Gillette is leading worldwide home applicants, such as
razor, battery, electronic and manual toothbrush,
manufacturing company. On April 14, 1998, the company
introduced the world” s first triple blades razor and begun to
sell July 1, 1998 in the United States and September in the
Western Europe. Since Gillette launched new razor in
1998, the company expected high returns in short-term;
however, the result of the new product has been defined
yet. SWOT ANALYSIS – Key Learning The areas of the
internal factors are Finance, Management, Manufacturing,
Market position, Personnel, and Research & Development.
All these factors can be defined as either strengths or
weakness or both. First of all, the company as a whole
gained net sales amount of 10. 1 billion dollars and net
income of 1. 4 billion dollars for the 1997 due to acquire
leading battery company ” Duracel” in 1996 and grow of
” Sensor Excel” razor. As a result, company could spend 1
billion dollars to invent ” Mach 3″ which is triple blades
razor. Even though Gillette had sufficient fund to invent the
new product, the company took high risk of financial side
that if the new product” s sale does not reach to company” s
expectation, the company will face shortage of capital
resources and can be lead to bankruptcy. But if Mach3
turn out to be a New Coke or McDonald” s Arch Deluxe aˆ“
much-hyped new products that were mostly duds and
fizzle- the gloom will be heavy from Gillette” s corporate
headquarters in Boston” s Back Bay to the South Boston
factory that Gillette has overhauled to produce 600 million
Mach3 blade cartridges per year, or about half of Gillette” s
annual target of 1. 2 billion Mach3 blades. (Boston Globe,
4/15/98) Since Gillette introduced ” Mach3″ in April, the
company changed its manufacturing tools to produce
Mach3 South Boston’s factory. Gillette already spent 300
million dollars for advertising and promotion worldwide for
the year that company introduced new product. The
amount is twice as much as the company put for advertising
” Sensor Excel” in 1989. Gillette released the new product
to retail stores on July 1, 1998, and starts to advertise on
TV and the other media six weeks later; however, many
people went to the company’s web site to look at the new
product. Even though company spent tremendous amount
of fund for the advertising, some people from Asia did not
recognize the product according to our group’s survey. For
customers, there are satisfaction and complaints for
Mach3. People, who satisfied with Mach3 according to
our survey, said there are less irritation and faster shaving
time. Customers who complaint about Mach3 argue that
they do not want to spend more money on better outlook.
According to our survey, one hundred percent of
surveyees, who does not satisfy with Mach3, say the price
is too high for the product. Price is relatively higher than
other products including ” Sensor Excel” which was the
most expensive one before ” Mach3″ came out. Its price is
6. 99 dollars per razor with one blade included – currently,
the company is selling for 7. 29 dollars per Mach3. It is 4
percents increased from original price, and 40 percents
higher price than other products. This may lead to decrease
in sales and the company” s total revenue. The company is
trying to reach customers several different ways. Gillette
offers Mach3 package product, which included Mach3
itself and couple of extra razors, Shaving cream and
deodorant. This package product makes each items” unit
price lower than sell separately. Also, the company offers
sweepstakes on the company’s web site, and there is no
obligation. This is the one of the finest ways to reach and
get involve the customers. The company give chance to
people to win prize without any obligation; however,
people will recognize the product automatically. Also,
Gillette can acquire the Since Gillette is well-known global
company, many retail stores are not offended to carry the
company’s product even though the product’s price is high.
Retail stores are assume that Mach3 will bring more
customers. On the other hand, even more customers come
to store, it is unpredictable for increasing store” s sales
revenue because price is too high so that consumers would
not buy. External factors are Competitive, Economic, and
Social. Gillette” s major rival in the market is Shick. Since
Gillette is the first company produce triple blades razor, the
company will lead the market; however, rival company
such as Shick will develop the same product with higher
quality or lower price. Then the result will be unforeseen
unless Gillette improve Mach3″ s weakness – ” high price”.
For long time in the United States, people” s income has
been growing. As a result, customers purchasing power
also increased. However, the company” s market is not only
the United States but also overseas, in fact, over sixty
percents of sales are made from overseas. Consequently,
the company has to consider the facts that poor countries”
consumers are willing to use cheaper product; especially
the countries in economic crisis. Recommendation There
are 3 target groups in the market. The first group is
disposal razor users that it’s approximately more than half
of the market. The advantages of this group are cleaner,
cheaper and easy to use. On the other hand, it is less
quality than other two razors. The second group is regular
razor such as Mach3 about 40 percents. The last group is
electronic shaver users which it takes remaining market
share. The customers who use the electronic shaver
satisfied with high technology, easy to use, saving time and
safety compare to the other two products. The
disadvantages of this product are high price and less
cleanness when one shaves. The goal of Gillette is trying to
acquire customers who use disposal and electronic shaver
to Mach3. In order to persuade the customers to change to
Mach3, the company should beat other product’s
weaknesses and add the improved the weakness of the
other product to Mach3 and decreases of its weakness.
Mach3 has several strengths; the first impression is fancy
outlook that makes customers feel differentiated from other
products. Second of all, men are challengers, always
pursue new trend; especially on the tangible items with high
technology. Although Mach3 has several strengths, it also
has weaknesses. High price makes people think twice to
purchase Mach3; the older generation of the Gillette razor
is cheaper than Mach3, that makes people wonder if it is
necessary to spend more money on the Mach3. The key
purpose for Mach3 is to shave beard, but the older
generation is also doing same job as Mach3; that makes no
different between older and newer product. The next
weakness is the advertisement. Gillette has spent 300
million dollars on the advertisement, but we did the survey
with at least thirty people; 22 out of 30 surveyees know the
brand from Television and magazine, but they have never
uses it. This means the advertisement has preached the
good news, but it has not reach people’s life. The majority
of men do not know why they should spend more money
to buy same result. The marketing strategy did not fail the
sale of the Mach3, it is price controller. The main point of
the marketing is to opening a market for product. Since
73% of the men from the survey know the product, this
mean the marketing strategy succeed its intention. The
biggest mistake we found is the price. As I mentioned, ” the
majority of men do not know why they should spend more
money to buy same result”. I would recommend to the
company, to lower the price and match the same price as
older generation. Let public buys Mach3 as the same price
as older generation, allow public to try out differences
between Mach3 and older generation. After when market
demand of the Mach3 is higher than older generation, then
increases its price.
