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Gillette is a company dedicated to the manufacture and sale of personal care products, especially blades and razors. Its business model is based on the sale of high quality products at premium prices, and it has focused on innovation and technological development to maintain its position in the market.
Some of the key elements of its business model include
- High quality product: Gillette has built a strong and recognised brand in the market, based on the quality and reliability of their products. They have invested in research and development to create innovative and patented products that meet the needs of their customers.
- Premium pricing strategy: Gillette is a premium brand and has used a premium pricing strategy to position its products in the market. This allows them to maintain high profit margins and reinvest in R&D and marketing.
- Innovation and technological development: Gillette has maintained a dominant market position through its focus on innovation and technological development. They have been leaders in introducing new technologies into their products, such as multi-edge razor blades and Flexball technology.
- Product diversification: In addition to blades and razors, Gillette has expanded its product offering into other personal care products, such as deodorants, shower gels and aftershave lotions.
- Strong brand presence: Gillette has built a strong and globally recognised brand. They have used successful marketing campaigns to build brand awareness and foster customer loyalty.
The Gillette company has become one of the great empires of the business world whose success strategy has been based on to market a core product at low costin this case a razor. However, in this case, Gillette's core business focuses on the sale of razor blades. A simple product, but used daily all over the world, which has turned the company into a multi-billion dollar enterprise. In this case study we are going to delve into its history and all the key aspects of its business model and its Canvas Model. How did a razor blade company become so successful? We analyse it all below.
Origin of Gillette
King Camp Gillette is the name of the person who one day invented razor blades. The idea came about during a train journey when he was constantly sharpening his razor to be able to shave.
The positioning bar is specially serrated for use with the Gillette dispenser.
- Turn... it's open.
- Turn the end of the handle to the left and the razor head will open to receive the blade.
- Close it! Push the blade out with your thumb.
Hook the slot of the ejected blade (a) into the notch of the positioning bar (B) and remove the dispenser. The blade will fall into place.
Constantly sharpening the razor to achieve a perfect finish didn't seem like a quick and easy job. But maybe, the use of disposable razor blades would further improve this work. This is how he came up with the business idea that would lead him to found American Safety Razor Company 28 September 1901. Initially, the idea was somewhat more rudimentary than what we know today, but it was the beginning of the commercialisation of razors with disposable blades.
The first major market was members of the US military. during his involvement in World War II. The company's agreement with the military involved the sale of 3.5 million razors and 32 million disposable razor blades. This further enhanced the promotion of these blades, which began to be marketed non-stop. This is when King Gillette decides to name the successful company after himself.
From then on, the success was unstoppable and the Gillette brand continues to be known worldwidea benchmark in the world of personal care, especially for men, although it has also carved out a niche for itself in the marketing of products for women.
GILLETTE BUSINESS MODEL
The business model of the Gillette company is the bait and hook model. In fact, the origin of this business model is attributed to the company's founder, King Camp Gillette. His idea of to market a core product at low costIn this case, the razor, was undoubtedly a brilliant strategy that made the product affordable and accessible to everyone.
Profitability would come from the marketing of the disposable blades that are necessary to be able to use the razor. The success of this business model is based precisely on the recurrent purchases (such as the subscription box business model) which constitute the company's most important revenues. Many brands have imitated this business model due to its high profitability by offering recurring sales and increased customer loyalty.
Gillette Canvas Canvas
VALUE PROPOSAL
- Gillette's value proposition is to make available to its customers a convenient and hygienic system for shaving hairs. The use of disposable blades means you always have a perfectly sharp tool for a perfect and safe shave.
- On the other hand, Gillette's strategy is to make your product affordable to your customersThis breaks down any barriers and allows you to reach a larger number of potential customers.
CUSTOMER SEGMENTS
THE TARGET CUSTOMERS FOR GILLETTE'S PROPOSAL ARE:
- Men who shave regularly.
- Women who depilate frequently and who mainly use blades to remove body hair.
A similar model to Gillette is the branch ofl Amazon's business plan (see TIP) called Amazon Kindle.
CHANNELS
WHICH CHANNELS DOES GILLETTE USE TO REACH ITS CUSTOMERS?
- Gillette has its own website from where they offer all kinds of information about their products, shaving tips, or skin care.
- Numerous physical shops dedicated to the world of care and beautyGillette's wide range of products is sold in department stores, department stores and even pharmacies.
- Through the social media Like Facebook or Twitter, Gillette promotes its products, offers advice and interacts with its profile followers.
- Gillette also has its own Youtube channel where it broadcasts shaving tutorials, advertising campaigns, and reports on the latest technologies used in its blades.
ACTIVITIES
WHAT ARE THE ACTIVITIES CARRIED OUT BY THE GILLETTE COMPANY?
- Gillette carries out important advertising campaigns and marketing strategies to maintain its position as a leading marketer of blades and razors.
- In addition, Gillette controls the entire manufacturing process and the production chain to ensure the highest quality and safety of its products.
- Gillette deals with managing the logistics chain for the products to reach the spaces where the brand is marketed.
- The company continuously devotes time and investment in order to finding the best materials and integrating the most innovative technologies in their products to differentiate themselves from the competition.
- Another activity that Gillette carries out is the customer service management to deal with any type of incident or doubt about its products.
- Social media management and publications in YouTube.
CUSTOMER RELATIONS
GILLETTE ESTABLISHES ITS RELATIONSHIP WITH CUSTOMERS IN THE FOLLOWING WAYS:
- On the one hand, Gillette does not only limit itself to the marketing of its products, it also offers tips to make the shaving process more comfortable, effective and safe.
- Movember InitiativeThrough this space, Gillette and the charity Movember are proposing a number of initiatives that men can take part in. These initiatives aim to raise awareness of men's health issues by proposing a number of challenges on a regular basis.
- Coupons and offersGillette periodically offers exciting promotions and discounts so that customers can purchase its products at a lower price by using the freemium model.
- Gillette offers its full range of variety of products in physical shops, department stores and pharmacies.as well as in digital shops. In this way, Gillette facilitates access to the offer to a larger number of customers.
- Gillette has three ways to get in touch with the customer serviceby email, phone or in physical shops.
- Through the social media Gillette interacts with users interested in its products and published different articles related to shaving and the launch or use of its razors.
SOURCE OF INCOME
WHAT ARE GILLETTE'S MAIN SOURCES OF REVENUE?
- On the one hand, the small margin on the sale of the main productin this case the razor.
- On the other hand, the recurrent purchases which involve the sale of disposable blades, necessary for the use of the main machine.
RESOURCES
WHAT RESOURCES DOES GILLETTE HAVE AT ITS DISPOSAL?
- The own brand Gillette has, after more than 100 years of experience and market presence, become synonymous with the quality of the finest blades and razors. In fact, the brand's name has been used by Gillette to give it name of a football stadium in Massachusettsafter having bought the rights to the name.
- Gillette has the patents on their blades and razor design.
- The company employees who are dedicated to customer service, physical shops, web maintenance, social media outreach, organisation of marketing and advertising campaigns and research into new designs and technologies.
- Manufacturing and processing plants of Gillette products
- Gillette was the first company to offer the razor concept with interchangeable bladesand integrating the "Twist to Open" mechanism into its razors.
In addition, Gillette has its own website where users can consult all the brand's products, learn about the company's history, join the Movember movement or access the blog with tips.
PARTNERS
THE MAIN PARTNERS OF THE GILLETTE COMPANY ARE THE FOLLOWING:
- Movember charityThe alliance between the razor company and the organisation has enabled the two to work together to carry out activities related to men's health.
- Retail companies who are responsible for marketing the brand's products.
- Supply providers to be able to carry out the production of razors and razor blades.
- Companies in charge of carrying out the manufacture of the products.
- Sponsor brands such as McLaren, Mercedes or Esport model (see TIP) among others.
- Celebrities who lend their image to participate in Gillette's advertising and marketing campaigns.
COST STRUCTURE
WHAT ARE THE COSTS BORNE BY GILLETTE?
- Payment of wages to workersThey work in the development of the different areas of the company: marketing, production, logistics, technological development, research...
- Investment in research, development and technological innovationThe aim is to continue to produce ever more advanced, better quality products, integrating the latest technologies.
- Manufacturing and production costs of the entire range that Gillette offers for sale.
- Logistics costs.
- Investment in advertising campaigns.
- Fees.
GILLETTE CURIOSITIES:
- The name "Gillette" is the generic brand name for razor blades in many languages.even lesser-known ones such as Czech, Estonian, Polish or Latvian.
- One of Gillette's marketing strategies was to send free razors to young people in the United States who had just turned 18.
- Numerous prominent sportsmen and women have lent their image to advertising campaigns. The company's most famous celebrities include David Beckham, Tiger Woods and Roger Federer among others.
- The newest model to be launched by Gillette in 2019 is a razor that provides instant heat at the touch of a button, making shaving much more comfortable. In addition, the heat intensity is adjustable.
