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Spoonfeedin WOrld

Business – Gillette’s cutting edge

Seema Sindhu

At a time when consumer product categories have been under pressure, Gillette surprised the Street with a significant improvement in its profitability (net profit rose 31 per cent) in the first quarter of this financial year.

Though sales grew a modest 12 per cent, they were higher than the overall grooming industry growth, indicating that more consumers did switch to the more expensive Gillette twin-edge products, which are 10 times more expensive than cheaper double-blade razors. In fact, its premium offering, MACH3, registered its highest ever growth in the past five years, helping Gillette achieve overall market leadership in the category.

Sharat Verma, marketing manager of Gillette India, says strong distribution strategies played a prominent role in the robust growth, as a result of which the brand has managed to tap both the ‘premium’ and the ‘value-for-money’ consumers. For example, keeping in mind the price sensitivity of the Indian market, it launched affordable products (7 O’clock, & Wilkinson, etc) in India with ‘buy-two, get-one-free’ types of conventional marketing, which helped it to boost sales.

But to make sure that the affordable products did not create any confusion on its premium positioning, Gillette also went in for cutting-edge technology. For example, following the success of MACH3, Gillette introduced its next generation triple blade shaving system MACH3Turbo. Operating under 35 patents, the MACH3Turbo boasts of anti-friction blades which reduce the cutting force needed to slice through hair and ultra-soft protective skin-guard with thinner microfins.

“There are pressures in good times and bad but the fundamental business principles stay the same – Innovate and Delight the Consumer with the best propositions. Gillette has always strived to help men across the country ‘look, feel and be their best’ and that continues to be the equity that Gillette holds in consumers’ minds today,” Verma says.

Harish Bijoor, CEO of Harish Bijoor Consults Inc, concurs, “Gillette is a player that has concentrated its efforts at percolating the product and its appeal across markets through the distribution route. Its growth is related to its evangelical efforts across all markets, mainland and hinterland India.”

The lower-value products, analysts say, followed the company’s realisation that while “new and improved” is still good, “lower price” works better in these tough times. Courting of the frugal was thus in.

But the game-changer, according to Verma, was an innovative campaign (which won the Gold as well as Silver Lion at the Cannes Advertising Festival) launched in October last year. Till then, MACH3’s sales in India had seen almost a negligible growth. Years of conventional product advertising had established a good brand image for Gillette, but that wasn’t enough to get Indian men to switch to its products.

But all that changed after the company , alongwith its media agency – WPP’s Mediacom – launched the “India votes: To shave or not” campaign, which ended up sparking a national debate on the merits of the clean-shaven look vs the stubbled look.

The effort got under way with a Nielsen-commissioned survey intended to determine the country’s attitude toward shaving. Online and live polls held in places such as gyms, malls, offices and movie theaters fed the fire while giving men a chance to use the product.

Research showed that for men to rationalise the price premium and switch to the Mach3, the real challenge lay in combating their inertia and indifference to shaving.

The campaign highlighted a series of controversial points: Were clean-shaven men more successful? Did the nation prefer clean-shaven celebrities? And the big one: did women prefer clean-shaven men?

Mediacom tied up with NDTV and for eight weeks, the channel ran celebrity interviews, panel discussions and news stories around the topic. Similar tieups were done with radio stations. The logic: Gillette wanted to generate a talking point on a subject that’s not necessarily top-of-mind.

In a record of sorts, 12.2 million Indians voted for a clean shave. “It’s been a very innovative, business building programme that has had impact on brand equity and trials. It’s been an inspiring combination of educating and entertaining the consumer,” says Sumeet Vohra, marketing director, P&G India, in his note to the campaign’s entry to the Cannes Lion competition.

The survey proved conclusively and publicly that women preferred clean-shaven men. The look emerged as the preferred style and was associated with attributes like confidence, success and being trustworthy, an opinion that’s shared by men, women and top management people.

Sharing this observation with the men of India created dramatic change in the brand’s fortunes. Sales went up by 38 per cent immediately, awareness doubled and trials increased by 400 per cent. Gillette’s market share increased by 35 per cent at one go.

The brand hasn’t looked back since then.

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September 29, 2009 - Posted by | Uncategorized |

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