Sample Marketing Analysis Paper on Proctor and Gamble

Executive Summary

Gillette mach 3 is one of the top razor brands across the world. The product, which is manufactured and distributed by P&G has been in the market since 1962 and has gained significant market shares through the years. The U.S and the U.K markets have particularly been an essential part of the global market for Gillette mach 3. Various factors have contributed to this product’s market growth. For instance, the company has invested heavily in different marketing procedures both in the international and the local markets. Different factors have also contributed to the product perception in the local and international markets. For instance, a combination of political, economic, social, environmental, legal and technological factors has driven commerce in the international market to a significantly high potential. In the U.K. P&G’s Gillette mach 3 has maintained a high market position in spite of the competition from Wilkinson’s Sword.

Internally, P&G has established a series of brand strengths and weaknesses which need to be explored. For instance, the product positioning, premium pricing, customer engagement and promotional activities, have all contributed significantly to the growth of P7G’s market shares in the razors’ industry. The success of the company can be attributed to its key strengths including global brand awareness, innovation in product development, strong marketing capacity in the international and local markets, and technological advancements. The company can continue to expand into new markets with the product and to identify opportunities for product innovation since Gillette mach 3 is currently in the mature product market in both the international and the local markets.

 

Introduction

Developing an international brand is an essential aspect of marketing practice. From large multinational companies to those that are only beginning to go international, ensuring that the created brand is recognized across borders is quite a challenge, and effective implementation of global marketing best practices is required. A thorough analysis of the international market environment, exploration of the organizational internal strengths and opportunities and application of proven strategic methods in reaching out to the target population are crucial if a brand is to grow sustainable. For instance, the Proctor and Gamble brand, Gillette Mach 3, provides evidence that product marketing is required regardless of the size of the producing brand. With the high level of brand awareness across the globe, P&G still had to invest significantly in marketing the new product in the UK market (local market), as well as in the international markets. In this essay, a critical analysis of the marketing practices used by P&G for Gillette Mach 3 is presented across the local and international markets. The UK is considered as a local market while the U.S. is a part of the international market to which Gillette is marketed.

Environmental Analysis

The effectiveness of a marketing plan relies on the influence of environmental factors on a product’s marketing. Environmental factors provide opportunities and threats to product markets; hence can be used as the basis of defining the acceptable practices in product promotion. To understand the potential of the product in any new market, conducting an environmental analysis is considered more like a strategy for understanding the market than it is a strategy for promotion of the product itself in specific markets. The PESTLE framework is utilized for an exploration of the external environment as it gives the opportunity to address all factors that may influence international business or another.

The first consideration in the PESTLE analysis framework is the political environment. Political factors determine the extent of a government’s influence on business. A government may, for instance, impose new taxes and duties to specific products in the market. The UK government provides incentives for businesses in the country. Tax incentives for research and development activities provided by the UK government would be beneficial for the P&G Gillette mach 3 market. Similarly, the U.S. provides incentives for businesses in the country. Based on these factors therefore, Gillette mach 3 has an opportunity in the local markets as well as in the international markets. Supportive government structures increase opportunities for profitability hence the potential for the brand’s growth in those markets.

Environmental factors such as interest rates, inflation and economic growth patterns affect the market growth of products in both the international and local markets. Key trends in economic progress including the shift of the economic superpower status from the U.S. to China and the exit of Britain from the EU affect the markets significantly, resulting in currency value changes. These affect the purchasing power of the consumers. In line with these factors and the consideration of Gillette mach 3 as a premium product, it can be deduced that P&G would have fluctuating growth in the local and international markets. Rastogi and Trivedi (2016) described social factors such as demographics, cultural trends and population analytics as essential in describing the external business environment. Such factors determine the propensity of the targeted customers to purchase particular products. In marketing Gillette mach 3, P&G positions the product as a premium product that draws people from conventional use of the cheap and easily available users. Majority of razor users in both the local and international markets may not afford the high prices associated with the Gillette mach 3 razor. Beenstock (1998) also reported that the marketing conducted for Gillette mach 3 purposed to improve the market shares for P&G’s main competitors in the UK market to the targeted 24% due to the premium prices assigned to the product and the social perceptions of the consumers. In the U.S. market, the main social factor that has affected the market performance of Gillette mach 3 is demographic change in that the population of the target market comprising of people of 29-39 years of age has been reducing. However, the social shift towards technology has led to the preference for disposable razors, and subsequently significant market opportunities for Gillette mach 3. By 1998, the market shares had grown by 70% of the targeted growth, indicating more growth prospects.

Similarly, technological factors that have resulted in the market growth including advancements in product innovations also affect the marketing efficiency and market growth of the company. Gillette mach 3 marketing has an opportunity in the local and international markets by virtue of the fact that it presents a revolution of shaving technology from disposable razors to non-disposable razors. In the US market, this creates an exceptional opportunity for those who seek smooth shaves. On the other hand, the UK market is stratified into those who would want the non-disposable razor at a premium price versus those who use the low cost products. With P&G’s major competitor in the market, Wilkinson Sword, being from the UK, the company faces a challenge in getting through to the diminishing target population of the 15 to 24 year olds who prefer low cost shaving systems (Beenstock 1998).

Legal aspects like taxation, employment, resources, imports and exports also influence the market characteristics across both the local and international markets for Gillette mach 3. In line with these factors, both countries have stringent regulations on labor management, resource utilization and environmental conservation practices. The legal and the environmental aspects of the external business environment are significantly intertwined and the capacity of the company to satisfactorily align its marketing practices to the legal and environmental requirements in both countries determines its potential for growth. The non-disposable technology marketed by Gillette mach 3 presents a revolution in environmental conservation through systems that foster recyclability.

Industry Analysis

The shaving systems industry has grown significantly through the years, resulting in the development of shaving systems that defy the conventional disposable razor systems utilization. P& G has been actively engaged in developing a sustainable market for its products, particularly Gillette mach 3, through the use of effective marketing mix management. Porter’s five forces can be used to explore the position of the product across the local and international markets based on different factors. The marketing mix can be used to define the product characteristics and the buyer behaviors from one country to the other, based on the impression that the company creates of its products and markets. In terms of product, Gillette mach 3 was the game changer in the shaving systems industry, and has since been mirrored by the key competitor of P&G in the industry. The product, marketed as a premium product in both the U.S and the U.K, provided users with benefits such as a clean shave, no bumps, comfort and reusability. These product attributes were formerly inexistent in any shaving products and are thus the key value propositions provided by the company. In the UK market, Gillette mach 3 currently faces fierce competition from Wilkinson Sword’s new products, which have been marketed as health razors. Gillette mach 3 has, however, penetrated much of the U.S. market, due to its marketing as a U.S. product (a factor which has been described as fallacious marketing) (Beenstock 1998).

In terms of pricing, Gillette mach 3 premium pricing sets it apart from other shaving systems. With the growth in the razor dominated shaving industry from 64% to 70%, it is expected that Gillette mach 3 will be able to continue attracting a target population that is above the conventional shavers’ population. With the presence of alternatives, Gillette mach 3 reaches less of the target market compared to the expected 15-24% (Statista 2018).Other factors such as promotional activities, the place, and the people, have also contributed to Gillette’s performance as an international product brand. In terms of promotional activity, P&G has actively participated in marketing activities for Gillette mach 3 across the local and international markets since its initial marketing. The company is actively engaged in internet marketing including through the use of social media campaigns and the company websites. Additionally, the company invested more than 432 million in marketing in the UK market alone. The need for heavy promotional activities is more prevalent in the UK market due to the greater competition in that market.

Marketing Strategy

P&G has been actively engaged in a series of marketing strategies for Gillette mach 3. From the product’s introduction in 1962, the company has planned and executed a series of campaigns on creating brand awareness and recognition across the international market. The impact of these campaigns has been an increase in brand awareness over the years. The chart below shows consumers’ responses on the types of razors they have used before. Standing at 41% usage, Gillette mach 3 is one of the best performers in terms of razor choice after Gillette Fusion (Bell et al. 2014).

The company has provided a description of different brand elements that make Gillette stand out from other brands in the shaving industry. Marketing approaches that focus on real people in target markets, televised media distribution that is aligned to national cultures and interactions that foster brand awareness are part of the conventional marketing activities for P&G and Gillette mach 3. In the UK market, the company has used over 213 million pounds in marketing through the years, mainly distributing television media content. Gillette mach 3 reported approximately 3.2 million unit sales in the U.S. in 2017, being the leading single razor brand in sales (Statista 2018). In the U.K, Gillette mach 3 was the second largest market share holder after private brands such as Bic from Wilkinson Swords (Statista 2018). With these characteristics, the product is bound to grow further in terms of market reach. The company continues to develop newer product attributes courtesy of technological advancements that have provided unparalleled support to premium brands. Moreover, Gillette mach 3 has a series of other supporting products with which it is marketed, giving an impression of a whole package rather than different products for the same purpose.

Marketing Strategy Analysis:

In terms of the market reach, the company has been able to effectively segment the markets and to maintain a high brand reputation that has promoted product purchase behaviors and brand building. The company is characterized by several key strengths and opportunities which foster its operational efficiency in the premium products market. For instance, the key brand strength associated with P&G is its recognition as an international household brand. The company markets several other household products that have become key brands in different sectors such as the Tide washing powders and liquid, Pampers baby diapers and many others. Each of these products has a target market, which also has the potential of being a market for Gillette mach 3 in each of the two targeted countries. In the UK, Gillette mach 3 has grown as a result of its strengths in brand name, as well as marketing activities. The chart below shows the progress in product ranking based on the responses from a survey carried out among French customers to rank different refillable razor products.

Source: (Statista, 2018)

P&G has invested heavily as a result of its financial capability, in the promotion of Gillette mach 3 and other associated products. With the heavy investment in marketing, the product has grown into a household brand name both in the UK and in the U.S. In the U.S., in particular, P&G has an additional strength in that while the brand is not a local brand. The company developed an impression on the minds of the customers that it is a local brand by virtue of the product qualities and the company’s recognition of national cultures and values. The only weakness of the brand is that it is marketed as a premium brand, which, to some extent, limits accessibility to other consumers who would have otherwise purchased the product.

The technological advancements involved in the development of a premium product act both as an opportunity for Gillette mach 3 and as a threat to the product’s existence due to its impacts on production and pricing. Revolutionary technologies in the shaving systems industry imply that a company such as P&G has to be constantly innovative with its products and to realize greater value for the consumers. According to Beenstock (1998), the availability of technologies has led to other companies also developing products that are similar to P&G’s Gillette mach 3, as exemplified by Wilkinson’s Sword. This means that with increased competition, P&G has to work harder in marketing, making technological advancement a threat to the survival of Gillette mach 3 in the local and international markets. On the other hand, P&G can adopt technologies for greater product innovation, and realize higher customer value through better marketing approaches.

Conclusion and Recommendations

The sustainability of Gillette mach 3 in the local and international markets is dependent on the company’s willingness to engage in greater product innovation, as well as higher investments in marketing practices. Currently, the product has gained significant recognition in both the local and international markets, mainly through limited competition in the initial introduction phases, and through the implication of the local brand perception in the U.S. P&G has used various marketing strategies to reach out to its target customers including by leveraging its brand name in different countries, using internet-based media in product promotion, setting a premium price and position Gillette mach 3 as a premium product in both the U.S. and UK markets. Each of these activities has significantly contributed to the market growth of the product in different countries, and the company can now focus on developing new markets and new products improvements for Gillette mach 3. Currently, it can be concluded that the product has reached maturity in both the UK and the U.S. markets.

Reference List

Ball, B, Rosser, B, Stanney, K, and Thomson, B 2014, ‘Market research: Gillette,’ [Slideshare]. Accessed from: <https://www.slideshare.net/BThomson22/gillette-market-research-report>. [19 Nov 2018].

Beenstock, S, 1998, ‘Marketing focus- cut –throat competition,’ Campaign Live. Accessed from: <https://www.campaignlive.co.uk/article/marketing-focus-cut-throat-competition-gillettes-aggressive-launch-mach-3-will-raise-stakes-shaving-systems-sector-pioneered-sensor-sue-beenstock/51364>. [18 Nov 2018].

Rastogi, N and Trivedi, MK, 2016, ‘PESTLE technique: a tool to identify external risks in construction projects,’ International Research Journal of Engineering and Technology 3, no. 1, pp. 384-388. Accessed from: <https://www.irjet.net/archives/V3/i1/IRJET-V3I165.pdf>. [18 Nov 2018].

Statista, 2018,Unit sales of the leading razor brands in the United States in 2017,’ Statista. Accessed from:<https://www.statista.com/statistics/194714/share-of-us-razor-sales-in-2013-by-brand/>. [18 Nov 2018].