Gillette : Devoloping new products
... main approaches to market research. • Qualitative research. e.g. working with several small focus groups comprising, for example, people who shave, and discussing with them what they look for in a razor/blades/shaving system. This generates a core understanding of HOW consumers use razors and what they think about the experience. • Quantitative research. e.g. using a questionnaire with a large, representative sample of people; this data gives a broad view of the information, looking more at the numerical objective data rather than the more subjective data acquired via qualitative research. For example, how many people shave, what do they use to shave, what products do they buy ? From consumer research the company moves into technological research and development. This involves converting a good idea into a product design and then discovering whether modern technology is able to reproduce it to the high specifications required and in the quantities needed. Usually a firm will produce prototypes that can be test-marketed on a representative sample of potential consumers. In the light of their reaction, the product can then be refined and developed until it is as good as it can be. Within the original research and analysis, there is also another vital question which needs to be asked. “Will this proposed new venture generate profits for the company?” Many businesses have come unstuck by wrongly believing the answer to be “Yes”. Usually, such businesses either underestimated the investment levels required for research and development, or the cost of setting up and operating the production process, or both. Generally speaking, any business must be careful in estimating potential sales; some organisations may get into financial difficulties if they are overly optimistic in their planning which may result in them going bankrupt or being acquired by a better-managed rival. Ironically, the rival may not be as creative but are better at managing their overall business. A successful product will generally attract competition. Patents can protect products, but it is impossible to prevent other firms coming up with their own interpretation and application of the original good idea e.g. for self-adhesive labels, shavers, or subsonic aircraft. In essence, the fact that competitors bring out products to challenge the original idea, is generally good for that category because the market becomes stimulated and total sales can increase. This is why product improvement through innovation in both concept and design has to be ongoing. This is also why Gillette have remained at the forefront of the shaving industry for the last century. 4. Beating the competition In order to guide itself and ensure the entire company is aligned in its objectives, an organisation often develops a vision statement. A vision statement is intended to convey what the organisation ‘is all about’. It is important to internal audiences i.e. Gillette’s staff, so they all know in which direction to pull. It is also important to external audiences such as the retailers who buy from Gillette and sell the products to consumers. Gillette’s vision statement reads: ‘To build total brand value by innovating to deliver consumers value and customer leadership faster, better and more completely than our competitors.’ The component words really do matter. ‘Delivering value’ to consumers is not necessarily about being the cheapest, but about earning a reputation for high quality products that represent good value for money. That’s true of many industries, and particularly those in which consumers believe there is a direct relationship between price and quality. ‘Customer leadership’ involves discovering what customers most want and then finding ways to fulfil those wants. It also involves helping customers to obtain maximum value out of their purchases e.g. by providing supporting literature, sound advice and a good after sales service, including product guarantees. ‘Faster, better and more completely’ represent key targets. As suggested earlier, speed of response to changing market conditions can be vital to success. Aiming to be ‘faster’ recognises that being ‘second to ...’ can lead to poor sales and low market share. Being ‘first to ...’ successfully can also generate intense product and brand loyalty from consumers. Leading the way with a firm focus on consumer needs. Aiming to be ‘better’ recognises that there are no gains from being first with a big breakthrough if the innovative product performs poorly, fails to meet the claims made for it, earns bad professional reviews, disappoints initial purchasers, and is rapidly followed by a clearly superior product from a rival firm. ‘More completely’ recognises that a razor is just one component of the much broader market of ‘personal appearance and wellbeing’. ‘Looking good, feeling good’ is a many-staged process of personal grooming, of which shaving is just one aspect. It is no accident that Gillette is heavily involved in the market for deodorants and anti-perspirants. The company recognised that rising incomes would lead consumers to spend more on a ‘total package’ that enhances personal appearance, personal hygiene and as such developed a strategy to expand its position within this expanding market. The market for razors is not one uniform market but a market that contains different segments, the needs of which have to be met in carefully targeted, subtly different ways. Gillette recognised that different segments of the market are seeking different product benefits. So, over the years, it has sought to develop several product categories ranging from popular disposable razors to elaborate shaving systems. In the UK an increasing number of men have switched from disposable razors to shaving systems which fuels the market demand for handle and replaceable blades. Diagram Gillette’s overall emphasis is on providing premium performance via the best value for money shaving experience, whether this is a system razor for the discerning customer seeking the best in shaving technology, or a high quality disposable product for people looking for a good quality shave with the convenience of a disposable. 5. Growing the business Many businesses look to expand into related areas that offer opportunities for growth and also an element of protection through market diversity. Gillette has four core business areas. • Personal grooming a range of products using the Gillette brand, including razors, razor blades, shaving creams. Brands include Gillette, Gillette Series, Right Guard, Right Guard Extreme, Natrel • Portable power the full range of batteries and torches sold under the Duracell brand name • Oral care dental and oral care products e.g. Oral-B manual toothbrushes and Braun Oral-B electric toothbrushes • Electrical appliances domestic items e.g. dry shavers, hair dryers, hair stylers, under the Braun brand name. Personal diagnostic app...