Gillette

[BRAND MANAGEMENT] GilletteIntroduction: Gillette is a brand of Procter & Gamble currently used for safety razors, among other personal care products. Based in Boston, Massachusetts, United States, it was one of several brands originally owned by The Gillette Company, a leading global supplier of products under various brands, which was merged into P&G in 2005. The original Gillette Company was founded by King Camp Gillette in 1895 as a safety razor manufacturer. On October 1, 2005, Procter & Gamble finalized its merger with The Gillette Company. As a result of this merger, the Gillette Company no longer exists. Its last day of market trading—symbol G on the New York Stock Exchange—was September 30, 2005. The merger created the world's largest personal care and household products company. In addition to Gillette, the company marketed under Braun, Duracell and Oral-B, among others, have also been maintained by P&G. The Gillette company slogan is "The Best a Man Can Get". The Gillette Company's assets were initially incorporated into a P&G unit known internally as "Global Gillette". In July 2007, Global Gillette was dissolved and incorporated into Procter & Gamble's other two main divisions, Procter & Gamble [BRAND MANAGEMENT] Gillette Beauty and Procter & Gamble Household Care. Gillette's brands and products were divided between the two accordingly. Origins: On November 15, 1904, patent #775,134 was granted to King C. Gillette for a safety 'razor'. King Camp Gillette was born in Fond du Lac, Wisconsin in 1855. To support himself when the family’s home was destroyed in the Chicago Fire of 1871, Gillette became a traveling salesman. This work led him to William Painter, the inventor of the disposable Crown Cork bottle cap, who assured Gillette that a successful invention was one that was purchased over and over again by satisfied customer. Patent Drawing of the Razor In 1895, after several years of considering and rejecting possible inventions, Gillette suddenly had a brilliant idea while shaving one morning. King Gillette later said that the idea for an entirely new kind of razor, with a disposable blade, flashed into his mind as he looked in irritation at his dull blade. King Gillette had been searching for the right product, one that had to be used--and replaced--regularly, around which to build a business. His innovation in shaving technology was just such a product. Another safety razor, the Star, was already on the market at the time but, like the straight razor it was meant to replace, its blade needed stropping before each use and eventually had to be professionally honed. It was an entirely new razor and blade that flashed in his mind—a razor with a safe, inexpensive, and disposable blade that could be clamped over a handle, used until it was dull, and then discarded. [BRAND MANAGEMENT] Gillette It took six years for Gillette’s idea to evolve. During that time, technical experts told Gillette that it would be impossible to produce steel that was hard, thin, and inexpensive enough for commercial development of the disposable razor blade. Then in 1901, MIT graduate William Nickerson agreed to try. By 1903, he had succeeded. Production of the Gillette safety razor and blade began as the Gillette Safety Razor Company started operations in South Boston. Sales grew steadily. During World War I, the U.S. Government issued Gillette safety razors to the entire armed forces. By the end of the war, some 3.5 million razors and 32 million blades were put into military hands, thereby converting an entire nation to the Gillette safety razor. About the Company: Before the Merger: The Gillette Company The Gillette Company is the world leader in the men's grooming product category as well as in certain women's grooming products. Although more than half of company profits are still derived from shaving equipment--the area in which the company started--Gillette has also attained the top spots worldwide in writing instruments (Paper Mate, Parker, and Waterman brands) and correction products (Liquid Paper), toothbrushes and other oral care products (Oral-B), and alkaline batteries (Duracell products, which generate almost one-fourth of company profits). Gillette maintains 64 manufacturing facilities in 27 countries, and its products are sold in more than 200 countries and territories, with more than 60 percent of sales occurring outside the United States. The Gillette Company is a globally focused consumer products marketer that seeks competitive advantage in quality, value-added personal care and personal use products. We are committed to building shareholder value through sustained profitable growth. Statistics: • • • Type: Public Company Stock Exchanges: New York London Frankfurt Zurich Industry: Consumer Goods emphasizing that with his razor men could shave themselves under any conditions without cutting or irritation. Gillette. and Leicester. Montreal. The renamed Gillette Safety Razor Company began advertising its product in October 1903. By 1923. John Joyce.25 billion (2004) Employees: 29. a London sales branch. 1904: King Gillette’s safety razor is patented 1918: Gillette manufacturer’s razors and blades for soldiers during World War I. Company History: Entrepreneurial Beginnings: With Gillette. By 1909 he had established manufacturing plants in Paris. with the first ad appearing in Systems Magazine. 1991: Gillette ranks 20th among the Fortune 500. The company sold 51 razor sets at $5 each and an additional 168 blades--originally at 20 for $1--that first year.648 blades that year. The following year the company bought a sixstory building in South Boston.884 razors and 123.400 Key Dates: • • • • • • • • 1901: American Safety Razor is founded by King C. 1996: The Company acquires battery manufacturer Duracell. 1967: Braun AG is acquired. Production of the razor began early in 1903.[BRAND MANAGEMENT] Gillette • • • Found: 1901 as American Safety Razor Company Sales: $9. the Personal Care Division. and offices in France and Hamburg. By 1906 the company had paid its first cash dividend. In 1910 King Gillette decided to sell a substantial portion of his controlling share of the company to the company's major investor. and the Paper Mate division.000 they needed to begin manufacturing the razor. the Toiletries Division (featuring Right Guard antiperspirant). foreign business accounted for about 30 percent of Gillette's sales. in 1905. During the years before World War I Gillette steadily increased earnings through print advertisements. Germany. England. Gillette was expanding abroad. Gillette had . Berlin. 1971: Company is organized into four domestic divisions: the Safety Razor Division. 1942: The Cavalcade of Sports program is formed to oversee the company's various advertising and promotional activities in athletics. Gillette became president of the company and head of a three-man directorate. In 1904 Gillette received a patent on the safety razor. He opened his first foreign office. At the same time. Nickerson developed production processes to make Gillette's idea a reality. sales rose to 90. while Gillette formed the American Safety Razor Company to raise the estimated $5. More favorable publicity followed when the Paris office gave Charles Lindbergh a Gillette Gold Traveler set the day after he completed the first transatlantic flight. government ordered 3. and entered the low-priced end of the market with the old-style razor. It introduced the "new improved" Gillette razor. his longtime friend.000 and bowed out. Expansion and growth continued. which sold at the old price. filed suit for patent infringement after Gillette produced a new blade using a continuous-strip process similar to one originally presented to Gillette by Gaisman. Edward Aldred. The company also continued to expand abroad. but he no longer played an active role in company management. From a high of $125 early in 1929. and died 14 months later at age 77.5 million razors and 36 million blades to supply all its troops. a New York investment banker.[BRAND MANAGEMENT] Gillette succeeded in fighting off challenges for control of the company from Joyce in the past. By the end of the decade. The company then announced what became its most recognizable product. Aldred remained on Joyce's management team. In order to meet military supply schedules. a position he used to manage day-to-day operations. After the war. In 1921 Gillette's patent on the safety razor expired. renamed the Silver Brownie razor. When Gaisman checked the company's financial records. Gaisman. The crisis led to management reorganization. at $18. Lambert agreed to work for no salary with the guarantee of company stock if he could bring earnings up $5 per share. the stock bottomed out after the disclosure. Gillette retained the title of president and frequently visited foreign branches. priced at only $1. he found that Gillette had over-reported its earnings for the past five years by about $3 million. bought out the Gillette shares left to Joyce's estate and took control of the company. Gaisman became the new chairman of Gillette and Gerard B. developing customers for the more profitable blades. only to face another problem. Gillette resolved the suit by merging with Auto Strop. came out of retirement to become president of Gillette. Wartime Production: During World War I the U.S. Gillette thus introduced a huge pool of potential customers to the still-new idea of selfshaving with a safety razor. Lambert. the Gillette Company made a bold advertising move: it admitted that the new blade it had brought out in 1930 was of poor quality. King Gillette resigned as nominal president. the Gillette . Joyce was made vice-president. shifts worked around the clock and Gillette hired over 500 new employees. but the company was ready for the change. as did its stock. son of the founder of the Lambert Pharmacal Company--makers of Listerine--and a former manager there. Gillette faced its first major setback. Auto Strop Safety Razor Company. Confidence in Gillette fell. In 1922 Gillette became royal purveyor to the Prince of Wales and in 1924 to King Gustav V of Sweden. but this time he took approximately $900. owned by Henry J. When Joyce died in 1916. ex-servicemen needed blades to fit the razors they had been issued in the service. Gillette also gave away razor handles as premiums with other products. Under Lambert. Made under Gaisman's strip-processing method. Spang attributed Gillette's continuing success to the sports advertising program. but domestic production more than made up for those losses. With profits at their lowest since 1915. Despite a short series. as men increasingly turned to bargain blades. Carl Gilbert became CEO. Gillette manufactured fuelcontrol units for military-plane carburetors.000. . the double-edged blade. the Sugar Bowl. He was replaced by a former Auto Strop executive. who had no more success. Lambert resigned in 1934 without meeting his goal of improving earnings and without receiving compensation from the company. which had been cut to save money." Although it eventually included the Orange Bowl. Spang purchased radio broadcast rights to the 1939 World Series for $100. The Blue Blade kept Gillette the leader in the field. which resists corrosion. the board of directors appointed Joseph P. nonrazor. in 1936. Wilkinson had developed a polymer coating that made it possible to put an edge on stainless steel. sales of Gillette's World Series Special razor sets were more than four times company estimates. During the 1960s Gillette faced a threat to its bread-and-butter product. the "Cavalcade of Sports" became best known for bringing boxing to American men. In 1962. president in December 1938 in an effort to invigorate the company. the Blue Blade promised uniformly high quality. The backlog of civilian demand after the war led to consecutive record sales until 1957. increasing the number of shaves from a blade. This success encouraged more sports advertising. Postwar Diversification: During the profitable postwar period Spang began to broaden Gillette's product line. a manufacturer of ballpoint pens. When Spang retired in 1956. The company had introduced Gillette Brushless shaving cream. Stampleman. the English Wilkinson Sword Company began to export stainless-steel blades to the United States. In addition. in which the Cincinnati Reds lost four straight games to the New York Yankees. and the Kentucky Derby. In 1955 Spang purchased Paper Mate Company. Spang immediately restored the company's advertising budget. Under this policy. Gillette's trademark sports advertising developed. but profits remained disappointing throughout the Great Depression.[BRAND MANAGEMENT] Gillette Blue Blade. During World War II foreign production and sales declined. in addition to the World Series and the All-Star game. nonblade product. Almost the entire production of razors and blades went to the military. a firm that made home permanents. By 1942 the events Gillette sponsored were grouped together as the "Gillette Cavalcade of Sports. and sports programs remained an important vehicle for Gillette advertising. In 1948 Spang began to diversify by acquiring other companies when he bought the Toni Company. its first. Spang Jr. Samuel C. " and promoted both internal development of new product lines and acquisition of other companies. By 1971 Gillette had four domestic divisions: the Safety Razor Division. and fire extinguishers. but Gelsthorpe left Gillette to join United Brands. The Trac II twin-blade shaving system introduced in 1971 was a success. After its own blade hit the market. He had come up from the financial end of the business rather than through sales. such as Eve of Roma high-fashion perfume. 15 months after his appointment as president. He concentrated on a limited number of promising markets. Many of the companies Gillette acquired. A new line of Toni hair-coloring products failed. Gillette did have some successes. kept it from showing a profit. and began to groom outsider Edward Gelsthorpe to succeed him. was left behind without a stainless-steel blade of its own to compete. . selling Ziegler's least successful acquisitions--including Buxton in 1977. which made Schick blades. Gillette. and the 1970 acquisition of the French S. and American Safety Razor--rushed versions of the stainless-steel blade onto the market. Ziegler was named president. Buxton leather goods. Mockler had been at Gillette since 1957 and had an entirely different background and style than Ziegler. but with mixed results. During the later 1960s Gillette pursued this strategy actively. The acquisitions led to shrinking profit margins. and Hyponex and the Autopoint mechanical pencil business in 1979--and pumping money into promising companies compatible with already-existing manufacturing or distribution capabilities. market. and the Paper Mate division. Mockler stuck with the Cricket disposable lighter even though high introductory marketing costs and a costly price war with the Bic Pen Corporation. compared to 70-75 percent before the challenge. now Chiquita Brands. Ziegler. the Personal Care Division. which featured Right Guard deodorant and antiperspirant. Gillette's market share stabilized at 60-65 percent. owned by the French Société Bic. Welcome Wagon in 1978. luxury perfumes. Vincent C. Diversification Moderated Starting in the Mid-1970s Mockler moderated Ziegler's diversification policy. Gillette recovered much of its market share through a simple strategy: developing a better blade and initiating an aggressive advertising campaign that emphasized quality.[BRAND MANAGEMENT] Gillette Two of Gillette's domestic competitors--Eversharp. Dupont gave Gillette the disposable Cricket lighter. He saw Gillette as "a diversified consumer products company.T.S. repeat-purchase consumer items. to replace him when he retired in 1975. calculators. Ziegler next tapped Colman M. and profits slumped in 1963 and 1964. had developed the razor-marketing strategy. which Gillette introduced to the U. Welcome Wagon. smoke alarms. particularly high-volume. He took over as chairman of the board in 1965. head of the company's North American razor operation. and when Gillette reorganized on a product line basis in July 1964. By the mid-1970s Ziegler was ready to retire. the market leader. Mockler Jr. and a line of small electronic items such as digital watches. the Toiletries Division. The stainless-steel blade controversy taught Ziegler not to rely on one product. and Hydroponic Chemical Company--which produced Hyponex plant foods--never found the fit with Gillette comfortable. as did Earth Born shampoos. Perelman. Ziegler had bought the family-owned business in 1967 to gain entry to the European electric-shaver market and for the quality and style of its small-appliance designs. which feels dry when applied. from Personna and Gem blades. Mockler pared Braun's less profitable lines and rode out a Justice Department antitrust suit against the acquisition. The suit eventually prevented Gillette from introducing Braun shavers in the U. In the 1970s Bic attacked Gillette's Cricket disposable lighter with its own disposable lighter. Growing fear of fluorocarbons.[BRAND MANAGEMENT] Gillette Mockler also held on to the West German Braun company.S. Gillette eventually developed new product-delivery systems to replace aerosol cans. and he put advertising dollars behind the products. Takeover Threats in the 1980s: Mockler's policies led to a higher profit margin and a surplus of cash. however. Gillette countered by competing with Bic on price while emphasizing the higher quality of its products. Since the Cricket was more expensive to make--it had more moving parts than the Bic--Gillette was losing the price war. Before the results of those policies could be seen. offered $4. razor blades accounted for 71 percent of profits. such as nonaerosol pumps and roll-ons. Dry Idea. however. affected sales of products in aerosol cans during the 1970s. Inc. also led to a new threat in the mid-1980s: the threat of takeover. He was attracted by Gillette's well-known personal-care brands. . Mockler also increased Gillette's advertising budget and undertook companywide cost-cutting measures in all other divisions. Inc. In 1986 Ronald O. He also started development of a new deodorant product. and sales soared. Gillette had to respond. the possibility of combining the sales and distribution systems of the two companies. Some of this cash was used in 1984 when Gillette added oral care products to its product mix with the $188. which included Right Guard and Soft & Dri deodorants and Adorn and White Rain hair sprays. It quickly recovered a quarter of the deodorant market for Gillette. and Gillette's expertise in marketing abroad. Gillette brought out the Eraser Mate pen despite marketing studies that questioned demand for an erasable pen. Gillette faced a more serious threat from Bic. When Bic began producing disposable razors and purchased American Safety Razor. Dry Idea was launched in 1978 after two years of development at a cost of $118 million. for Gillette's alreadyestablished product line. head of Revlon. market before 1984. produced only 15 percent of Gillette's pretax profits. which made dramatic cuts into sales of Gillette's 98¢ Paper Mate pens. Lighters and pens. By 1980 Gillette had improved profitability despite the attack by Bic. with its 13 percent of the blade market. In the 1960s Bic came to the United States with a 19¢ disposable pen. Mockler faced other problems.--the leading maker of toothbrushes in the United States--from Cooper Laboratories. which deplete the earth's ozone layer. The excess cash.1 billion for Gillette.5 million purchase of Oral-B Laboratories. and non-European operations of its old competitor. both of which were refused by the Gillette board of directors. The Lady Sensor soon followed in 1992. Gillette brought in a new head of shaving operations. but in 1988 Gillette came out on top with 52 percent of the votes for directors to Coniston's 48 percent. Early to Mid-1990s: Gillette made another effort to expand its presence in shaving when it attempted to buy the U. who had agreed to give the company the right of first refusal on the block. razors and blades still accounted for a little over 70 percent of profits. shaving products. With takeover threats behind it and restructuring completed.[BRAND MANAGEMENT] Gillette Gillette rejected Revlon's offer of $65 a share and bought back stock from Perelman at $59. Sensor's touted superior shave was a huge success with consumers. thinned out its workforce through layoffs. Gillette unveiled the Sensor shaving system. formerly head of European operations. which included 16 million of Coniston's 112 million shares at $45 a share.S. . Gillette returned to emphasizing its powerful brand names and its bread and butter. The deal potentially placed 11 percent of Gillette's stock with Buffett. should he wish to sell it. While toiletries and cosmetics represented low-margin items and profitable stationery products accounted for only 9 percent of the company's total profits. though it tightened up cash flow at the company. and developed new ad campaigns to emphasize the more profitable shaving systems over disposable shavers such as its own Good News. Members of the partnership said they would actively seek offers to sell or dismantle Gillette if they managed to get representation on the board. In early 1988 Coniston Partners announced that it had acquired approximately 6 percent of the company and was determined to replace four members of Gillette's 12-member board so it could influence company policy. Coniston Partners' battle to get shareholders' proxy rights was intense. The blades. Finally. for a total of $558 million.50 a share and paid some expenses. Symons. Buffett's dividend was $52. to be used in a permanent shaving system. backed by a $100 million advertising budget. That was not the end of the takeover threats. Gillette reorganized top management. modernized its plants while shifting some production capacity to lower-cost locations. In response to the takeover threats. in August 1989. with sales for both products exceeding $500 million that year. John W. Revlon made two other unsolicited requests to buy the company in 1987. Warren Buffett's Berkshire Hathaway bought $600 million of Gillette convertible preferred shares. The friendly agreement decreased the threat of takeover. In October 1989. cost close to $200 million to develop and were launched simultaneously in the United States and Europe. and the product garnered several awards. and sold many smaller and less profitable divisions. The matter was finally resolved when Gillette instituted a stock repurchase for all shareholders.5 million a year. which featured thinner blades mounted on springs by lasers so they could follow contours. and aftershave categories. the Oral-B Advantage toothbrush. The company announced the acquisition of Parker Pen Holdings Ltd. flexible microfins. the 1990s proved to be extremely fruitful years for Gillette thanks to an aggressive program of new product development coupled with the pursuit of targeted acquisitions. Near the end of the year Gillette acquired Thermoscan Inc. This popular feature was added to all Oral-B toothbrushes the following year. the world leader in alkaline batteries. which included 14 "high-performance" products in the deodorant/antiperspirant. Also in 1990. early in 1990. Mockler. and the United States in 1994. Gillette thus added its first major product line since the purchase of Oral-B. shaving cream. Thermoscan promised to provide a base for Gillette to expand into the rapidly growing personal home diagnostic products area. including the integration of Parker Pen facilities into Gillette's structure. who had had a very successful term as CEO and chairman and who planned to retire at the end of 1991. Gillette in late 1993 launched in continental Europe and Canada its next-generation shaving system. Also in 1991 Gillette launched another award-winning product. The addition of the Parker brand to Gillette's Paper Mate and Waterman brands moved the company into the top position worldwide in writing instruments. batteries immediately .[BRAND MANAGEMENT] Gillette Wilkinson Sword. interests since Gillette controlled about half the U. Just four years after the debut of Sensor. for $107 million. in fact. which had bristles that change color to show when a new toothbrush is needed. a leader in infrared ear thermometers. Alfred M. Mockler's heir apparent who was president and chief operating officer. SensorExcel. died unexpectedly in January of that year. Despite the Wilkinson setback. which promised even closer and more comfortable shaving based on its skin guard made of "five soft.1 billion for Duracell International Inc. replaced Mockler in both of his positions. Significant new product introductions and a major acquisition highlighted 1992. Gillette's personal-care product division launched the Gillette Series line of men's toiletries.S. SensorExcel was rolled out in Japan. a division of Nobel Industries of Sweden. Gillette returned to acquisition mode in 1995 and 1996." After its successful debut. The Justice Department blocked the sale of Wilkinson's U. Zeien. Then in late 1996 the company made its largest acquisition ever when it paid $7. as part of a realignment of its shaving and personal-care units in North America and Europe. which was designed to remove plaque better than other toothbrushes. England. In late 1995 Oral-B's position in Latin America was bolstered with the purchase of the Pro oral care line. the Oral-B Indicator toothbrush. with the deal being consummated in May 1993. Late in 1993 Gillette took an after-tax charge of $164 million for a reorganization of its overseas operations. Other 1993 and 1994 product introductions included Braun's FlavorSelect coffeemaker... About 2. market and Wilkinson was number-four in the market with about 3 percent. for £285 million ($484 million).000 jobs were eliminated as a result of the reorganization. Gillette sold its European skin and hair care operations to Nobel Consumer Goods AB. and Custom Plus men's and women's disposable razors with pivoting heads.S. allowing the head of the razor to move with the angle of the jaw and skin. Sales neared the $10 billion mark. Gillette's underperformance continued in 1999 and 2000. trailing only razors and blades. Marketing strategy was slanted to persuade current Gillette product users to trade up their previous equipment in favor of the newer. The new safety razor system introduced a third blade into the twin-blade system that had dominated the wet-shaving market for the previous quartercentury. more expensive models because of their improved performance. Kilts. More immediately. needed all his skills. protected by 35 patents. comfortable shave. allowing shavers to use fewer strokes to get the same close. as 1996 revenues were $9. The blades were set at an angle so that each blade shaves closer to the skin. who had earned a reputation as a fixer of troubled companies. including SensorExcel for Women. about 11 percent of its total workforce. a whopping 41 percent of Gillette sales came from products that debuted during the previous five years. and net income--despite the Duracell charge--was a healthy $949 million. In October 2000 Gillette's managing board responded by firing CEO Michael Hawley and announcing a world-wide restructuring effort that would be led by former Nabisco CEO James M. the cartridge itself was designed to facilitate cleaning. and Russia also contributed to the loss of income. in large part because of currency-exchange differences. In October. As a result. Gillette's battery business. In 1996 the company also launched more than 20 new products. Lowered sales in key markets such as Brazil. Sales during the third quarter of the year alone dropped 15 percent. the Duracell merger led Gillette to record a fourth quarter 1996 charge to operating expenses of $413 million to eliminate overlap between Gillette and Duracell operations. Despite (or perhaps because of) the expense of the expense of introducing the new razor. Gillette saw its worst economic performance in almost a decade in 1998. The shaving cartridge was set on a pivot. and the handle was ergonomically designed to make the razor more comfortable in the hand. in January 2001.7 billion. which had . And an improvement on the SensorExcel was already in the works. The entire Mach 3 system. That year.[BRAND MANAGEMENT] Gillette became the company's second-leading product line in terms of sales. cost Gillette $35 billion just to bring to market. Duracell batteries had been under distributed outside the United States. Razor Wars: Late 1990s and Beyond: Gillette introduced a significant innovation in shaving technology--the first major innovation in safety razors since the beginning of the 1970s--with the Mach 3 in 1998. Germany. and share prices dropped by 11 percent virtually overnight.700 jobs. Gillette management announced staff cuts of 4. which reached more than 200 countries by the mid-1990s. the corporation set the price for replacement cartridges about 35 percent more than its previous best-selling razor. who joined the firm during its centennial year. In addition. a testament to the company's new product development strength. so Gillette planned to achieve sales growth by leveraging its existing marketing channels. Kilts. the SensorExcel. offering a closer shave with fewer nicks and cuts. Its stationery and small-appliance businesses showed the greatest losses and the battery and toiletries businesses provided most of the profits. [BRAND MANAGEMENT] Gillette dominated the top of the market. lost market share to other brands (Energizer and Rayovac) that offered similar performance at a lower cost. much of which was provided by its mens' and womens' wet razors. As a result of these and other expensive practices. it nonetheless saw sales of its products increase. Massachusetts. Gillette's earnings continued to perform below expectations. In addition the company lacked fiscal discipline and used an antiquated quarterly tracking system. Stock prices fell by about 60 percent in the months between early 1999 and late 2001. the world's first four-blade shaving system. the Mach 3 and Venus systems. Gillette was able to report a 43 percent increase in profits. The company's grasp of its core businesses--toiletries and oral care--remained strong. Gillette Company’s Head Quarters. Gillette claimed that the Quattro illegally infringed on Gillette's patents for the Mach 3. The violence of the company's reaction was explained in part because the Quattro actually increased Schick's market share from about 14 percent to about 17 percent. Gillette's control of the toiletries market was threatened early in 2003 when rival Schick-Wilkinson Sword introduced the Quattro. Boston . Although Gillette lost its attempt to ban sales of the Quattro in court. At the same time Gillette's market share slipped by a similar amount--although the Boston-based firm still held a commanding 63 percent of the total wet-razor market. By the end of the first quarter of 2004. According to marketing guru. P&G agreed to sell its SpinBrush battery-operated electric toothbrush business to Church & Dwight. Soft & Dri. Braun. P&G would exchange 0. It also divested Gillette's oral-care toothpaste line. and Gillette's stationery division. 2005. "The extra 18% premium paid by P&G for Gillette's stock is going to make it 18% more difficult for the deal to pay dividends to stock holders. 2005. Duracell. with conditions to a spinoff of certain overlapping brands.[BRAND MANAGEMENT] Gillette James M. credit rating agencies put both . the merger was subject to approval by the shareholders of both Gillette and P&G. and Oral-B to their stable. Rembrandt. although on paper it was a pure stockswap. and Dry Idea were sold to Dial Corporation. Kilts (Last CEO of Gillette Company) Merger: • Acquired by Procter & Gamble (P&G) on October 1. as an endorsement for TAG Body Spray. P&G branched into the record business with its sponsorship of Tag Records. The deodorant brands Right Guard. The acquisition was approved by the European Union and the Federal Trade Commission. In light of this move.[5] The companies officially merged on October 1. Paper Mate were sold to Newell Rubbermaid. forming the largest consumer goods company and placing Unilever into second place. The merger was not expected to get regulatory clearance by 2005. Al Ries.975 shares of P&G common stock for each share of Gillette. In 2008. However. It represented an 18% premium to Gillette shareholders based on the closing prices on January 27. As per the P&G and Gillette merger deal."P&G would have to borrow funds to finance the planned repurchase of its stock. 2005. P&G planned to buy back $18-22 billion of its common stock immediately after the merger. In January 2005 P&G announced an acquisition of Gillette. This added brands such as Gillette razors. Liquid Paper. This would make the deal structure a 60% stock and 40% cash deal. The buy back process could take around 18 months to complete. a scale business. the more opportunities there are to grow margins and invest in brand innovation. As of September 30." Presently Managed Company: Proctor & Gamble: Procter & Gamble (P&G) is a Fortune 500 American multinational corporation headquartered in downtown Cincinnati.6 billion dollars in sales. In 2011.56 Billion . and cost savings. US CEO: Robert McDonald (also President & Chairman) Revenue: US $ 82. P&G had debts of $21.4 billion and Gillette of $3. According to Lafley. opportunities for even more innovation. Statistics: • • • • • • • Type: Public Company Traded As: NYSE: PG Industry: Consumer Goods Founded: 1837 Head Quarters: Cincinnati. P&G recorded $82. Ohio. The more scale a company can create. "This combination of two best-in-class companies creates a stronger brand portfolio. which was up from sixth place in 2010. The reason is that consumer products is." Analysts felt that both scale and focus were important in this industry and P&G had attempted to gain both with this acquisition. in the end. Synergy: Both the companies expected the merger to bring tremendous synergies. 2004.1 billion. faster sales growth. Fortune magazine ranked P&G at fifth place of the "World's Most Admired Companies" list. In the words of Lafley.[BRAND MANAGEMENT] Gillette companies under a review for a possible downgrade. S&P placed all ratings for P&G on Credit Watch with negative implications based on the likelihood that P&G's leverage would increase significantly due to the merger. "P&G and Gillette can grow together at levels that neither could sustain on its own. Procter & Gamble is the only Fortune 500 Company to issue C Share common stock. Ohio and manufactures a wide range of consumer goods. The company called the soap Ivory. began a profit-sharing program for the company's workforce in 1887. as a result of the suggestion. began producing Crisco. On October 31.001 Billion Employees: 127. Alexander Norris. an inexpensive soap that floats in water.000 (as of 2010) Website: http://www. The company began to build factories in other locations in the United States because the demand for products had outgrown the capacity of the Cincinnati facilities. sales reached $1 million. William Procter's grandson. the military contracts introduced soldiers from all over the country to Procter & Gamble's products. The company's leaders began to diversify its products as well and. In 1858–1859. the company won contracts to supply the Union Army with soap and candles. By this point. the . emigrated from England and Ireland respectively.354 Billion Total Equity: US $ 68. a candle maker.pg.com Business Units: • • • • • • Beauty segment Grooming segment Health Care segment Snacks & Pet Care segment Fabric Care & Home Care segment Baby Care & Family Home Care segment Company History: William Procter. As radio became more popular in the 1920s and 1930s. In the 1880s. in 1911.797 Billion Total Assets: US $ 138. Procter & Gamble was born. he correctly assumed that they would be less likely to go on strike. their father-in-law. Procter & Gamble began to market a new product. approximately 80 employees worked for Procter & Gamble.[BRAND MANAGEMENT] Gillette • • • • • • Operating Income: US $ 15. 1837. William Arnett Procter. During the American Civil War. They settled in Cincinnati initially and met when they married sisters. called a meeting in which he persuaded his new sons-in-law to become business partners. a soap maker.818 Billion Net Income: US $ 11. In addition to the increased profits experienced during the war. Olivia and Elizabeth Norris. By giving the workers a stake in the company. and James Gamble. a shortening made of vegetable oils rather than animal fats. Once again focusing on laundry. these shows often became commonly known as "soap operas".1 billion. the Ireland-based pharmaceutical company Warner Chilcott announced they had bought P&G's prescription-drug business for $3. Olestra. In 1996. which were leaky and labor intensive to wash. As a result. In 1994. Procter and Gamble is a tier one sponsor of the London's Olympic Games 2012 and sponsors 150 Athletes. Numerous new products and brand names were introduced over time. Procter & Gamble began selling the first toothpaste to contain fluoride. On August 24. Norwich Eaton Pharmaceuticals (the makers of Pepto-Bismol). 2009. disposable diapers were not popular.. Branching out once again in 1957. the company purchased Charmin Paper Mills and began manufacturing toilet paper and other paper products. These acquisitions included Folgers Coffee. this placed their management in the unusual position of testifying in court that they had entered into transactions that they were not capable of understanding. Also known by its brand name Olean. although Johnson & Johnson had developed a product called "Chux". Olestra is a lower-calorie substitute for fat in cooking potato chips and other snacks that during its development stages is known to have caused anal leakage and gastrointestinal difficulties in humans. among others. Max Factor.[BRAND MANAGEMENT] Gillette company sponsored a number of radio programs. Procter & Gamble has dramatically expanded throughout its history. Procter & Gamble acquired a number of other companies that diversified its product line and significantly increased profits. In 1955. The company introduced "Tide" laundry detergent in 1946 and "Prell" shampoo in 1947. Procter & Gamble again made headlines when the Food and Drug Administration approved a new product developed by the company. known as "Crest". and the Iams Company. becoming an international corporation with its 1930 acquisition of the Thomas Hedley Co. One of the most revolutionary products to come out on the market was the company's "Pampers". based in Newcastle upon Tyne. Noxell (Noxzema). England. albeit at the environmental cost of more waste requiring land filling. Procter & Gamble maintained a strong link to the North East of England after this acquisition. Procter & Gamble began making "Downy" fabric softener in 1960 and "Bounce" fabric softener sheets in 1972. and Procter & Gamble began branching out into new areas. Prior to this point. and subsequently sued Bankers Trust for fraud. but its headquarters still remains in Cincinnati. the company made headlines for big losses resulting from leveraged positions in interest rate derivatives. Shulton's Old Spice. . Pampers provided a convenient alternative. first test-marketed in 1961. RichardsonVicks. Babies always wore cloth diapers. both in terms of manufacturing and product sales. The company moved into other countries. President and Chairman) . Cincinnati. Ohio Robert McDonald (CEO.[BRAND MANAGEMENT] Gillette Head Quarters. [BRAND MANAGEMENT] Gillette Time Line: Product Portfolio: • • • Razors/Blades Shave Gel & Foam Skin Care Anti Perspirant/Deodorant Body Wash • • Razors/Blades: . Gillette Aristocrat Gillette Super Speed: 1947 saw the introduction of the new "Super Speed" model. were introduced around 1902.[BRAND MANAGEMENT] Gillette Older Products: Double-edged safety razors: The first safety razor using the new disposable blade. The great innovation of this new model was the "Twist to open". also a TTO design. or TTO design. which made blade changing much easier than it had been previously. Gillette First Safety Razor Gillette Aristocrat: Gillette maintained a limited range of models of this new type razor until 1934 and the introduction of the "Aristocrat". with different versions being produced to shave more closely—the degree of closeness being marked by the color of the handle tip. This was updated in 1954. wherein the razor head had to be detached from the handle. . in various versions. It remained in production until 1986.[BRAND MANAGEMENT] Gillette Gillette Super Speed Gillette Adjustable: In 1958. Gillette Adjustable Gillette Super Speed Redesigned: The Super Speed razor was again redesigned in 1966 and given a black resin coated metal handle. the first "adjustable" razor was produced. The model. This allowed for an adjustment of the blade to increase the closeness of the shave. . remained in production until 1986. "The Knack". with a longer plastic handle.[BRAND MANAGEMENT] Gillette Gillette Super Speed Redesigned Gillette Knack: A companion model. Gillette Knack Newer Products: Gillette Techmatic: . was produced from 1966 to 1976. Trac II Plus is an identical model but adds a lubricating strip at the top of the blade. Gillette Adjustable Techmatic Gillette Trac II & Trac II Plus: Trac II was the world's first two-blade razor. The adjustable version featured user-selection of shave closeness on the cartridge. Gillette claimed that the second blade cut the number of strokes required and reduced facial irritation. It featured a disposable cartridge with a razor band which was advanced by means of a lever. The European versions of the Trac II and Trac II Plus are known as the GII and GII Plus respectively .[BRAND MANAGEMENT] Gillette Techmatic was a single blade razor introduced in the mid-1960s. This exposed an unused portion the band and was the equivalent of five blades. debuting in 1971. Both versions of the Techmatic and their cartridges have been discontinued. The adjustable version was interchangeable with the non-adjustable version. The blades and handles are interchangeable. Gillette Techmatic Gillette Adjustable Techmatic: Adjustable Techmatic is a version of the Techmatic dating from 1970. [BRAND MANAGEMENT] Gillette . dubbed Lubra-Soft. . Gillette Trac II & Trac II Plus Gillette Atra: Atra (known as the Contour. Gillette Atra Gillette Atra Plus: Atra Plus featured a lubricating strip. "Slalom" in some markets) was introduced in 1977 and was the first razor to feature a pivoting head. which Gillette claimed made it easier for men to shave their necks. but has a wider cartridge head. Gillette Sensor Gillette Sensor for Women: The Sensor for Women was released around the same time and is nearly identical. Gillette claimed that the blades receded into the cartridge head. . and was the first razor to have spring-loaded blades. helping to prevent cuts and allowing for a closer shave.[BRAND MANAGEMENT] Gillette Gillette Atra Plus Gillette Sensor: Gillette Sensor debuted in 1990. when they make contact with skin. . This featured "Microfins. All Sensor handles can use all Sensor cartridges." a piece of rubber with slits at the bottom of the cartridge and Gillette claimed this helped to raise facial hairs. making for a closer shave.[BRAND MANAGEMENT] Gillette Gillette Sensor for Women Gillette Sensor Excel: Sensor Excel was released in 1993. Gillette Sensor Excel Gillette Sensor 3: Sensor 3 has three blades instead of two. and the "Good News! Pivot Plus". Gillette Good News Gillette Blue II: Blue II is a line of disposable razors. it is marketed as the Prestobarba. which included a lubricating strip. In Latin America.[BRAND MANAGEMENT] Gillette Gillette Sensor 3 Gillette Good News: Good News was the first disposable. which featured a lubricating. the "Good News! Plus". strip as well as a pivoting head. double-blade razor. . released in 1976. The Good News came in three forms: the "original". which Gillette claims reduces irritation and requires fewer strokes. .[BRAND MANAGEMENT] Gillette Gillette Blue II Gillette Blue III: Blue 3 is a line of three-blade razor. a pivoting head with greater flexibility and a blue lubrication strip that faded with usage to encourage users to change their blades more frequently. The Mach3 featured five improved micro fins and spring blades. It is available also in disposable variant. Gillette Blue III Gillette Mach 3: Mach3. the first three-blade razor introduced in 1998. cheaper version of Sensor 3 (Sensor compatible). . a new grip and claims improved lubrication and "anti-friction" blades. Gillette Mach 3 Disposable Gillette Mach 3 Turbo: Mach3 Turbo had ten micro fins as opposed to the five on the original.[BRAND MANAGEMENT] Gillette Gillette Mach 3 Gillette Mach 3 Disposable: The above with a different plastic handle. All Mach3 blades are interchangeable between the three products in the range. so it is possible to use the Mach3 Turbo blades on a Mach3 razor. The Mach3 Power Nitro has a slightly different handle design.[BRAND MANAGEMENT] Gillette Gillette Mach 3 Turbo Gillette Mach 3 Turbo Champion: Mach3 Turbo Champion has a slightly different handle design. Gillette Mach 3 Turbo Champion Gillette M3 Power: M3Power is a battery-powered version of the Mach3 Turbo razor which can also be used with the power switched off. The blades differ from Mach3 Turbo with a new coating which Gillette describes as "Power Glide". The lubrication and micro fins are identical to Mach3Turbo. . Gillette Venus Gillette Venus Divine: Venus Divine is a female version of the Mach3 Turbo. .[BRAND MANAGEMENT] Gillette Gillette M3 Power Gillette Venus: Venus is a female version of the Mach3. Mach3 blades can attach to a Venus handle and vice versa. Venus blades are interchangeable across the line.[BRAND MANAGEMENT] Gillette Gillette Venus Divine Gillette Venus Vibrance: Venus Vibrance is a female version of the M3Power. Gillette Venus Vibrance Gillette Venus Embrace: Venus Embrace is a five-bladed razor with a ribbon of moisture surrounding the blades. . the Venus Spa Breeze.[BRAND MANAGEMENT] Gillette Gillette Venus Embrace Gillette Venus Breeze: Venus Breeze is a three-blade razor with shave gel bars built into the head of the razor. Gillette Venus Breeze Gillette Venus Spa Breeze: Another version of the Breeze. is essentially the same as the Breeze. . but with a white tea scent to the shave gel bars. [BRAND MANAGEMENT] Gillette Gillette Venus Spa Breeze Gillette Venus Pro Skin Moisture Rich: Venus Pro Skin Moisture Rich. featuring Moisture Rich shave-gel bars that are enhanced with a triple blend of body butters. The Fusion has five blades on the front. is an updated version of the Breeze. launched in January 2011 in the United States. Gillette Venus Pro Skin Moisture Rich Gillette Fusion: Gillette Fusion is a five-bladed razor released in 2006. and a single sixth blade on the rear for precision trimming. . The Fusion Power is battery powered and emits "micro pulses" that are claimed to increase razor glide. Gillette Fusion Power Gillette Fusion Power Phantom: Fusion Power Phantom (Stealth in UK) was released in February 2007 and features a redesigned handle with a darker color scheme than the original.[BRAND MANAGEMENT] Gillette Gillette Fusion Gillette Fusion Power: Gillette Fusion Power is a motorized version of the Fusion. . The Pro Glide series feature re-engineered blades with edges that are thinner than Fusion and are finished with low-resistance coating which allow the blades to glide more easily through hair. . Gillette Fusion Power Phenom Gillette Fusion Pro Glide & Pro Glide Power: Fusion Pro Glide and Fusion Pro Glide Power were launched on June 6.[BRAND MANAGEMENT] Gillette Gillette Fusion Power Phantom Gillette Fusion Power Phenom: Fusion Power Phenom was released in February 2008. 2010 in North America. It has a new blue and silver color scheme. they can trust a single 3-in-1 tool to get the look they want. Instead of multiple products. .[BRAND MANAGEMENT] Gillette Gillette Fusion Pro Glide Gillette Fusion Pro Glide Power Gillette Pro Glide Styler: The Fusion Pro Glide Styler provides an opportunity for men who style their facial hair to simplify their grooming routines. high-tech design to allow every man to get in the game.[BRAND MANAGEMENT] Gillette Gillette Pro Glide Styler Gillette Fusion Power Gamer: Fusion Power Gamer (also known as "Cool White" in select markets). With 5 blades spaced together to help reduce pressure with less irritation than MACH3. Gillette Fusion Power Gamer Shave Gel & Foam: . Gillette Fusion Power harnesses Gillette's advanced shaving technology available with a sophisticated. even when shaving against the grain and a precision trimmer for tricky spots. [BRAND MANAGEMENT] Gillette Fusion Pro Glide Clear Shave Gel Fusion Pro Glide Irritation Defense Shave Gel Fusion Pro Glide Hydra Smooth Shave Gel Fusion Pro Glide Soothing Shave Gel Fusion Hydra Gel Moisturizing Shave Gel Fusion Hydra Gel Clear Skin Shave Gel Fusion Hydra Gel Tough Beard Shave Gel Fusion Hydra Gel Ultra Sensitive Shave Gel Fusion Hydra Gel Clean and Fresh Shave Gel Fusion Hydra Gel Cooling Shave Gel Fusion Hydra Gel Pure and Sensitive Shave Series Sensitive Skin Shave Foam . [BRAND MANAGEMENT] Gillette Gel Series Cool Cleansing Shave Gel Series ExtraComfort Shave Gel Series Moisturizing Shave Gel Series Pure and Sensitive Shave Gel Series Protection Shave Gel Series Sensitive Skin Shave Gel Series Conditioning Shave Foam Classic Regular Shave Foam Classic Sensitive Skin Shave Foam Classic LemonLime Shave Foam . rugged male image are slowly coming to an end. The days of the unkempt. There are articles that associate this scenario with the increasing vanity of men with the emergence of what has been coined as the metro sexual. the notion of male aesthetics is equated with the clean cut. For instance. the existence of male grooming products provided by Gillette is due to the demand held by the market. the “razor wars” that exists between the major players in the industry is triggered by the drive towards product differentiation ascendancy in the market. In the same regard. and odorous image of men.[BRAND MANAGEMENT] Gillette Market Environment The environment surrounding all the competition between the market of razors and male grooming kits presents major implications on the actual trends and innovations held by the companies. hairless. Nowadays. The Market of Men’s Grooming: Male grooming has become one of the more tackled concepts in recent studies and articles. These are a portion of the male demographic that are a . those that sport such reckless abandon on facial hair are considered as scholars and learned components of society. This trend shies away from the initially idealized appearance of the bearded male during the renaissance era. This consequent depilated look has also been manifested in the male body image in Asian countries like Japan. grooming and a rather debonair lifestyle as among their priority. There are other studies that focus on the male preference towards a “depilated” look. Players in the Safety Razor Market: Player Country of Origin Model Bic France Croma Germany Dorco South Korea . The consequent changes in society which affected the body image of the modern male demographic have considerably taken the necessary steps which are inherently favorable to the male grooming industry. This is one of the bases of the assumption that it is inherent for males to disregard any effort in grooming. This hairless look apparently dates back to the Egyptian times where a hairless façade is regarded as beautiful. There have been accounts that indicate the preference of the male demographic towards sporting a shaven appearance. In the said period.[BRAND MANAGEMENT] Gillette part of the young professional crowd and places looks. [BRAND MANAGEMENT] Gillette Feather Japanese Gillette USA Iridium - Laser India Lion South Africa Merkur Germany Panda China . [BRAND MANAGEMENT] Gillette Personna - Racer Egypt Schick USA Shogun China Super-Max India Wilkinson United Kingdom . Generally. Schick-Wilkinson Sword. In the late 90s. ushered in their Quattro. amounting to $35 billion more or less. The company had to bring out a considerable amount of money to protect the said system. the brand called this technology as the Mach 3 system which also one of the reasons why the company incurred the worse performance since their creation. This is reinforced with the manifestation of economic fluctuations as seen in exchange rates and inflation in the turn of the millennium. This product is a four-bladed system that took Gillette’s Mach 3 head-on.[BRAND MANAGEMENT] Gillette The Battle for Shaving Supremacy: The Gillette brand has been one to first introduced safety razors to the public during the 1970s. a new era of shaving products has emerged. Gillette’s product was successful in tapping both male and female demographic with their products. This took place when the brand introduced Mach 3. Direct competition is from the already established low priced blades available from other companies and indirect from . a safe disposable shaving product that ushered in a third member to the conventional twin blade system that has been present in the market for decades. To boot. one of the closest rivals of the company. the said increase in the sales of Quattro is doubled by the sales acquired by the Mach 3 system. The courts sided on the latter which made Gillette’s attempt to ban the sale of the Quattro a total failure and consequently allowed an increase in the market share of the same. The third blade provided the consumer the chance to acquire a closer shave and with less strokes. Legal battles emerged between the said companies as Gillette claimed that Schick infringed on their patented system. Competition: Gillette faces 2 types of competition. However. Wilkinson Sword: Wilkinson Sword is a brand name for companies that make gardening tools and razors. bayonets. Gillette faced direct competition from local brands. Schick : Schick is a brand of safety razors by Wilkinson Sword. In other markets Wilkinson sells the same products under the Wilkinson Sword brand. The company was founded in London in 1772. Super Nacet. Schick also markets shaving gels. It competes in most markets against Faber-Castell. . The Bic pen. low-end blades from Eastern Europe and China (Tatra. shaving razors and water sports products. and Schick. The Schick brand is used in North America. Major Competitors: Bic: Société Bic is a company based in Clichy. In 2000 it closed its razor plant in the UK and consolidated production in Germany. and other objects such as typewriters. a subsidiary of Energizer Holdings. and Tiger). Wilkinson Sword's origins are in the manufacture of swords. were its competitors. In the higher end products Gillette faced competition from Schick. where they made gardening tools. In 1934. Schick is the top selling brand of safety razors and blades in Japan. a local brand. Australia. France. was the company's first product and 50 years later is still synonymous with the name Bic. While second in sales to Gillette globally. In the double edged blades Gillette faced competition from imported. and motorcycles. by Baron Marcel Bich known for making disposable products including lighters. (Chelsea and Acton).[BRAND MANAGEMENT] Gillette the traditional methods of shaving. The brand is currently owned by Energizer Holdings. But since the sales volumes were low the market was not intense. Asia and Russia. USA and Bagus. founded in 1945. Bic. Past product lines have included guns. Wilkinson Sword has manufactured its products in three UK locations over the years: in London. Schick introduced its highly successful single blade safety razor system that stored ten blades in a steel injector. garden shears. In the disposables section Bic. Cramlington in Northumberland and Bridgend in Wales. Global Gillette. Newell Rubbermaid and Schwan-Stabilo. more correctly the Bic Cristal. Gillette has 90% market share in the high end segment. ballpoint pens. It was founded in 1926 by Jacob Schick as the Magazine Repeating Razor Company. magnets. scissors. suppliers of those inputs have less bargaining power. ○ When suppliers are reliant on high volumes. Volume is critical to suppliers. Bargaining Power of Suppliers: Low Similar with the buyers. This can positively affect Gillette. Low cost inputs positively affect Gillette. Though they could be readily be replaced by the company with another supplier. This is done normally through correspondence so as to provide both supplier and manufacturer that capability of using the business knowledge to their advantage.[BRAND MANAGEMENT] Gillette Porter’s Five Forces Model: 1. the suppliers in this industry has some level of power over the major players. it is important in the consumer product industry that a good relationship between the supplier and manufacturer is established. they have less bargaining power. Parameters: • Inputs have little impact on costs. ○ When inputs are not a big component of costs. • . because a producer can threaten to cut volumes and hurt the supplier’s profits. the intensity of the competition also displays the fact that the players compete at a considerably small market share. Also the barriers to entry are not many except minimum size requirements for economies of scale. Strong brands positively affect Gillette. then new competitors will have to improve their brand value in order to effectively compete. high initial investments and above all the retaliation by Gillette which could be anything. Large number of customers. This positively affects Gillette. The expense of building a strong distribution network positively affects Gillette. Parameters: • Strong brand names are important. Bargaining Power of Buyers: Low There are a couple of factors to consider so as determining the bargaining power of the suppliers in the market. In the case of Gillette. First. Limited bargaining leverage helps Gillette. In the same regard. it has been established that the switching cost of the consumers may well be low. Hence. 1. ○ If strong brands are critical to compete. it should be determined whether or not there are a good number of customers in the market. On the other hand. • • . a considerable number of male consumers and some of the female demographic may be acquired as their core customers. This means that the customers may shift from one brand to another without any major changes in the costs against them. Threat of New Entrants: Low The 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. However. the operations of the company are global in nature. Parameters: • • Product is important to customer. Patents limit new competition.[BRAND MANAGEMENT] Gillette 1. this is based on the earlier finding that the products are interchangeable and indistinguishable. ○ When customers cherish particular products they end up paying more for that one product. no one customer tends to have bargaining leverage. Strong distribution network required. ○ Weak distribution networks mean goods are more expensive to move around and some goods don’t get to the end customer. ○ When there are large numbers of customers. . When companies need to spend resources building a brand. which will increase the profits for the remaining firms. they have fewer resources to compete in the marketplace. the major competitors of the company particularly Unilever. Competitive Rivalry between Existing Players: Medium to High In this category. male grooming products appear to be interchangeable and indistinguishable. ○ When exit barriers are low. ○ An inferior product means a customer is less likely to switch from Gillette to another product or service. ○ • 1. market share from each other. ○ Large industries allow multiple firms and produces to prosper without having to steal Exit barriers are low. the substitutes are seen primarily in salons and barbershops where they provide the customers with a “professional” shave. because the best methods are patented. Parameters: • • Large industry size. Patents positively affect Gillette. Threat of Substitutes: Low Another factor that affects the competition equilibrium is the existence of substitutes. These costs positively affect Gillette. the brands implement a high level of product differentiation to keep their core customers from defecting to their competitors and even the substitute products. Large industry size is a positive for Gillette. In this case. ○ It takes time and money to build a brand. weak firms are more likely to leave the market. Parameters: • Substitute product is inferior. This means that the effect of substitution in the said industry is rather low as it appears that it costs more on the part of the customers. 1. (Madapati 2003) The recent merger of the Procter & Gamble and Gillette. Customers are loyal to existing brands. However.[BRAND MANAGEMENT] Gillette Patents that cover vital technologies make it difficult for new competitors. Low exit barriers are a positive for Gillette. Kimberly-Clark and Colgate-Palmolive and Schick-Wilkinson Sword are constantly seeking ways to take away the market dominance of the consumer product monolith. This means that there are certain companies in another industry that provide for products or services that satisfy the existing demands of the market. [BRAND MANAGEMENT] Gillette SWOT Analysis: Strengths: • • • • • • • Market Leader Strong Brand Image Global Presence Aggressive Advertising Quality Innovation Product Portfolio Range Weakness: • Long Development Cycles • Relatively Static Market Growth • Expensive Brand Maintenance Opportunities: • Demographic Changes • Consumer Brand Preference • Demand for High Quality Threats: • Cloning of Successful Brands • Similar Products available at a Lower Price • Economic Downturns . [BRAND MANAGEMENT] Gillette BCG Matrix: With respect to Gillette: With reference to the above figures. The brand typically generates cash in excess of the amount of cash needed to maintain the business. in a "mature" market. Gillette predominantly in the Blades & Razor market is a cash cow. and every corporation would be thrilled to own as . They are regarded as staid and boring. Germany and France. But the Headline “Think when You Shave” and the subsequent copy are still targeted squarely at the cut throat razor. In 1904 they sold 90. They were feeding a huge pent up demand for men to get away from cut throat razors. Advertising: Gillette has a long history of promotions for its products. something that was possible because of the large profit on the blades. less than a month later and they have new artwork and copy. And King Camp Gillette was a believer in strong marketing. . Canada. then finally the tag line on the logo “No Stropping No Honing” Next we have a new advert from April 2nd 1913.[BRAND MANAGEMENT] Gillette many as possible. Early Advertising: Gillette started production of safety razors in 1903. especially towards young men. since such investment would be wasted in an industry with low growth. They are to be "milked" continuously with as little investment as possible. Great Britain. Quaintly they talk about “self-shaver” because then most of their audience would have had their shaving done for them by their barber. The first advertisement is from March 5 1913 and is aimed squarely at the cut throat razor with the headline “Try the 3 Minute Gillette Shave” and the copy about how easy it is to use.884 and by 1908 they had factories in America. which this time gets named as an “ordinary razor”. when they sold just 51 in the year. Another War Advertisement: . these are brand reinforcement. But in reality they are more than that. keeping the Gillette name in front of the public during the hostilities. In the real paper these adverts are half the size of the ones above and this time they seem to be simple public information messages about the availability of different kinds of blades during wartime austerity.[BRAND MANAGEMENT] Gillette The following are two wartime adverts. Ingraining this gift concept in the collective conscience was good marketing because it reached new customers who would then be forced to buy the expensive patented blades for posterity. especially travel sets.[BRAND MANAGEMENT] Gillette The ad is exhorting. It is telling men to shave themselves and is telling them how much more . This razor as gift concept obviously worked because it is not uncommon to come across totally unused vintage razors. presumably womenfolk. The men presumably put the gift in the draw and continued using their old razor. The next advertisement is another dig at the cut throat razor and the use of barbers. a bit brave of Gillette when giving a blade as a gift is traditionally bad luck. to buy men razors for Christmas. triple silver plated in a Morocco box at the immense price of a guinea. or 21 shillings. Then the right hand side has the product. and for the first time the price. this is not aimed at the mass market. This third advertisement is getting closer to a true product advert. . And what a product. how presentable they will be after just three minutes with a Gillette razor. They use the left hand side to trumpet the superiority of the safety razor with some features and benefits whilst having veiled digs at the competition.[BRAND MANAGEMENT] Gillette convenient it will be. From the Sketch in Christmas 1926. who 10 years later as Edward VIII abdicated as king. Edwards father. Once again they are banging on about the Christmas present angle. One very nice point is that by 1926 they have a royal warrant. just like De Beers banged on about buying diamond engagement rings. You can see that this is a much more sophisticated advertisement. supported a very fine beard and an even finer moustache. There was no royal warrant to the king in 1926 because George V. And it worked for both companies. . Even today you see big Christmas gift packs of system razors appearing at retailers in Q4 each year. By Appointment to His Royal Highness the Prince of Wales.[BRAND MANAGEMENT] Gillette Finally we have a much later advertisement and from a different periodical. That would be the very clean shaven Edward Albert Christian George Andrew Patrick David Windsor. in addition to the World Series and the All-Star game.[BRAND MANAGEMENT] Gillette World Series: Gillette purchased radio broadcast rights to the 1939 World Series for $100. the Sugar Bowl. in which the Cincinnati Reds lost four straight games to the New York Yankees.000. sales of Gillette's World Series Special razor sets were more than four times company estimates. the "Cavalcade of Sports" became best known for bringing boxing to American men. Despite a short series." Although it eventually included the Orange Bowl. and the Kentucky Derby. Spang attributed Gillette's continuing success to the sports . 1942 the events Gillette sponsored were grouped together as the "Gillette Cavalcade of Sports. The diversified field of sporting events continued onto television. CBS. With all of this. The Cavalcade of Sports officially began on radio in 1942 as the Gillette Company grouped various existing sports sponsorships under one banner. and (after NBC decided against featuring boxing due to sensitivity over criminal allegations in the sport) then for several more years on ABC. . according to an article on the Gillette Company in Volume 68 of the International Directory of Company Histories. The Gillette stable of radio sports programs spanned several different networks (including NBC. the Cavalcade of Sports was best known for Friday night boxing on NBC from 1944 through 1960. and sports programs remained an important vehicle for Gillette advertising. however. The sponsorships had begun three years earlier. reportedly including at least two golfing tournaments as well (beginning in 1958) football's Rose Bowl. and Mutual) and grew to include not only ongoing sponsorship of the World Series and All-Star Game in baseball.[BRAND MANAGEMENT] Gillette advertising program. the Gilette World Sports program continues the concept to the present day in many countries from Ireland to Africa to Asia. As late as 1988 the Cavalcade of Sports banner was used in connection with Gillette’s sponsorship of the NHL's Stanley Cup playoffs. Internationally. but the annual Kentucky Derby in horseracing and football’s Cotton Bowl Classic and Orange. Yankee Stadium. playing tips. and Forbes Field . Griffith Stadium. Briggs Stadium of Detroit. Wrigley Field. Ebbets Field. Connie Mack Stadium. Crosley Field of Cincinnati. Milwaukee County Stadium. 1953 New York Yankees world champion centerfold photo. Fenway Park. Cleveland Stadium. Busch Stadium. Polo Grounds.[BRAND MANAGEMENT] Gillette Gillette World Series Book: 1954 Gillette World Series Record Book featuring 112 pages of outstanding major league baseball facts to include current rosters. highlights and records of past World Series games highlight of this book for me is the 15 major league baseball stadium diagrams to include Memorial Stadium of Baltimore. Comiskey Park. [BRAND MANAGEMENT] Gillette Modern Advertising: Advertising Agencies associated with Gillette: • McCann-Erickson • O&M • BBDO . Derek Jeter firstly will be seen with stubble. who have experience of over 45 years including painting fences.[BRAND MANAGEMENT] Gillette Advertisements: Popular Ads: The World’s Biggest Shave: In order to demonstrate the outstanding performance of its grooming regimen Gillette produced a big painted billboard in New York City with Yankees star Derek Jeter. Obviously. His painted face is about 20 feet wide. World’s Smallest Ad: Some people use a pen or pencil to write ads. outlining the process. . used nanotechnology to etch the world's smallest ads on the whiskers of a man's shaven beard. Each ad is less than 100 microns in size. To emphasize the precision of its blades. then with shave prep. Gillette and French ad agency CLM BBDO. with help from scientists at the University of Nottingham who are not currently curing cancer. and finally with his famous shaven face – a three-day cycle that will be repeated through March 6. Guinness has been brought in to verify the world record. Others use an electron microscope. Obviously. Derek’s face on poster was painted by two painters. that makes them impossible to see. so Gillette blew the images up for print and poster ads. The billboard is being repainted daily to reflect the various stages of men’s grooming. There's also the video below. Perhaps after nine years it's time to take Tom Ridge's color-coded attack warnings with a little humor. terror alerts: Ads running in New York City subways spoof post-9/11 terrorism alerts. urging that straphangers be mindful of body odor instead. It would be more believable if Federer weren't obviously trying so hard not to seem like he's acting—a bit of a recurring problem in much of the tennis legend's commercial work.[BRAND MANAGEMENT] Gillette Gillette's subway ads offer B.O. Federer stunt more credible than his acting: Here's a new Gillette video that's been making the rounds. purportedly showing Roger Federer knocking a bottle off a guy's head from a distance with his serve. . which promotes Gillette's Fusion ProGlide razors. a Giant Grassy Roger Federer: Gillette has gone from grooming to landscaping in England. was helped along by the company's Facebook community Creative Ads: Charlie Chaplin Clean Shave: . a huge portrait of Roger Federer in a field. and then shaved.[BRAND MANAGEMENT] Gillette Gillette Paints. where it painted. Then Shaves. The concept of the stunt. [BRAND MANAGEMENT] Gillette Adolf Hitler Clean Shave: Saddam Hussein: . [BRAND MANAGEMENT] Gillette Gillete RAZOR Hoarding: Christmas SANTA Ad: . [BRAND MANAGEMENT] Gillette Take off Everything before You Shave: Gillette i Phone Application: . etc The app was created by BBDO / AIM Proximity. but to go viral and make the most of the app. flickr . Its a pretty good attempt at a branded iPhone app. apply various types of facial hair and then use the Gillette ”fusion” razor (your finger) complete with vibration to shave yourself a masterpiece! Catchy little concept. . they really needed some sort of social media “share” option to post back into the likes of facebook.[BRAND MANAGEMENT] Gillette Gillette have just launched an iPhone app called “uArt“. where you get to load in a photo of yourself. twitter. There were calls to boycott Gillette products given their association with Thierry Henry. Gillette also ships a razor to males in the United States around the time of their 18th birthday. Park Ji-Sung. Marketing experts have highlighted "the curse of Gillette". Rahul Dravid.” said Tim Brosnan. these deals make a powerful statement about baseball’s strength in the marketplace. Gillette & Major League Baseball: The MLB’s partnership with Gillette – which began in 1939 . when it was the only sponsor for World Series television broadcasts) and the England national rugby league team. executive vice-president of business for the MLB.is the longest running sponsorship association of any US sports league. after a handball by Henry went undetected by referees and allowed France to knock Ireland out of a major soccer competition. and Michael Clarke are sponsored by the company. Athletes such as Roger Federer. given the mishaps that happen to sports stars associated with the brand. Shoaib Malik. Thierry Henry. “In addition.” .[BRAND MANAGEMENT] Gillette Gillette’s Association with Sports: Gillette major promotions include sponsorship of sports events such as Major League Baseball (since the 1940s. Tiger Woods. Derek Jeter. Kenan Sofuoglu. “The strong commitment by these companies to join forces with baseball is a testament to the strength of our game and our business as part of the cultural fabric of society and its ability to touch so many people around the world. as of 2010 Gillette has been sending the Fusion Pro Glide. especially given the current economic climate. along with the Rugby League Four Nations. [BRAND MANAGEMENT] Gillette Gillette & Rugby League Four Nations: The Rugby League Four Nations is an annual rugby league football tournament run in partnership between the Australian Rugby League. Massachusetts which serves as the home stadium and administrative offices for both the NFL's New England Patriots football franchise and the MLS' New England Revolution soccer team. the stadium retains the Gillette name because P&G has continued to use the Gillette brand name and because the Gillette Company was founded in the Boston area. Gillette and the Patriots jointly announced in September 2010 that their partnership. Although Gillette has since been acquired by Procter & Gamble. England and New Zealand The tournament is sponsored by Gillette and therefore officially known as the Gillette Four Nations. Rugby Football League and New Zealand Rugby League representing the top three nations in the sport: Australia. Gillette Stadium: Gillette Stadium is a multi-purpose stadium located in Fox borough. which includes naming rights to the stadium. The stadium was originally known as CMGI Field before the naming rights were bought by Gillette after the "dot-com" bust. will extend through the 2031 season . followed by each athlete shaving with a Gillette Fusion Power razor. support of social causes . Gillette claims the two-year deals with the three sportsmen are part of a strategy to bring in a range of sports stars to give the brand resonance with more consumers. Gillette said the new adverts with the trio of sports stars is its ‘largest sports marketing campaign’ in its 108-year history.[BRAND MANAGEMENT] Gillette Gillette Champions Ad: The ad features a montage of great moments from each sportsman’s career. “They were chosen for both their outstanding sporting performances and also their performances off the field. and ending with the tag line “Prepare to be your best today”. in their charitable actions. The company signed the sports trio in 2006 on two-year deals as part of an attempt to sign up a broader range of different sports stars to give the brand wider exposure. Gillette’s Association with Entertainment: Gillette Master of Style Ad: Gillette.[BRAND MANAGEMENT] Gillette and for their reputations as icons of true sporting values. Actor Gael García Bernal and Academy Award Winning Actor Adrien Brody will serve as brand ambassadors to help Gillette celebrate the individuality of men with facial hair. announced a partnership in January 2012 with three entertainment icons to unveil a precision styling tool for men with facial hair – Gillette Fusion Pro Glide Styler Musician and Fashion Designer André 3000 Benjamin. Gillette brand manager. the world’s leading male grooming brand. .” said Nathan Homer. when the company had the vision to see the value in connecting the brand with top-tier sports and athletes. Gillette has been responsible for men getting their jobs. if not the very first. Gillette had been involved with top-tier athletes and sports back in the first few decades of its existence. . Gillette is one of the earliest brands. and Kaka end as part of the conclusion of the marketing program. Gillette’s participation in sports marketing grew from its ventures in North America to involvement in global sporting activities and events. Gillette has been associated with top athletes and sport since the early 1900s. to venture into the area of sports marketing. having the life and. The global Gillette Champions program. getting the girl. For a brand to feature the prefix ‘super’. awareness. it needs to display a few set characteristics: power.[BRAND MANAGEMENT] Gillette Brand Ambassadors: Brand Ambassadors chosen by Gillette represents the champion spirit in them for the associated sport they play. which continued the pioneering element of sports marketing in the brand’s heritage from its early days close to a century back For Gillette. being men. most importantly. Over the years. including soccer players such as Messi. wealth and influence. Thierry Henry. Gillette is also letting its contracts with other athletes. choosing the right sporting ambassador isn’t as easy as it may seem. however. was keeping some of the athletes .for new local marketing campaigns. NHL star Alex Ovechkin and New York Yankees captain Derek Jeter .[BRAND MANAGEMENT] Gillette Gillette. Major brand ambassadors/ex-ambassadors include: Roger Federer: Roger Federer is a Swiss professional tennis player who held the ATP No. 1 position for a record 237 consecutive weeks. and 285 weeks overall.such as Federer. . [BRAND MANAGEMENT] Gillette Highlights/ Controversies: Crazy Roger Federer Trick Shot a Viral Hit for Gillette: A video featuring tennis star Roger Federer that plays on our collective fascination with “real or fake” hit the web and has quickly gone viral, accumulating more than 700,000 views. Tiger Woods: Tiger Woods is an American professional golfer whose achievements to date rank him among the most successful golfers of all time. Formerly the World No. 1, he is the highest-paid professional athlete in the world, having earned an estimated US$90.5 million from winnings and endorsements in 2010. [BRAND MANAGEMENT] Gillette Highlights/ Controversies: Gillette ends endorsement deal with Tiger Woods: Procter & Gamble Co. will not renew its endorsement deal with golfer Tiger Woods at the end of the year, adding another name to the list of companies that cut ties with the golfer after last year's revelations of marital infidelities. Thierry Henry: Thierry Daniel Henry is a French footballer who plays for Arsenal as a striker, on loan from New York Red Bulls. [BRAND MANAGEMENT] Gillette Highlights/ Controversies: Boycott threat to Gillette products over Thierry Henry 'handball' row: A boycott of Gillette products is being organized after the 'face' of the brand, France footballer Thierry Henry, was blamed for knocking Ireland out of the 2010 World Cup. Curse of Gillette: goes and does that handball.. been cut down by .[BRAND MANAGEMENT] Gillette One by one. who was knocked out of the ATP World Tour semi-final by sixth-seeded Russian Nikolay Davydenko. Other prominent brand ambassadors: . pardon the pun. the quartet of global sports stars who have eschewed facial hair to vaunt the merits of a close shave have. the world's best tennis player. one of Gillette's current trio of top-notch ambassadors. First Thierry Henry. but Woods's crash was quickly followed by a shock defeat for Federer. the curse of Gillette. Then Woods. makes headline news after crashing his car following an argument with his wife. the golden boy of golf and all-round sporting god. Not only that.. [BRAND MANAGEMENT] Gillette Rahul Dravid Derek Jeter David Beckham Park Ji Sung Kaka Michael Clarke André 3000 Benjamin Adrien Brody Gael García Bernal . [BRAND MANAGEMENT] Gillette .