The case study describes the product development strategies of the world's number one shaving products company, Gillette, over the decades. A detailed history of the company is given that primarily focuses on its various acquisitions. The case explores the rationale behind Gillette consciously diversifying its product mix and then fine-tuning the same. The strategies put in place by the company for developing and marketing two of its globally successful brands, Sensor and Mach3 are discussed in detail.
In
early 2003, Boston (US) based Gillette was the world's
leading producer of razors, electric shavers, shaving
cream, wet shaving products and hair removal devices for
both men and women. In addition to its traditional
shaving related products, Gillette's product line also
included toothbrushes, toiletries, cosmetics and other
household appliances. With the purchase of Duracell
batteries in 1996, Gillette was also a leading player in
the alkaline battery market.
Over
the years, Gillette had established a formidable
reputation for combining sophisticated technology and
savvy advertising to launch premium products. The
company aimed at deriving 40% of its sales from entirely
new products and not just product line extensions. Such
emphasis on continuous investment in R&D had
resulted in successful products as Mac3, Sensor, Sensor
Excel, Oral-B Cross Action Toothbrush and Gillette for
Women Venus. Of the company's entire product line, Mach3
and Sensor were considered to be its greatest product
launches.
For
fiscal 2002, Gillette's sales were $8.45 bn, up 0.5%
from the earlier year. Net income for this period was
$1.21 bn, a 33% rise. Gillette employed 31,300 persons,
of which about 72% were located outside the US. |
