CASE STUDY ON GILLETE

BY: SALONI , GUNJAN , IMA , ABHILASHA, DIVYA, DEEPANSHI

COMPANY BACKGROUND 1901: American Safety Razor founded by King C.Gillette

1904: King Gillette's idea for double edged safety razor was awarded a patented

1905: By end annual production grown to 2,50,000 razor sets & 1,00,000 dozen count blade packages

1918: Gillette manufactured razors and blades for soldiers during World War I

New product lines added :

Internal Development: New product included foamy shave cream(1953), Soft & Dry antiperspirant(1963)

Key Acquisitions: Toni company, Paper Mate, Braun AG

1971: Company is organized into four domestic divisions: the Safety Razor Division; the Toiletries Division (featuring Right Guard antiperspirant); the Personal Care Division; and the Paper Mate division

Safety Razor Division

SRD accounted for roughly half of the worldwide sales of razors & blades Founded on a strong program of R&D, Gillette SRD managed to market new

shaving products In 1971, SRD introduced a technological triumph- the Trac II twin blade shaving

system & became market leader In 1974, SRD took Trac II concept further with introduction of Atra, a lightweight,

twin blade razor In 1975 Twin blade concept was transferred to two disposable razors – the Daisy

shaver for women & Good News for men Gillette SRD’s 1985 product line consisted of cricket disposable lighters & widget Gillette SRD employed a product management form of organization

ADVERTISING & SALES PROMOTION HISTORY

Gillette made it first sports event sponsoring in 1939 of about

$200,000.

•Sales increased four times the estimated figures.

•Introduced into boxing event sponsoring and moved into television.

•Testimonials by famous sports personalities as a advertising technique.

SALES PROMOTION AT SRD

SRD was promoted 6-8 times a year.

Reduce the shelf price.

Display.

Advertise.

Newspaper delivered coupons.

CYCLE 1 PROMOTION It was the job of sales promotion manager to recommend promotion

to the brand groups that would maximize results. Adam’s had a budget of $1.2 million for consumer promotion for the

safety razor brands. Initially he decided to recommend trade plus consumer offer where

consumer offer should be delivered through FSI Program. Tentatively he decided to combine the 3 SKU’s that is Atra 5 pack,

Trac 5 pack and Good news razor 10 pack into a one group for consumer promotion.

As Atra and trac were the 2 largest selling SKU’s in the shaving market and Good news was the newly introduced package.

Til october 1985 had achieved distribution in less than 15% of food and drug store nationwide.

TRADE PROMOTION OFFER

Consumer promotion I

FSI can be used to deliver 20 coupon, redeemable by the consumer on any of three promoted items.

Consumer promotion II

a free travel kit offer would substitute for the coupon

BOB ADAMS’ DELIBERATIONS Option I :- FSI coupon FSI coupon was automatically viewed by these audiences as a

promotion event and no special efforts were required to hype the promotion with sales force and trade.

Best estimate said that the 20 coupon would redeem at roughly 13 times the rate of the premium offer.

Coupon redemption facts Grocery shopping by :- 81% of female, and 19% male. Coupon redemptions:- 83% of females are redeemers and 57% of male. Heavy coupon users (5+ / week) :- 27% of females are hevy users and 13% of

males. For long run aspects:- The nature of the premium was a positive factor in

long run and travel kit would be seen by many customers as an aid in organizing their shaving materials during travel.

He considered whether the travel kit itself should be imprinted with the Gillette name and logo. This would add 10-20% to the cost of the kit.

Issue of implementation :- Success appeared to be heavily dependent on Bob’s redemption estimate.. Travel kit would pose special challenges in marketing to the trade. Travel kits would

have to be sold heavily to the trade. He thought of offering free travel kit for trade buyers to get them personally involved

in the promotion. Then he thought of display unit that would flag the premium offer . On past

experience , he recalled cardboard display plus shipper and packing costs about $2.50 Travel kit promotion :- display quantity needed:- if separate display then 6000 and if

combined 4000 for 3 products.

Success of the travel kit would require full support from SRD sales force and trade and redemption of the offer would require major monetary and time commitment.

He also thought that low level campaign would cost $100,000 and could be funded out of 3 brand’s advertising budgets

And also can be promoted by radio.

QUESTIONS ?

Evaluate the various promotional tools described in the case. What is the specific marketing objective(s) of each ?

Put together two promotion plans – one for option 1 and one for option 2. Make sure that each plan has objectives and a listing of tools and their costs ?

What are the pros and cons of each option ? Which do you choose ? Why ? For each promoted item, what feature price should the Gillette salesperson suggest

to the retailer assuming that the retailer will use the off-invoice only as reducing retailer costs ?

How do sales promotion and advertising differ in the planning process ? In execution ?