Gillette : Managing Product Innovation
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Case Details:
Case Code : MKTA015
Case Length : 21 Pages
Period : 1990-2003
Pub Date : 2003
Teaching Note :Not Available
Organization : Gillette
Industry : Consumer Goods
Countries : USA
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Please note:
This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Introduction Contd...
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Gillette had spent millions of dollars each year on R&D in its seven laboratories located in the US, UK, Germany and Spain.
The R&D investments had resulted in such successful products as Mach3, Mach3 Turbo, Sensor, SensorExcel, Gillette for Women Venus, Oral-B CrossAction Toothbrush, etc. Mach3 and Sensor were considered to be Gillette's most successful product launches.
Gillette's stated goal was to achieve 40% of its sales from products launched in the previous five years. Gillette estimated that to achieve this goal it needed to launch 20 new products every year.
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Background Note
Gillette's history dated back to King Gillette (King), who had established his career as a product salesman. In 1895, while working for the Baltimore Seal Company, King arrived at the idea of a disposable razor blade, that men interested in shaving on their own would find convenient.
He also discovered that men would pay as much as $5.00 for a home shaving kit. King reasoned that, as the blades were cheap, the cost of shaving at home would slowly decrease and more and more men would pickup the daily shaving habit.
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In 1901, William Nickerson, a MIT graduate and a successful mechanical engineer, joined King. Together they formed the Gillette Safety Razor Company in Boston (The name was changed to Gillette Company in 1952).
They quickly developed the machinery for the low cost production of the blade. A razor plus one blade was priced at $5, and 20 blades at $1.
In the first year of launch (1903) only 51 razors and 168 blades were sold. The following year, an US patent was awarded to the product. Soon the sales increased to 90,844 razors and 123,648 blades. Within two years, Gillette had captured 80% of the US market for razors and blades...
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