, age, income, occupation, generation (demographic variables) and lifestyles (psycho graphic variable) as a cluster in an attempt to more precisely define its market segments.

The Selective specialization pattern would apply to Gillette as explained:

Low High

M1

M2

M3

P1

MACH 3 TURBO

P2

MACH 3

P3

SENSOR EXCEL

P4

VECTOR PLUS

Gillette defines

M1 comprising of those group of male customers who are either in their twenties or early thirties, have a high disposable income (if student, then those who spend comfortably), are salaried, belong to the current generation and maintain lifestyles that have a bearing on their buying behaviour.

M3 on the other hand would comprise of such male customers who are in their late thirties or above, do not have a very high disposable income, and are not very conscious of their looks or the status value of the products they buy.

M2 would comprise of customers who lie between these two customer groups.

PI Product 1

P2 Product 2

P3 Product 3

Segment-by-Segment Invasion Plans

The core philosophy behind this concept is to enter the market segment by segment without revealing one's total expansion plans so that competitors are caught unawares as to the segment into which the firm will move in next.

THE GILLETTE CASE

Gillette has also followed a similar strategy in the India market.

Conventional Shaving

Ready Shaving

Premium Shaving

Triple Blade

C5

Twin Blade

C2

C4

Double Edge / Flat Blades

C1

C3

THE SEQUENCE OF EVENTS:

1986 (C1): Company manufactures two types of blades, the premium 7 O'Clock Ejtek Super Platinum and the stainless brand 7 O'Clock Ejtek Super Stainless

1993 (C2): Company commences the launch of Gillette Shaving products in India with the launch of Gillette Presto Readyshaver.

1995 (C3): Company launches another Readyshaver under the Brand name of 7 O'Clock Ready II

1996 (C4): The Company successfully launches "Gillette Sensor & Sensor Excell" shaving systems

1998 (C5): Company announces launch of new generation triple blade shaving system Mach3Turbo

POSITIONING

WHY POSITIONING?

In today's world of strategy convergence (undifferentiated strategies), pursuing a meaningful and relevant positioning & differentiation has become imperative for every company in order to give the customer a reason to demand their products.

Jack trout says, “While positioning begins with the product, the concept really is about positioning that product in the mind of the customer in an over communicated environment. The advertiser should present a simplified message and make that message consistent with what the consumer already believes by focusing on the perceptions of the consumer rather than on the reality of the product.

The best way to get into the mind of the consumer is to b the first

Gillette has always been on its toes when it comes to introducing latest technology products and has thus reaped the benefits of being the first entrant, the latest being the introduction of mach3 turbo in India and mach 3---- abroad

According to Al Ries and Jack Trout, “The Fathers of Positioning” a Market Leader should:

Not boast about being number one.

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It must reinforce this by saying so

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at hold leadership positions. It is often easier and cheaper to introduce a new brand rather than change the positioning of an existing brand. Ries & trout call this Single Position Strategy, because each brand occupies a single, unchanging position in the minds of the consumer

Must be willing to embrace change rather than resist it.

THE GILLETTE CASE:

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Gillette as a market leader has been careful not to boast about its position. Also it has always introduced new brands to target different market segments (presto for lower end, mach3 for upper end etc.) instead of bringing about changes in any one particular razor to maintain the distinct image of each of its razor in the mind of the customer.

Positioning, as Philip Kotler defines, is the act of designing the company's offering and image to occupy a distinctive place in the mind of the target market i.e. create a customer focused value proposition, a cogent reason why the target market should buy the product.

In the words of Jan Welborn Nicholas, the most successful entrepreneurs learn to transform their passion into position.

Positioning is a Perceptual Location. It's where your product or service fits into the marketplace. Effective positioning puts you first in line in the minds of potential customers.

That's why it's so important for entrepreneurs to transform their passion into a market position. If you don't define your product or service, a competitor will do it for you. Your position in the market place evolves from the defining characteristics of your product.

THE ELEMENTS OF POSITIONING:

The primary elements of positioning are:

Pricing. Is your product a luxury item, somewhere in the middle, or cheap, cheap, cheap.Размещено на http://www.allbest.ru/

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Quality. Total quality is a much used and abused phrase. But is your product well produceРазмещено на http://www.allbest.ru/

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d? What controls are in place to assure consistency? Do you back your quality claim with customer-friendly guarantees, warranties, and return policies?

Service. Do you offer Размещено на http://www.allbest.ru/

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the added value of customer service and support? Is your product customized and personalized?

Distribution. How do customers obtain your product? The channel or distribution is part of positioning.Размещено на http://www.allbest.ru/

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Packaging. Packaging makes a strong statement. Make sure it's delivering the message you intend.Размещено на http://www.allbest.ru/

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Positioning is your competitive strategy. What's the one thing you do best? What's unique about your product or service? Identify your strongest strength and use it to position your product.

THE GILLETTE CASE:

For Gillette their strength lies in the superior quality of their razors ,all of which are imported from the US (untouched by hand),except for presto and they have used this strength wisely to position their product over the years. Unquestionable quality of Gillette products has been the most important factor in making it a market leader.

VALUE DISCIPLINES:

Micheal Treacy and Fred Wiersema proposed a positioning frame work called “Value Disciplines”

Within its industry a firm could aspire to be:

Product leader - advancing on technological frontier

Operationally excellent firm - highly reliable Размещено на http://www.allbest.ru/

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performance

Customer intimate firm - high responsiveness in meeting individual customer needs

THE GILLETTE CASE:

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Through our research and analysis, it is evident that Gillette has acquired the status of the first two disciplines but needs to work on achieving a minimum performance level in the third as well.

THE UNIQUE SELLING PROPOSITION:

According to Rosser Reeves every company should develop a “Unique Selling Proposition (USP) or promote only one central benefit of the product which makes communication to target market easier; employees are clearer about what counts and it is easier to align the whole organization with a central positioning. But nowadays marketers feel that double positioning may be more distinctive i.e. the co. can cash in two benefits at the same time.

THE GILLETTE CASE:

In our case Gillette has been able to cash on the `sata - sat' philosophy or in other words a razor which gives u the smoothest shave in least possible time without any compromise on their quality.

POSITIONING ERRORS:

Kotler points out that a company must avoid four major positioning errors:

1) Under positioning: buyers only have a vague idea of the brand

2) Over positioning: buyers have too narrow image of the brand

3) Confused positioning: buyers have a confused image of the brand (company makes too many claims about the product or changes brand positioning frequently)

4) Doubtful positioning: buyers do not believe the claims the brand makes.

THE GILLETTE CASE:

With respect to avoiding confused positioning Gillette has been successful. Gillette has traditionally been positioned as a premium, high quality product. Thus even though the company has acquired 7'o clock ,Wilkinson & Wilman ( gradually eliminating competition) it has carefully distanced itself from these lower segment brands to avoid confusion among the buyers about Gillette's image.

POSITIONING POSSIBILITIES:

Also a company can choose from different positioning possibilities.

Attribute positioning: positioning itself on a particular attributes- size/number of years of existence

Benefit positioning: product is positioned as a leader in certain benefit

Use/application positioning: position the product as best for some use/application

User positioning: position the product as best for some user group

Competitor positioning: the prod claims to b better in some way than a named competitor

Product category positioning: product is positioned as leader in certain product category

Quality/price positioning: product is positioned as offering the best value

THE GILLETTE CASE:

Here Gillette has traditionally focused on

Application positioning-best for the finest shave

Quality positioning- unquestionable quality (imported razors)

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6. THE MARKETING MIX

WHAT IS A MARKETING MIX?

The term was coined by Neil H. Borden in his article 'The Concept of the Marketing Mix' in 1965.

The 'marketing mix' is probably the most famous phrase in marketing. The elements are the marketing 'tactics'. Also known as the 'Four Ps', the marketing mix elements are price, place, product, and promotion.

Some commentators will increase the mix to the 'five Ps', to include people. Others will increase the mix to 'Seven Ps', to include physical evidence (such as uniforms, facilities, or livery) and process (i.e. the whole customer experience e.g. a visit the Disney World).

The concept is simple. Think about another common mix - a cake mix. All cakes contain eggs, butter, flour, and sugar. However, you can alter the final cake by altering the amounts of mix elements contained in it. So for a sweet cake add more sugar! It is the same with the marketing mix. The offer you make to you customer can be altered by varying the mix elements. So for a high profile brand increase the focus on promotion and desensitize the weight given to price.

Essentials of marketing mix:

Product:

Defines the characteristics of your product or service that meets the needs of your customers.


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