Marketing Management-2: Indian Institute of Management, Indore
Marketing Management-2: Indian Institute of Management, Indore
Bombay Shaving Company essentially uses value-based pricing: Consumers were led to believe that
each new blade represented a technical development and, thus, provided a closer shave. The precision safety
razor from BSC was more expensive than the market-leading multi-blade Gillette razor, which cost 245. The
cost of 20 BSC blades per pack was 400, while each Gillette blade pack had six blades and cost 780. A
detailed comparison of different brands is shown in the table below:
Competitor Brands Pricing ( In Rs)
Local sellers 150-300
Ustra 250-300
Gillette 500-600
Peaarl Shaving 500-700
BSC 1200-1500
The overall method of BSC Value-based Pricing can be summarized in Figure Z below:
Q8) What are the current distribution channels and levels adopted by this brand and does it require
any addition/deletion of the channels or levels to improve its distribution strategy?
Bombay shaving company started with the same strategy as Dollar Shave Club (DSC), a subscription
shaving accessories start-up that had disrupted Proctor & Gamble brand Gillette’s share of the men’s
shaving product market in the US through viral video marketing. DSC disrupted FMCG sales and
distribution by selling shaving razors, blades, and shaving accessories directly to consumers from its
company website through a subscription model I.e., Direct Channel (online).
1) Collaborating with e-commerce sites is essential as the company website alone cannot provide enough
traffic for sales.
2) Logistic costs can be reduced by collaboration with e-commerce sites having a large network.
3) Delivery time and customer feedback systems will be enhanced with e-commerce sites.
4) Advertising and marketing costs can be controlled by tying up with big e-commerce sites. BSC can add
videos and infographics directly in e-commerce ads.
5) Helps the company in educating customers by doing product and price comparisons between BSC
products and competitor products.
Channel Deletion:
BSC should avoid entering into offline channels. However few stores for customer educational purposes can
be accepted. Reasons for limiting offline channel growth are:
1) Selling offline will contradict with the goal of the company to save supply-chain costs and reduce the
price.
2) Pricing of the products should be changed in online platforms and new prices should adhere to offline
indirect costs and their returns.
3) By concentrating on both online and offline channels the company should keep its marketing and strategic
decisions differently. This will result in channel conflict.
4) Multi-channel conflict will arise during e-commerce sales because of price differences across channels.