G2 Group4 Data Research Document Ver1.1(2)

8/14/2019 G2 Group4 Data Research Document Ver1.1(2)

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Market Applications And Practices

Gillette is a brand of Procter & Gamble currently used for safety razors, among

other personal hygiene products. Based in Boston, Massachusetts, it is one of

several brands originally owned by The Gillette Company, a leading global supplier

of products under various brands, which was acquired by P&G in 2005. Their slogan

is, "The Best a Man Can Get". 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 purchase of 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 householdproducts company. In addition to Gillette, the company marketed under Braun

Duracell and Oral-B, among others, which have also been maintained by P&G.

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

Beauty and Procter & Gamble Household Care.

Company History:

Key Dates:

1901: American Safety Razor is founded by King C. Gillette.

1904: King Gillette's safety razor is patented.

1918: Gillette Manufacturers razors and blades for soldiers during World War

I.

1942: The Cavalcade of Sports program is formed to oversee the company's

various advertising and promotional activities in athletics.

1967: Braun AG is acquired.

1971: Company is organized into four domestic divisions: the Safety Razor

Division; the Toiletries Division (featuring Right Guard antiperspirant); the

Personal Care Division; and the Paper Mate division.

1991: Gillette ranks 20th among the Fortune 500.

1996: The Company acquires battery manufacturer Duracell.

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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.

Postwar Diversification

During the 1960s Gillette faced a threat to its bread-and-butter product, the

double-edged blade. Wilkinson had developed a polymer coating that made it

possible to put an edge on stainless steel, which resists corrosion, increasing

the number of shaves from a blade.

Two of Gillette's domestic competitors--Ever sharp, which made Schick

blades, and American Safety Razor--rushed versions of the stainless-steel

blade onto the market. Gillette, the market leader, was left behind without a

stainless-steel blade of its own to compete, and profits slumped in 1963 and

1964. Gillette recovered much of its market share through a simple strategy:

developing a better blade and initiating an aggressive advertising campaign

that emphasized quality. After its own blade hit the market, Gillette's market

share stabilized at 60-65 percent, compared to 70-75 percent before the

challenge.

During the later 1960s Gillette pursued this strategy actively, but with mixed

results..

Gillette did have some successes. The Trac II twin-blade shaving system

introduced in 1971 was a success, and the 1970 acquisition of the French S.T.

DuPont gave Gillette the disposable Cricket lighter, which Gillette introduced

to the U.S. market.

Diversification Moderated Starting in the Mid-1970s



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Mockler also increased Gillette's advertising budget and undertook

companywide cost-cutting measures in all other divisions. Before the results

of those policies could be seen, Mockler faced other problems. Growing fear

of fluorocarbons, which deplete the earth's ozone layer, affected sales of

products in aerosol cans during the 1970s.

Gillette faced a more serious threat from BicIn the 1970s Bic attacked

Gillette's Cricket disposable lighter with its own disposable lighter. Since the

Cricket was more expensive to make--it had more moving parts than the Bic--

Gillette was losing the price war. Lighters and pens, however, produced only

15 percent of Gillette's pretax profits; razor blades accounted for 71 percent

of profits Gillette countered by competing with Bic on price while

emphasizing the higher quality of its products.

Takeover Threats in the 1980s

In 1986 Ronald O. Perelman, head of Revlon, offered $4.1 billion for Gillette.

He was attracted by Gillette's well-known personal-care brands

In response to the takeover threats, Gillette reorganized top management;

thinned out its workforce through layoffs; modernized its plants while shifting

some production capacity to lower-cost locations; and sold many smaller andless profitable divisions.

With takeover threats behind it and restructuring completed, Gillette returned

to emphasizing its powerful brand names and its bread and butter, shaving

products.

Principal Operating Units

Blades & Razors; Duracell; Oral Care; Braun; Personal Care.

Early Gillette product

The first safety razor using the new disposable blade, were introduced around

1902.



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Gillette maintained a limited range of models of this new type razor until

1934 and the introduction of the 'Aristocrat'. The great innovation of this new

model was the 'Twist to Open', or TTO design, which made blade changing

much easier than previously, wherein the razor head had to be detached

from the handle.

1947 saw the introduction of the new 'Super Speed' model, also a TTO

design. This was updated in 1954, with different versions being produced to

shave more closely - the degree of closeness being marked by the color of

the handle tip.

In 1958, the first 'adjustable' razor was produced. This allowed for an

adjustment of the blade to increase the closeness of the shave. The model, in

various versions, remained in production until 1986.

The Super Speed razor was again redesigned in 1966 and given a black

plastic handle. It remained in production until 1986. A companion model, 'The

Knack', with a longer plastic handle, was produced from 1966 to 1976.

Older Gillette products

Trac II, the world's first two-blade razor, debuting in 1971. Gillette claimed

that the second blade cut the number of strokes required and reduced facial

irritation. The Trac II Plus is an identical model but adds a lubricating strip at

the top of the blade. The blades and handles are interchangeable.

Atra 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.

The Atra Plusfeatured a lubricating strip, dubbed lubra soft.

Gillette Sensor debuted in 1990, and was the first razor to have spring-loaded

blades. Gillette claimed that the blades receded into the cartridge head,

when they make contact with skin, helping to prevent cuts and allowing for a

closer shave.

The Sensor for Women was released around the same time and is nearly

identical, but has a wider cartridge head.

In 1995, an improved version, the Sensor Excel was released. This featured

"Micro fins," a piece of rubber with slits at the top of the cartridge and Gillette

claimed this helped to raise facial hairs, making for a closer shave. Another



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version, the Sensor 3, has three blades instead of two. All Sensor handles can

use all Sensor cartridge

Current Gillette products

Mach 3 The first three-blade razor introduced in 1998, which Gillette claims

reduces irritation and requires fewer strokes. It claimed five improved micro

fins, improved spring blades, and a pivoting head with greater flexibility than

previous Gillette products. It used a blue lubrication strip that faded as the

razor was used to encourage users to change their blades more frequently.

The Mach3 handle was also redesigned. Venus was designed for women and

is a Mach 3 variant.

Mach 3 Turbo had ten micro fins (as opposed to five on the original), a new

grip and claims improved lubrication and "anti-friction" blades. 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 Turbo

Champion has a slightly different handle design. The Venus Divine is the

Venus version of the Mach3 Turbo.

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

in having what Gillette says is a new blade coating which it describes as

"Power Glide". The lubrication and micro fins are identical to Mach3Turbo.

The Mach 3 Power Nitro has a slightly different handle design. The Venus

Vibrance is the Venus variant of the M3Power. Venus blades are

interchangeable across the line.

The Gillette Fusion is a five-bladed razor released in 2006. There are two

different versions of the Fusion available: the Gillette Fusion, and the Gillette

Fusion Power. All share the characteristic five blades on the front, and a

single sixth blade on the rear that Gillette claims acts as a "precision

trimmer". In addition, the Fusion Power is battery powered and emits "micro

pulses" that are claimed to increase razor glide. In February 2007, the Fusion

Power Phantom (Stealth in UK) was released which featured a redesigned

handle and a darker color scheme than the original Fusion Power. In February

2008, Gillette released another revision, the Fusion Power Phenom, with a

new blue and silver color scheme.

http://en.wikipedia.org/wiki/Venushttp://en.wikipedia.org/wiki/Venus


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The Venus Embrace is the Venus variant for women and is also marketed

towards cyclists.

The desire to release ever more expensive products, each claiming to be

the best ever, has led Gillette to make disputed claims for its products. In

2005 an injunction was brought by rival Wilkinson Sword which was granted

by the Connecticut District Courtwho determined that Gillette's claims were

both "unsubstantiated and inaccurate" and that the product demonstrations

in Gillette's advertising were "greatly exaggerated" and "literally false." While

advertising in the United States now had to be rewritten, the court's ruling

does not apply in other countries.

Procter & Gamble shaving products are currently under investigation by

the Office of Fair Trading in an inquiry into alleged collusion between

manufacturers and retailers in setting prices. An industry insider has revealed

that the Fusion range of blades, which cost 5p ($0.08) each to manufacture,

sell with a mark-up of more than 4,750 per cent.

Brand worth

Some of Gillettes profit and sales may not have been due to the direct worth

of the product, but due to it being presented to the public from a well-known

company.

In 2008 Gillette, as a company, was worth US$57 billion and it was estimated

that the brand value of Gillette was worth US$20 billion. This equated to 37%

of the companys value, which was the same as DaimlerChrysler, one of the

world's largest car manufacturers at the time.

Promotions

Gillette has a long history of promotions for its products, especially towards

young men. Current promotions include sponsorship of sports events such as

the Rugby League Tri-nations and shipping their then-flagship product

(currently the Fusion) to males in the United States around the time of their

18th birthday.

http://en.wikipedia.org/wiki/Wilkinson_Swordhttp://en.wikipedia.org/wiki/Office_of_Fair_Tradinghttp://en.wikipedia.org/wiki/Rugby_League_Tri-nationshttp://en.wikipedia.org/wiki/Wilkinson_Swordhttp://en.wikipedia.org/wiki/Office_of_Fair_Tradinghttp://en.wikipedia.org/wiki/Rugby_League_Tri-nations


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Athletes such as Roger Federer,Tiger Woods, Derek Jeter,Thierry

Henry, Park, Michael, Shoaib Malik and Rahul Dravid are sponsored by the

company.

There were calls to boycott Gillette products given their association

with Thierry Henry, after a handball by Henry went undetected by referees

and allowed France to knock Ireland out of a major football competition.

Marketing experts have highlighted "the curse of Gillette", given the mishaps

that happen to sports stars associated with the brand.

Presently active

North America

Central America

Asia

Western Europe

Eastern Europe

South America

Oceania

Africa

Mass market swipe

The `world premier' of the `product of the century', as Gillette India chooses

to describe its latest introduction, is one of the largest investments made by

the Gillette Company for the India market since the company began

operations here, and it is across all functions from product development,

R&D and product testing, to marketing, distribution and advertising.

Company Perspectives :

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.

http://en.wikipedia.org/wiki/Tiger_Woodshttp://en.wikipedia.org/wiki/Derek_Jeterhttp://en.wikipedia.org/wiki/Thierry_Henryhttp://en.wikipedia.org/wiki/Thierry_Henryhttp://en.wikipedia.org/wiki/Rahul_Dravidhttp://en.wikipedia.org/wiki/Tiger_Woodshttp://en.wikipedia.org/wiki/Derek_Jeterhttp://en.wikipedia.org/wiki/Thierry_Henryhttp://en.wikipedia.org/wiki/Thierry_Henryhttp://en.wikipedia.org/wiki/Rahul_Dravid


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Principal Competitors:

Colgate-Palmolive Company; the Proctor & Gamble Company; Societe BIC;

American Safety Razor Company.

Market share:

Gillette has a market share of above 75% in almost all countries where it has

a presence in, except India and a few other third world countries while in

some places like Latin America it is almost 90%.

SWOT ANALYSIS:

Strengths :

Gillette's brands are category-defining icons.

They possess leading market shares in each of the Company's core

categories.

And historically, these are premium, high-growth categories.

In this age of increasing globalization, Gillette already has a very strong

global presence and a very broad network for distributing and merchandising

our products. Innovation is the lifeblood of consumer products, and no company has a

better historic track record than Gillette in using innovation to improve the

value and strengthen the market position of our products.

Innovation differentiates products marketing drives awareness and closes

the sale. Gillettes strengths in innovation and sales.

Weaknesses :

Gillette's advertising spending lags behind most of its competitorsHas never had the reputation of a first-rate sales and marketing

company

Lack of a clear and coherent vision for the future and lack of a clear

growth strategy resulted in a decline in the effectiveness of operations

and sales



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Failure to effectively utilize Gillette's asset base

Poor relations with retailers (such as no relationship with Wal-Mart

and other globally dominant chains)

Poor management of several of Gillette's strong brand names.

Continuous growth through diversification and expanding product lines

has resulted in a decrease in net sales

2008= sales decreased by 1.58% as a result of weakened foreign

markets combined with foreign exchange rate fluctuations

Low quick ratio of .4 and low current ratio of .8 indicating that the

company might have trouble meeting its financial obligations

Receivable turnover, inventory turnover, and asset turnover lag

behind competitors signifying that Gillette is inefficient in its

operations

Sources

http://www.thehindubusinessline.com/catalyst/2003/11/06/stories/200311060

0040100.htm

http://www.fundinguniverse.com/company-histories/The-Gillette-Company-

Company- History.html Wikipedia

http://www.gillette.com

http://deadpresident.blogspot.com/2005/04/gillette-india-vs-usa.html

http://www.essaytrader.net/Essays-View-37777

http://case14.blogspot.com/2006/12/w-is-for-weaknesses.html

http://www.thehindubusinessline.com/catalyst/2003/11/06/stories/2003110600040100.htmhttp://www.thehindubusinessline.com/catalyst/2003/11/06/stories/2003110600040100.htmhttp://www.fundinguniverse.com/company-histories/The-Gillette-Company-Company-%20%20%20%20%20%20%20%20History.htmlhttp://www.fundinguniverse.com/company-histories/The-Gillette-Company-Company-%20%20%20%20%20%20%20%20History.htmlhttp://www.gillette.com/http://deadpresident.blogspot.com/2005/04/gillette-india-vs-usa.htmlhttp://deadpresident.blogspot.com/2005/04/gillette-india-vs-usa.htmlhttp://www.essaytrader.net/Essays-View-37777http://case14.blogspot.com/2006/12/w-is-for-weaknesses.htmlhttp://case14.blogspot.com/2006/12/w-is-for-weaknesses.htmlhttp://www.thehindubusinessline.com/catalyst/2003/11/06/stories/2003110600040100.htmhttp://www.thehindubusinessline.com/catalyst/2003/11/06/stories/2003110600040100.htmhttp://www.fundinguniverse.com/company-histories/The-Gillette-Company-Company-%20%20%20%20%20%20%20%20History.htmlhttp://www.fundinguniverse.com/company-histories/The-Gillette-Company-Company-%20%20%20%20%20%20%20%20History.htmlhttp://www.gillette.com/http://deadpresident.blogspot.com/2005/04/gillette-india-vs-usa.htmlhttp://www.essaytrader.net/Essays-View-37777http://case14.blogspot.com/2006/12/w-is-for-weaknesses.html

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G2 Group4 Data Research Document Ver1.1(2)