Gillette Safety Razor

Introduction

Since the toiletries division split off from the safety and razor blade division at Gillette, we need to invest in a new product line with the greatest potential for significant growth; the blank cassette market is something we need to explore. Before we enter the blank cassette market we will need to analyze these four things: how attractive the market is, the strengths and weaknesses we possess in relation to the new line, what target market is most feasible, and what plan of action is best.

Blank Cassette Market

The blank cassette tape market is attractive because of the exponential growth potential. The market is projected to hit $150,000,000 by 1970 which is an impressive number considering this is 60% higher than the previous year, and is expected to grow 30% a year throughout the decade. This shows that the product is still in the early adopter stage of the product life cycle, so there is still time to capture a good percentage of market shares.

Because of this rapid growth in the cassette market from many firms attempted to enter the industry but had very poor quality products that were defective and did not last as long as promised. The majority did not design the cassettes for the consumer they just jumped into the market to make a profit and did not think about the long term brand value that they wanted to create. But Gillette has proven to have superior products in the past and with using the exceed expectations.

Current competition for standard and professional quality cassettes, are Sony, 3M, and Mallory. Although 3M and Sony are also in the reel-to-reel tape market where 3M is the leading brand, in the blank tape market they do not seem to have a competitive advantage. They have very limited distribution with poor displays and packaging, and seemingly non-existent television advertising. But there are newer entrants into the market: RCA, Capitol Records, and Memorex. Memorex is posing a serious future potential threat with a 50 person salesforce of former P&G employees, so the lack of competitive advertising in this market will not last long.

Strengths and Weaknesses

SRD’s key strengths that will be valuable when entering into the blank cassette market are: their ability to handle high volume manufacturing of precision metal and plastic products, marketing of mass-distributed packaged goods that reach over 500,000 retail outlets, a strong sales force, a respected quality brand, strong history of acquisitions that prove diversification abilities, and a proven ability to overcome their competition in the razor industry by innovating.

One weakness that could be a concern is our internal resources. The salesforce for SRD has stated that they can squeeze in the cassettes giving as much as 10% of their time during the first year provided SRD