The Razor Wars Continue
Case Overview: Founded in 1901 by King C. Gillette, the Gillette Company has been extremely successful since it’s inception into the shaving market. Gillette did such a good job from the start in the shaving market, that the company went sixty-years before having any meaningful competition for it’s customers. In 1962 Gillette was enjoying a seventy percent share of the market and everything was looking rosy for the top shaving product company in the world, until the Wilkinson Sword – Schick Company (Schick) introduced a stainless-steel blade to the market, becoming the Pepsi to Gillette’s Coke. Due to competition with a new product design, Gillette’s market share dropped below fifty percent of the market in just three years, it’s lowest point in the company’s sixty-four year history. Luckily for Gillette, Schick was not in position to take advantage of the market share that they had quickly carved out and they eventually had to sell a large portion of their blade business to Gillette. While Gillette could consider themselves lucky, lessons were learned within the company that would be applied in the future.
Over the next thirty years, Gillette continued to grow their company by expanding into new product lines, including pens, batteries, and deodorants. However the lessons that Gillette learned from the Schick stainless-steel blade competition came to fruition in 1990 with the introduction of Gillette’s Sensor razor, which quickly gained global market domination. Over the next few years Gillette continued to tweak their Sensor razor product with great success. The success of this razor allowed Gillette to invest in the type of research and development that was necessary to release Gillette’s next generation razor in 1998 – the Mach3 razor. The Mach3 became Gillette’s most successful product ever, hitting sales of one billion dollars in eighteen months and winning the Grand Edison Award for the best new product of 1998. The downside of the Mach3 was that it created the start of razor wars with Schick. In 2003 Schick introduced the Quattro, adding an additional blade to Gillette’s Mach3. In retaliation, Gillette released the Fusion razor with five blades. The razor wars have created criticism as many analysts see the increase in blades as unnecessary, and some public backlash has occurred for Gillette in a product market that has become flooded with wet razor options. In 2005 Gillette was purchased by Proctor and Gamble and ended the Gillette company, however the Gillette name brand lives on. Update Overview: The past couple of years have continued to see growth in sales for the Gillette brand razors, as Gillette has increased market sales internationally and introduced new products to market. One market in particular that Gillette has made large gains in is India, a nation of over five hundred million men. Gillette launched a marketing campaign and primary data collection by “commissioning a Nielsen survey on the country’s attitude toward shaving”.[i] The name of the marketing campaign was “India votes…to shave or not” in which they spurred much national interest and discussion on Indian men and women’s thoughts on shaving. The outcome of the survey was that Indian women prefer a clean shaven man.[ii] As the men in India found this out, awareness and interest in shaving grew. To help grab market share Gillette also introduced in India a cheaper version of their Mach3 razor at nearly one-third of the cost. These combined actions created a thirty-eight percent increase in Gillette sales in the razor market in India and increased product trials by an amazing four hundred percent.[iii]
However, not everything has gone perfect for Gillette. Gillette aggressively pursued the sports market by signing three active sports legends - Tiger Woods, Thierry Henry, and Roger Federer - to an advertising campaign that reportedly cost upwards of forty million dollars...