Gillette Safety Razor Division: Blank Cassette

Gillette Safety Razor Division: Blank Cassette

Parker McGuiness

January 23, 2017

MKTG 4020-001

Introduction

Gillette’s forecast of demand for its shaving systems revealed that the Safety Razor Division (SRD) would not be able to achieve its target growth several years out, unless there was an addition to one of its product lines. Vice President of new business development for SRD, Ralph Bingham, proposed an entry to the steadily growing blank recording cassette market. The feasibility of introducing this product to the market will be assessed by forecasting sales, market competition and distribution analysis.

Competitive Analysis

Sony, 3M, Mallory are well known brands that control most market share in the professional and standard quality cassette market. However, these brands do not fully utilize advertising and distribution strategies; which opens the door for new entry to the market. Entering the market effectively will rely on strong promotional strategies through packaging and advertising, which the market currently does not have. Gillette has a reputable brand image and the means of access to the market with its well established sales promotion and media advertising. Entry to the market of standard and professional quality cassettes was not only attractive to Gillette. It was noted that more companies were entering the business, eager to improve upon the deficiencies in the present market. Gillette doesn’t have much time to spare if it chooses to saturate the market.

Industry

The blank cassette market expected to reach $130 million in sales in 1970, up 60% from the previous year. Innovations in product design and usability showed a promising market growth rate through the 1970’s. Due to the many trends linking the profitability of the blank cassette market, it was forecasted that sales would increase 30% each year through the 1970’s. In 1979, sales are expected to reach $1.38 billion (exhibit 1). This rapid growth in the blank cassette sales is a strong indicator that the market is promising.

Distribution

Bingham noted the lack of wide distribution of any blank cassette brands. The packaging and display of the cassettes was poor and could be improved upon. SRD’s marketing department is exceptionally strong, and could be utilized to get the product in front of nearly every consumer. The Safety Razor Division also has connections with nearly every main distributor of blank cassettes. By focusing on its already established sales force and wholesalers, distribution through discount stores, drug stores, variety stores, and catalog stores would reach 67% of total estimated sales in 1970. Finding other distributers for a smaller amount of reach would be ineffective due to costs and logistics. The target market for blank cassettes will be aimed at teenagers riding the new technology wave, and young professionals in the work force. The age group between 0-19, 20-29 makes up over half of all cassette owners and will continue to be the primary consumers. Media advertising will be the primary outlet to reaching the target market. There is considerable upside to media advertising because it isn’t currently utilized by competitors. If Gillette’s advertising efforts are presented effectively, and competitors efforts remain the same; it is capable of dominating promotion of blank cassettes and gaining market share.