Gillette's Marketing Approach
Gillette is making a significant change to its marketing approach, which is defined by a 20% price reduction on its razors. Competition and market demand are the two major environmental factors that have driven this action. (Tuttle, 2017). Gillette and its major rival Schick have been working on ways to raise prices over the years by addressing other aspects like the quality and features of their products. They have been using various tactics, such as creating new, elegant patterns for their razors and including more blades. However, the emergence of competitors such as Harry’s and Dollar Shave Club have prompted the company to adjust its price to remain competitive (Tuttle, 2017). The competition has become stiffer, and as a result, Gillette has lost a significant market share, and its sales have become dismal. The market demand has also been dwindling with more people preferring to grow beards, and this has necessitated Gillette to lower its prices to capture the remaining market (Tuttle, 2017).
Impact on Market Share
Gillette has been in command of the shaving razors industry for some time, and this action of lowering its prices is likely to be effective in helping the company regain its lost market share. The company’s lost customers have been shifting to cheaper brands from competitors, and therefore the move of lowering prices is likely to attract those customers back as well as new ones (Constantinides, 2006).
Alternative Strategies
The action taken by Gillette is also a necessary one given the current lower demand for the company’s products. The alternative course of action for Gillette includes entering into mergers, acquisitions, or partnering with some of their competitors. This would help the company to maintain its high pricing strategy while focusing on superior quality and product features as a result of new competencies (Constantinides, 2006).
References
Constantinides, E. (2006). The marketing mix revisited: towards the 21st century marketing. Journal of marketing management, 22(3-4), 407-438.
Tuttle, B. (2017). Gillette Is Finally Slashing Its Crazy Razor Prices. [online] Time.com. Available at: http://time.com/money/4724823/gillette-razor-prices-cut/ [Accessed 17 Apr. 2017].
