Gillette to Unveil Product Innovation, Fighting for Market Share
Jan 7, 2004
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Personal care products maker Gillette Co. announced plans to unveil its latest product innovation on Jan. 15 in New York, U.S.
The Boston, MA, U.S.-based company, which makes Gillette razors, Duracell batteries, and Braun Oral-B dental care products, declined to comment further on the introduction.
The development comes as Gillette faces off against rival Schick-Wilkinson Sword in the razor category, leading some industry analysts to suspect the company may announce a development in its razor technology.
Gillette is already preparing to bring Venus Divine, its next-generation of women's razors, to market in the spring. The company claims the new razor, which has additional lubrication in its moisturizing strip, outperforms its Venus razor, which was introduced in 2001.
For years, rival Schick was a distant number two to Gillette. However, since the sale of Schick by Pfizer Inc. to Energizer Holdings Inc. last year, Schick has taken a number of aggressive, suggesting it is trying to take some of Gillette's business.
Last year, Schick introduced Quattro, the first four-blade razor for men, and Intuition, a shaving system for women that is attaches a three-blade razor to a lathering bar.
Quattro was a direct challenge to Gillette's Mach3 line, a three-blade razor introduced more than 5 years ago.
Gillette has taken Schick's challenge seriously and has defended its market share by increasing the amount it spends to advertise and promote its premium razors. The efforts included a large mailing of free Mach3Turbo razors this past fall to consumers in selected markets and the introduction of the Mach3Turbo Champion, a red, racing-inspired version of its three-blade Mach3Turbo razor, in September 2003.
In addition, Gillette filed a federal lawsuit in August 2003 against Schick, alleging Quattro infringed one of Gillette's patents for the Mach3.
Then, in December, it filed a second, separate suit alleging Intuition violated Gillette's patents for "sealed storage tubs," which Schick uses to hold Intuition's cartridges and affix them to a shower wall.
Schick has also sued Gillette. Schick alleges Gillette's advertising claims that its razors provide "the world's best shave" are false.
Only time will tell who will win both in the courtroom and in the market.
At the end of 2002, Gillette had an 84-percent share of the U.S. razor category based on the value of products it sold, as tracked by Chicago, IL, U.S. market researcher Information Resources Inc., according to CIBC World Markets analyst Joe Altobello. Schick had a 12-percent market share, he said. By the end of November 2003, Gillette's share had fallen to 57 percent and Schick's share had climbed to 41 percent, Mr. Altobello said.
Although he warns that the information from IRI omits some important retail channels such as stores owned by Wal-Mart Stores Inc., Mr. Altobello said the numbers illustrate Gillette is wise to take Schick's challenges seriously.
"They have gone to great lengths to make this (product) announcement," he said. "This leads me to believe it is a significant announcement, maybe even in the blade and razor category."
Morgan Stanley analyst Bill Pecoriello expects Gillette may launch a " breakthrough" razor this year. However, Mr. Pecoriello was expecting the product would be introduced in the second of half of 2004.
A spokeswoman from Energizer, which also competes with Gillette in the battery business, said she hadn't heard about any product innovations expected from Gillette. She declined to speculate on what news Gillette might announce. (Dow Jones)
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