Company Analysis and Outlook

1. The Gillette Company: Dinosaur
or Innovative Survivor?
Yinka DaramolaA presentation by:

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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. THANK YOU FOR YOUR
KIND ATTENTION!

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. 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. 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