The document provides information about Tata Motors, a major Indian automotive manufacturing company. It discusses the company's product portfolio including passenger cars, trucks, buses and military vehicles. Tata Motors has manufacturing plants in India as well as other countries like the UK, South Africa and Thailand. The summary also includes details about Tata Motors' management and board of directors.

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Contents
ABOUT US
OUR TEAM
INDUSTRY ANALYSIS
COMPANY ANALYSIS
BRAND ANALYSIS
CONCEPT OF THE MONTH:
EXPERIENCE CURVE

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OUR PRESENCE
ABOUT US
VISION
The SIMCON - SIMSREE consulting club is an
initiative started in 2012 for those students in
pursuit of excellence in management consulting
and strategic management. Aimed at creating
awareness among the students about consultancy
as a discipline, the club strives to maintain strong
relations with top consultancy firms and provide
platform to craft highly skilled & competent
consultants from SIMSREE. The club is a resource
for information about consulting and a place for
students to obtain real-world consulting experience.
SIMCON provides an avenue of interaction among
faculty, students and alumni through competitions,
live projects, guest lectures, and conclaves. For
this purpose the club has also been publishing its
monthlynewsletter– BEACON (BE A CONSULTANT)
and maintains a FACEBOOK PAGE where latest
news and development in the consulting industry
are posted.
MISSION
To create awareness amongst the students
about consulting industry & its latest trends.
To maintain strong relations with top
consultancy firms.
To provide platform to craft highly skilled &
competent consultants from SIMSREE.
To provide exposure to students via
competitions, live projects, guest lectures &
conclaves.
Contributions invited:
To make this feature a successful effort, we seek continued involvement and contribution from our readers, that is YOU. We
invite articles, research papers, and trivia on themes related to consulting. Be it industry news, consulting trends, a joke, a
cartoon or feedback, we are eager to hear from you. So go ahead, do your research, pen down your thoughts and mail your
entries to simcon.simsree@gmail.com.
Best Regards,
SIMCON - SIMSREE CONSULTING CLUB

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OUR TEAM
SANANDANDESHPANDE
NIKHILRAO
AMEYAMAHABAL
CHITRAWANI
deepesh jethwani
krishna nain
prathamesh indani
Sushil Gurav

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AUTOMOBILE INDUSTRY
INDUSTRY ANALYSIS

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Motorcycles sales have been stagnant in the past few
years & grew by 2.65% as compared to FY13. Scooter
segment has been seeing good growth in the past few
years & this segment grew by a 20.75% in FY14. The
high growth rate in the scooter segment has resulted in
companies increasing their attention in their scooter
lineup. Out of the total two wheeler sales in FY14, 25%
constituted of scooters.
Passenger Vehicles
Thepassengervehiclessegmentcomprisesofpassenger
cars, utility vehicles & multipurpose vehicles. The total
passenger vehicle sales increased by 3.90% in FY15 to
2,601,111 units, up from 2,503,509 in FY14. Domestic
passenger car sales in FY15 increased to 1,876,017
units from 1,786,826 units in FY14, an increase of
4.99%. The passenger cars segment showed a positive
growth for the first time in the last three years, where
high fuel costs, economic slowdown & high interest
costs had dented sales. The sales of utility vehicles
grew by 5.3% to 553,699 units while the sales of vans
declined by 10.195 to 171,395 units.
Others
Royal Enfield
Mahindra Two Wheelers
Suzuki Motorcycles India
Yamaha India
TVS Motor Company
Bajaj Auto
HMSI
Hero MotoCorp
Market Share
41.75%
11.75%
0.25%
1.30%
3.23%
2.47%
23.43%
14.47%
1.35%
A total of 23,366,246 vehicles including, two wheelers,
three wheelers, passenger vehicles & commercial
vehicles, were produced in April 14-March 15 as
against 21,500,165 vehicles that were produced in
April 13-March 14, registering a growth of 8.68% in
FY15.
Two Wheeler Segment
The two wheeler segment accounts for the largest
share in terms of volume sales in the automobile
segment. This segment is further divided into two
main segments – scooters & motorcycles. The market
share of various companies in this segment in FY14
was as follows –
0
200000
400000
600000
800000
1000000
1200000
FordTata MotorsToyotaHondaMahindra &
Mahindra
Hyundai
Motors
Maruti
Suzuki
Sales Figures For FY15 & FY14
FY14FY15
Commercial Vehicle Segment
The commercial vehicle segment comprises of two sub
segments –
• Light Commercial Vehicles
• Medium & Heavy Commercial Vehicles
The total sales in the commercial vehicle segment,
which is a key indicator of economic activity, declined
by 2.83% in FY15. In FY15, the total sales in this
segment were 614,961 units, compared to 632,851
Introduction
The automobile sector in India has emerged as Indian
economy’s ‘sunrise sector’. India is one of the fastest
growing passenger car markets & the second largest
market for two wheelers. India is set to be the 4th
largest automotive market by volume by the end of
2015 & by 2020, 6 million vehicles are expected to be
sold annually. It is expected that this upward trend
will be sustained in the coming future in the backdrop
of increased thrust on exports and a strong domestic
market. The automobile industry accounts for almost
7% of India’s GDP & employs around 19 million
people directly as well as indirectly.
Industry Composition & Performance
The automobile industry comprises of the following
four segments –

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units in FY14. The gradual improvement in the
infrastructure sector is expected to drive the growth of
Medium & Heavy Commercial Vehicles segment this
year as well. [Source]
Domestic sales for various companies in the medium
and heavy commercial vehicles (M&HCV) segment
during the period April 14 – February 15 & April 13
- March14 were as follows –
Company Market Share
(%)
Domestic Shares
(units)
FY14 FY15 FY14 FY15
Tata Motors 55.17 54.98 97,769 1,12,133
Ashok Leyland 25.08 28.07 45,273 57,260
VECV Eicher 12.27 10.81 21,745 22,063
SML Isuzu 2.66 2.45 4,715 5,005
M&M 1.54 1.84 2,730 3,771
AMW Motors 2.35 1.38 4,181 2,815
VECV Volvo 0.43 0.47 772 879
Three Wheeler Segment
The Three wheeler segment can be further divided into
thepassengersegment&cargosegment.Threewheeler
sales rose to 531,927 units in FY15, up from 480,085 in
FY14, registering a growth of by 10.80%. This segment
had seen a decline of 10.9% in FY14. While Piaggio
is the market leader in the cargo segment, Bajaj leads
in the passenger segment. Overall market share of
Bajaj is 39% while that of Piaggio is 33.1%, as of FY14.
Other major players in this segment are Mahindra &
Mahindra and Atul Motors.
The cargo segment has been negatively impacted in
recent times due to the onslaught from four wheeler
small trucks (operating in the Small Commercial
Vehicle segment) like Tata Motors’s Ace & Ashok
Leyland’s Dost.
Porter’s 5 Forces
1. Threat of New Entrant – Low
• The automobile sector is a highly competitive
market & it is difficult for a new entrant to make
an impact
• Moreover, this is a very capital extensive industry
& companies have to wait for many years before
they start making profits. This can deter companies
from opening business in India.
2. Threat of Substitutes – Low to Medium
• The major substitutes to automobiles are public
transport systems like metros, tube trains etc.
• However, India is a highly under penetrated
market & automakers still have huge opportunity
here. India has just 18 cars per 1000 people, which
is amongst the lowest in the world.
• Thus, good public transport system might not have
a significant impact on the sales of automobiles.
3. Bargaining Power of Buyers - High
• The automobile sector has fierce competition
among the companies and most of the companies
have atleast one product in each of the sub
categories in their respective segments.
• The customers are spoilt for choices & since the
customer has multiple options with each one
as good as the other in terms of performance &
features, price plays an important role in the
buying decision.
• Hence there is a lot of pressure on the companies
to price their product competitively.
4. Bargaining Power of Suppliers – Low
• Most of the suppliers manufacture components
specifically for a client & are dependent on them.
• Hence the bargaining power of suppliers is low.
5. Competigive Rivalry – High
• The Indian automobile market is fiercely
competitive with a high number of companies
eying to increase their market share.
• Many a times there is little to differentiate between
the quality of the products of different companies
and thus making it imperative for them to come up
with innovative strategies to garner the attention
of customer & stand out.
Growth Drivers for the Automobile Industry
Growing demand
• The increasing population coupled with rising
income among the working population augers
well for this industry.
• Greater availability of credit & financing options
will help in increasing the demand.
Policy support
• The Government has tried to promote India as the
auto manufacturing hub through its policy sops &
relaxation of FDI norms.
• This has further received thrust due to the Make in
India initiative.
Focus on R&D
• GoI has started National Automotive Testing and
R&D Infrastructure Project (NATRiP) to create
global competencies in the automotive sector in

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India which will help position India prominently
on the global automotive map.
• Underthisproject,sevenR&Dcentresofexcellence
will provide low cost manufacturing & product
development solutions.
• The government has also taken initiative to boost
R&D in the auto component sector through
various initiatives.
Low Penetration Levels
• In India, the car penetration level is only 18 per
1000 people.
• This provides a huge opportunity of automakers
due to the vast untapped market.
Recent Trends & Developments
Fuel Efficiency Guidelines to Change April 17
Onwards
• Under the new guidelines that will be applicable
from April 2017, cars & utility vehicles will have to
deliver a mileage of atleast 18.2 KM/Lt, which is an
increase of 15% from the current average mileage.
• This means that automakers can still sell cars with
fuel efficiency of less than 18.2 Km/Lt but they
will have to ensure that they sell other vehicles
which have fuel efficiency of more than 18.2 Km/
Lt so that the average (i.e. the mean) of the fuel
efficiencies of all the models is 18.2 Km/Lt.
Rise in the Sales of Petrol Cars
• The demand of diesel car, which was at an upward
swing for the past few years due to the rising
difference in the prices of petrol & diesel, is
tapering off.
• Reduction in the prices of petrol & diesel was
expected after the government decided to fully
deregulate the fuel prices to match it market linked.
• Petrol cars constituted almost 63% of the total cars
sold in FY15, the highest in the last 4 years, and
it further increased to 67% for sales in the April
2015.
• Moreover, the National Green Tribunal recently
ordered a ban on all Diesel vehicles older than 10
years from plying in the Delhi region in order to
curb pollution.
• This has lead to weakened sentiment among diesel
cars because people are vary to buy diesel cars as
they will have lesser resale value which has resulted
in a drop in sales.
Launch of Bajaj Quadricycle Hits a Roadblock
• MorethanthreeyearsafterBajajAutofirstdisplayed
the prototype of its low speed & lightweight four
wheeler for intra city transport, Public interest
litigations (PIL) has stalled the launch in India.
• In December 2013, the ministry of road transport
& highways had created a new category of vehicles
called ‘quadricycles’ which was followed by a
notification by the law ministry that allowed the
use of quadricycle on Indian roads, thus paving
way to for the ambitious project of Bajaj Auto.
India as an Export Hub
• A lot of companies in the automobile sector have
made India as their manufacturing & export hub
and since 2000, the number of cars, utility vehicles,
two wheelers & commercial vehicles has grown
every year.
• In FY15, Indian automobile companies exported a
record 3.5 Million vehicles, which was 15% more
than the number of vehicles exported in FY14.
Impact of Union Budget
• Support of Rs 75 Crore was announced for electric
vehicles, under the FAME (Faster Adoption and
Manufacturing of Electric Vehicles) scheme for
FY16.
• Fully built imports of commercial vehicles will
now attract an increased custom duty of 20%.
• For small cars, two wheelers, commercial vehicles
& three wheelers, excise duty went up to 12.5%
from the earlier 12% whereas education cess was
removed.
Effects of Poor Monsoon Forecast
• The forecast of poor monsoon could spell trouble
for the automobile industry, which is slowly
limping back to life
• Poor monsoons will impact the sales of entry level
hatchbacks, economy motorcycles, SUVs, tractors
& light commercial vehicles in particular
References
Passenger Cars Sales Up 4.99% - Business Standard, Maruti
Boosts Passenger Vehicle Market Share – Business Standard,
Piaggio Eyes 40 Pie – Business Standard, The Hindu, Livemint,
Roland Berger

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TATA MOTORS
COMPANY ANALYSIS

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Company Overview
Tata Motors Limited is an Indian multinational
automotive manufacturing company. Formerly
known as TELCO (Tata Engineering and Locomotive
Company), it is headquartered in Mumbai and is
a subsidiary of the Tata Group - one of the biggest
business houses in India.
Its product portfolio covers passenger cars, trucks,
vans,coaches,buses,militaryvehiclesandconstruction
equipment. In terms of volume, it is the world’s 17th
largest motor vehicle manufacturing company, 4th
largest truck manufacturer and 2nd largest bus
manufacturer.
Tata Motors has auto manufacturing and assembly
plants in Jamshedpur, Pantnagar, Lucknow, Sanand,
Dharwad and Pune in India; and also in Argentina,
South Africa, Thailand, and the United Kingdom. It
has R&D centers in multiple locations across India
along with those in South Korea, Spain and the United
Kingdom.
Tata Motors is listed on the Bombay Stock Exchange
(BSE), where it is a constituent of the BSE SENSEX
index, the National Stock Exchange of India (NSE) and
the New York Stock Exchange (NYSE). Tata Motors is
ranked 287th in the 2014 Fortune Global 500 ranking
of the world’s biggest corporations.
Management
Name Designation
Mr. Cyrus P.
Mistry
Non-Executive Director and
Chairman
Mr. Nusli N.
Wadia
Non-Executive, Independent
Director
Dr. Raghunath
A. Mashelkar
Non-Executive, Independent
Director
Mr. Nasser
Munjee
Non-Executive, Independent
Director
Mr. Subodh
Bhargava
Non-Executive, Independent
Director
Mr. Vinesh K.
Jairath
Non-Executive, Independent
Director
Dr. Ralf Speth Non-Executive Director
Ms. Falguni S.
Nayar
Non-Executive, Independent
Director
Mr. Ravindra
Pisharody
Executive Director (Commercial
Vehicles)
Mr. Satish B.
Borwankar
Executive Director (Quality)
201420102009200820072006200520041998199119841954
Entered the commercial vehicle sector after
forming a joint venture with Daimler-Benz of
Germany. (This joint venture ended in 1969)
Entered into a technical collaboration
with Hitachi Construction Machinery for
manufacturing hydraulic excavator
Entered the passenger vehicle market by
launching Tata Sierra (Multi Utility Vehicle –
MUV).
Launched Tata Sumo, Tata Safari and Indica
which went on to become one of the best-selling
cars ever in the Indian automobile industry.
Acquired Daewoo’s. Rang the opening bell at the
New York Stock Exchange to mark the listing of
Tata Motors.
Added buses such as Starbus &
Globus and trucks such as Novus to its
portfolio.
Formed a joint venture with the Brazil-based
Marcopolo, Tata Marcopolo Bus, to manufacture
fully built buses and coaches.
Joint venture for providing distribution,
sales and after-sales to Fiat (ended in 2012)
Acquired British car maker Jaguar Land Rover
from Ford Motor Company. Launched Tata
Nano – branded as the world’s cheapest car.
Unveiled the Tata World Truck range jointly
developed with Tata Daewoo. Acquired full
ownership of Hispano Carrocera.
Acquired an 80% stake in the Italian design
and engineering company Trilix to enhance
company’s styling and design capabilities.
Introduced ‘T1 Prima Truck Racing
Championship’ – India’s first Truck Racing
championship.
Mr. C
Ramakrishnan
President and Chief Financial
Officer
Dr. Timothy
Leverton
President and Head, Advanced
and Product Engineering
Mr. Mayank
Pareek
President (Passenger Vehicle
Business Unit)
Mr. Gajendra
Chandel
Chief Human Resources Officer
Evolution Of Tata Motors Over The Years

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New Product Offerings
1. Tata Motors has launched its new models Manza,
Zest, Bolt & GenX Nano in the Passenger Vehicles
segment over the last one year. This is in addition
to what Jaguar (acquired by Tata Motors) has
added in its luxury-segment portfolio.
2. It has launched Super Ace Mint in the Light
Commercial Vehicle segment in the same time
period.
It has also launched its ‘ULTRA’ range of trucks
to cater to the Intermediate and Light Commercial
Vehicle (ILCV) segment.
3. The New Safari Storme & Tata Movus are its new
models launched over the last 12 months in the
SUV segment.
Land Rover (acquired by Tata Motors) has also
launched its latest model ‘Discovery Sport’ in the
SUV segment
Shareholding Pattern
SWOT Analysis
Shares held by Custodians and against which
Depository Receipts have been issued
Insurance Companies
Others
State/Central Govt(s)
Financial Institutions
Mutual Funds / UTI
General Public
Foreign Institutional Investors
Promoter & Promoter Group
34.33%
1.34%
0.07%
0.17%
8.54%
21.25%
24.76%
7.31%
2.22%
Competitor Analysis
Name Market
Cap.
Sales
Turnover
Net
Profit
Total
Assets
Tata
Motors
147,371.89 34,288.11 334.52 33,459.27
Eicher
Motors
53,060.64 3,031.22 558.92 1,225.06
Mahindra
&
Mahindra
81,269.94 40,508.50 2,783.00 19,960.75
Ashok
Leyland
19,935.37 13,562.18 81.69 7,382.32
F o r c e
Motors
2,019.92 2,791.31 77.69 1,244.52
SML Isuzu 1,632.40 881.27 17.40 274.92
(All values are in Rs Crore)
Key Financials
in Rs Crore in Rs Crore
Particulars FY14 FY13 Growth
Sales Turnover 232,833.66 188,817.63 19%
Operating Profit 34,837.70 24,547.30 26%
Profit Before Tax 18,868.97 13,633.48 28%
Reported Net
Profit
14,104.18 9,862.49 30%
0
10
20
30
40
50
ROCERONW
FY14FY13FY12FY11FY10
31.30
48.37
40.77
26.28
21.32
Profitability (%)
9.37
25.41
24.14
21.86
20.39
The consolidated Return on Net Worth and Capital
Employed have been decreasing gradually over the
last four years; and Tata Motors would definitely be
keen on arresting this trend.
• Market Leader in Commer-
cial Vehicles segment and
among the top in Passenger
Vehicles segment
• Increasing profitability from
international sales since Jaguar
& Landrover acquisition
• Increased expenditure on
R&D (Revotron 1.2T engine a
case in point)
• Limited coverage of the
ruralmarket
• Slow reaction to market
sentiment (reference segment:
SUV)
• Perception problem among
new car buyers as it is famous
in taxi and car rental space
• Fewer upgrades available of
existing models
• Rising per-capita income of
the middle class which will
boost the demand
• Customizing product offer-
ings for the rural markets
• Mergers and Acquisitions to
acquire new technology
• Demand for Electric cars will
increase as people adopt
eco-friendly techniques.
• Increasing cost of fuel
• Intense competition in the
automobile sector
• Frugal engineering and dis-
ruptive innovation in product
design by competitors
• Increase in raw material
costs
• Increase in interest rates
leading to deferred purchases
Strengths Weaknesses
Opportunities Threats

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The Profit Margin (%) graph shows that consolidated
Operating Profit Margin has remained fairly constant
over the last four years. However, the stand-alone
Operating Profit Margin has been decreasing
consistently over the last four years – from 11.4%
in FY’10 to -2.65% FY’14. Similarly, the Net Profit
Margin has decreased from 6.26% to 0.97% from
FY’10 to FY’14.
Barring FY’11, the consolidated Earnings per Share
have not varied a lot and Tata Motors would like to
increase the EPS, if possible, to enhance shareholder
interest.
New Developments
1. Tata Motors has outlined three priorities for the
business: put winning and cost-effective products
to the market fast, institutionalize a culture of
collaborative and disciplined product development
and improve quality and customer experience.
2. Tata Motors has been working on a voluntary
retirement scheme (VRS) for workmen across its
plants and managerial staff aged above 40 as part of
a drive to improve competitiveness and cut costs.
3. TataMotorsappointedformerMarutiSuzukiChief
Operating Officer (Marketing & Sales) Mayank
Pareek as President of its Passenger Vehicle
Business Unit (PVBU) last year. He has brought
about a strategic shift. After focusing on selling
to fleets and taxis, Tata Motors is now targeting
a new set of customers — the young consumers
and professionals. Hence dealers have started
recruiting a new sales force; training them on soft
skills to attract the new target customer base.
4. Tata Motors recently announced its association
with tyre manufacturer CEAT Ltd. and mobile
commerce platform Paytm who would be new
partners in Tata Motors Loyalty Programs - Tata
Delight and Tata Emperor. These programs are
designed to offer loyalty benefits for their members
from across multiple product segments.
Conclusion
Tata Motors is one of the undisputed market leaders
in the commercial vehicles industry in India and
is gradually emerging as one of the key players
internationally. It has been surging ahead on a number
of fronts in an attempt to further entrench its position
as a market leader. However, sustaining and increasing
this success is far from easy. Apart from product
reliability, the most important determinant of future
success would be the company’s ability to enhance its
support framework. The future presents challenges
and opportunities for the company in equal measure,
both domestic as well as overseas. Given its renewed
focus, Tata Motors looks well positioned to capitalize
on these opportunities and take on the world.
References
Tata Motors, Press Releases – Tata Motors, TAMO Key
Developments - Thomson Reuters, Tata Jaguar – Thomson
Reuters, MoneyControl
0
3
6
9
12
15
Net Profit Margin Operating Profit Margin
FY14FY13FY12FY11FY10
7.38
13.77
13.46
13.00
14.96
Profit Margin (%)
2.76
7.56
8.12
5.21
5.98
0.0
0.2
0.4
0.6
0.8
1.0
Current Ratio
FY14FY13FY12FY11FY10
0.59
0.70
0.83 0.81
0.94
The consolidated current ratio has been consistently
below 1 which indicates that company could face
difficulties in future meeting its short term financial
obligations. However, its overall increasing trend is an
encouraging sign.
0
30
60
90
120
150
EPS
FY14FY13FY12FY11FY10
44.11
145.3
42.77
30.92
43.82

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GILLETTE
BRAND ANALYSIS

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GILLETTE RAZOR
Gillette introduces
Gillette Blue Blade.
One of the first few
commercials to
showcase their blue
blades
Gillette
introduces
Gillette
Thin Blade
Gillette introduces its first blade dispenser –
Blue Blade Dispenser. This eliminated the
need to unwarp the blades
1938
1932
Gillette introduces an adjustable
razor with three settings – for
light, medium and heavy beards.
It came up with a commercial to
show their unique product and its
functioning. Click here to watch.
1946
1957
1971
Gillette introduces Trac II, the first
twin-blade shaving system. Click
here to watch.
1990
Gillette as a brand is known for men’s safety razors. Its name bears the name of its previous parent company –
The Gillette Company. It was later merged with P&G and hence now falls under the umbrella of P&G Company.
In 1901, King C. Gillette changed the way shaving was done by inventing the first safety razor. It was granted
patent on November 15th, 1904. With the new shaving razor, a man didn’t need to send his shaving blade to
the barber for sharpening. King C. Gillette founded a company on a time-honoured credo- ‘There is a better
way to shave and we will find it’.
Gillette introduces MACH3 shaving system, first
triple blade shaving system with a tag line – “breaks
the performance barrier”. Click here to watch.

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Brand Portfolio
Gillette brand holds a diverse range of products
including shaving razors, shaving creams, foams,
deodorants.
Gillette Kiss and Tell Campaign
This campaign focused on the line- Is the stubble
killing the kiss? This campaign was run worldwide
and one of the findings of the campaign was that 2 out
of 3 women like clean shaven men.
Gillette’s kiss and tell campaign uses the established
theory of – people buy based on emotions and justify
that with logic. Now Gillette’s most important market
segment was the young generation who thought it
is cool to be unshaven. So it wanted to establish an
emotional connection with the youth which conveys
the message that they really care about. So after a lot of
research it was found that the reason has to be women.
So Gillette presented some facts which could catch any
teenagers’ eye and let him ponder over his decision of
being unshaven-
• 85% of the women prefer to kiss a clean-shaven
man
• 2 out of 3 women said men will have a better luck
with them if they were clean-shaven
• 76% of the women would give a more passionate
kiss to a clean-shaven man
Gillette Marketing Campaigns
Since early days Gillette has given a lot of importance
to sports marketing to convey its message of being
a performance brand. So be it the partnership with
baseball greats like Pittsburgh Pirates’ infielder, Honus
Wagner or footballs greats like Messi. But it was its
association with boxing which gave it most payback
on its advertising dollar. Slowly it started to collaborate
with the top players of all sports to advertise for its
brand. From Roger Federer of lawn tennis to Rahul
Dravid of Indian cricket team to Tiger Woods of Golf,
all became the face of their products.
How does Superman Shave?
Just after Warner Bros realised their film – Man of Steel
to reboot their Superman franchise, Gillette rolled out
a big promotional campaign of ‘How does Superman
shave?’ The campaign was cleverly designed on the
storyline of the movie.

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In the movie we see a full bearded Clark Kent
wandering the earth in search of his destiny. Along
the way he must find not only his journey but also his
razor as we all know that he comes back as this clean
shaven Superman. This brings back us to the question
of How does Superman shave?
So here are some videos where different people explain
their theories of how Superman shaves his facial hair.
Bill Nye, Kevin Smith’s Theory, Jamie and Adam’s Theory
Shave India Movement
Although Gillette was successful in capturing the
market for its double-edged razors, its new flagship
product – Gillette Mach 3; a three-blade razor; was a
big flop in the market. There were several reasons for
the 400 million market to be reluctant to try the new
razor –
a. 80%oftheIndianmenhadthehabitofshavingwith
the double-edged razor and were so habituated
with the cuts that they thought its normal to be
cut or burn
b. Men in India actually like the stubble look inspired
from Bollywood
c. Pricing of Mach 3 was 50 times more than the
double-edged razor
d. Gillette products were sold through licenced
retailers and hence distribution was also limited
and a major concern
To address these problems Gillette needed to come up
with some new marketing techniques as traditional
marketing was suddenly inadequate. A unique
marketing campaign- Shave India Movement was
designed to catch the attention of rich and poor alike.
The campaign caught eye because of its infomercials,
social media and stunts such like world record for
shaving.
The tagline for the campaign was – ‘No more excuses
for men not to shave’. Gillette also conducted a
survey with Indian women as to what kind of men
they preferred to kiss- clean shaven or stubble. 77%
of the women responded that they prefer men with
clean shaven looks. This was further communicated
to the public with the help of Bollywood celebrities
communicating about their choices. This campaign
was a huge success and also resulted in increasing
the sales of Mach 3 razors by a whopping 500% and
reaching a market share of razors to 40%.
Here are some interesting advertisements of their
razors: First Girlfriend vs. First Real Girlfriend, First
Suit vs. First Real Suit, First Razor vs. First Real Razor
‘Use Your And’ Campaign
In 2012, Gillette launched its first ever women
product- Gillette Venus, a shaving razor for women. To
enter into this market it used social media platforms
to spread the word. Its ‘Use Your And’ campaign
encouraged women to move beyond the labels. Click
here to watch the commercial.
You are warmth and wisdom. And grace and guts.
No ‘ifs’ or ‘buts’, just ‘ands’. This is the message in the
commercials. The campaign #UseYourAnd encourages
women to move beyond labels. The campaign also
talks about gender based equality and conveys the
message to break through that mentality.

17. VOLUME 03BEACON
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STP
Segmentation
Gillette has a varied range of products in India. Its
Mach 3 is targeted at high income group of people
while its TRAC II is targeted at low income group.
Hence in the razor category, it spans the entire male
population. Other products like deodorants, shaving
cream/ gels are targeted at medium to high income
group. Also after the success of Gillette Mach 3 Turbo,
it decided to launch a similar product called Venus
Power for women, thus creating gender segmentation.
Targetting
Gillette’s market segment has been proved to be
extremely profitable. The razor market has highest
market share in India and America. The segment is
also very attractive because very less competition from
any such strong players in the market. Substitutes like
shaving machines are also not the exact substitutes for
the product.
Positioning
Gillette products are positioned as everyday use and
available for all products. The huge variety and range
of razors position them for people from all classes.
Other products like batteries are also positioned the
same way.
But some products like foams and shaving gels,
deodorants are positioned as premium products.
References
Mahercomm, People, JL Watson Consulting – Typepad, Financial
Times, Gillette

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COSTPERUNIT
TOTAL UNITS
EXPERIENCE CURVE
CONCEPT OF THE MONTH

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Introduction
In the mid 1960s, the management consultants at
Boston Consulting Group (BCG) while working with
a leading manufacturer of semi-conductors, observed
that a consistent relationship existed between the unit
cost of production and the total volume produced.
Data revealed that the company’s unit production costs
would fall by an expected amount- typically 20-30% in
real terms each time the ‘experience’ or accumulated
production volume is doubled. This relationship was
termed as the Experience Curve- the more experience
a firm has in manufacturing a product, lower are its
costs. It was first described by BCG consultant Bruce
Henderson as one of the signature concepts of BCG
and arguably best known.
The experience curve is defined by the function:
Cn = C1 X-a
Where,
C1: Direct cost of 1st unit of production
Cn: Direct cost of nth unit of production
X: Cumulative volume of production
a: % experience rate (i.e. the rate at which direct
costs decrease when output increases)
Types of Experience
• Experience in fulfilling demand
It is the classic experience curve which refers to the
ability of the firm to produce existing products at a
cheaper rate and delivering them to an ever-wider
audience. It is very significant for those industries
which are competitive, production-intensive, cost-
sensitive and relatively stable. For example, the cost
of hard disk drives declined to about 50% for each
doubling of accumulated production from 1980 to
2002. The average cost per GB from $80,000 in 1984
to $6 in 2001.
• Experience in Shaping demand
Experience in shaping demand when paired effectively
with experience at fulfilling demand can be used as a
powerfulcompetitiveweapon.Itcanbeseenasasecond
order type of experience which comes from sharing
experience across different areas and also includes the
ability to forget past lessons when the information
has become obsolete and is no longer relevant to the
latest production generation. For example, Facebook
overtook rival Myspace by effectively shaping demand
with successful innovations like experimenting with
technology and introducing features like live chat, etc.
In the graph below, experience in fulfilling demand is
the straight line which shows the reduction of costs
as a function of cumulative volume of product and
experience in shaping demand is represented by the
repeated jumps across different successive experience
curve which shows the company’s ability to move
from one product generation to other repeatedly and
successfully.

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Experience at Shaping Demand Differs and Complements
Experience at Fulfilling Demand
Experience at fulfilling demand is achieved through
a logical deductive process- capturing the cost data,
analyzing them, determining opportunities for
improvement, implementing the changes and iterating
whereas experience at shaping demand is achieved
through an inductive process- sample consumer
behaviors, formulating hypothesis on the unmet
needs, testing the hypothesis with new offerings,
shutting down the test or expanding it based on
empirical results, formulating new hypotheses based
on the latest empirical results and repeating the same.
For long term competitive advantage, neither
experience type, by itself, has ever been sufficient.
Both are equally necessary.
Reasons For The Experience Curve Effect
• ImprovedLaborProductivity: Astheaccumulated
production of the standardized product increases,
the efficiency of the labor force also increases since
they become more skillful and are mentally more
confident. Also less time is wasted in learning or
experimenting and making mistakes.
• Increased Standardization and Specialization:
Efficiency tends to increase as the production
processes, products become more standardized.
Employees gain more experience in their tasks and
operate at a faster pace since they get specialized in
those set of tasks.
• InnovationinProductionMethods:Withincreased
specialization and accumulated experience, the
workers concerned with the production processes
are most likely to come across innovative ways
to improve them. For example, the Japanese
engineering workers evolved unique jigs and
fixtures that helped smooth flow of operations.
• Value Engineering & Fine Tuning: Newer
ideas on value engineering can be adopted with
accumulating product experience and usage.
This helps to cut down unnecessary material
consumption and other underutilized inputs.
For example, using lead at the core of copper
conductors to cut down the total costs without
affecting the overall performance.
The other reasons are better use of equipment, product
redesign, changes in resource mix, etc.
The Experience Curve is a great enabler for a cost
leadership strategy. A company has competitive cost
advantage if it has managed to grasp a big market
share in less time in a new market. It is because it
can manufacture products at cheaper rates than
its competitors. But this advantage is sustainable
provided that the cost savings are passed on to the
buyers as price decreases rather than kept as profit
margin increases.
In theory, the phenomenon of ‘Experience Curve’
shouldmakeitdifficultforthenewentrantstochallenge
those firms which are already well established and
have a substantial market share. But in practice, new
firms enter old industries and in sometime become
major players in their markets, mostly because they
can leapfrog over the experience curve through
innovation and invention.
References
BCG Perspectives, The Economist, Management4All,
Policonomics, Strategic Thinker - Wordpress