Will P&G take over the Indian Razor Market?

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.

How to start using Facebook Fan Page for small businesses

Over the past three months, I have been helping some small companies (including start-up businesses) and a non-profit organization in developing their online marketing campaigns, especially for social media marketing stuff... It was really hard at the beginning due to the lack of their online content, fan bases, resources, etc. Also, the challenging part was not using “tactics” but developing “strategy”.

It has become a common sense that it is crucial to produce valuable contents and tell your stories to online users to see successful effects from social media marketing campaigns. But how? How could I start it from “nothing”? That was my question... Also, in the real world, not every business sells “interesting” products or “fun” services…

Here are my two cents on how to start facebook fan pages for small (start-up) businesses, which I have gained from the challenging experience.

The first step of Social media marketing is building social network and connecting with people online. This is why we have seen some “Big” companies organizing and working with their “Brand Ambassadors” to build their social media network quickly and efficiently. Some companies assign some of their “followers” as their brand ambassadors who have shown “strong” loyalties to their brands throughout social media sites such as Facebook Fan Pages (e.g. Levis). The brand ambassadors have engaged in increasing brand awareness online for those companies by spreading words and promoting certain campaigns throughout social media sites.

Then, what about the start-up or small businesses? They should find their own brand ambassadors, too! From where? They are all around you! Your friends, employees (if you have), your personal connections in social media sites, etc. Your friend can be the most valuable brand ambassador who spreads your brand out there for you!!! If you have taken Marketing 101, you are familiar with the term, “Early Adopter”. We have learned that we need to focus marketing efforts on those “Early Adopters” to spread words quickly and generate WOM effects effectively at the beginning marketing stage. In the social media marketing era, those brand ambassadors are “Early Adopters” and you need them in developing successful social media marketing campaigns.

To give you an example about “Brand Ambassador”, let’s assume there is a “B” company that has 10 brand ambassadors and each of the 10 brand ambassadors have 100 “personal” connections (friends) in Facebook. When the company publishes a post on its Facebook Fan page and the brand ambassadors click the “Like” button or “share” the post, the post can have a chance to reach out to 1000 (10 X 100) people through Facebook without any cost. This is partly because of the “News Feeds”, which is one of the Facebook functions. Through the “News Feeds”, whenever one person updates his/her status (e.g. “Like”or “Share” a certain post), most of the people in the person’s Facebook connection can see the updates. This could lead the post to be exposed to the friends of the “10” ambassadors and turn them into “followers”.

Lastly, keep in mind that you need to spend most of your time and efforts in developing online content than asking your friends for some “help”. In the end, the quality and quantity of your online content will be the factors that determine the success of your online marketing campaigns. For this, I would recommend having your company’s own Youtube Channel or blog along with Facebook Fan Page for producing online contents constantly. Having blog articles or video materials in Youtube Channel will definitely help you build your contents on the Facebook Fan page as well and they will enable you to constantly provide special experience to your “followers”.

Case Analysis: How Has McDonald’s Become the Market Leader?

McDonald’s has become the biggest fast food restaurant in the world and its logo can be seen all around the world these days. Its recent report for revenues also shows the company’s huge success; the company posted revenues of $5.945 billion for the second reporting quarter of 2010, which is a 5% increase compared to $5.647 billion in the second quarter of 2009. (http://www.wikinvest.com/stock/McDonald's_(MCD))

1. McDonald’s Success during the economic slowdown
Compared to its competitors like KFC and Wendy’s, the company managed to overcome the economic crisis well and generated strong revenue, which enabled the company to add 650 more outlets by the end of 2009. The company’s success can be attributed to its strategy called “Plan to Win” with which the company focused on increasing sales at existing locations by improving the menu, refurbishing the outlets, and extending hours. Its strategy also involves monitoring pricing to make sure its menu remains affordable without hurting the company’s profit margins. For example, although the company struggled with the increasing costs, it has kept the pricing on its Dollar Menu, which brings in almost 15 percent of total sales. To maximize its profit from the Dollar Menu, the company also replaced its $1 double cheeseburger with the McDouble, which is similar but less expensive to make (Strategic Management: Text and Cases). Its success during the economic slowdown can also be attributed to the nature of its products. Since McDonald’s products are considered as “inferior goods”, they were consumed relatively more than other normal goods and contributed to keeping the company business profitable.

2. Learning from Mistakes
Before seeing great success in 2008 and 2009, McDonald’s did experience hard time, which resulted from its “mistakes” in running franchises and monitoring operations over the past decade. For example, its growing size and continuous expansions made it difficult to maintain its core competencies such as consistent, fast, friendly service. Furthermore, it stopped monitoring its franchises for cleanness, customer service, and food quality, which laid the company behind the growing competitors such as Wendy’s. Even though the company has been known as the “best” and “biggest” fast food business in the world, according to a 2002 survey by market researcher Global Growth Group, McDonald’s came in third in average service time behind Wendy’s and sandwich shop Chick-fil-A Inc.

However, the company learned lessons from its “mistakes” and seized opportunities to bring itself to the next level. Some of the efforts the company made to improve its sales again are as follows:

• Getting the basics of service and quality right, in part by reinstituting a tough “up or out” grading system that would kick out underperforming franchisees.


• Tried to draw more customers through the introduction of new products instead of expanding its outlets


• Revamped the menu with “healthier” foods and promoted them with a slogan, “I’m loving it” (Strategic Management: Text and Cases)

3. My two cents on the company's future
There still exist some threats such as the growing concerns about health problems caused by fast foods, which would hurt the company’s growth. In addition, the company has also been facing the changes in the tastes of consumers, which have been led mostly by exotic “fast” foods like sushi. The growing competitions from supermarkets and convenience stores that also offer quick meals have become great challenges to the company as well.

With the efforts that the company has made to improve its product lines and turn its bad image around, however, the company is expected to remain its market power in the industry and sustain its growth. For example, McDonald’s has been trying to include more fruits and vegetables in its popular Happy Meals. This improvement has raised the company’s operating costs because of the perishable nature of produce making it more expensive to ship and store.(Strategic Management: Text and Cases) However, this improvement in the menu will help the company change the way people think of McDonald’s and improve its brand image.

Customers purchase experience and value, not just “taste”. To sustain its “absolute” reign in the fast food industry, McDonalds should strive to be positioned as a brand that provides special experience and value to its customers, beyond just a place to eat a “Big Mac” burger.