Introduction
- Gillette is the best provider of personal care products.
- The market has become saturated.
- Industry players are investing in research and development in their pursuit for continuous product innovation and development.
Gillette has sustained its competitiveness in the global personal care industry by providing customers with high quality products. The firm’s success has also emanated from the adoption of emerging shaving technology systems. In an effort to enhance its long term success, Gillette undertakes continuous product research and development. This aspect has played a fundamental role in the firm’s pursuit to understand the market needs.
Internal analysis
Competitive advantage:
- Product innovation and investment is part of effective marketing strategy.
- Its product innovation is supported by comprehensive research and development.
- Broad product portfolio.
Investment in product innovation and optimal marketing strategy are the core sources of the firm’s competitive advantage (Ferrell & Hartline 2011). To sustain its competitiveness, the firm invests in continuous product research and development. The firm has also invested in a wide range of products in an effort to meet the customers’ product needs. Subsequently, the firm is in a position to cater for a large number of customer groups.
SWOT analysis
Strengths and Weaknesses
- Strengths:
- Product innovation
- Market awareness
- Market leadership and global market presence.
- Pricing strategy
- Weaknesses:
- Human capital.
- Brand maintenance
This chart shows that there is a high probability of Gillette attaining future market growth. This goal can be attained by leveraging on its strengths, weaknesses, opportunities, and threats. Some of the firm’s strengths include product innovation, effective product pricing, market leadership, and optimal market awareness.
Opportunities and Threats
- Opportunities:
- Production technology
- Consumer brand preferences.
- Demographic change.
- Investment in e-commerce.
- Threats:
- Intense competition
- Economic downturn
- Manufacturing capability
- Static growth
- Increase in the number of substitutes.
The firm faces a number of opportunities, which include emerging production technologies, change in the consumers’ demographics, e-commerce, and change in consumer tastes and preferences. Despite this aspect, the firm faces a number of threats emanating from intense competition, economic downturn, static growth in sales revenue, and increase in the number of substitute products.
Market Segmentation
The firm has adopted different market segmentation dimensions which include:
- Behavioural; benefit sought.
- Demographic; Age, gender, income, social class.
- Psychographic dimension; lifestyle.
The firm has adopted three main market segmentation variables in an effort to market its customers to diverse customer groups. The main market segmentation dimensions that the firm has integrated in its marketing activities include behavioural, demographic, and psychographic. Market segmentation plays a critical role in a firm’s effort to market its products to diverse customer groups (McDonald & Dunbar 2012).
Competitor analysis
Intense competition from local and international companies.
- Core competitors:
- Colgate-Palmolive, Energizer Holdings, Schick, Societe BIC, Dettol, Fa, & Godrej.
- Competition from private labels established by major retail firms.
Despite attaining market leadership, the firm faces intense competition from different firms, which deal with personal care products. Examples of the firm’s core competitors include Colgate-Palmolive, Energizer Holdings, Schick, Societe BIC, Dettol, Fa, and Godrej.
The firm also faces intense competition from private labels established by retail firms such as Costco and Wal-Mart. These firms are diversifying their product lines by offering their own personal care products.
Position map
The position map above illustrates Gillette’s market position in comparison with some of its competitors. From the chart, it is evident that Gillette has managed to develop and sustain an optimal market position. This goal has been attained through investment in product innovation and research and development. Subsequently, the firm is in a position to develop high quality products. Furthermore, the firm has adopted an optimal marketing strategy, which makes its products attractive to customers.
Market analysis; Porters Five Forces
- Rivalry; High
- Buyer bargaining power; Low
- Threat of entry; low
- Threat of substitute ; Moderate
- Supplier bargaining power; High
The firm faces a high threat of rivalry emanating from the intensity of competition. The industry is characterised as mature. Subsequently, the degree of industry concentration is relatively high. The industry is further characterised by high supplier and low buyer bargaining power. The supplier bargaining power has emanated from the integration of effective production . One the other hand, the low buyer bargaining power is due to the level of market dominance by the firm. The industry is also characterised by low threat of entry.
Customer analysis
Main customer groups:
- Individual customers.
- Institutional customers.
- Development of products in accordance with the customers’ needs.
The firm targets both individual and institutional customers. The individual customers are comprised of consumers who are conscious about their personal outlook. Furthermore, the firm markets its products to institutional customers such as beauty shops, salons, and spas. The firm has adopted a comprehensive marketing campaign in an effort to influence the various customer groups by adopting sports marketing strategies and endorsement by celebrities.
Environmental analysis
Pestle analysis
Main macro environmental forces:
- Political forces.
- Economic forces.
- Social forces.
- Technological forces.
- Legal forces.
- Economic environment; change in the consumers’ purchasing power as a result of economic downturns.
- Technological forces; High rate of technological innovation leading to emergence of new manufacturing and marketing technologies.
- Social environment:
- Change in the consumers’ attitude with regard to personal grooming.
- Increase in the consumers purchasing power.
- Political environment:
- High level of political stability;
- most countries in which the firm operates are characterised by a high level of political stability.
- Legal environment:
- Effective laws that protects innovation by investors.
- Implementation of optimal intellectual property rights.
- Examples of IPRs that have enhanced Gillette’s growth include patents, and copyrights and trademarks.
The firm’s operations are subject to forces emanating from the external business environment. Subsequently, it is imperative for Gillette’s management team to take into account the major market forces. Some of the forces that the firm should consider include the economic, legal, political, social, and technological forces (Hill & Jones 2008). This move will enable the firm’s management team to formulate optimal operational and marketing strategies.
The firm faces a challenge due to the high rate of technological change. Subsequently, it is imperative for the management team to ensure that optimal production and marketing technologies are integrated. This move will remarkably enhance the firm’s competitive capacity. Furthermore, the firm should adjust its marketing strategies such as pricing in order to align itself with the change in consumers’ purchasing power. Intensive market awareness should also be undertaken during periods of economic recession.
Individual consumers are increasingly becoming concerned about their personal look. The trend has emerged from the recognition of the view that personal grooming products improve individuals’ level of confidence by making them feel good. In its pursuit to attain global market presence, it is essential for Gillette to develop a comprehensive understanding of the consumers’ cultural and behavioural characteristics.
The prevailing level of political stability in a particular economy plays a critical role in organisations’ operational processes. In a bid to sustain its market dominance, Gillette intends to expand its global market presence. However, the firm will be required to target economies, which are politically stable in order to minimise the risk of loss emanating from political instability.
An effective legal environment is critical in an organisation’s effort to attain the desired success (Porter 2008). First, the legal environment enables organisations to undertake product innovation through acquisition of patents and copyrights. The prevailing legal environment in the US has enabled Gillette to invest in product research and development. Therefore, the firm’s legal environment has culminated in protection of the firm’s products against counterfeiters.
Conclusion
Gillette has managed to develop and sustain a substantial market share in the global personal care industry. The firm has penetrated a number of economies in an effort to maximise its profit.
Its success has emanated from development of a number of core competencies. Some of these competencies relate to new and continuous product development.
Gillette has managed to develop and sustain a substantial market share in the global personal care industry. The firm has penetrated a number of economies in an effort to maximise its profit. Its success emanates from the development of a number of core competencies. Some of these competencies relate to new and continuous product development. Subsequently, the firm has developed a broad product portfolio. Furthermore, its commitment to provide customers with high quality personal care products such as shaving products has remarkably contributed in the firm’s effort to develop a strong level of customer loyalty.
Reference List
Ferrell, O & Hartline, M 2011, Marketing strategy, Cengage Learning, Mason, OH.
Hill, C & Jones, G 2008, Strategic management theory; an integrated approach, Houghton Mifflin, Boston.
McDonald, M & Dunbar, I 2012, Market segmentation; how to do it and how to profit from it, John Wiley & Sons, Chichester.
Porter, M 2008, Competitive strategy; techniques for analysing industries and competitors, Simon and Schuster, New York.