Gillette show how leaders can grow
The new version of the brandgym book we're working on is all about brand leadership: how to achieve it, and then retain it. And a great example of a brand leader that keeps getting stronger is Gillette, as described by Mark Ritson in his column.
They have an 85% share of razor-blade
sales, so you may think that's it for growth. But, as Mark explains, this does not have to be the case. Here are his four ways for leaders to keep growing:
"1. Drive
profitability. Market share might have reached its zenith, but that
doesn't mean your margins can't be squeezed. One industry insider
recently claimed that, despite a pack of four Fusion razor blades
retailing for £9.72, the manufacturing and packaging costs for the
product are less than 30p. That's a whopping mark-up of more than
3000%. How about that for a margin?
2. Practise positive
cannibalisation: Gillette launched its five-blade Fusion line in 2006
with a 30% price premium over Mach 3, its previous three-blade
offering. With an 85% market share, it makes more sense for Gillette to
focus its marketing on switching its own customers from Mach 3 to the
more profitable Fusion line than trying to win any more competitor
share. That is why Gillette is spending millions to compete against
itself with ads and online comparisons to convince its Mach 3 consumers
that their current razor is simply not good enough and to trade up to
Fusion.
3. Drive usage. Gillette is now
investing heavily in an online campaign to encourage consumers to use
their Gillette razor 'downstairs as well as upstairs'. Videos with
powerful messages, such as 'When there's no underbrush, the tree looks
taller', are increasing blade-use on the lower body. One of the joys of
an 85% share is that you can run general campaigns to grow total
category usage, safe in the knowledge that most of the upturn in sales
will benefit your brands.
4. Extend
the brand. You have a billion-dollar brand equity, so use it to take
control of other related categories. For Gillette that has meant a
successful foray into the 'software' side of shaving with a 55% share
of the UK's shaving-cream category.
5. Stay edgy. Today's market
dominator could end up tomorrow's has-been brand. But not Gillette, who is one of the brands
linked to the coolest TV series of 2009 – HBO's True Blood. Its tie-in
campaign shows a vampire endorsing Fusion as the best shave for the
undead. It will deliver defensive awareness while keeping the brand
contemporary and hip."
More on how Gillette stay on top here, in a post on how they combine product "sausage" and emotional "sizzle", including my fave Gillette ad of all time starring David Beckham.
