Gillette overhauled to produce 600 million Mach3

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Gillette is leading worldwide home applicants, such as
razor, battery, electronic and manual toothbrush,
manufacturing company. On April 14, 1998, the company
introduced the worlds first triple blades razor and begun to
sell July 1, 1998 in the United States and September in the
Western Europe. Since Gillette launched new razor in
1998, the company expected high returns in short-term;
however, the result of the new product has been defined
yet. SWOT ANALYSIS – Key Learning The areas of the
internal factors are Finance, Management, Manufacturing,
Market position, Personnel, and Research & Development.

All these factors can be defined as either strengths or
weakness or both. First of all, the company as a whole
gained net sales amount of 10.1 billion dollars and net
income of 1.4 billion dollars for the 1997 due to acquire
leading battery company Duracel in 1996 and grow of
Sensor Excel razor. As a result, company could spend 1
billion dollars to invent Mach 3 which is triple blades
razor. Even though Gillette had sufficient fund to invent the
new product, the company took high risk of financial side
that if the new products sale does not reach to companys
expectation, the company will face shortage of capital
resources and can be lead to bankruptcy. But if Mach3
turn out to be a New Coke or McDonalds Arch Deluxe
much-hyped new products that were mostly duds and
fizzle- the gloom will be heavy from Gillettes corporate
headquarters in Bostons Back Bay to the South Boston
factory that Gillette has overhauled to produce 600 million
Mach3 blade cartridges per year, or about half of Gillettes
annual target of 1.2 billion Mach3 blades. (Boston Globe,
4/15/98) Since Gillette introduced “Mach3” in April, the
company changed its manufacturing tools to produce
Mach3 South Boston’s factory. Gillette already spent 300
million dollars for advertising and promotion worldwide for
the year that company introduced new product. The
amount is twice as much as the company put for advertising
“Sensor Excel” in 1989. Gillette released the new product
to retail stores on July 1, 1998, and starts to advertise on
TV and the other media six weeks later; however, many
people went to the company’s web site to look at the new
product. Even though company spent tremendous amount
of fund for the advertising, some people from Asia did not
recognize the product according to our group’s survey. For
customers, there are satisfaction and complaints for
Mach3. People, who satisfied with Mach3 according to
our survey, said there are less irritation and faster shaving
time. Customers who complaint about Mach3 argue that
they do not want to spend more money on better outlook.

According to our survey, one hundred percent of
surveyees, who does not satisfy with Mach3, say the price
is too high for the product. Price is relatively higher than
other products including “Sensor Excel” which was the
most expensive one before “Mach3” came out. Its price is
6.99 dollars per razor with one blade included – currently,
the company is selling for 7.29 dollars per Mach3. It is 4
percents increased from original price, and 40 percents
higher price than other products. This may lead to decrease
in sales and the companys total revenue. The company is
trying to reach customers several different ways. Gillette
offers Mach3 package product, which included Mach3
itself and couple of extra razors, Shaving cream and
deodorant. This package product makes each items unit
price lower than sell separately. Also, the company offers
sweepstakes on the company’s web site, and there is no
obligation. This is the one of the finest ways to reach and
get involve the customers. The company give chance to
people to win prize without any obligation; however,
people will recognize the product automatically. Also,
Gillette can acquire the Since Gillette is well-known global
company, many retail stores are not offended to carry the
company’s product even though the product’s price is high.

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Retail stores are assume that Mach3 will bring more
customers. On the other hand, even more customers come
to store, it is unpredictable for increasing stores sales
revenue because price is too high so that consumers would
not buy. External factors are Competitive, Economic, and
Social. Gillettes major rival in the market is Shick. Since
Gillette is the first company produce triple blades razor, the
company will lead the market; however, rival company
such as Shick will develop the same product with higher
quality or lower price. Then the result will be unforeseen
unless Gillette improve Mach3s weakness – high price.

For long time in the United States, peoples income has
been growing. As a result, customers purchasing power
also increased. However, the companys market is not only
the United States

Categories: Management


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