Since its inception at the beginning of the twentieth century, Gillette has been a market leader in the wet shaving industry whose products include disposable razors as well as razors with disposable blades (Chernev, 2009). Gillette’s position as market leader has largely been attributable to the company’s leadership in innovation in the industry. Over the years, Gillette has been at the forefront in conducting research and producing new razors with technological and design enhancements. This has enabled the company to stay ahead of competition.
In 2005, Procter & Gamble acquired Gillette in move that was regarded as the largest consumer products deal ever (Chernev, 2009). The result of the acquisition was the creation of the largest company in the household and personal care products’ segment. In the same year that Procter & Gamble purchased Gillette, Gillette had announced the introduction of its new Gillette Fusion brand. With the support of its new parent company, Gillette had the resources and experience to become a billion dollar brand. Procter and Gamble already had 22 other billion dollar brands and it predicted that the Gillette Fusion brand would become a billion dollar brand in several years’ time (Chernev, 2009).
Initial results however showed that Gillette Fusion was not on course to becoming a billion dollar brand. In fact, market data showed that Gillette Fusion was not faring as well as its predecessor, the Gillette Mach3 which was a huge success. This case study seeks to understand the reasons for the lackluster of the Gillette Fusion and considers some of the actions that could be taken to transform Gillette Fusion into a billion dollar brand.
2. Main Problem
Level of Analysis
The level of analysis for this case is Level 3. In particular, the analysis relates to marketing communication which arguably is the reason why the Gillette Fusion brand has not performed comparably to Gillette Mach3. The marketing strategy adopted for Gillette Fusion is slightly different from that adopted for Gillette Mach3. The differences in the marketing strategy are arguably the reason for the difference in performance between the two brands.
As mentioned, one of Gillette’s greatest strengths is in its ability to innovate and to justify the innovation to its consumers. There is no gain in producing innovative products if consumers do not buy into the innovation. Gillette has introduced numerous new and innovative products in the past (Chernev, 2009). The introduction of innovative products has been the source of competitive advantage for Gillette. It therefore makes sense to continue with the strategy of leading in innovation which is what Gillette Fusion is all about.
The main problem is that Gillette Fusion is not promising to be as successful as other innovative brands that have been introduced in the past. There are several possibilities of what the problem could be. To begin with, the product itself could have introduced innovations that are not required by the market or that make the end product too costly (Berner & Symonds, 2006). Another problem could be the manner in which the new product is packaged, branded and marketed. This seems to be the problem with Gillette Fusion and is what is hindering the brand from becoming a million dollar brand.
3. Critical Factors
One of the ways through which Gillette sought speed up the adoption of Gillette Fusion is by setting a carefully selected price. Prior experience with Gillette Mach3 Power had indicated that consumers are sensitive to price. A marginal price reduction by $2 had resulted in a 20% increase in demand (Chernev, 2009). As a result of this past experience, Gillette was keen on using pricing as a means of capturing high consumer numbers. Contrary to what would be expected of a new innovation, the Gillette Fusion was priced at a level lower than its predecessor the Gillette Mach 3. This strategy was intended to win over customers who were already using other brands and to set off Gillette fusion on a high tempo towards becoming a million dollar brand.
The marketing strategy adopted for Gillette Fusion was to highlight the features of the new brand. The list of features contained in the Gillette Fusion was markedly different from the list of features of the Gillette Mach3. Whereas Gillette Fusion had five blades for instance, the Gillette Mach3 had three blades. The features of the Gillette fusion are undoubtedly a step or two ahead of the features of a Gillette Mach3 and others competitors such as the Shick Quattro which had four blades. The intention of this marketing was to show to consumers the superiority of the Gillette Fusion in terms of quality and innovation and hence get consumers to switch to Gillette Fusion
Simultaneous Launch of Gillette Fusion and Gillette grooming products
Noting that Gillette only controlled 30% of the market share of grooming products, the management of Gillette decided to launch a grooming products’ line and aggressively market it alongside Gillette Fusion (Chernev, 2009). The combination of resources for the purposes of marketing the two lines of products would create a phenomenal marketing program that would capture the attention of the market. Additionally, it was hoped that the opportunity for growth in the grooming products’ segment would boost the adoption of Gillette Fusion to create a million dollar brand…”
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