Price:

Decide on a pricing strategy - do not let it just happen! Even if you decide not to charge for a service (a loss leader), you must realise that this is a conscious decision and forms part of the pricing strategy.

Promotion:

This includes all the weapons in the marketing armoury - advertising, selling, sales promotions, Public Relations, etc.

Place (or route of distribution):

Some of the revolutions in marketing have come about by changing this P. Think of telephone insurance and the internet! A bit of lateral thinking here might reap rewards for your business.

Now these can be viewed in a graphical representation:

A marketing mix is a combining of these four variables in a way that will meet or exceed organizational objectives. A separate marketing mix is usually crafted for each product offering. When constructing the mix, marketers must always be thinking of who their target market are. Mix coherency refers to how well the components of the mix blend together. A strategy of selling expensive luxury products in discount stores has poor coherency between distribution and product offering.

In the long term, all four of the mix variables can be changed, but in the short term it is difficult to modify the product or the distribution channel. Therefore in the short term, marketers are limited to working with only half their tool kit. This limitation underscores the importance of long term strategic planning.

With this simple understanding of what a marketing mix means and to what extent it can in fact affect a company's sustenance in an industry, let us now see how each of these four factors influence the company and what the respective strategies are that the Gillette company is taking.

7. PRODUCT STRATEGY

THE PRODUCT

A product is anything that can be offered to a market for attention, acquisition, use or consumption. The primary purpose of a product is to satisfy a want or a need.

Each product can be seen through product levels, with each level adding more value to the product. Initially, Kotler had proposed three product levels.

The Three Level Classifications:

THE GILLETTE CASE:

The core product would be the quality of shave

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The actual product would comprise of the razor designed so as to give a comfortable grip and packed in an appealing manner.

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The augmented product would include the superior technology that Gillette shaving products are known for and the reliability that comes with the Gillette brand name.Размещено на http://www.allbest.ru/

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The Five Level Classifications:

Kotler has now revised this to a five product level. At the heart of it lies the core product, next the basic product followed by the expected product and augmented product. The potential product would lie in the outermost circle.

THE GILLETTE CASE:

Core Product: Quality of Shave

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Basic Product: Razor with comfortable grip, well packed

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Expected Product: Blades that do not give cuts or rashes on skin

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Augmented Product: RazРазмещено на http://www.allbest.ru/

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or with lubrastrip indicating when the blade needs to be replaced, the anti-clogging push-clean technology, etc.

Potential Product: product customization could be one new development.

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PRODUCT CLASSIFICATION

Products may be classified on the following basis:

1) Durability and Tangibility

Durable Goods

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Non durable Goods

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2) Consumer Goods Classification

Convenience Goods:

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immediately and with minimum effort. These are available at multiple purchase locations.

Shopping Products

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y after gathering sufficient product information. The potential buyer typically compares the product with that of competition on the basis of price, style and quality before making the purchase decision.

Specialty Goods

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Unsought Goods

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onsumers do not want to normally think about. These goods require advertising and personal selling effort.

3) Industrial Goods Classification

These are classified in terms of how they enter the production process and their relative costliness.

Material & parts : goods that enter the manufacturer's product completely.

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Capital Goods : long lasting goods that facilitate developing the finished product.

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Supplied & Business Services : Short lasting goods and services that facilitate developing or managing the finished product.

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The Gillette Case

Gillette shaving products meet the attributes of convenience goods as

They are purchased frequently and with the minimum of effort.

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Buying is on a regular basis

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Further within this category, Gillette shaving products can be further classified as Staple Goods.

PACKAGING AND LABELLING

WHAT IS PACKAGING?

Packaging comprises of all activities of designing and producing the container for the product.

This container may include up to three levels of material:

Primary Package : Tetra pack, bottle, sachet, etc

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Secondary Package : cardboard box, etc

Shipping Package : Cartons, etc

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WHY PACKAGING?

Packaging has been getting increasing focus as a marketing tool for the following reasons:

They promote Company and /or Brand Image

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convenience to the consumer and in turn higher profits to the producer.

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DECISIONS INVOLVED:

The following decisions are involved in the process of coming out with an effective package

1) Identifying what the primary purpose of the package is.

2) Choosing the right colour, which is in line with the product ?

3) Amount of text to be written

4) Size, shape and materials to be used.

LABELLING:

Once the packaging decision is taken, it needs to go through engineering tests to ensure the effectiveness/robustness of the package under normal conditions. This is followed by testing it at the dealer/intermediary and consumer level. Finally, labeling is done to identify, describe and promote the product.

Packaging and labelling therefore is an important element and can not be ignored while formulating the product strategy.

The Gillette Case:

However, for a product like Gillette shaving razors, it does not play a very significant role. A customer who buys a Gillette shaving product does not consider the package an important enough factor which would influence his buying behaviour. Labeling does have some significance for a product associated primarily with quality, like Gillette razors. Therefore, while Gillette's consumers do not base their buying decision on the basis of the packaging, their comfort levels would be influenced by the labelling.

RESEARCH AND DEVELOPMENT

“Gillette holds its edge by endlessly searching for a better shave.”

Wall Street journal, December 10, 1992.

Let us now go through the company's constant focus towards research and development since its inception.

At the last turn of the century, King Gillette founded what would become a corporate giant, based on a simple yet essential invention: the safety razor with disposable blades.

THE DISPOSABLE:

One morning in 1895, Gillette, now living in Boston, had a revelation: if he could put a sharp edge on a small square of sheet steel, he could market a safety razor blade that could be thrown away when it grew dull, and readily replaced. Gillette visited metallurgists at MIT, who assured him his idea was impossible. It took Gillette six years to find an engineer, William Emery Nickerson (an MIT-trained inventor), who could produce the blade Gillette wanted.

THE `T'-SHAPED RAZOR:

The 'T'-shaped razor with disposable double-edged blades, has been one of the dominant razor shapes since its initial introduction at the turn of the century. The blades are the only ones with two cutting edges, which doubles the amount of shaving which can be done by a single blade. Moreover, the blades are intended to be immediately disposable.

THE TWIN BLADE SHAVING:

Shaving with the double edged blades has its own drawbacks - it requires men to normally shave twice and even more to get a smooth close shave. These type of razors had a complex securing/detaching mechanism and various other not required design materials and stylistic components, manufacturers came up with the new technology of twin edged razors -which were of both disposable kind and ones which came with a replaceable cartridge. This product became an instant hit as it was very easy to handle and also gave a closer shave with less irritation and cuts. Gillette has the Sensor Excel and Presto razors in this category.

APPLYING R & D - PRODUCT INNOVATION

Gillette constantly believes in providing its customers improved variants. Following are some of the features that the company has added to its products:

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of hair in between the blades by using the twin instruments of spacer and button.

The moisturizer strip-moisturizes the skin while we shave and we get a clean shave without rashes.

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The platinum blade-superior metal for safety and better shave

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The pivoting head- flexible head to run freely on the facial curvatures.

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VECTOR PLUS- A CASE STUDY

The company realized that in India people have different shaving habits i.e. low shaving frequency, tough beard etc., and also the customer complained of hair clogging in the twin edged razor. Another problem specific to the Indian conditions was the lack of running water. It adapted its designing to meet Indian requirements and presented Gillette Vector Plus, an anti-clogging twin blade system with a contemporary look that offers a smooth, close, safe and convenient shaving experience at an affordable price.

The noticeable superior performance of Vector Plus over double edge, and also other twin blade razors comes from superior “rust-free” twin blades with lubrastrip and pivoting head, while the Push button cleaning mechanism provides anti-clogging facility.

According to Regional Business Director Manoj Kumar, "Gillette Vector Plus has been created keeping in mind the shaving habits of a large number of Indian consumers, especially those who use double-edge blades. Infrequent shaving leads to longer stubble/hair and that coupled with use of still water leads to clogging of twin blades for people who shave infrequently. Gillette Vector Plus with 2 Gillette blades and a unique push clean button has been designed to address this and offer the consumers a smooth and close shave."

Now read this to believe:

“We bleed so that you can get a good shave at home.”

-A Gillette Employee.

At Gillette 200 volunteers from various departments come to work unshaven each day, troop to the second floor of company's South Boston manufacturing and research plant, and enter small booths with a sink and a mirror. There they take instructions from technicians on the other side of the small window as to which razor, shaving cream, or after shave to use, and then they fill out questionnaires. This practice helps Gillette to constantly improve their products and also reflects upon the company's commitment to providing quality products.

This commitment of the employees of the Gillette company sums up the amount of effort Gillette puts in constant research and development to provide its customers with a better product for a safer, closer shave.

8. PRICING STRATEGY

THE 9 PRICE-QUALITY STRATEGIES:

INTRODUCTION

We need to set price when we have a new product, or when we enter a new market with an existing product

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Philip Kotler identified 9 price-quality strategies

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HIGH PRICE LOW PRICE

HIGH QUALITY

PREMIUM	HIGH VALUE	SUPER VALUE
OVER CHARGING	MID VALUE	GOOD VALUE
RIP-OFF	FALSE ECONOMY	ECONOMY

LOW QUALITY

THE PRICING PROCESS:

1) Set Pricing Objectives

2) Analyze demand

3) Estimating costs

4) Draw conclusions from competitive intelligence

5) Select pricing strategy appropriate to the political, social, legal and economical environment

6) Determine specific prices

SELECTING THE PRICING OBJECTIVE

Possible Pricing Objectives

1) Profit objectives e.g.

a) Targeted profit return

2) Volume objectives e.g.

a) Dollar or unit sales growth

b) Market share growth

3) Other objectives e.g.

a) Match competitors' price

b) Non-price competition

DEMAND ANALYSIS:

The demand analysis sums the reactions of many individuals who have different price sensitivities. The first step in estimating demand is to understand what affects price sensitivity. Nagle identified 9 factors:

1) Unique-value effect

2) Substitute-awareness effect

3) Difficult-comparison effect

4) Total-expenditure effect

5) End-benefit effect

6) Shared-cost effect

7) Sunk-investment effect

8) Price-quality effect

9) Inventory effect

PRODUCT MIX PRICING:

The pricing must be modified when it is a part of the product mix. The types are:

Penetration pricing: Where the organisation sets a low price to increaseРазмещено на http://www.allbest.ru/

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sales and market share.

Skimming pricing: The organisation sets an initial high price and then slowly lowers the price to make the product available to a wider market. The Размещено на http://www.allbest.ru/

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objective is to skim profits of the market layer by layer.

Competition pricing: SetРазмещено на http://www.allbest.ru/

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ting a price in comparison with competitors.

Product Line Pricing: Pricing different products within the same product range at different price points. An example would be a video manufacturer offering different video recorders with different features at diРазмещено на http://www.allbest.ru/

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fferent prices. The greater the features and the benefit obtained the greater the consumer will pay. This form of price discrimination assists the company in maximizing turnover and profits.

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reduced price. Gillette does follow this practice of bundling its shaving accessories together and offer it as a value pack.

Psychological pricing: The seller here will consider the psychРазмещено на http://www.allbest.ru/

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ology of price and the positioning of price within the market place. The seller will therefore charge 99p instead Ј1 or $199 instead of $200

Premium pricing: The price set is high to reflect the exclusiveness of the product. An example of products using this strategy would be Harrods, first class airline services, Porsche Размещено на http://www.allbest.ru/

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etc.

Optional pricing: The organisation sells optional extras along with the product to maximise its turnover. This strategy is used commonly within the car industry.

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THE GILLETTE CASE:

With all the above tools and directions for pricing, Gillette India ltd. prices its products by taking into account the nine price-quality objectives and also the pricing objectives. After a detailed analysis of the above guidelines, it has been consciously using premium pricing for some products and average pricing for some. It strives for profits, market share and eventually ends up the market leader.

The price cut offer on vector plus was to take on the smuggled versions that had entered the Indian market.

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The hike in the price of presto from Rs 12 to Rs 15 was to induce the cusРазмещено на http://www.allbest.ru/

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tomer to move on to vector plus.

It doesn't need to follow all the 6 steps of pricing as it is a market leader with no potential threats. Some steps are redundant. It follows the following steps:

1) Set Pricing Objectives

2) Analyze demand

3) Estimating costs

4) Determine specific prices

Its strategies are very much evident from the following price chart of all the Gillette razors and blades.

THE GILLETTE PRICE CHART

Triple Blade Shaving System

	Razor + 1 cartridge	2 cartridges	4 cartridges	8 cartridges
Mach 3	235.00	158.00	305.00	585.00
Mach 3 Turbo	395.00	200.00	380.00	695.00

Double Blade Shaving System

	Razor + 1 cartridge	2 cartridges	4 cartridges	8 cartridges
Vector Plus	29.00	35.00		65.00***
Sensor Excel	125.00	55.00*	240.00	485.00
7'o clock P II	56.00		80.00**

*1 piece only, packs of 2 not available

**pack of 5 cartridges

*** pack of 6 cartridges is for Rs. 65.00

Disposable Shaving Systems

Variant	Price (Rs.)
Presto	15.00
7 O'clock	12.00

9. PLACE STRATEGY

Definition:

A place strategy refers to how an organization will distribute the product or service they are offering to the end user. The organization must distribute the product to the user at the right place at the right time. Efficient and effective distribution is important if the organization is to meet its overall marketing objectives. If the organization underestimates demand and customers cannot purchase products, because of it profitability will be affected.

What channel of distribution to use?

Two types of channel of distribution methods are available. Indirect distribution involves distributing your product by the use of an intermediary. Direct distribution involves distributing direct from a manufacturer to the consumer, for example, Dell Computers. Clearly direct distribution gives a manufacturer complete control over their product.

Distribution Strategies:

Depending on the type of product being distributed there are three common distribution strategies available:

1. Intensive distribution: Used commonly to distribute low priced or impulse purchase products eg chocolates, soft drinks.

2. Exclusive distribution: Involves limiting distribution to a single outlet. The product is usually highly priced, and requires the intermediary to place much detail in its sell. An example of would be the sale of vehicles through exclusive dealers.

3. Selective Distribution: A small number of retail outlets are chosen to distribute the product. Selective distribution is common with products such as computers, televisions household appliances, where consumers are willing to shop around and where manufacturers want a large geographical spread.

If a manufacturer decides to adopt an exclusive or selective strategy they should select a intermediary which has experience of handling similar products, credible and is known by the target audience.

THE GILLETTE CASE:

The appointment of distributors is handled by Gillette India directly. In NCR region, a separate well-defined area is allocated to each distributor.

The distributor appoints the EFF (Effective Field force). This comprises a team of 5-6 people who work directly under the distributor and are paid by him (and not the company).

The broad structure in the distribution network is as follows :

Assistant Sales Manager (ASM)

Territory Sales Manager (TSM)

Distributor

EFF

The goods are stored at depots before they move into the hands of the distributor. The ASM and TSI are on company payroll.

The Territory Sales Manager prepares the TMR (Total Market Report) detailing important variables like market share, growth trends, etc for the area under him. Also, it is the TSI who communicates schemes and benefits rolled out by the company to the distributor who in turn informs his EFF. The TSI meets distributors on a monthly basis for periodic review. The TSI is responsible for the targets/performance of the area under him and he is expected to communicate actual results back to the company on a regular basis.

In NCR Region, the margin being given at the retail level is 12%. One distributor has approximately 1100 shops under him. There are around 15-20 distributors in Delhi. The distribution is monitored basis off take and the distributor's (or distributor's appointed person) frequency of visiting the retail outlet is keeping in view the availability of ready stock. In Delhi, sale of goods to the retailer takes place on both a cash as well as credit basis. The distribution chain in Delhi is known to be smooth and without bottlenecks with ABSOLUTELY NO PROBLEMS being reported with regard to handling and acquiring stocks. On an average, a retail unit stocks the maximum number of Prestos, in relation to Vector Plus and Mach 3

DISPLAY:

The company has developed innovative display units for both smaller kirana and bigger supermarkets. It seeks to increase sales through

1) Increased range - increase in the number of SKU's (Stock Keeping Units)

2) Deepening the impact of a Gillette wall - the height at which the wall is displayed should at the eye level of the customer.

3) Depth - ensuring availability of product range at the retail outlet

The company does not interfere in any manner as far as the putting up of Gillette walls in shops is concerned i.e. it is entirely at the discretion of the retailer. For more sophisticated outlets, racks are used designed in ways such that they take up minimum space

For the high-end products, the move is from hanging cards to a grooming center where the entire grooming regime is brought together.

10. PROMOTION STRATEGY

WHY PROMOTION?

Promotion keeps the product in the minds of the customer and helps stimulate demand for the product

PROMOTION STRATEGIES:

A successful product or service means nothing unless the benefit of such a service can be communicated clearly to the target market. An organizations promotional strategy can consist of:

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Is any non personal paid form of communication using any form of mass media. Companies can run the same advertising campaigns used in the home market or change them for each local market. Broadly a company can choose from three different advertising strategies.

The company can use the same ad everywhere (across different regions and countries), varying only the language, name, colors etc.

It can use the same theme globally but adapt the copy to each local market.

The third approach consists of developing a global pool of ads, from which each country selects the most appropriate one.

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od public relations is not only to obtain favorable publicity within the media, but it is also involves being able to handle successfully negative attention.

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obtain an increase in sales short term. Could involve using money off coupons or special offers.

Personal selling: Selling a product service one to one.

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Direct Mail: Is the sending of publicity material to a named person within an organisation. There has been a massive growth in direct mail campaigns over the last 5 years.Размещено на http://www.allbest.ru/

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Spending on direct mail now amounts to Ј18 bn a year representing 11.8% of advertising expenditure ( Source: Royal Mail 2000). Organisations can pay thousands of pounds for databases, which contain names and addresses of potential customers. Direct mail allows an organisation to use their resources more effectively by allowing them to send publicity material to a named person within their target segment. By personalising advertising, response rates increase thus increasing the chance of improving sales.

THE GILLETTE CASE:

TV/Radio - Gillette has an extensive advertisement campaign being run on television.

The company uses a mix strategy for its ad campaigns for different products. It has adopted the first approach for mach3 & mach3 turbo ads wherein it uses a standardized ad across all countries , only making changes in the language, colors etc. For the lower segment razors like vector plus & presto it retains the global theme but adapts it to local market needs.

The advertisement for each product has been developed keeping in mind a specific section of the market. For E.g. Vector plus ad campaign targeted towards middle income group has that specific backdrop in the ad. Whereas Gillette Mach 3, a high end product, has a campaign portraying foreign models to cash in on the tendency of the Indians that anything associated with foreigners is of good quality and meant for the higher class. The vector plus ad also comes during the telecast of cricket matches in the form of “push clean facts- factual information of the game.” (The name push clean actually stands for the push-clean technology)

Print - This medium is mainly used by Gillette to spread awareness of their cents-off deals i.e. their reduced price packs and banded packs. Several ads are flashed in daily newspapers and magazines to advertise these schemes.

Internet- The Gillette website is excellent and there are dedicated websites for their new products which present the product and related information in a very nice manner.

However the company does not have a India specific website which we believe the company can develop as an additional promotional tool.

Also the company can try and inform people about the new technology in shaving and about the right way to get a smoother shave, through the use of direct mails and pop up ads. SMS can also be a very handy tool to spread awareness about discounts and other promotional schemes.

Movie/Soaps- This is another avenue Gillette can explore and reap great benefits from. As we know movies have great influence on not only youth but among all ages .So Gillette can have tie-ups with movie/producers and can show use of Gillette products in the same. This can also be a very handy tool to reach the less educated and lower income groups. Gillette has already associated itself with the Hollywood movie iRobot, we suggest them to try something similar here.

Based on consumer survey we found that the ad- recall is very less and also the ad is not having a great impact on the people. Therefore we suggest that Gillette ropes in a Bollywood star or a cricketer for its advertisements which have not only a greater impact but also help the ad recall and retention.

Sales Promotion:

It consists of diverse collection of incentive tools , mostly short term , designed to stimulate quicker or greater purchase of products or services by consumers or the trade .

Sales promotion includes tools for:

1) Consumer promotion -. In this kind of promotion, `Reduced price packs' are offered in which single package is sold at reduced price. `Banded packs' of two related products sold at lower price than sum total of the two are also offered. `Premiums' are also offered i.e. a free gift is given with the product.

2) Trade promotion - Price-off i.e. a straight discount off the list price on each case purchased during a stated time period .The other are allowances which include advertising allowance that compensates the retailers for advertising the manufacturers' product and also a display allowance that compensates them for carrying a special product display.

3) Business and sales force promotion - This includes participation in trade shows and conventions, sales contests which aim at the sales force or dealers to increase their sales result over a stated period. Other method is `Specialty Advertising' in which low cost items bearing the company's name and address are given to prospects and customers.

THE GILLETTE CASE:

Consumer promotion - Gillette offers Price Packs (cents-off deals) i.e. offers to consumers' savings of the regular price of the produРазмещено на http://www.allbest.ru/

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cts flagged on the label or package. When shaving gel for example is given free with mach 3 turbo it is called a CP Offer - Consumer Promotion Offer.

Trade promotion - Gillette, at present as found in our survey is not much into using trade promotion tools.

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Business and sales force promotion - The sales force (EFF) is given an additional incentive for the sales achieved by them over & above their target. This is paid as a percentage of the additional sales achieved. However, Размещено на http://www.allbest.ru/

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the company was unwilling to disclose the exact percentage to us.

The company works on a slab system wherein the incentive payout increases with higher sales achieved. The company follows a 'Points System' for the EFF i.e. targets are given in terms of points/time period. Higher points are earned by the EFF individual for selling a higher variant

11. MARKET STRATEGY

The Boston Consulting Group (BCG) matrix

It is a simple tool for assessing a company's position relative to others in terms of its product range. It is a 2x2 matrix plotting market share against market growth.

History of the BCG Matrix

n 1960's - diversification of businesses

n Need for universal management tool

n First implementation in 1969 by Boston Consulting Group

Why use it?

The BCG matrix helps a company think about the portfolio of products and services which it offers and make decisions about which it should keep, which it should let go and which it should invest further in.

When is it used?

It is used in initial audit discussions to identify “product development opportunities.”

The company then plots its products on the matrix -- for example a product in a fast growing market in which it has a low share would appear in the top left hand area, whilst one in which it had a high market share but where the market was growing slowly would appear in the bottom right.

How to use a BCG matrix?

Key Assumptions of BCG Matrix

Stable cost/price relationship (Not valid if the firm is pricing on projected lower average unit costs in the future)

Market leader influences the average costs

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Profit margin is a function of market share (This ignores profitable niches)

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BCG Matrix Format

n Vertical Axis = Relative Market Growth

n Split at 10% by a horizontal line

n Horizontal Axis = Relative Market Share

n Split at 1x by a vertical line

WHAT IT MEANS:

To help the analysis and stimulate the subsequent discussion the BCG model offers four descriptions of the product/market combinations which might be found:

Stars represent those products or services which the company has a high share of the market and the market is growing. They should be invested in further to maintain the growth.

Cash cows represent those products in which the company has a high market share but where the market is mature and slow growing or even declining. These products should be 'milked' to provide cash for investments in future product areas.

Dogs are products where the company has low market share and where the market itself is not growing. These should be dropped from the portfolio to release funds for investment in more attractive opportunities.

Question marks are those products in which the company ahs low share but where the market is beginning to take off or has significant growth potential. They need to be watched closely and investment maintained to keep a presence since they could become tomorrow's starts -- but equally the commitment should not be too high since they could also turn out to be tomorrow's dogs!

THE GILLETTE RAZORS BCG MATRIX

With the study of the BCG Matrix, we have tried to apply this concept to this project of ours. We have analyzed the razor market and then placed the various razors and blades of Gillette in the relevant quadrants.



Analysis:

The reasons for placing the product portfolio in the above manner is as follows:

DOGS: 7 O' CLOCK P II AND WILMAN RAZORS

Here we have considered Wilman razors and the 7 O'Clock razor P II because Wilman razors are losing market share very rapidly while the 7 O'Clock razors are too expensive for their segmentation. Consider this: the P II, which is a twin razor costs Rs.85 while a Vector Plus costs only Rs.29, which also has several added features like superior technology, imported blades, anti-hair clogging mechanism, etc. As a result, they have a low market share as well as low market growth, as the complete eradication of double edged shaving pattern is one of the primary objectives of Gillette

QUESTION MARKS: SENSOR EXCEL, VECTOR PLUS AND STERLING

Here we put sensor excel because it has been losing its market share due to its pricing close to that of Mach 3 . A Sensor Excel would initially cost Rs.125 and it successively boils down to Rs.3 per shave (price per shave), which is the same for that of Mach 3 (which however costs Rs.235 initially). People actually are tending to buy either vector plus or Mach 3 as a result of which Sensor Excel is becoming redundant. Vector Plus is one product with tremendous potential for market growth, since it combines superior technology, great looks, attractive and competitive price and above all the Gillette tag. Then we have the Sterling, the double-edged razor which may not have much growth in the future, which also doesn't gel with the company's objectives but then it is the only such product in the company's product basket. There still are some customers who use only double-edged razors and are also specific about the 7 o' clock brand.

STARS: MACH 3 AND PRESTO

Here we placed Mach 3 and Presto because they have a high market share as well as market growth. Presto would never decline in sales because the market for a disposable razor always exists due to its simple characteristic of ready to use and throw. Mach 3, the premium product of the company has also been a huge success amongst its segmented markets of youth and executives and its demand is only growing. So the company has in fact launched more innovations or developments of the basic product like Mach 3 Power and Mach 3 Turbo.

CASH COWS: WILKINSON AND 7 O' CLOCK BLADES (FLAT BLADES)

The reason for putting them here is that they currently enjoy both high market share as well as market growth. But now there could be slow growth or even decline in this segment due to decline in double-edged razors ( if the company succeeds in its objective), so these products should be 'milked' to provide cash for investments in future product areas.

Evaluation of BCG Matrix: Pros

n Simple and rapid

n Solid basis for decision-making

n Good measurability of market share and growth

n Provides information about efficient resource allocation within the organization

n Generator for strategic options

Evaluation of BCG Matrix: Cons

n Oversimplifies complex decisions

n Only 2 factors considered = creates risk

n Uncertainty in market and SBU definition

n Only considers current businesses no dynamics

n Does not recognize possible synergies between SBUs

n Can fall prey to the “GIGO” syndrome

Conclusion

As long as management understands that the BCG Growth/Share Matrix generates options which require further analysis and validation, this tool can greatly enhance strategic decision making

12. CONSUMER ANALYSIS

On the basis of our questionnaire and consumer survey, we found the following:

BRAND RECALL:

FREQUENCY OF SHAVE:

PLACE OF PURCHASE:

THE REASONS FOR CHOOSING A PARTICULAR RAZORS



WILKINSON: A GILLETTE PRODUCT?

Analysis of the consumer questionnaires

Post completing the survey , we got down to the task of analyzing the data that we got . This was important for us to try and understand the shaving market scenario, consumer behaviour and consumer perception about Gillette.

Frequency of Shave

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Of the sample of 200 that we surveyed we found that while 31% of the respondents shaved on a daily basis, 28% of the respondents shaved every alternate day. Also, slightly over one third (34%) were only shaving once in 3-4 days.

Therefore, 62% of the respondents (34+28) was not shaving on a daily basis. Our findings corroborate the fact that shaving frequency in India is low and shaving conditions relatively tough.

Brand Recall

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e first question that we put to our respondents. Also, to try and gauge their natural response , we did not provide them with options.

Upon consolidation of survey results, we find that an overwhelming 84% of those surveyed mentioned Gillette as the brand they associate with shaving.

Place of Purchase

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ts would fall under the category of convenience goods being bought on a regular basis, we wanted to find out the place from which the buyer was making the purchase.

We found that more than half(56%) of those surveyed were making the purchase from locality stores and 22% were making their purchases from Departmental stores.

Reasons for choosing a particular razor

100 respondents mentioned quality of shave as the primary attribute that they consider when they make their buРазмещено на http://www.allbest.ru/

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ying decision. Another 52 respondents based their decision on the `convenience of shave' while 48 respondents considered factors other than quality and convenience behind their purchase decision.

Impact of Promotions

64% of the respondents said that they would respond favouraРазмещено на http://www.allbest.ru/

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bly to promotional schemes brought out by the company. However, 21% said that any such promotional schemes would not influence their buying behaviour and the remaining 15% were not sure.

Ad Recall

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ge ad recall for Gillette shaving products. Others who did recollect could primarily recall their Sata Sat ad.

7 O'clock and Wilkinson as Gillette brands

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ion that we put to our respondents. A majority of them (around two third) were unaware that 7 O'clock and Wilkinson were actually under the Gillette umbrella and perceived them as brands of competition.

Analysis of interaction with the distributors & the retailers

In our study, we interacted with both the distributors as well as the retailers and we found that:

Both the distributors & the retailers were well stocked with Gillette shaving products- both in terms of quantity and range of products. Therefore, availability of the product is not a problem. Whereas it was not the same with competitive products like Supermax, 365 that are not readily available at all retail outlets.Размещено на http://www.allbest.ru/

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The distributors supply both in cash & credit terms to the retailer.

The frequency of supplies from the distributors to their respective retailers is dРазмещено на http://www.allbest.ru/

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ifferent in different cases. in some the retailer receives the supplies on need as basis, others receive it according to a pre-determined time frame of a every 3 days(for outlets in big shopping malls, departmental stores) week, fortnightly.

Neither the retailer nor the distributors face any problem of defective items or any other complaints from the end user.

The retailers receive a margin of 12 % on all Gillette products ( with the exception of vector plus, on which the margin is only 10%) as compared to 24-25% margin on competitive products.(Размещено на http://www.allbest.ru/

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house of Malhotras & local players)

There are no formal feedback forms that the company circulates but any problem is carefully handled. Also the option of online booking for these agents is not available as of now.

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of one of the distributor (merchandiser)

“ Gillette is very professional in its approach as far as distribution is concerned. House of Malhotras is a `Lala company'. Their attitude towards the retailer is a take it or leave it kind of attitude.”

RECOMMENDATIONS

A set of recommendations have been developed for Gillette India keeping the following factors have been in mind

а Consistency: We have tried to ensure that we do not lose focus of the outlined objectives.

а Viability: We have tried to come up with suggestions which are cost effective, practical and can be implemented by the company.

а Market Realities: The Indian shaving market has a lower shaving frequency and relatively poor shaving conditions.

We recommend that the company could adopt the following strategies.

Gillette walls - Going beyond the shop

These have been put up by Gillette as a strategy behind cash counters in large shops and departmental shops to promote impulse buying.

Both the designing of the wall and the placing of the razors/cartridges is done in such a manner so as to capture the customer's attention and `push him' into buying the product (Gillette is known for pressure selling since it deals in premium products).

It is suggested that

1) These be put up in new places beyond shops eg college canteens and cafeterias, coffee bars, cinemas & multiplexes. The company can display the entire range or a particular price range of products that it offers depending upon target market visiting these places.eg: college canteen-presto, vector plus

2) These walls are designed aesthetically and have a particular theme that goes with the area where the walls are being put up. Eg. A wall in a college canteen would have bright vibrant colours and photographs of college goers as this would appeal more to a College going market.

Gillette Gift Packs

These are currently available in the market. However, the company normally promotes them and tries to increase off take during the festive season. We suggest that the company could target the following new segments

1) The Corporate Gift Market - Gillette products are known to be premium products and the company enjoys a good brand image in the market. Therefore, there is potential to make inroads here. (Though it would be imperative that the company brings out smart and well designed cases that would make it a decent gift item for a corporate gift.)

2) Wedding Gift market - This will require attractive packaging. A mirror can also be included on the inside flap of the case. Also, keeping in view the nature of the occasion, some perfume etc might have to be included as a part of the gift pack as simply giving a razor along with cartridges may convey the wrong message.

3) Birthday Gifts - The company can promote Mach 3/Mach 3 Turbo as the best gift that a friend / family member can give to a teenager who has just started shaving.

4) Valentine gifts - this particular day has gained a lot of importance in the past few years thanks to excessive commercialization. Gillette can cash on this day too by coming out with attractive gift packs during this time with special focus on mach3 /mach3 turbo

Warranty Card

Gillette products are of supreme quality. The company does not suffer from a problem of goods returns of defective pieces from vendors. However, to increase the perceived value of the product in the mind of the customer; the company could provide a warranty card along with its premium end products - Mach 3 and Mach 3 turbo. Since Gillette offers unmatched product quality, the cost implications of product replacement would be minimal.

Further, Gillette could do product differentiation by offering different warranty periods for different cartridge packs (2-4-8). Therefore, a pack of 8 cartridges would have maximum warranty while a pack of 2 cartridges would cover a lesser period for defects.

Also, during the consumer survey we realized that there is a problem of counterfeit Gillette products in the market.

To counter this, the company could start putting holograms on its products which will

a) Help consumers differentiate between counterfeit and genuine Gillette products.

b) Establishes “trust” in the company products in the minds of the consumer

The Mach 3 experience

We recommend that Gillette should position its premium Mach 3 product as a superior shaving experience rather than `just a shaving product'. Since, we came across quite a few consumers who perceive mach 3 to be an expensive product; the company should position it as a product bundle. The following add-ons can be included.