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Gillette ppt

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Company Analysis and Outlook

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Gillette ppt

  1. 1. The Gillette Company: Dinosaur or Innovative Survivor? Yinka DaramolaA presentation by:
  2. 2. Organizational Overview • Founded in 1903 by King C. Gillette and Will Nickerson as an innovative approach to improving men’s daily shaving experience • Still predominantly known today as a shaving brand, 111 years later • Grew its market share and global presence by aggressively acquiring different firms between 1955 and 1996 • Acquired by P & G in 2005 for a record $ 57 billion (5 X Sales) • Currently ranked world’s 23rd most valuable brand by Forbes
  3. 3. Case Breakdown • Holds a 70% share of global blades and razors market • Revenues are currently at $ 8.03 billion • Its acquisition by Procter & Gamble has not done much to increase its earning power • Former Global Gillette has now been ‘stripped’ of its acquisitions by P & G management • Currently positioned in the personal grooming market selling Razors & blades, pre & post shave creams and deodorants and body washes
  4. 4. Case Breakdown • Acquired by P & G because of its great success and expertise in marketing its products to men • Its alliance with P & G appears to be far more beneficial to the parent company than to the brand • Has devolved from a multi-market player into a single market player • Uses high research and development budgets to stay innovative, and high advertising budgets to maintain image status • Favors sports endorsements and sponsorships as promotional tools, in comparison to other forms of traditional advertising
  5. 5. Challenges • No longer has a diverse portfolio to grow its revenues and brand image with • Conflicting management philosophies are shrinking sales for Gillette • Competitors such as Wilkinson Sword and Bic offer similar and less complicated products at good value • Shrinking advertising, promotional, and research and development (R & D) funds • Stagnant sales figures despite high advertising and R & D expense by parent company
  6. 6. Challenges • Products are becoming increasingly complicated and somewhat pricey • Sports endorsements losses could impact brand image and value • Competitors such as Wilkinson Sword and Bic offer similar and less complicated products at good value • Although entrance has been gained into the global women’s market, the synergies are not reflective of expectations • Brand has now reached maturity and needs to devise a strategy to grow sales or risk losing market share
  7. 7. 0 1 2 3 4 5 6 7 8 9 1997 2011 2012 2013 2014 Sales ($ billions) Sales ($ billions) Brand Global Sales, Lifecycle Stage Sources: Craft and Quick, 1999. P & G Annual Reports 2013, 2014
  8. 8. Market Impact • Parent firm spent $ 9.2 billion on advertising in 2014; using radio, television, print, and in-store advertising • R & D expense by P & G has remained at $ 2 billion annually over the last 3 years • Sales have remained stagnant regardless; hovering around $ 8 billion over the last 3 years • In 2006 it launched the six-bladed Fusion, which has sold over a billion dollars • Continues to use sports marketing and endorsements to maintain brand image
  9. 9. Market Impact • Has ventured successfully into the global women’s shaving market • Spent $300 million to research, develop, and market its Venus line • The resultant success earned Gillette a 50% share in the global women’s market • Has launched a new men’s shaving line called Fusion ProGlide Flexball in 2014
  10. 10. Projected Outcome • Gillette needs to develop a new strategy to grow brand revenues • Partnering with professional social media marketers can greatly enhance brand image and inform product development • New strategies and products should be engaged in, to expand foothold in women’s markets • Gillette should strive to keep itself in the forefront of consumers minds using technology to its advantage • Gillette will need to develop less complicated and more efficient products to stay competitive
  11. 11. Q1 • Mach 3 (1996) and Fusion (2006) both surpassed the $ 1 billion dollar mark in sales in record time • Both were products of interactive and expensive R & D investments • 7- bladed Fusion ProGlide Flexball (2014) took 5 years to develop and was tested on 24,000 men before its launch • Products may be becoming too complex, and just marginally more efficient. Strategy may need to change because complexity may scare off users • Focus should now be on developing less complex, and more efficient solutions to stay competitive • Serious priority should also be given to garnering a stronger foothold in women’s shaving markets
  12. 12. Q2 • Sports advertising has featured prominently in Gillette’s advertising strategy since 1939 • Brand endorsers are often chosen to mirror company values • Tiger Woods’ marital infidelities are in conflict with P & G company values of integrity • Supporting Woods’ would also have been a conflict of interest for a parent company distributing so many products consumed by families • A Bloomberg poll conducted shortly after the 2009 incident showed a fall in Woods’ popularity from 6th to 24th among consumers • Accenture also withdrew endorsement for the same principles
  13. 13. Q3 • Alliance with P & G not yielding expected benefits to Gillette. Will Gillette benefit commensurately from their experience with women? • Some success was recorded with the introduction of the Venus Shaving Line • P & G has not always had success with propelling its acquisitions into female markets • For instance, Tampax and Olay took 5 and 15 years respectively to yield tangible benefits after their acquisition • It will require a careful combination of P & G’s knowledge of women with properly channeled and interactive R & D to create the right products
  14. 14. Summary • Gillette’s marriage with P & G is clearly one-sided • Gillette needs to re-think its strategy of growing market share faced with shrinking budgets and increasing competition • Maintaining its prominence with sports advertising and endorsements works • Using the benefits of social media marketing to design new products and enforce existing brand image is essential to survival • Increasing its share in the global women’s market using P & G’s experience in marketing to women, will shorten the learning curve • Gillette can still grow market share if it focuses on developing less complicated new shaving products for men
  15. 15. THANK YOU FOR YOUR KIND ATTENTION!
  16. 16. References Craft, D. & Quick, A. (Eds.). (1999). The Gillette Company. In Company Profiles for Students (Vol. 1, p. 581-587). Detroit: Gale. Retrieved from http://go.galegroup.com/ps/i.do?id=GALE%7CCX3427200122&v=2.1&u=nu_main&it=r&p =GVRL&sw=w&asid=57635228c50642605c5985c6c95aad0d Forbes. (2013). World’s most valuable brands: Gillette. Retrieved October 31, 2014 from http://www.forbes.com/companies/gillette/ Grant, T. & Ferrara, M. H. (Eds.). (2005). The Gillette Company. In International Directory of Company Histories, (Vol. 68, p. 171-176). Detroit: St. James Press. Retrieved from http://go.galegroup.com/ps/i.do?id=GALE|5CHA&v=2.1&it=aboutBook&sw=w Horovitz, B. (2014, Apr 30). On the ball: Gillette rolls out rolling razor: Fusion ProGlide FlexBall to cut hair shorter, miss less. USA Today, 4. Retrieved from http://ezproxy.nu.edu/login?url=http://search.proquest.com/docview/1520011585?acc ountid=25320 Kanter, R.M., (2009, December 14). Harvard business online: Tiger Woods and the decline of celebrity endorsements. Bloomberg Businessweek. Retrieved from http://www.businessweek.com/managing/content/dec2009/ca20091215_901506.htm
  17. 17. References Kotler. P, & Keller, K.L., (2012). Marketing management (14th ed.). Saddle River, NJ: Pearson Education Inc. Lee, J. (2010, January, 10). Gillette. Marketing, 21. Retrieved from http://go.galegroup.com/ps/i.do?id=GALE%7CA216963778&v=2.1&u=nu_main&it=r&p=A ONE&sw=w&asid=2987ff65c0fc2a6c1681594c4a528393 Marinovich, S. (2005 November, 21). A competitive edge in a cutthroat market. Brandchannel. Retrieved from http://www.brandchannel.com/features_effect.asp?pf_id=290 McGrath, M. (2014, October 24). Procter & Gamble removes the batteries, plans an exit from Duracell. Forbes. Retrieved from http://www.forbes.com/sites/maggiemcgrath/2014/10/24/procter-gamble-removes-the- batteries-plans-an-exit-from-duracell/ Neff, J. (2010, February 15). Why P&G's $57 billion bet on Gillette hasn't paid off big – yet: Five years and one recession later, company says value is there but hidden. Advertising Age. Retrieved from http://adage.com/article/news/marketing-p-g-s-57-billion-bet- gillette-years/142116/
  18. 18. References Procter and Gamble. (2014). 2014 Annual report. Retrieved from http://www.pginvestor.com/interactive/lookandfeel/4004124/PG_Annual_Report_2014.p df Procter and Gamble. (2014). 2013 Annual report. Retrieved from http://www.pginvestor.com/Cache/1001180053.PDF?Y=&O=PDF&D=&fid=1001180053&T =&iid=4004124 Procter and Gamble. (2009). Our values and policies. Retrieved from http://www.pg.com/images/company/who_we_are/pdf/values_and_policies907.pdf Procter and Gamble. (2005). 2005 Annual report. Retrieved from http://www.pg.com/annualreports/2005/pdf/pg2005annualreport.pdf Schnakenberg, R. (Ed.). (2007). Global Gillette. In Encyclopedia of Major Marketing Campaigns (Vol. 2, pp. 669-673). Detroit: Gale. Retrieved from http://go.galegroup.com/ps/i.do?id=GALE%7CCX3446600123&v=2.1&u=nu_main&it=r& p=GVRL&sw=w&asid=710c97c2139dffd4038033e0338f42fb

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