Running Head: GILLETTE COMPANY CASE 1

GILLETTE COMPANY CASE

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Table of Contents

Introduction......................................................................................................................................2

Company Background.................................................................................................................3

SWOT Analysis...............................................................................................................................4

Personal Grooming Industry........................................................................................................5

Problem statement...........................................................................................................................5

Competitive Analysis.......................................................................................................................6

Colgate-Palmolive.......................................................................................................................6

Uniliver........................................................................................................................................6

Energizer Holding........................................................................................................................7

Pricing Strategy of Gillette Company for Dry Idea antiperspirant brand....................................8

Place of dry antiperspirant brand.................................................................................................8

Alternatives......................................................................................................................................9

Company should use rebranding strategy....................................................................................9

Company should use Social Media Marketing..........................................................................10

Company should use Social Media Marketing..........................................................................10

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Recommendations..........................................................................................................................11

Appendices....................................................................................................................................13

Appendix 1: Gillette Deo Market..............................................................................................13

Appendix 2 Personal Grooming Industry chart.........................................................................13

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Introduction

This case discuss the creativity problems on introducing the new brand of dry

antiperspirant brand that was introduced in 1978. Currently creativity is important in consumer

products because it increase brand attractiveness and increase sales. Currently company was

getting advertisement services from branding agency named as BBDO but after continuous

struggle. In 1981 the market share of the company was declined because the advertisements were

not effective to attract consumers. The competition in the industry has increased and there are

major player in the industry. So it was a high time for company to realize these issues and bring

changes in advertisement techniques to attract consumers and develop brand.

Company Background

The Gillette Company has been in business for more than a century. In the late 1960s, the

company pursued an acquisition strategy, acquiring the Hydroponic Chemical Company for $1.8

billion. The acquisition failed as a fit and due to shrinking margins. It did, however, increase the

company's market share and revenues. Since then, it has maintained its position as one of the

most admired brands in the world. While the first Gillette razor was introduced in 1879, it was a

flop. As a result, the company had to change its formula and launch a new one. In the late 1960s,

the Gillette razor was facing competition from the double-edged blade. In 1962, Wilkinson

Sword Company began exporting stainless steel blades to the United States. The company was

able to develop polymer coatings for the razor blades that increased their lifespan and allowed

consumers to shave longer.

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Despite its reputation as a world-class brand, Gillette has struggled to keep up with its

competitors. Its underperformance during the 1990s was largely due to currency-exchange

differences. Profits were lowest in its toiletries and stationery businesses, and the company's

profits were lowest. During this period, the managing board of Gillette fired CEO Michael

Hawley, and hired James M. Kilts, a former Nabisco CEO, to lead the restructuring effort. The

company also lost market share in the battery business to cheaper alternatives.

The Gillette Company is a global consumer products marketer. It aims to create

competitive advantage in personal care products through innovation and superior design. The

company is committed to building shareholder value through profitable growth. And, it's worth

remembering that it is a global company. But it has had a turbulent history. It has had a few

owners over the years, and has survived a few scandals. Some people may even consider it a

success story of its competitors. In the late 1960s, Gillette pursued an acquisition strategy,

acquiring the Hydroponic Chemical Compa ny, which manufactured plant foods. The

acquisition failed, however, as the company's profit margins dwindled. During this period, the

Gillette Company had a negative cash flow and a negative profitability ratio. In the following

years, the company is still on its way to achieving its strategic goals. Although its business has

suffered, the new management team is still committed to improving the lives of millions of men

and women worldwide.

In 1871, the Gillette family moved to Chicago. In 1871, the family's hardware supply

business was destroyed by the Great Fire. At age seventeen, Gillette became a traveling salesman

and improved his wares. By 1890, the Gillette Company had four patents. By then, the business

had found its niche in the disposable goods market. By this time, the company had more than 3.5

million customers in the United States.

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SWOT Analysis

Strengths

 Company have huge market presence and it is considered as leader in the industry

 Company use aggressive advertisement strategies and company have very strong and

positive image in the industry

 Company is well-known for its quality and innovation in the industry

Weaknesses

 Company have diversified products but it has a long lifecycle for development

 Company have relatively static market growth

 The cost of maintaining the brand image and its quality is very high for company

Opportunities

 Social needed of consumers are changing

 E-commerce is an emerging option for companies to interact with consumers and

enhance consumer services

 New technology is also an opportunity to reduce the cost

Threats

 Counterfeit products

 Substitutes are increasing

 Consumers buying power is increasing

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Further refer appendix 5

Personal Grooming Industry

Consumers spending depends on their income level, the increasing income level trend.

Personal grooming industry consist of major proportion of bath & shower products i.e. 46%, the

skin care industry contribution is 16%, Hair care industry consist of 31%, color cosmetic is 6%

and Fragrances 1% refer Appendix 2. Despite being highly competitive and consolidated, the

USA antiperspirant market has a high presence of global players. Moreover, increasing

awareness among consumers regarding hygiene and sanitation is expected to boost the growth of

this category. Various factors such as changing lifestyles and consumer behavior patterns are

also contributing to the growth of this industry. Detailed research is essential for identifying

market opportunities. Here is a market analysis of the USA antiperspirant market.

The deodorant market is segmented into two types of consumer: men and women. Men,

on the other hand, are expected to account for a larger share of the market. The global deodorant

ingredients market is predicted to grow at a fast pace, especially among Asia Pacific countries.

However, the demand for fragrance products in emerging economies is expected to increase in

the coming years. The US antiperspirant industry is expected to grow significantly during the

forecast period.

The US antiperspirant market is expected to expand at a steady pace through the forecast

period. The e-commerce segment is likely to register the fastest growth, with a growth rate of

13.4% over the forecast period (Taylor Nelson Sofres, 2002). Furthermore, consumers prefer to

buy their deodorants and perfumes online rather than visiting a retail outlet. Further, most

prominent brands offer significant discounts to lure consumers online. While the US is currently
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the largest market for antiperspirants, its growth is expected to remain relatively stagnant over

the next five years.

In recent years, the US antiperspirant market has grown rapidly. Rising income levels and

a growing population are two of the main factors boosting the growth in this market. Moreover,

rising disposable income and increasing use of antiperspirants are also driving the growth of this

industry. The rising demand for antiperspirants is fueled by new and innovative ingredients and

the low price of these products. Besides, environmental concerns are likely to pose a major

challenge to the US antiperspirant market.

Problem statement

Recently the competition in the industry is increasing and companies are adopting

innovative techniques to grab consumer’s attention. Gillette Company was working with BBDO

and continuous struggle of this agency resulted a strategic positioning in the industry. But in

1981 the market share of the company started to decline and the major cause of this was low

impact of advertisement on consumers. Carole Johnson was analyzed that the recent test

commercials did not meet the targets and did not gave the expected views. These numbers were

not enough to go with these commercial techniques. But the company was looking for new and

innovative advertising techniques to start the branding process for the product (M. Spence;

1986).
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Competitive Analysis

Colgate-Palmolive, Uniliver and Energizer Holdings are one of the major player in the

antiperspirant industry. The detail of products is mentioned in appendix 3 and Further SWOT

analysis is also in appendix 4 details are discussed below:

Colgate-Palmolive

The speed stick deodorant is a brand of antiperspirant in the United States, formerly

known as Mennen Speed Stick, which was purchased by Colgate-Palmolive in 1996. The

deodorant contains a deodorant chemical that can be applied to the body to prevent sweat and

odor. It has many different varieties, including the stick form and a gel version for women. The

product lines include Irish Spring, 24/7 Pro, and Stain Guard.

It is a popular brand in the U.S., with several nationally known brands such as Palmolive,

Mennen, Ajax, and Irish Spring. It also sells other products like Murphy Oil Soap and Softsoap.

It even makes pet food called Hill's Science Diet. There are other products made by the

company, and you can buy them online or in local retail stores.

The Speed Stick brand is a leader in the men's deodorant category. It has been the number

one brand for ten years, and the company recently introduced the Speed Stick Ultimate

deodorant. It has a proprietary odor-absorbing formula that releases fragrance constantly, so that

you can stay fresh and smelling great for up to twenty-four hours. The speed stick contains

Triclosan, which is a proven antiperspirant ingredient.

The speed stick antiperspirant is one of the most widely used brands of antiperspirant in

the world. It is available in several varieties. The original speed stick deodorant has a fragrance
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that lasts for about four hours. The new formula contains a unique ingredient called Triclosan

that helps fight bacteria that cause odor. The product is not harmful to sensitive skin and is very

gentle.

Uniliver

AXE has been in the antiperspirant business for more than a century. The company's

advertising campaigns have been centered on the millennial male, and its TV commercials

portray "geeky" men who are ready to woo chicks. Its logo has even been used in a few of its

products. The Axe brand uses its proprietary Dual Action technology to effectively bust odor and

boost irresistible fragrance. Today, the AXE line has a 48-hour freshness promise.

The latest campaign from Axe shows the benefits of its deodorant. The brand is the

global leader in men's fragrances, and has launched a new scent that has a romantic edge. The

new fragrance, Axe Effect, is a refreshing addition to the lineup. The brand's newest ad, "The

Walk," celebrates attraction and envisions a world populated by confident, irresistible guys. The

ad offers a new take on the brand's mission statement: AXE helps guys feel their best.

The AXE bullet is a new eight-centimetre spray that contains a concentrated formula.

Axe is a popular brand among men, and in the U.S., it is the #1 men's fragrance. AXE is also

popular in countries such as Canada, Brazil, and Italy. The company's Axe website features

exclusive content, contests, and other special offers.

Axe is one of the world's top fragrance brands, and its new ad for dating has changed the

game for guys everywhere. With its innovative advertising campaign, 'The Walk' celebrates

attraction and transforms the world through confidence and irresistible scent. The ad has been
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lauded by men all over the world. So, if you're a guy who loves to impress girls, you can feel

confident with Axe.

The brand's Facebook page is experiencing a downward trend, with Likes and followers

falling at an average rate of 5% a year. The drop is due to users unliking Axe. It has also

decreased in "talking about" count. The brand has a 45% reduction in its Facebook page's

"talking about" counts. While this might seem like a lot, it's not a big deal. Those are just a

couple of people out of thirty million unique monthly gamers, and these aren't the only two

issues that are hampering the brand's growth.

Energizer Holding

Dove men antiperspirant is made for men who want to stay dry, fresh, and comfortable

all day long. It has a refreshing fragrance that you will love. It is also made to care for the

sensitive underarm skin. Your underarms take a lot of pressure from various sources, so some

deodorants can actually build up and become a hindrance rather than a help. Dove Men+Care

provides the necessary hydration to keep your underarms cool, fresh, and odor-free.

Since its launch in the 1950s, Dove has marketed primarily to women. The company used

its "Campaign for Real Beauty" to promote female beauty. Now, Dove is attempting to reach its

male counterpart. While the move has received some skepticism, it is a welcomed one. Dove's

rival, Procter & Gamble, has already launched antiperspirant for men.

The company has reorganized its marketing ranks in recent years to focus on men's

personal care products. The company recently asked supermarket chain H-E-B in San Antonio to

test the new Dove Men+Care Extra Fresh antiperspirant. Dove has been promoting its products
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in the men's section for more than a decade. It says that the men's personal care market is worth

$700 million.

Dove has a long history of marketing to men. Its name has been associated with fair-

skinned women, but the product has been developed for men as well. It has become the fastest-

growing antiperspirant in the U.S. in recent years. In 2004, it grew to $148 million. Its sales have

been growing steadily since. The Dove brand has become one of the most successful brands in

the category (Mooradian, 2012).

In 2002, Dove launched men's lines for both sexes. During the last five years, it has

become the fastest-growing antiperspirant brand in the U.S. During this time, the brand has

expanded its range to include antiperspirant for women. The Dove brand has been a hit among

men for more than a century, but has only recently been growing due to the high cost of

manufacturing and distribution.

Pricing Strategy of Gillette Company for Dry Idea antiperspirant brand

The pricing strategy of the Dry I.D. antiperspirant brand has a simple and effective

strategy. The company releases a new product every two years, which increases its sales and

profit margin. Its advertisements are aimed at convincing consumers to upgrade and purchase the

product. The pricing strategy is simple to describe but it is complex to implement. The sales

strategy for the Dry Idea antiperspirant brand varies from market to market, and the product is

priced to match it.

The Dry Idea antiperspirant brand, manufactured by the Gillette Company, has been in

the market for over three decades. In 1978, it was introduced in the market. In the third quarter of
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1998, sales of the product fell by 15 percent. In October, the company announced that it would

be cutting 4,700 jobs, which accounts for eleven percent of the company's total workforce. The

drop in income was caused by lower sales in the key markets of the United States and Canada.

This decision led to a huge slump in the stock price overnight, which subsequently sank 11

percent.

This strategy is successful for two reasons. The company has a very wide range of

products, and its prices are competitive. It is the only brand that can compete in all segments and

with other leading brands. The company's product line extends across all product lines. The only

problem is that Gillette Australia has no R & D facilities and imports its products from the US,

New Zealand, Brazil, Germany, and New Zealand.

Place of dry antiperspirant brand

• A roll-on antiperspirant started in 1970 by Gillette company

• Company was using premium pricing and it was Supported by promotion and

advertisement nationally

• There are few advantages of this product as it protect from Dryness

• Well designed and proper packaging

Alternatives

1. Company should use rebranding strategy

2. Company should use Print Media

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3. Company should use Social Media Marketing

Company should use rebranding strategy

Pros

Rebranding a company is a good way to keep up with the times and increase

competitiveness and profitability in the target market. Rebranding is that it reduces the cost of

production. Since rebranding involves changes in advertising and public dealing, a company can

use the same set of technology and quality assurance for different products. In addition, changes

are relatively minor, requiring no extra disbursements or alterations. In addition, a company can

take advantage of a new, more contemporary brand identity, allowing it to stand out from

competitors.

Rebranding is a great way to increase your visibility in the market. It creates a more

authoritative position in the market, and can increase brand awareness. Rebranding is a great way

to make your business more successful. Its advantages include an increased sales volume and

better profits. Rebranding a company can also lead to increased profitability.

Cons

Rebranding requires extensive changes in the logo, advertising, and trade name symbols.

It isn't suitable for all businesses (Dave Chaffey; 2006). For instance, it is difficult to distinguish

the same products from similar ones in the same market, especially for smaller and mid-sized

companies. Moreover, the costs of rebranding are often very high. This means that rebranding is

a costly venture.
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it can be tricky if you're a small business. For example, rebranding a company with a

low-income product can cause it to suffer from bankruptcy. A rebranded logo can also damage

your credibility in the market.

Company should use Social Media Marketing

Pros

While Social media is rapidly becoming a more important and preferred means of

communication, print media isn't as popular among consumers. It's not as easy to recycle as

electronic media, but it's far more durable. Unlike online content, printed material is often read

more than once. And unlike most forms of electronic media, it won't vanish after one viewing.

As a result, print media can benefit from more exposure. Print media is a trusted form of

communication, it's an economical and reliable way to reach a large audience (Laudon and

Traver 2013).

The advantages of social media are more personal, online media aren't trusted to reach

people in their homes or businesses, and they are not very targeted. This makes print publications

more effective.

Cons

They are still a valuable source of information for many consumers. If you're a company

that wants to attract the right type of customer, print media is a great option. It require huge

investments in print media. This option is time consuming, it require continuous efforts to

maintain the record and get the desired results. It is bit long process.
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Company should use Social Media Marketing

Pros

One of the main advantages of print media is the fact that it is tangible. Consumers can

touch the pages of a magazine or newspaper, and they can feel the density of the paper.

Additionally, consumers are able to distinguish between various types of advertisements and

different kinds of news. This makes it possible for consumers to see the details of a particular ad.

Another advantage of printed media is that it is uncluttered. This means that readers can

focus on reading the content of the article or ad without being distracted. The lack of distractions

allows people to better absorb what they are reading.

The most important thing to keep in mind when choosing the format for your next

marketing campaign is to understand your audience and their interests. Once you know your

demographic and what they are looking for, you can select a medium that will work best for you.

print media is more trustworthy than electronic media. Consumers tend to trust advertisements

from credible sources. This means that print ads can attract more customers and make more

sales. In addition to reaching a wider audience, print media can be used for spreading awareness

about a particular product or event. This is especially true for local businesses and organizations.

So, while they're not the most reliable form of advertising, they still have a lot to offer.

Cons

Aside from its cost, newspaper advertisements have many advantages. Newspapers have

a large audience and are often the most affordable option for promoting a business. Despite its

drawbacks, many big brands still use newspaper advertisements. They can reach a large audience
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and generate more income. While the paper is not the best option for small business owners, they

do have a huge audience. And newspapers can be a great way to promote a brand. The cost of

print media is high and people now a days do not have much time and interest to read

newspapers.

Recommendations

After analyzing the whole situation and industry overall performance we found that today

consumers prefer products that are available online because today’s generation is more intended

towards online and social activities. Company should adopt social media marketing strategy to

meet the current requirements of the company. Company should continue with BBDO and let

them use social media marketing to engage consumers, update the regular details about product,

and continuously interact with customer through social media to update about company and

product. Changing agency was never an option because company do not have enough time to

transfer whole data to new agency . Company need to work on improving the product quality and

build short videos based on story i.e. an emotional story or social activist story to attract the

consumers along with that company should work on distribution channels and offer incentives

for distributors so that they work on improving the distribution of the products and acquire more

area.
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References

Dave Chaffey (2006); Definition of E-marketing Vs Digital Marketing-Online Marketing Mix;

Available at http://ww.smarinsights.com/archive/digital-marketing-strategy/ Assessed
28/06/2015

Mooradian, T. A., Matzler, K., Ring, L. J., (2012). Strategic Marketing, Pearson Education

Shirley M. Spence. Gillette Co.: Dry Idea Advertising (A), The Creative Problem, HBR, 1986

Luarn P. and Lin H. (2003); A Customer Loyalty Model for E-service Context; Journal of
Electronic Commerce Research; Vol.4 No.4 156-167

Taylor Nelson Sofres, TNS (2002); Government Online: An International Perspective; An

Annual Global Report; Available at
unpan1.un.org/intradoc/groups/public/documents/…/UNPAN007044.pdf Assessed
15/8/15
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Appendices

Appendix 1: Gillette Deo Market

Types Sales Percentage Products

Deodorants 25% Anti-Odor Protection

Antiperspirant 75% • Protection against

perspiration wetness

• Provide effective
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deodrancy

Appendix 2 Personal Grooming Industry chart

Personal grooming Industry

1%

6%

Bath & Shower Products

16% Hair care
Skin Care
46% Color cosmetic
Fragrances

31%

Appendix 3: Major Players in the industry

Colgate- Speed
pamolive Stick

Uniliver AXE

Energizer
Dove
Holdings
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Appendix 4: SWOT ANALYSIS

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Global presence
advertising
strategy
quality and
innovation

cost is increasing
counterfeit
products
SWO development cycle
low growth
consumers buying
power is increasing
T increasing cost

Social needs
consumers
preferences
E-commerce