Reasons Gillette Is The Best A Brand Can Get - Assignment Example

Gillette Section1 It is often very difficult to judge a company based on a single criterion because companies like human beings have many facets that influence their overall performance and it would be unfair to judge them based on a single criterion. However there are some criteria such as growth in stock price and brand equity that determine how well a company is doing. However one other criterion which is very important and which I think is the most significant is the ability of the brand to leverage its brand name and command a premium based on it. In other words, the mark-up percentage that a company commands on its products is a very good criterion to judge its influence and position in the market. Section 2 As mentioned above the mark-up that a brand commands without sacrificing on market share shows us the value attached to that particular brand by the consumer since he is willing to pay the extra amount for that particular brand because he associates great value to it. Based on this criterion, there are a handful of brands that come to mind that charge a very big mark-up, however very few global brands come close to the mark-up commanded by Gillette. The razor series by Gillette commands a mark-up ranging from 3000% to a whopping 4750%. This mark-up is huge if we are to compare it with other global brands of our times. The cosmetic industry average is 80% to 90%, while that of brands like Coke is in the range of 300% to 600% (toptenz.net). The mark-up of Gillette is all the more significant because in its field of operations it has a market share of close to 70% (brandingstrategyinsider.com), which proves the value that the consumer sees in the brand. On another front, it proves the profitability of the brand. The huge margin that Gillette products have clearly indicates to us that the brand is a star in the portfolio of companies P&G has. Thus the mark-up along with the market share it has and with no clear competitor in sight makes Gillette the most enviable brand in the world today. Section 3 The important factor in analyzing the company’s marketing strategy is to understand the 4Ps in their entirety and not as separate entities and more importantly one has to understand that every strategy comes from the vision and mission the company has and in the case of Gillette the vision is “to establish a brand value by delivering consumer value faster through innovation in customer leadership” (finance.mapsofworld.com). Moreover it is important to note that the company has tailored the 4Ps based on the various markets it operates in but without forgetting the vision. From the vision it is clear that innovation is at the core of the product. Thus when it comes to the product, the company leaves no stones unturned; it invests heavily in R&D to come out with newer and better products at regular intervals. This lets the company always stay ahead of competition and it gives the company the ability to charge a premium because of the innovation in the product. When it comes to Price, they are high because the company is such a dominant player that it can dictate prices with consumers willing to pay the amount. Moreover the reason for high prices is the heavy investment the company does in R&D and new product development. Thus to get back the money it has invested it has to price the products high. However this is not always the case, in price sensitive markets, the company had to come out with disposable range of razors priced at what the market could afford. (themanagementor.com). This proves the consumer centric approach of the company. With the might of P&G to back it, Place is not an issue for the brand. In fact the distribution of the products is based on the geographical location. In the developed countries where sales & distribution is organized, the company has great depth of SKUs available while when it comes to the developing countries, where sales and distribution is unorganized, the number of SKUs is limited to those that would suit the environment. The last but not the least is the Promotion the company adopts. Once again it is derived from the vision. The vision speaks of consumer value and this is reflected in the tag line the company has adopted- “Gillette, The Best a Man Can Get” (taglineguru.com). It has also invested heavily in advertisement with big international stars endorsing the brand. (promisecorp.com) All in all we see that today Gillette is where it is because it has understood what the consumers want and that is based heavily on R&D and New product development. Every action is based on the vision the company has and this has led to the current position, where it has such a strong connection with the consumers that they are willing to pay the high premium/mark-up. Section 4 There are two parts to what a leader in the industry has to do; first it has to consolidate its leadership position and second it has to look at different avenues where it can use its expertise to generate more revenues. Looking at both aspects we see that currently Gillette enjoys a great position in the industry; however it cannot rest on past success. With market share eroding away although at a slow rate the company has to stay aggressive and ahead of the curve. The company has to stick to its core competency and vision which is product innovation and understanding what consumers want. Thus it has to continue with the R&D and new product development. Moreover it has to come up with newer ways of promotion, especially with the digital and web media taking prominence it has to leverage their availability and ability to target the new generation. On another front it is very important for the company to realize that after a point growth in market share would be impossible, thus the next thing to do is extend the brand. Since the name Gillette is synonymous with men’s grooming, it can extend the product portfolio into other sections of men’s grooming. One more thing the company has to do is try and shift consumers from the lower end products to the higher end products understandably because higher end products are more profitable for the company. All in all the company has to keep up the good work it is going, but has to also look at newer avenues where it can leverage the brand name Gillette. References: “5 Reasons Gillette Is The Best A Brand Can Get”. JUNE 23, 2009. Web. may 08, 2011. “Gillette”. Web. may 08, 2011 “Bad month for Woods and Gillette’s brand ambassadors” 30 Nov 2009. 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