Gillette’s Blank Cassette Project

Case Analysis of Gillette’s Blank Cassette Project

Introduction

This report aims to give some recommendations to Mr. Bingham, the vice president of new business development for the Gillette Safety Razor Division (SRD), for his reference when making decisions on entering the cassette tape market after careful analysis of the current situations SRD faced.

Analysis

 The necessity of entering the blank cassette market

Given the current situation of SRD into consideration, entering the blank cassette market is of great necessity. After the removal of the toiletries division from the SRD’s jurisdiction, Mr. Bingham needs to seek new ventures with high growth markets where SRD’s already established strength can be used. The blank cassette market is such an opportunity. The market for recording tapes of all types would be approximately $650 in 1979, $500 of which would be in prerecorded tapes and the remaining would be in blank tapes. Once the project is successful, SRD could get out of its current dilemma.

 The strength of entering the blank cassette market

There are at least four strengths for Gillette to enter the blank cassette market:

1. The lack of leader in the existing blank cassette market. Due to the recent emergence of this market no company has successfully positioned itself at the top, and as a result the existing market is full of low quality cassettes, which do not fit machines, have poor internal cassette construction in order to reduce costs, and inferior quality tape resulting in poor recordings.

2. The great potential of making profit of the blank cassette market.

3. The established good reputation of Gillette. Gillette is strongest in mass-distributed packaged goods, the high volume production of plastic products, and has an already established sales force within the largest selling retailers of blank cassettes including 500,000 discount stores, department stores, and drug stores. The strengths that Gillette has established just so happen to be what firms in the cassette market struggle with most. This has sparked the consideration for entering the cassette market.

4. The mature advertising capacity.

5.

 Suggestions on the decisions to be made be made by Mr. Bingham

1. The cassettes should be marketed under the Gillette name. Although the new cassettes under the Gillette name would have no additional function over other brands, the new cassettes would sure have a good quality. That is to say, the cassettes under the Gillette name would not do harm to the established reputation of Gillette. It is suggested that