Gillette Safety Razor Division: Case Write Up
Ralph Bingham, VP new business development of Gillette Safety Razor Division (SRD) needs to decide whether to enter the rapidly growing blank recording cassette market. He is assessing whether Gillette can use its strengths in high volume manufacturing and marketing of mass distributed packaged goods to assume a leadership position in this new market. I recommend Gillette avoids entering this market Analysis
The SRD commissioned consultancy report on the recording cassette market did not focus on how consumers use cassette recorders and it does not allow for comprehensive understanding of different customers. In the report, potential customers are segmented into 3 categories by type of usage: 1) Students who use cassette recording for taking notes and recording lectures. 2) Business people who use them for dictating and recording conferences and 3) households who use them for recording and playing music. This segmentation is not focused on the different benefits customers can derive from the product and is too broad; the same customer can belong to more than one segment and will potentially be presented with conflicting value propositions. For example: the “household” category includes teens who are students as well as business people who are parents, this category does not identify the different users within the home, nor does it recognize the individual making the purchasing decision within the category. Teens and parents are both “bucketed “in this category although they potentially use the product for different reasons and should be approached with different value propositions. A teenager who buys the product using her allowance and is interested in recording popular music off the radio will be less focused on quality and more on price than her parents who are avid classical music fans. Currently the blank cassette market is characterized by a lack of market leader, poor packaging of the product,...
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