Cracking the Brand Growth Code

Subconscious brand preference, more than a millennial obsession with direct delivery.  Gillette take note.

Podcast and Transcript from Knowledge@Wharton

MARKETING

Cracking the Code on Brand Growth

The battle for business growth does not take place on the internet or on store shelves. Rather, it takes place in the subconscious mind of prospective customers, whose purchasing decisions are more malleable than many brand leaders realize, write Michael Platt and Leslie Zane in this opinion piece. Zane is the founder of Triggers, a growth strategy company that has helped Fortune 500 firms with brand-building initiatives for 24 years. Platt is a professor of marketing, psychology and neuroscience at Wharton. He leads the school’s Neuroscience Initiative.

When Dollar Shave Club founder Michael Dubin launched his now famous YouTube video in 2012, no one imagined that it would cause earth-shaking tremors under razor behemoth Gillette. But it did. The tongue-in-cheek style video explaining the Club’s many virtues had a seismic effect. The day it was released, the brand’s website crashed from huge traffic. Within 48 hours, 12,000 orders were received. A few years later, Unilever bought the Club for $1 billion.

Most analyses of the Dollar Shave Club’s success conclude that it accomplished this feat because of millennials’ obsession with direct delivery, the founder’s comedic flair, or its bargain basement prices. We say it was something much deeper. In fact, Dollar Shave Club rose to prominence because it employed the formula we have discovered to be the key to changing subconscious brand preference: the expansion of a brand’s positive associations in customers’ memories to the point that it becomes an automatic, involuntary choice.

While some marketers have called this startup’s success an anomaly, we have found that the opposite is true. Every brand, whether a startup or an established household name, has untapped growth potential and the ability to become the automatic choice of more consumers.  ... " 

3D Print Your Own Razor Handles

Nice idea that sounds fun, now engaging will it be?   How will the ads bring up this concept? Personalization certainly.  I have worked with Gillette.

Gillette Lets Consumers Make 3D-Printed Razor Handles  By CGT Staff  

Procter & Gamble's Gillette has introduced Razor Maker, an online assortment of products whose handles can be customized in a choice of 48 three-dimensional designs and seven colors.

The handles will be produced at Gillette’s Boston facility using stereolithography, a technology developed by 3D printing giant Formlabs, to hold either Mach3 or Fusion5 ProGlide cartridges. They will be sold via a dedicated razor-maker.com website and manufactured in limited quantities. Orders will be shipped within two to three weeks.

"Historically, 3D printing has been involved in the development or manufacturing for products people interact with every day. But consumers have had little interaction with 3D printing itself," said David Lakatos, chief product officer at Formlabs. “These new custom razor handles are the next step toward changing that dynamic.”

“Gillette is in the business of helping men look, feel and be their best,” said Pankaj Bhalla, director of Gillette & Venus North America. “That means giving them grooming options that not only meet their shaving needs, but also match their lifestyle, look and budget.

Prices start at $19 for a partially 3D-printed handle with black, rubberized grip; a fully printed handle is $25. Chrome handles are $39 and $45, respectively. Text can also be added to the design. Each handle comes with one razor cartridge. Customers can order four additional cartridges for $15. Color choices are black, white, red, blue, green, grey and chrome.   ....  " 

Gillette

Gillette: Fat, Happy and Vulnerable in Its Own Fiefdom
By Bob Herbold on his blog .... 

A recent article in Fortune magazine discussed the massive loss of market share by Gillette; moving from 71% when it was acquired by Procter and Gamble in 2005 down to its current 59%. It points out that a key reason for this was that Gillette simply missed the growing consumer interest in an adequate performing, and very reasonably priced, razor. Dollar Shave Club, Harry’s and Schick jumped on this trend. Meanwhile, Gillette simply stuck to its decades-old game plan of evermore sophisticated and complex razors at ever-increasing prices.

How did Gillette become so unaware of reality? Basically, it appears that Gillette was its own isolated fiefdom at Procter and Gamble, basking in prior success. They got away with this because competition was historically weak, and Gillette was making good profits, so P&G management left them alone. ... " 

Getting Direct to Consumer Right

From CustomerThink, detailed piece on how Gillette is doing direct to consumer, followiing un a number of moves to deliver quality razor blades with new pricing and replenishment models.
Gillette Shows How to Get It Right When Going Direct to Consumer (DTC).  Will continue to see new approaches  like this.

Gillette Replaces Dad with Assistant

In Fastcompany, by Jeff Beer.   Includes video of Ad:

Most Men Ask Their Phone For Advice Before Dad, So Gillette Made An App For That
The brand’s new Father’s Day ad, “Go Ask Dad” is most definitely trying to make grown men cry.

According to Gillette’s research, 84% of guys said their go-to source for information is their phone, while just 13% said they turn to Dad first. And  72% of guys said their phone was the one source of information they can’t live without, and only 10% said Dad. .... 

So for Father’s Day, agency Grey New York created a follow-up to last year’s ad, aiming to get more young men real-talking to their fathers with another edition of “Go Ask Dad.” Last year it was a tablet, while this year the brand disguised the dads as a Siri-like personal assistant app....   " 

Procter Uses Simple Text for Razor Reorder

Addressing  the Razor blade club competition.  Procter's Gillette is using a simple text for order and replenishment.  How does this compare with approaches like Amazon Dash?  Other automated replenishment methods?

In Bizjournals:
Procter & Gamble Co. revealed today that it has launched Gillette on Demand, which will enable consumers to order razor blades with a one-word text message.

The Cincinnati-based company (NYSE: PG) said Gillette On Demand is the brand’s first direct-to-consumer service. Orders are shipped straight from Gillette facilities to men’s doorsteps in about two to three business days  .... " 

Buying Disruption in Personal Care

Buying into Disruption.

Unilever Buys Dollar Shave Club for $1 Billion   
Deal represents a big win for Dollar Shave Club’s investors.
Unilever announced on Tuesday evening that it is getting into the razor business, by agreeing to acquire Dollar Shave Club.

No financial terms were disclosed, but multiple sources close to the deal tells Fortune that Unilever  UK  is paying $1 billion in cash for the Santa Monica, Calif.-based business. That same source says that Unilever approached Dollar Shave Club about the acquisition.

Dollar Shave Club founder and CEO Michael Dubin will continue to run the company, which will operate its direct-to-consumer razor business as an independent entity. The acquisition should help Dollar Shave Club expand faster into new geographies (it’s currently in three countries), and significantly improve its distribution abilities in existing markets. ... " 

(Update) Discussion in Retailwire.

Leading with Strategic Thinking at Gillette

Via José Ignacio Sordo Galarza:

I hope this note finds you in good health and spirits!  If you recall right, almost 10 years ago, in early 2005 P&G agreed to acquire Gillette in an effort to combine many of the world’s top brands and broaden P&G’s portfolio of consumer products. P&G set a goal of generating more than $1 billion annually in combined revenue and savings within three years of merging with Gillette. ... 

Time pass by.  Last year I was blessed to meet a couple of Northwestern University Professors (Olson and Simerson) and while talking about business strategy and best in class cases, we all agree to write down about the case of the LA P&G merger with Gillette and integrate it as part of a Business Strategy book.  

As of April 13, 2015, our book will be available .  The title is “Leading with Strategic Thinking” and “our” chapter is “Driving Strategy through Structure and Process”.  This is a really nice testament of what Jorge Montoya used to say about the Latino 4F’s:   Focus, Force, Frugality and Foresee Crisis.    Here is a link to the teaser about our work.   .... " 

P&G Razor Innovation

In the HBR Blog.  How consumer innovation for Gillette is moving to the far east.   Matches some other speculation I have heard about how other innovation work is moving to the centers of populations and thus new markets.

EmPower Research

Newly discovered: EmPower Research.  " ... EmPower Research provides Custom Market and Media Intelligence services to Global 2000 companies, and Advertising and PR agencies worldwide. It was founded in 2004 by MIT Sloan MBAs, former Booz Allen Hamilton consultants, and senior marketing managers from Gillette, Whirlpool, and Applied Materials. Our client list today includes some of the world’s best known brands and companies. Our success is driven by a singular commitment to integrity and customer satisfaction. Our goal is to establish long-term relationships with our clients – built on winning recurring business earned via successful prior engagements ... " .  Much more here.  What I have seen so far is impressive.

Gillette, Razor and Blade Strategy

In the HBR blog, more history and discussion of the renowned Gillette razor and blade strategy. " ... What should we take away from this? Did Gillette just miss a better strategy or was Gillette investing in a high-quality brand, which required high prices for the razor handles? Are psychological ties — habit and the like — more important than the legal ties that could have come with the patents? In 1904, knowing what you know about razors-and-blades today, what strategy would you have advised King Gillette to play? .... " . Read the whole piece.

Razors and Razor Blade Strategy

An interesting piece in Techdirt, commenting on an original paper in the Social Science Research Network, about the classic business strategy of razors and razor blades.

We heard it often as a governing profit strategy. That it makes sense to sell the razors at a loss or small profit, knowing that you can sell many compatible razor blades at considerable profit. Those blades can be made so they only work with your razor handle.

Although this seems to be a working strategy, the article examines the history of Gillette, and makes the case that the original razor handle was protected by patents rather than compatibility. A useful commentary on the history of common consumer technology.

Creative Destruction and Gillette

Walter Riker sends this interesting quote and link along. Profound thoughts. Read it all.

Gillette, Razor Blades, and Creative Destruction
by Jeff Stibel
Gillette is perhaps one of the most innovative companies in the world, constantly reinventing its own model, often upending past products in favor of the new in a fit of what most people call creative destruction. And no surprise, Gillette is at it again, with the first new shaver developed since Procter & Gamble bought them in 2005 .. '

Gillette Acquisition Being Realized

An adage article on the acquisition of Gillette, five years later. I saw some of the exchange and I agree there was much hidden value there, and carefully curated can be of considerable value.

Can Knowledge Hurt Innovation?

From HBR, Can knowledge hurt innovation? ' ... A meeting I had recently with some folks at Gillette highlighted an important issue facing the would-be innovator — the "curse of knowledge." ... '. Intriguing thought, but I don't like it.

Procter Buys Retailer

In an unusual move P&G has bought the 'Art of Shaving', a high end mall retailer with 36 stores that sells Gillette products. A rare move into the retail space for P&G, apparently to further understand the male grooming space. More here.

Shopportunity Book

Read Kate Newlin's 2006 book: Shopportunity: How to be a Retail Revolutionary. She is a former president of Faith Popcorn's company: Brainreserve. She also worked at P&G during the late 70's, as I did. The book is directed at the consumer rather than the retailer or manufacturer, but it does make some useful points. Along the way she builds up a set of 21 steps to be a retail revolutionary that are worth considering.

Some of this book is about selling and buying experiences with women's clothing, which I know little about. Yet there are some good tales and insights along the way. The Vlasic Pickles $2.97 Gallon jar example of Wal-Mart and its suppliers is well told. That also leads to the destructive influence that low price and perpetual promotions have had on the department store. Some good historical points about how department stores started and evolved. She also tours upscale and downscale specialty stores. Newlin says that good design, in specialty shops or department stores is rare.

She praises P&G and their Gillette acquisition, if only to provide ammunition to fight Wal-Mart. She is relentless in criticizing Wal-Mart from a number of directions. She suggests that at the end of the day it can be about the thrill of the hunt and that companies like Whole Foods and Wegmans do this very effectively. Part of her advice to consumers is to always shop above your budget (but not necessarily buy). Probably not advice for the Wal-Mart shopper.

They had a shopportunity web site, but it is no longer online. Newlin's consulting company.
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Gillette and Game Marketing

Gillette partners with EA Sports
" ...Gillette and EA Sports officials say the partnership will include joint retail promotions, print and TV advertising, and a heavy online presence. They say they're both targeting young men through sports and want to build their businesses in markets around the world ... "

Project Dogfood

Paul Gillin writes about an upcoming marketing summit:

" ... Announcing Project Dogfood, an experiment in community website development. This is an innovative idea from a fast-moving company named CrossTech Media, which produces a new conference called New Marketing Summit. I'll be co-anchoring this event Oct. 14 and 15 at Gillette Stadium in Foxboro, MA along with bestselling author David Meerman Scott and social media superstar Chris Brogan ... "