Will P&G take over the Indian Razor Market? – Tae Hyun Moon

Gillette has been leading the world’s razor and blades sales and it possesses dominant market shares in the developed countries like the U.S. Then, what have brought such a great success to Gillette in those regions over the years? The answers are its “premium” quality and strong “brand value”.  Its products are quite expensive, but consumers have been willing to purchase the pricy products because their value for the products exceeds the prices.  For instance, its parent company, P&G, introduced the Fusion ProGlide in the U.S market in June 2010, which is its most expensive razor. A four-pack of the manual cartridges sells for $16.99, about a 15% premium to regular Fusion blades. According to the company, the Fusion ProGlide is now its best-selling razor in the market.

As the brand turns its eyes to the emerging markets like India, however, it has been facing new challenges to overcome. P&G has found out that the consumers in the emerging markets are totally different from the ones in the developed countries.  Its failure to capture the differences in consumer attributes & behaviors has caused its poor performance in the emerging markets and Gillette has been behind some of its competitors and local brands.

For example, P&G has tried to penetrate the razor market in India for years. The brand, however, has been struggling with the market mainly because its products are “too” expensive for Indian consumers to afford.  As a response to this, P&G introduced Gillett Vector, which has sold for a reasonable price, but there have been some complaints about Vector’s quality. Because the product is often carelessly manufactured, the cartridge for the Vector has even come under close scrutiny by consumers (http: //badgerandblade.com).

After seeing some failures, P&G is developing its Multidomestic strategy to improve its performance in the emerging markets. It is a business strategy with which companies produce differentiated products/services that could satisfy consumers in different markets who have different preferences and behaviors.  For example, products as varied as detergents, shampoos, pickles, and cough syrup are sold in sachets in India.  As an effort to adapt to the Indian market, P&G now uses “reverse engineering” as one of its Multidomestic strategies for its new product development.  With reverse engineering, the company starts with price-setting at which consumers can afford and then adjusts the features and manufacturing processes to meet the target.

Gillette Guard, which P&G recently launched, could be considered as a product that the company developed with Multidomestic strategy.  Gillette Guard is designed to be affordable for the Indian consumers and lead the brand to the top place in the market. The razor costs 15 rupees, or 34 cents, and uses blades that cost five rupees, or 11cents. Its price setting takes into account not only consumers but the booth (kiosk) owners who serve most shoppers in developing markets. The company hopes that the lower cost would stimulate more of the small store owners to stock up on the item (Ellen Byron, Gillette’s Latest Innovation in Razors: the 11-Cent Blade, WSJ, Oct 1st 2010).

In addition to the price factor, P&G designed Gillette Guard to satisfy different tastes of the Indian consumers. For example, in designing the product, P&G took into account the fact that Indian men prefer a lighter weight although most men in the U.S. and Western Europe prefer a heavy razor handle. Gillette Guard also aims to attract users of double-edge razors, about 400 million men in India (Ellen Byron, Gillette’s Latest Innovation in Razors: the 11-Cent Blade, WSJ, Oct 1st 2010).

Despite its different approach to the Indian consumers with Gillette Guard, there still remain a few challenges that P&G has to overcome to become the market leader.  Competition against Super-Max would be one example. In fact, Super-Max is currently taking the first place in the double-edge blades market and its products cost roughly 1.5 to 2 rupees only, which is half of the cost of Gillette Guard.  Whether Gillette Guard would successfully attract low-class consumers and increase its brand loyalties among them will be the ultimate turning point to the company which will determine its future market power in India.


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