In 1900, King C. Gillette had the revolutionary idea to create a disposable blade that was very thin
and very strong. The concept of an inexpensive disposable blade made of stamped steel seemed
unbelievable at the time, yet by 1901 he had proven disbelievers wrong. The Boston-based
business person founded Gillette that year; he passed away in 1932 after growing the company,
eventually selling it to a fellow director, John Joyce. Fast forward to 1971: Gillette was still going
strong and producing the first twin-blade shaving system, the Trac II.
In 2005, the company was purchased by Proctor & Gamble Co. (P&G), an American multinational
consumer goods company, for over USD 50 billion, in the largest acquisition in its history. Today,
Gillette is the leading men’s razor brand, with 80 percent of U.S. market share. Gillette’s most
popular razor, the triple-blade Mach 3, with diamond-like coating blades, ‘Power Glide’
smoothness, ergonomic handles and pivoting precision heads, is sold internationally as a mid-tier
product.
In 1984, while it was still operating as Gillette, the company entered the Indian market with the
Mach 3 in local packaging, targeting professional men with higher-than-average disposable
incomes. The Mach 3 promised a close shave, done quickly and with less irritation than other
razors, and its promotional materials and distribution models all supported that promise. This
value proposition worked well in developed countries, with P&G offering the same razors in
different packaging. In India, however, despite market presence for over twenty years, the
company was unable to gain dominant market share.
Market Research
In 2009, deciding to address weak sales in India, P&G sent a diverse team to get a closer look at
how Indian men shave. In the 2011 P&G Annual Report, one member of the team, Graham
Simms, Male Grooming Research and Development, describes how the team conducted
thousands of interviews, home visits and shop-alongs to gain a strong understanding of the habits
and routines surrounding shaving in India. At the time, the average Indian man was shaving with
a double-edged razor, a century-old technology, because it was a more affordable option. Since
the average Indian man represents half a billion potential customers, this was a significant cultural
preference that needed to be taken into consideration.
Products and Services for a Global Market Module — Product Development
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Graham goes on to say the team discovered Indian men were shaving with a double-edged razor
while sitting on the floor, in low light and holding a mirror in one hand. This resulted in many nicks
and cuts and an uncomfortable, time-consuming shaving experience. In addition, the lack of
running water in their homes meant the men had to go outside to a community water source and
pour water into a bowl to carry back to their houses to rinse the blades. Lastly, the team found
that Indian men had an indifferent attitude to shaving and went longer between shaves than their
U.S. counterparts. It was something they could do to feel good about themselves, but they weren’t
willing to pay a premium for it, even if they could afford to.
Localization
Previously, Gillette and P&G had employed the “glocalization” model of international trade, taking
a domestic product and doing the minimum to customize it to each international market. This
could include using locally targeted packaging or making only slight modifications in
manufacturing, both common practices for large companies expanding into new markets. In order
to address its market challenges in India, P&G decided to start from the beginning and produce
a model that would directly meet the expressed needs of the Indian market: cost, safety and ease
of use. This method of wholly customizing to a target market is known as “localization” and is
becoming increasingly popular as international customers become more discerning with their
disposable income.
Through this process, the Gillette Guard razor was created. The Guard is the most significant
product launch since the creation of the Gillette brand. It uses 80 percent fewer parts than the
best-selling razors and consists of plastic housing, a single blade, a safety comb to reduce nicks
and cuts when shaving longer hair, easy-rinse cartridges to minimize use of water, an ergonomic
ribbed handle for ease of use, and a hanging hole for easy storage when not in use.
Moving to a drastically simplified product design, a process called “reverse innovation”, and
relocating the entire manufacturing process to India allowed the company to significantly reduce
costs and offer the product at approximately USD 0.30 per razor and USD 0.10 per blade when it
launched in 2011. As part of the launch, the company revised its marketing strategy to address
the indifferent attitudes toward shaving and adjusted its business model in the country.
Rather than focusing on strong relationships with a handful of powerful retailers, P&G focused on
India’s network of local shops, or kiranas, to distribute the newly developed razor, making it readily
available to everyone, everywhere. It also began a strategic marketing campaign, hiring
Bollywood actors to represent the company in a series of advertisements showing good-looking
actors dancing in the streets, gaining the attention of the town and of an attractive Bollywood
actress. The series of ads and the local distribution channels worked together to begin changing
Indian men’s shaving culture, and this contributed greatly to the Gillette Guard’s success. Today,
Indian men prefer the Gillette Guard to their traditional double-edged razor seven to one, and
P&G has over 50 percent of the market share in India.
What’s Next?
P&G successfully used reverse innovation to become a leader in the Indian market. What are its
next steps? Some experts suggest the challenge the Gillette brand may eventually face is a
phenomenon called “market disruption”. This occurs when a domestic or international supplier
begins offering a simpler and cheaper option in a well-developed market. P&G has chosen not to
offer the Gillette Guard in its domestic market for the time being; however, at some point in the
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future another company may offer a similar product. This could greatly decrease P&G’s long-held
dominant market share domestically. Potential risks aside, the case of P&G and the Gillette Guard
in India is an excellent example of a company focusing on localization of its products and reaping
the benefits.
Learning Outcomes
This case study relates to the following learning outcomes from the module Product Development
in the course Products and Services for a Global Market:
• Describe international trade considerations and their implications when developing or
adapting products for international trade, including market entry strategies, product life
cycle and market research regarding the product.
• Incorporate product design considerations and design policy in products to suit consumer
preferences, and to include comparative advantages in international markets
• Describe product adaptation and customization, and considerations for use of each.
