Read the caselet carefully and answer the following questions:
1.Product innovation should be a major component of the product policy of a firm. Explain how Gillette has met its customers’ expectations by continuously making innovations in its products.
2.In this era of cut-throat competition, New Product Development is very crucial for the survival of a firm, but there are many risks involved in it. Identify the risks involved in being the “first mover” in the market.
3.What are the stages of new product development? Explain with reference to the Gillette case.
Mr. King C. Gillette devised and marketed the first safety razor in 1901. In a short span of time, Gillette converted his idea into a highly successful, marketable product. Speed to market has been a characteristic of the famous company, which still bears his name, ever since. The Gillette Company continues to recognize the importance of 'being ahead of the field' in a competitive market in which consumer requirements are becoming increasingly diverse and demanding.
Rather like batteries, razors and shavers are a means to an end - it's what they produce that really matters. Looks and style are increasingly important, but to the person looking for the perfect shave it is the razor's performance that matters most of all. Meeting this challenge involves Gillette coming up with good ideas for product improvement and then taking advantage of modern technology to convert them into economically viable products. 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 Gillette Company has a long history of being 'the first to market...' in its own areas of operation. Its achievements include producing the first successful:
- Safety razor in 1901.
- Trac II introduced in 1971.
- Twin bladed razor which was the world's first twin blade shaving system, lightweight and easy to handle, launched in 1972. GII, its international version, was introduced in Germany, its first overseas market, in 1972.
- Twin bladed disposable razor in 1976.
- Pivoting head razor in 1979.
- Pivoting head disposable razor in 1980.
- Razor designed specifically for women called Sensor, in 1992. Sensor Excel was introduced in 1993. The Sensor Excel twin blade cartridge incorporates a revolutionary skin guard composed of five soft, flexible microfins that deliver — at the time — unprecedented shaving closeness and comfort. It debuted in Western Europe, with a U.S. launch in 1994.
- The Custom Plus line of twin blade disposable razors for men and women was introduced in 1994, featuring an improved lubricating strip and longer handle for greater control.
- Triple blade razor “Mach 3” launched in 1998. Gillette M3Power -- a MACH3 innovation -- is a groundbreaking, powered wet shaving system for men that delivers a totally new shaving experience resulting in Gillette’s best
shave ever.
- Gillette for Women Sensor Brights razors in 1998.
- 1999 -- The Gillette Company introduced its second entry into the growing teen shaving category, new Gillette for Women Sensor Dazzlers razors.
- Gillette Sensor 3 three-blade premium disposable razor. Sensor 3 represents a significant breakthrough in disposable razor performance.
- 2003 – Building on the tremendous success of Venus, the world's best-selling women's razor, the Gillette Company introduced Venus Divine, a new razor that delivers the closest shave for divinely smooth skin.
As well as being first to market, Gillette has also continuously produced products, which feature improvements to existing technologies, including 3 bladed disposables and ergonomically superior handle developments, including Sensor and Venus for Women as stated above.
This timeline above also demonstrates how the speed of innovation has accelerated with shorter and shorter gaps between new introductions and superior products. Being 'the first to market…' can bring advantages known as 'first mover advantages'. These include being able to generate initial consumer interest via both media investment and accompanying press and PR coverage. This then leads to the main retail stores displaying the products in-store and supporting the products with powerful promotional campaigns.
There are risks of being the innovator, however. To be successful, the innovation process has to be conducted thoroughly. This usually involves a great deal of research and in more than one form.
Gillette conducted detailed research before launching any of their new products. They went through all the stages of new product development right from the idea screening stage to the commercialization stage.
They undertook Qualitative research (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) and Quantitative research (using a questionnaire with a large, representative sample of people, for example, how many people shave what do they use to shave, what products do they buy). From consumer research, the company moved into technological research and development. This involved 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. Then the firm produced prototypes that were test-marketed on a representative sample of potential consumers. In the light of their reaction, the product was then refined and developed until it is as good as it can be.
Within the original research and analysis, there was also another vital question, which needed 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". Generally speaking, any business must be careful in estimating potential sales. Some organizations 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 rivals may not be as creative but are better at managing their overall business.
Gillette recognized 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.
Gillette has the following 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, and Right Guard Extreme.
- 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 and hair stylers, under the Braun brand name. Personal diagnostic appliances. e.g. electronic ear thermometers, under the Thermo Scan brand name. A range of Braun household appliances including kettles, coffee makers and food processors.
Gillette is the market leader in the majority of these areas, and the company continues to invest in each of these core categories and remains innovative. Its scientists, technicians and product engineers are continually trying out new features and production techniques with a view to improving product performance. The company's longstanding interest in being 'first to get it right' remains a key element of its continuing prosperity and progress.
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