GILLETTE BY P&G SBU: PERSONAL CARE

CONTENTS
1. Background of the company 2. Mission and objectives of the company 3. Provide its market definition on the basis of Customer Groups, Customer Functions and Customer Technologies 4. Internal Environmental Analysis 5. Customer Analysis 6. Industry Analysis (with special focus on PESTEL) 7. Competitor Analysis (with special focus on Five Forces Competitor model) 8. On the basis of above information conduct a SWOT analysis 9. Perform a Portfolio analysis for the company chosen

10. Strategies using Ansoffs Growth Share Matrix 11. Perform a 4-P (Product, Price, Place, Promotion) analysis mentioning the major strategies adopted for these elements

Procter & Gamble (P&G)

The Procter & Gamble Company (P&G) boasts boatloads of brands. The world's top maker of household products courts market share and billion-dollar names. It's divided into three global units: household care, beauty and grooming, and health and well-being. The company also makes pet food and water filters and produces a soap opera. Some two dozen of P&G's brands are billion-dollar sellers, including Fusion, Always/Whisper, Braun, Bounty, Charmin, Crest, Downy/Lenor, Gillette, Iams, Olay, Pampers, Pantene, Pringles, Tide, and Wella, among others. P&G shed its coffee brands in 2008. Being the acquisitive type, with Clairol and Wella as notable conquests, P&G's biggest buy in company history was Gillette in 2005. Procter and Gamble Home Products Ltd (P&G) is attempting to capture a bigger share of the Indian home and personal care products market and not

just in detergents. In recent calls with analysts, it has been mentioning the Indian male grooming market in which its unit Gillette India Ltd operates, and its efforts to increase its share. The Procter & Gamble Company (P&G) is one of the world's largest consumer goods companies. It markets more than 300 brands in the beauty, health, fabric, home, baby, family, and personal care product categories. The company operates in the Americas, Europe and Asia. It is headquartered in Cincinnati, Ohio, and employs about 135,000 people. The company recorded revenues of $79,029 million during the financial year ended June 2009 (FY2009), a decrease of 3.3% compared with 2008. B r a n d s Ariel is a brand of laundry detergent/liquidavailable in numerous forms and scents. Bounty is a brand of paper towelsold in the United States and Canada. Braun is a small-appliances manufacturer specializing in electric shavers, epilators, hair care appliances andblenders. Cover Girl is a brand of women's cosmetics. Crest/Oral B is a brand of toothpasteand teeth whitening products. Dawn/Fairy is a brand of dishwashingdetergent.[ Downy/Lenor is a brand of fabric softener . Duracell is a brand of batteries and flashlights. Fusion is a brand of men's wet shave razors and is the quickest P&G brand to have reached $1 billion in annual sales. Gain is a brand of laundry detergent, fabric softeners and liquid dish soap. Gillette is a brand of safety razor and male grooming products. Head & Shoulders is a brand of anti-dandruff shampooand conditioners. Olay is a brand of women'sskin careproducts. Oral-B is a brand of toothbrush, and oral care products. Pampers is a brand of disposablediaper and other baby care products. Pantene is a brand of hair careproducts (conditioners/styling aids). Pringles is a brand of potato chips. Tide is a brand of laundry detergent. Wella is a brand name of hair care products (shampoo, conditioner, styling, and hair color). Whisper is a brand of pantyliners sold primarily in Asian markets. Mister Cleanis a brand of multi-purpose cleaner, and spray sold in theUnited StatesandGreat Britain.

MALE GROOMING AND PERSONAL CARE GILLETTE

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.
http://www.pg.com/en_US/company/purpose_people/index.shtml

In the December quarter, blades and razor shipments were up by 25%, while grooming segment value sales grew by 21%. Lower value growth could be partly explained by lower per-unit realizations on the new range. It has also dropped prices on its refills by 12-15%.Gillette also appears to have reconfigured Mach3 to ensure its margins do not suffer. Its segment margin actually improved to 31.6% in the December quarter, compared with 24.8% in the year-ago period. Initially, its value growth may suffer, especially if the product cannibalizes sales of Mach3 Turbo. But the refill costs nearly 70% of the razor cost, higher than even Mach3 Turbos 60%. Thus, what it may lose on the razor it will recover from the refill. With a proprietary design, users have no option but to buy Gillettes cartridges. Gillettes strategy, backed by P&Gs focus on higher growth from developing markets, will see it grow at higher rates in the coming years.

http://www.livemint.com/2010/03/21212857/Gillette-India-to-beat-market.html

GILLETTE: MISSION AND VALUES

OUR VISION:
The Gillette Companys 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.

MARKET DEFINITION
Customer groups(Product) Customer segment Customer need
Salon like shaving Removes dirt and oil Gillette shaving Regular and Heavy razors Users Teens/youth, midlevel Gillete Hair care executives

Gillette Shaving Employees/Students Cream

Gillette Deodrant Executives, working men

Smoothness, Skin protection Better wetness protection

ENVIORNMENTAL ANALYSIS

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.

Internal Environment(Global)
Our unique organizational structure offers the global scale benefits of an international company and the local focus to be relevant for consumers in roughly 180 countries where our brands are sold. Our corporate structure provides the framework that allows us to tap the benefits of a global organization with speed and efficiency. Our global operations keep us in touch with our local communities. And our strong governance practices ensure that we conduct our operations with consistently high standards and integrity. P&Gs structure has removed many of the traditional overlaps and inefficiencies that exist in many large companies.

Global Business Units (GBUs) focus solely on consumers, brands and competitors around the world. They are responsible for the innovation pipeline, profitability and shareholder returns from their businesses. Market Development Organizations (MDOs) are charged with knowing consumers and retailers in each market where P&G competes and integrating the innovations flowing from the GBUs into business plans that work in each country. Global Business Services (GBS) utilizes P&G talent and expert partners to provide best-in-class business support services at the lowest possible costs to leverage P&Gs scale for a winning advantage. Lean Corporate Functions ensure ongoing functional innovation and capability improvement.

Core strengths

Consumer Understanding No company in the world has invested more in market research than P&G. We interact with more than five million consumers each year in nearly 100 countries. We conduct over 20,000 research studies every year, and invest more than $400 million annually in consumer understanding. The insights we gain help us identify opportunities for innovation and better serve and communicate with our consumers. Innovation P&G is the industrys innovation leader. Nearly all organic sales growth over the past nine years has come from new brands or improved products. We continually strengthen our capabilities and pipeline by investing twice as much, on average, as our major competitors. We also leverage a global network of research partnersand more than half of all product innovation coming from P&G today includes at least one major component from an external partner. Their contributions have consistently helped us earn honors from the SymphonyIRI New Product Pacesetters Reportthe annual list of the biggest innovations in our industry. Over the past 15 years, 125 P&G products have earned a spot on the top 25 Pacesetters listmore than our six largest competitors combined. Symphony IRI recognized P&G as the most innovative manufacturer in the consumer packaged goods industry for the last decade presenting the Company with its Outstanding Achievement in Innovation award. In 2009, P&G launched 5 of the top 10 most successful non-food products as judged by SymphonyIRI: Tide Total Care, Gillette Venus Embrace, Bounty Extra Soft, Always Infinity and Secret Flawless. Brand-Building P&G is the brand-building leader of our industry. Weve built the strongest portfolio of brands in the industry with 50 leadership brands that are among some of the worlds best -known household names and which together make up 90% of P&Gs sales and more than 90% of profits. Twenty-three of these brands each generate more than $1 billion dollars in annual sales.

Human Resources

 Hire and retain some of the most talented people in the industry. Rewarded and recognized for their contributions through financial compensation, promotions and freedom to influence project selection Global training programs on managing the innovation process Training for high-potential junior staff

P&G operates in more than 80 countries worldwide

Marketing Constant emphasis on building brand recognition and brand value In the 1880s it was one of the first companies to advertise nationally. In the 1930s, P&G was the first firm to develop the idea of brand management. They would set up marketing teams for each brand and urge them to compete against each other. In the 1930s they used their own soap operas and radio programs to promote their products and appeal household women. Research Research World class R&D organization, with more than 7,500 scientists working in 12 countries around the world. This includes 1,250 Ph.D. scientists. For perspective, this is larger than the combined science faculties at Harvard, Stanford & MIT. Invest 4% of sales back into research & development which is higher than most of their global competitors Social Development
P&G focuses on two areas they can make a difference 1. Water 2. Hygiene and health 3. These focus areas support ongoing work to understand issues concerning water availability, quality and quantity, and health, hygiene and nutritional issues. http://www.pg.com/en_US/company/purpose_people/index.shtml

We Share P&Gs Purpose and Values. Our Purpose, Values and Principles are the foundation on which we develop leaders at P&G. Our shared Purposeimproving the lives of the worlds consumersin addition to our Valuestrust, integrity, ownership, leadership and passion for winningunify us as we collaborate as a team internally and compete to win externally.

We Hire the Best. Nearly a half-million people apply for P&G jobs every year. We hire less than 1%. We attract top talent because of P&Gs reputation as a great company for leaders, and we identify the best applicants by using a proven recruiting process that measures intelligence, assesses character and leadership, and predicts success at P&G. We Challenge P&G People from Day One. We believe theres no substitute for hands-on experience when it comes to leadership development. Thats why we create early, meaningful responsibilities for every employee. Typical assignments demand collaboration inside and outside the Company, disciplined project management and the need to be in touch with consumers, retail customers and other external stakeholders. Business and Functional Leaders Actively Recruit, Teach and Coach. Line business leaders are accountable and involved at every step of the process. This starts at the top. Our Chief Executive Officer, Vice Chairs, Presidents and Functional Officers recruit on college campuses and teach in our executive education programs. These senior executives also act as mentors and coaches for younger managers, helping them develop the skills necessary to lead large businesses and organizations.

Customer analysis

Who are our current and potential customers What do our customers do with our products Where do our customers purchase our products When do our customers purchase our products Why and how do our customers choose our products Why do potential customers not purchase our products

Majority of people associate Gillette with shaving. More than half of the people purchase shaving products from locality stores. Quality of shave as the primary attribute that they consider when they make their buying decision. More than 50% responded to advertisements in buying decisions. Around two third were unaware that 7 Oclock and Wilkinson were actually under the Gillette umbrella brand and thought competitors.

SEGMENTATION
BENEFIT DEMOGRAPHIC
BEHAVIORISTIC

PSYCHOGRAPHIC

FAVOURED BRANDS Gillette

Quality of shave

Executive,Working men Employees

Regular and Heavy Users Regular and Heavy Users First time users

High autonomy Value oriented

Convenience

Hedonistic Gillette High self-involvement High sociability, active Hypochondriac conservative Gillette

Technology & Fashion Price conscious

Teen /Youths Mid level Executive Low Income, Illiterates, Unaware

Laggards and non regulars.

Local players

Personal Grooming Industry An Outlook Industry Analysis

Due to increased awareness and rising income levels, the industry is expected to undergo a major shift from traditional double-edged razors segment to twin and triple blades razors segment. Razor blade market has tripled from Rs 2 billion in 1986 to Rs 6 billion in 2006. In value terms, in 2003, doubleedged blades comprised 78%, systems 15% and disposables 7%. As per AC Nielsen/ORG's estimates, the domestic shaving preparations market in 2003 was pegged at Rs 1.5 billion. Within the industry, cosmetics and personal care industry has been growing at an average rate of 20 per cent for the last few years. However, current consumption is still below many countries in Asia which shows that there are further growth opportunities. In 2004, market size of men's personal care segment is estimated at approximately Rs 750 crores, with Gillette having the largest market share.G illette, which followed a strategy of targeting first-time shavers, introduced the Vector for the lower end segment; Mach3 Turbo was aimed at the premium end. Gillette is the market leader in the Rs1,000 crore and five billion units razors and blades market. Its market share was 40% while that of its nearest competitor, the House of Malhotras, was 14%, according to a report by Motilal Oswal Securities Ltd. Gillette is the market leader, but its growth rate was tepid in fiscal 2009 (year ended June), as volume sales grew by just 2.8%. In a bid to increase share and growth, Gillette introduced the Mach3 in November, priced at Rs125 or 60% lower than the Mach3 Turbo. This product is targeted at greater conversions from the doubled-edged segment, which accounts for 62% and 86% of the razors and blades market, in value and volume terms, respectively. And nearly half of this market comprises users who get their shaves done in a salon. Gillette is attempting to convert this segment by giving salon quality shave at an affordable price. Thus, the industry is growing at a decent rate but still is at an infant stage and this offers great opportunities to players like Gillette and Colgate Palmolive to expand their customer base to include higher number of lower middle class people and thereby increase their revenues and profitability. The Indian blade market consists of four broad segments 1) Flat blades 2) Disposables 3) Twin blades 4) Triple blades.

http://www.indiainfoline.com/Markets/Company/Fundamentals/ManagementDiscussions/Gillette-India-Ltd/507815 http://www.business-standard.com/india/index2.php

PESTEL ANALYSIS

External Forces ECONOMICAL:The external environmental factors in terms of increasing purchasing power of the Indian consumers and a high level of interest in personal grooming amongst Indian men and a strong focus of the company to create awareness for technologically advanced products have resulted in signs of growth in the triple blade and twin blade systems. Due to higher income elasticity of demand, demand for personal grooming products are expected to grow at a rate higher than the rise in income levels of people. However, since the market is still driven largely by price and not quality (typically in rural markets and smaller towns), consumers might not value the potential benefit of paying higher prices for better and safer products. The increased awareness coupled with the increase in disposable incomes has led to a desire to upgrade lifestyles through owning and using better quality brands. Adapted to the recession by lowering earning projections Shed 15% of the management staff to help cope with the tough economy Focus their greatest resources on the 43 best-selling brands

TECHNOLOGICAL:Gillette came up with new and improved products like Mach3 Turbo and New Vector Plus to cater to the increasing needs of this section of the market. Further, penetration of cable television into the smallest of Indian towns has led to an increased awareness of latest lifestyle trends and brands, which have become an aspiration for many consumers. ProSeries represents Gillettes innovative shave care science at its best. Including: Gillette Fusion ProSeries Thermal Scrub: Gently warms and helps to clean and clear away dirt, excess oils and dead skin cells, softening facial hair before shaving. Gillette Fusion ProSeries Sensitive Face Wash: A mild soap-free formula with aloe vera suitable for everyday use on sensitive skin. Gillette Fusion ProSeries Intense Cooling Lotion: A soothing aftershave gel that helps provide instant cooling relief for just shaved skin and hydrates for an incredibly comfortable end to your shave. Available in manual and power, the Gillette Fusion ProGlide razor is most technologically advanced razor to date. By addressing every aspect of the razors contact with hair and skin, its an advancement in mens shaving comfort and performance. Enhanced Fusion features include:

Re-engineered Low Cutting Force blades with thinner edges Fusions advanced low-resistance blade coating Improved blade suspension system 25% larger Lubrastrip Streamlined Comfort Guard Innovative microcomb, exclusively on ProGlide Power

http://www.gillette.com/en/us/home.aspx#/international/

POLITICAL:The Government's continued focus on liberalization; trade friendly policies and improvement in infrastructure have resulted in a steady inflow of global investments into the Indian market which has again resulted in higher income levels due to increased employment opportunities and sustained economic boom. SOCIAL:Grooming is gaining popularity among male at a rapid rate.The society is changing and people are getting more conscious on improving their looks.Now people dont prefer salons because they are busy and need to save to time.As s result ,market is booming and growing rapidly. They are spending more money and time on grooming and are increasingly seeking information and advice to ensure they have the best products available to help them look and feel their best.With the number of men engaging in facial and body grooming on a daily, weekly or monthly basis, one thing is clear: Men have carved out their own niche in the beauty industry and they demand products and services tailored to their specific needs.

Have to keep up with changing trends in consumer demand and culture of different countries. P&G SHIKSHA in partnership with CRY. PADHEGA INDIA BADHEGA INDIA Reached to over 87000+ childrens.

Legal / Regulatory
Must meet industry regulations and standards in many different countries

FIVE FORCE COMPETITORS MODEL

MICHAEL.E... PORTERS 5 FORCE MODEL 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. Porters 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. Porters 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.

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

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: fragmented source of supply. pliers customers are fragmented, so their bargaining power is low,

obtain higher prices and margins. This threat is especially high when industry,

development (e.g. reluctance to accept new releases of products), 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.

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

product is undifferentiated and can be replaces by substitutes, related to high costs -sensitive, themselves,

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. 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 operations),

operation with fully depreciated assets,

Scarcity of important resources, e.g. qualified expert staff

-term service contracts,

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. 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 ustomer relationships,

COMPETITORS
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. 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. Colgate-Palmolive Colgate-Palmolive is one of the largest companies in the FMCG sector. The Company has launch of its International Palmolive Shave Gel and Palmolive Shave Foam in the year 2000, in response to growing consumer interest in skin conditioning benefits. The Chairman of Indian Operations mentioned that the companys strategy for Personal Care is to remain in top niches. Every year, they intended to take 3-4 initiatives. Colpal has shaving products under the brand name Palmolive shaving cream. It has three variants in the shaving cream/gel/foam category. Harbans Lal Malhotra & Sons (Malhotra), 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. Godrej Godrej is a domestic brand of shaving cream and now it is looking to expand in the global market for hair color and shaving creams. It has two variants in the shaving cream category. They are Godrej Shaving Cream and Godrej Premium Shaving Cream. The price of these two is shown in the table below. One observation is that even the premium shaving cream from Godrej is priced quite below (44%) below the competitors products of same quantity. HLL Hindustan Lever Limited, which is now called as Hindustan Unilever Limited, is a subsidiary of Unilever (USA). It is the largest FMCG company in India. It is also reputed to be the largest exporter of India. Its distribution network is very strong. It has over 2000 suppliers and associates and about 7000 redistribution stockists. With this massive distribution network in place, HLL enjoys commanding position in many FMCG products in Indian market. In the Shaving Cream/Gel/Foam category also HLL has two brands. Both of them are very strong brands in the Indian market. With the help of the its distribution system these brands have a deeper reach to the Indian consumers. These brands are shown in the tree below: HLLs Shaving Cream/Gel/Foam:

similar to that of Old Spice shaving cream. But HLL does not have any product in the gel or foam category to compete brands like Old Spice and Gillette. Other Brands Other competitive brands like Dettol and Park Avenue are also there in the market scene. The price for their shaving cream product is mentioned below. These are not premium segment brands and were priced accordingly

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

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. Source indiainfoline.com

SWOT ANALYSIS SRENGTH

Market leader Strong brand leader Global presence Aggressive advertising Quality and innovation Portfolio range (Mach 3 etc)

WEAKNESS Relatively static market growth Heavy dependence on high street retail outlets.

OPPORTUNITES Consumer brand preference Demand for high quality New innovative technology Increased grooming sophistication

THREAT New competitors Imitating the products Growth in substitutes

Portfolio Analysis

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

BCG MATRIX
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. 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. Key Assumptions of BCG Matrix lower average unit costs in the future) er influences the average costs

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 OClock razor P II because Wilman razors are losing market share very rapidly while the 7 OClock 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 doesnt gel with the companys objectives but then it is the only such product in the companys 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 ,PRESTO,GILLETTE GUARD 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. 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

Ansoff Growth matrix

Market penetration:Exisiting Products into existing markets. Gillette Mach3 ,Gillette Vector plus Product development:Introduction of new product into existing markets. Mach3 Turbo,Gillete guard
Gillette introduced the Mach3 in November, priced at Rs125 or 60% lower than the Mach3 Turbo. This product is targeted at greater conversions from the doubled-edged segment, which accounts for 62% and 86% of the razors and blades market, in value and volume terms, respectively. And nearly half of this market comprises users who get their shaves done in a salon. This new shaving system is easy to use and offers a great shaving experience at a price that millions of Indian men can afford. Gillette, a name synonymous with superior shaving innovations, has today announced the launch of Gillette Guard, the brands first product designed especially for India. This occasion marks

the first time that a razor has been designed and created to suit the needs of an Indian consumer, offering a superior & safe shave at an incredibly affordable price of Re 1 for one shave. Priced at an affordable Re 1 for 1 shave*, the Gillette Guard promises a much safer shave than the current available double edge razors. The product has many innovative features that help to reduce nicks, cuts and irritation besides ensuring better hygiene for the consumer.

Diversification:New product New market

Gillete guard:Entering the rural market at low price with high

standard.

http://www.indiainfoline.com/Markets/News/Gillette-unveils-Gillette-Guard/4955753264

http://www.business-standard.com/india/index2.php

4ps analysis of Gillette

Product and Service Customer value hierarchy chart in the 4 Ps analysis shows that Gillette products (Vector Plus) is currently fulfilling only the core and basic needs to some extent. Thus, other new product will cater to these needs. Again, additional features need to be there to satisfy the basic and expected needs of the people.The new Gillette Cream would target the basic and core product consumers where Gillette has no presence so far. So, the customer values promised and delivered would also be different from that of the premium segment. The focus is on to indianise the product which is evident with the launch of Gillette Guard. Pricing The customers in the target cluster are not very price sensitive. The customers in the cluster prefer brands like Axe and Denim which lie in the price range of Rs 43-45 for a 70ml pack. However, since Gillette is perceived as an expensive brand as compared to its competitors, Price of Gillette cartridges is very high .But Gillette vector plus and Gillette guard are popular products at a mid and low price range.

The price cut offer on vector plus was to take on the smuggled versions that had entered the Indian market. The hike in the price of presto from Rs 12 to Rs 15 was to induce the customer to move on to vector plus.
Promotion Gillette has always shown ads which are futuristic in nature (Shaving with Mach 3 on a space shuttle is an example). But the advertisements for the shaving cream have to be Indianised. This is the biggest challenge for Gillette which has so far treated the Indian market as a dumping ground for its outdated products in the US. Roger Federer, Tiger Woods, David Beckham and Thierry Henry are a few of Gillettes global ambassadors called Gillette Champions. Irfan Pathan has done a couple of ads for Sensor Excel. But the advertisement should also focus rural market.

Place
Indirect distribution Direct Distribution

ASM

TSM

Distributor
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 : 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.