MarkeLlng ManagemenL ll Workshop on rlclng for CllleLLe 8azors

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Sec 8 Group 10
hlshek SrlvasLava (11CuM064)
mlL has (11CuM068)
nush Saha (11CuM074)
Loveleen Slngh (11CuM088)
MohlL kapoor (11CuM093)
aiketing anagement II
Woikshop on Piicing
Razois & Blaues
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Table of Contents
ecLlve 3
lnLroducLlon 3
MeLhodology lollowed 4
M8kL1 8LSL8CP 8lCL S8Lu CLCuL1l- -u -L?SlS 4
rlce spread 3
rlce Spread for varlous SegmenLs 8
PypoLhesls regardlng prlclng of razors 11
rlclng SLraLegy 11
ulsLrluLlon -eLworks and Marglns 14
ulfflculLy ln comparlson of prlces of dlfferenL 8rands 13
ulfference ln aprlorl expecLaLlons and acLual scenarlo 13
ppendlx 16
ppendlx 1 LlsL of rlces of ulfferenL 8rands across varlous markeLs 16
ppendlx 2 LlsL of all 8rands accordlng Lo lndusLry segmenLaLlon and rlce spread 18










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Ub|ective
The objective oI this workshop is to discover the diIIerent pricing strategies employed by various
brands belonging to the same or diIIerent company in the Razor product category in India, and
deduce the Iactors that are stimulating a particular organization to adopt a particular pricing
strategy.
Introduction
It is interesting to note that in this vast country with the population oI more than 1,025,251,059
(as per census) the number oI males above 18 years oI age is 273,480,712 and Iemales is about
494,828,,64 the number oI units/industries manuIacturing saIety razor blade is only 2 nos. and
that too in large scale sector. These are M/s Indian Shaving Products Limited and M/s Vidyut
Metallics Limited. Former has collaboration with Gillette Inc. oI U.S.A and latter has
collaboration with Speciality blades Inc. U.S.A. The brands being manuIactured are Gillette, 7`O
Clock, Topaz and Super Max, Wilkinson Sword etc. In small sector there are Iew players like
Malhotra Shaving Products with brand Glide.
The total market size oI razor and blade industry in India has grown Irom a Rs 2 billion market
in 1986 to 6 billion market in 2006. The market has a 15-20 rate oI growth overall. The
premium segment is growing at a higher rate, oI 35-40. It is a Iragmented industry and is
getting consolidated. As per AC Nielsen/ORG's estimates, the domestic shaving preparations
market in 2003 was pegged at 3.8 billion units y volume.
Due to increased awareness and rising income levels, the industry is expected to undergo a major
shiIt Irom traditional double-edged razors segment to twin and triple blades razors segment.
Furthermore the Indian blades and razors market continues to be dominated by the double edge
blade segment (more than 90). However, Iactors such as increased purchasing power oI the
Indian consumers, a high level oI interest in personal grooming amongst Indian men and a strong
Iocus by companies under this segment to create awareness oI technologically advanced products
have resulted in very encouraging signs oI growth in the triple blade and twin blade systems. In
double edge blade system there is a lot oI competition Irom organized and unorganized players
as the technology requirement is low and pricing oI these blades is also quite low.
GIL is the largest MNC branded player with no signiIicant MNC / local organised competition in
personal grooming segment.
Thus, the industry is growing at a decent rate but still is at an inIant stage and this oIIers great
opportunities to players like Gillette to expand their customer base to include higher number oI
lower middle class people and thereby increase their revenues and proIitability. Also the
premium market is growing but there are not many players in Indian market. Gillette is
undisputed market leader in premium segment with oIIerings such as Mach3, Mach3 Turbo.
Also Gillette has entered ultra premium market with a new launch Fusion.
The industry segmentation is done on the basis oI Ieatures. The diIIerent segments here are Flat
Blade traditional razors with wings to Iit in blades. Popular brands include Zorik, Parker, Indian
and many Chinese products.
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Single Blade which are low priced and have single blade attached to cartridge, these are
generally popular in rural areas where people do not generally shave themselves. Either they buy
razor Ior animals or barber buys them. Popular brands are 7`O clock, 7`O clock PII, Guard, Clik,
Super Clik, Platinum, Glide magik, Chinese plastic and steel razors. Twin Blade which priced
higher than single blade and have two blades to provide smooth shave. Some also have lubricant
strip attached to them. Used in both rural and urban areas by middle class. Popular brands in this
category are Gillette Vector, Vector Plus, Presto, Sensor excel women, Gallant II, Laser II.
Triple Blade which has three blades and lube strip. Premium segment blades and are popular in
urban areas and more users are Irom younger generation. Popular brands in this category are
Gillette Mach3, Mach3 Turbo and SuperMax III. Four Blades which contains Iour blade and is
priced higher than three blade razor. Only one brand present in this segment is Quattro by
Wilkinson. Five Blade which has Iive blade cartridges and is meant Ior ultra premium segment.
Its latest in market and only brand present in this category is Gillette Fusion and Fusion Power.
Also all oI the above segments are Iurther divided into Disposable and Reusable Category with
diIIerent brands available across both these segments. A detailed chart is given showing brands
present across diIIerent segments.
Metbodology Followed
An on-site survey was conducted by our group. We covered the markets oI Delhi, the NCR, and
its adjoining villages. DiIIerent points in the distribution chain were contacted; distributors,
wholesalers, and retailers. In-depth interview was conducted with the person-in-charge` to get
an estimate oI the margins, the prices, and the popularity oI each product under the Razor
category. The data thus collected has been tabulated in the excel sheet and attached with this
document.
MARKET RESEARCH: PRICE SPREAD CALCULATIUN AND ANALYSIS
We have visited various parts oI Delhi-NCR in order to do price comparison. The markets
covered were:
O Chawdi Bazaar
O Sadar Bazaar(Old)
O amla Nagar
O Chandni Chowk
O hirki Village
O Raj Nagar
O Saket Market
O Big Bazaar(DLF Saket)
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O Aya Nagar Village
O Nainwal
O Noida
O Murthal Village
O Sector 23 A Gurgaon

Price spread
In order to calculate the Price spread, we have chosen the Ieature (Blades/Disposable/Non-
disposable) as the diIIerentiation criteria.
OVERALL (in Rs.)
O Max Price: 449
O Min Price: 3
O Spread: 446
!rice:
Economy Under Rs 20.00
O Max Price: 18(Super Clik, Super Max3)
O Min Price: 3(Chinese Plastic)
O Spread: 15
Mid-Range Rs 21.00-80.00
O Max Price: 70(Topaz)
O Min Price: 22(Zorik)
O Spread: 48
Premium Rs 81.00-Rs 200.00
O Max Price: 199(Sensor Excel Women)
O Min Price: 90(Mach 3)
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O Spread: 109

Ultra-Premium Above Rs 200.00
O Max Price: 449(Fusion Power)
O Min Price: 250(Fusion)
O Spread: 199
Features:
Reusable Disposable
Single Blade 7 O'clock
7 O' clock PII
Guard
Click
Super Click
Platinum

Glide Magik
Chinese Plastic razor
Chinese Steel razor

Twin Blade Vector Plus
Sensor Excel
(Women)
Laser II
Gallant II

Presto
Sport Disposable
Glide Ultra
Glide Pace

3-Blade Mach3
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mach 3 Turbo
Tech3
Sport 3
Petal 3(Women)

-Blade Wilkinson Quattro
5-Blade Fusion


Disposable Reusable
Max Price Min
Price
Spread Max Price Min Price Spread
Flat
Blade
70(Topaz) 3(Chinese
plastic)
67
Single
Blade
5(Glide
Magik)
4(Glide
Magik)
1 18(Super
Clik)
10(Guard) 8
Twin
Blade
17(Gillette
Presto)
5(Glide
Pace)
12 199(Sensor
Excel
women)
35(Gallant
II)
164
3-Blade 125(Gillette
Mach 3)
15(Super
Max3)
110
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5-Blade 449(Gillette
Fusion
Power)
250(Gillette 199

Price Spread for Various Segments


0
10
20
30
40
30
60
70
80
Zorlk 1opaz
ffe Mk
M8
0
2
4
6
8
10
12
14
16
18
20
Cuard Super Cllck Cllde Maglk
S|ngefe Mk
M8
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0
30
100
130
200
230
@|nfe Mk
M8
0
20
40
60
80
100
120
140
Mach3 mach 3 1uro Super Max 3
3fe Mk
M8
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0
30
100
130
200
230
300
330
400
430
300
luslon luslon ower venus
fe Mk
M8
0
30
100
130
200
230
300
330
400
430
300
l
u
s
l
o
n
l
u
s
l
o
n

o
w
e
r
M
a
c
h
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m
a
c
h

3

1
u
r

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p
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e
s
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o
C
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r

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x
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s
p
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a

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S
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p
e
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C
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c
k
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L
r
a
C
a
l
l
a
n
L

l
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S
u
p
e
r

M
a
x

3
Z
o
r
l
k
1
o
p
a
z
C
l
l
d
e

M
a
g
l
k
C
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e

u
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r
a
C
l
l
d
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a
c
e
Cverf Mk
M8
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Hypotbesis regarding pricing of razors
1) Gillette razors are targeted Ior premium segments.
While going through Gillette advertisements, our group thought that Gillette targets high
end customers. Prices are generally kept high. So, Gillette is considered a premium
brand.

2) Gillette only spends on Advertisement.
We expected Gillette to spend heavily in advertisements and leverage its brand value and
recognition, against push strategy oI lesser brands. But we Iound that that Gillette also
engaged in extensive push strategies apart Irom advertisements to sell the razors.

3) Price is the most important Iactor driving demand.
Prior to this assignment, we had a hypothesis that Price was the most important Iactor
driving the demand. However, we Iound that price is not the only Iactor determining the
product demand. There are other Iactors also as quality oI product, product brand name
etc.

4) Razors don`t have high margins.
Premium razors use high end technologies and extensive marketing which cost a lot and
low cost razors does not have enough spread to provide high margins.

Pricing Strategy:
Pere we have dlscussed dlfferenL facLors whlch were domlnanL ln decldlng Lhe prlce of varlous razor
rands presenL ln markeL ulfferenL facLors can acL as decldlng facLors durlng prlclng of a producL
dependlng on how a company decldes Lo lnLroduce lLs producL CerLaln companles whlch only caLer Lo
local markeL may refraln from any klnd of adverLlslng acLlvlLles and declde Lhe producL prlce ased only
on cosL Slmllarly a company whlch chose Lo adverLlse lLs producLs may lnclude Lhls cosL whlle decldlng
Lhe prlce of producL
G|ee ( G) us|on
-ew Lechnology rlnL adverLlsemenL enlarged undllng of eneflLs rand
value eLLer quallLy
us|on oer
-ew Lechnology rlnL adverLlsemenL enlarged undllng of eneflLs rand
value eLLer quallLy
Mfch3 Plgh adverLlsemenL cosL ln 1v and rlnL rand value eLLer quallLy
mfch 3 @uro
LxLra eneflL of smooLhness and fasL shave Plgh adverLlsemenL cosL ln 1v
and rlnL rand value
preso
Low frllls dlsposale lower and mlddle lncome group ln rural and uran
populaLlon
Gufr Low frllls lower and mlddle lncome group slngle lade
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Iecor low frlll Lwln lade addlLlonal uLLon Lo clean Lhe lade
Iecor us
low frlll Lwln lade addlLlonal uLLon Lo clean Lhe lade eLLer
smooLhness gel on lades
Ienus
mlddle lncome women populaLlon rand value eLLer quallLy eLLer
deslgn and grlp

Sensor Lxce
(Women)
mlddle lncome women populaLlon rand value eLLer quallLy

nfrfns f
mfhorf fn
sons pv L
Spor D|sposfe shorL use dlsposale no adverLlsemenL cosL
Super C|ck shorL use dlsposale no adverLlsemenL cosL
Urf shorL use dlsposale no adverLlsemenL cosL
Gffn II
1argeLlng Mlddle and low lncome group of men wlLh a me Loo producL no
adverLlsemenL cosL lncurred
Super Mfx 3
1argeLlng Mlddle and low lncome group of men wlLh a me Loo producL no
adverLlsemenL cosL lncurred
2or|k
lasLlc ody so low manufacLurlng cosL 8undllng of a pack of lades ls
Lhere hence prlced a lL hlgher Lhan LradlLlonal flaL lade razors
@opf sLeel ody rugged use

kAL (kf|ohms
Agency L)
G|e Mfg|k
slngle lade dlsposale no value aLLached shorL Lerm use LargeLlng uran
low lncome group
G|e Urf
Lwln lade dlsposale no value aLLached shorL Lerm use LargeLlng uran
low lncome group
G|e fce
Lwln lade dlsposale no value aLLached shorL Lerm use LargeLlng uran
low lncome group

illette(!)
Gillette Iollows diIIerent pricing strategies Ior diIIerent products.
Mach 3, Mach 3 Turbo, Sensor Excel, Fusion, and Vector Plus Iollow !remium !ricing,
!roduct Bundle !ricing, Value Added !ricing. Gillette oIIers uniqueness in service in terms
oI its 3-blade and 5-blade product. In addition to this, Fusion Iollow Market-skimming price
since there is no other company with the same 5-blade Ieature. Gillette comes with high price
because oI its promotional/advertising cost and high quality product price. Gillette also Iollow
Captive !roduct pricing, they will charge a low price and recoup its margin (and more) Irom
the sale oI the only design oI blades which Iit the razor.
Laser
Laser ultra comes with mid-range price segment. They Iollow !roduct bundle pricing strategy,
oIIer 5 razor bundled with Laser ultra product. Techs 3, Sports 3 Iollow Value Added Pricing
oIIering better value with 3-blade Ieature. Based on Segmented pricing, Laser comes with low
price segment (Sport Disposable, Click, Super Click), mid-price segment (Laser II) and premium
price segment (Tech3,Sports3).
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RAL (Radiothm Agency Ltd.)
Glide comes with disposable Ieature. It targets customers in economic range(less than Rs.20.00/-
). Prices are less because oI its disposable Ieature. Glide Iollows selective advertising strategy
which make the cheaper than other. Glide also Iollows Economy Pricing. The cost oI marketing
and manuIacture are kept at a minimum.
allant
Gallant comes with mid-range price segment. They Iollow Product bundle pricing strategy, oIIer
5 razor bundled with Gallant II product at Rs.42/-.The same Gallant II comes in Rs.20/- without
any bundled razor.
Chinese Unbranded !roducts
Unbranded products come with diIIerent-diIIerent name (Titan, Indian etc) and with varied price
range. Because oI low quality materials, they are cheapest among others. They also Iollow
Economy pricing. The cost oI marketing and manuIacture are kept at a minimum.



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Distribution Networks and Margins

1he aove marglns are oLalned from varlous sLakeholders lnvolved ln Lhe supply chaln le Cl
ulsLrluLers Wholesalers/SLocklsL and 8eLallers eLc 1here could e varlaLlons ln marglns of wholesalers
and reLallers as wholesalers pass Lhelr marglns Lo reLallers someLlmes ln Lhose cases reLaller can
command margln as hlgh as 30 lso ln cerLaln low prlced producLs reLallers are commandlng marglns
of upLo 33 lor eg ln case of CllleLLe resLo reLaller ln chandnl chowk markeL geLs lL for 8s12 and sells
around 1617 dependlng upon Lhe quanLlLy of purchase Lhus maklng more Lhan 30 proflL on a slngle
plece
CerLaln local players and Chlnese producLs offer more marglns Lhan naLlonal players uL as Lhelr M8
are noL flxed Lhe marglns also keep varylng eLween 1030



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Difficulty in comparison of prices of different Brands:

1 -o Lwo producLs were exacLly same Lo allow for falr comparlson of prlces
2 Lven slmllar producLs llke Laser and Zorlk had dlfferenL undled producLs Lradeoff eLween Lhe
eneflLs of undled producLs would depend on Lhe consumers percepLlon of Lhe marglnal uLlllLy
of each facLor
3 Lack of knowledge of Lhe acLual cosL of manufacLure for each rand made esLlmaLlon of prlce
premlum and prlclng sLraLegy dlfflculL
4 Lven lf Lhe feaLure provlded (say lurlcaLlng sllp) ls Lhe same for 2 rands lL ls dlfflculL Lo
compare whlch one ls eLLer
3 1he resLrlcLlon of Lled producLs (llke lades) forced us Lo compare lade/carLrldge prlces whlch
were also dlfferenL for seemlngly Lhe same Lhlng (Lwlnlade carLrldge) lockln effecL Lo e
evaluaLed
6 ulfflculL Lo udge Lhe real llfeLlme and quallLy of a producL vs Clalm made y Lhe manufacLurer
Difference in a-priori expectations and actual scenario:

1 We had expecLed LhaL shavlng was mosLly done personally aL home fLer Lhe onfleld survey
especlally ln Lhe suuran areas and malnly Lhe vlllages we learnL LhaL even Loday mosL lndlans
go Lo Lhe 8arer for a shave
2 We LhoughL LhaL Lhe LradlLlonal flaLlade razors were noL ln use excepL y Lhe elder generaLlon
compleLely new use of Lhls razor was dlscovered y us when we came Lo know LhaL ln vlllage's
people use lL Lo shave cows and uffaloes
3 We had expecLed CllleLLe Lo e Lhe only leadlng rand slnce Lhey adverLlse so heavlly and LhaL
Lhe resL of Lhe markeL was hlghly fragmenLed Powever we reallsed LhaL even lf Lhere were
many rands LhaL dld noL elong Lo CllleLLe mosL of Lhem were owned y Lhe Pouse of
MalhoLras" We had een lgnoranL aouL Lhe exlsLence of Lhls maor player ln Lhe razor and
lade lndusLry Pence Lhe markeL was acLually domlnaLed y Lwo sLrong compeLlLors
4 We had expecLed 8azors Lo e a lowlnvolvemenL producL for all 8uL we reallzed LhaL for qulLe a
few uran Male rofesslonals Loday lL was an emoLlonal uy lL was enllghLenlng Lo know of Lhe
dlfferenL ways ln whlch Lhe rand (especlally CllleLLe) was ulldlng cusLomer loyalLy y maklng
shavlng a hlghlnvolvemenL acLlvlLy




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Appendix

Appendix : List of Prices of Different Brands across various markets
Cha
wdl
8az
aar
Sadar
8azaa
r(ld)
ka
ml
a
-a
gar
Cha
ndn
l
Cho
wk
khl
rkl
vlll
ag
e
8a
-a
ga
r
Sake
L
Mark
eL(Le
Marc
he)
8lg
8aza
ar(uL
l
SakeL
)
y
a
-a
gar
vlll
ag
e
-al
nw
al
-o
lda
sec
Lor
18
Cur
gao
n
SecL
or
23
mar
keL
mur
Lhal

leaL
ures

G|e
e(G
)

luslon 3
lad
e
300 230 32
0
320 320 320 32
0

luslon
ower
3
lad
e
423 330 44
9
423 449 449 44
9

Mach3 3
lad
e
92 90 99 93 99 99 99 99 99 99
mach
3
1uro
3
lad
e
123 123 12
3
123 12
3
123 123 12
3
123 123
presLo 2
lad
e
dlspo
sale
14 12 17 16 17 17 17 17 17 17 17 17
Cuard 1
lad
e
10 13 13 13 13
vecLor 2
lad
e
14
9
139 13
9
13
9
139 13
9
139 149
vecLor
lus
2
lad
e
40 33 49 39 39 39 39 39 49 39 39 49
venus 370 370 370
Sensor
Lxcel
2
lad
199 199
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(Wom
en)
e

nfrf
ns f
mfho
rf
fn
sons
pv
L

SporL
ulspos
ale
2
lad
e
dlspo
sale
12 10 12
Super
Cllck
1
lad
e
12 18 17 18 18 17
ulLra 2
lad
e
63
Callan
L ll
2
lad
e
33 33 42 40 42 42 42 42 42
Super
Max 3
3
lad
e
16 13
Zorlk flaL
lad
e
23 23 23 23 23 23
1opaz flaL
lad
e
70

kAL
(kf|o
hms
Agenc
y L)

Cllde
Maglk
1
lad
e
dlspo
sale
3 4 3
Cllde
ulLra
2
lad
13 10 13
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e
dlspo
sale
Cllde
ace
2
lad
e
dlspo
sale
6 3 6

Ch|nes
e
Unrf
ne
rou
cs

lasLlc
Slngle
8lade
1
lad
e
3 3 3 3 4 3 4 4 7
SLeel
slngle
8lade
1
lad
e
16 13 13 13 12 12 12 13 13


Appendix : List of all Brands according to industry segmentation and Price
spread
Mk Mfx
r|ce
M|n
r|ce
r|ce
Spref
No of
fes
G|ee ( G) luslon 320 320 230 70 3 lade
luslon ower 449 449 330 99 3 lade
Mach3 99 99 90 9 3 lade
mach 3 1uro 123 123 123 0 3 lade
presLo 17 17 12 3 2 lade
Cuard 13 13 10 3 1 lade
vecLor 149 149 133 14 2 lade
vecLor lus 49 49 33 14 2 lade
venus 370 370 330 40 3 lade
Sensor Lxcel
(Women)
199 199 180 19 2 lade



nfrfns f mfhorf fn sons
pv L
SporL ulsposale 13 13 10 3 2 lade
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Super Cllck 18 18 12 6 1 lade
ulLra 63 63 60 3 2 lade
CallanL ll 42 42 33 7 2 lade
Super Max 3 18 18 13 3 3 lade
Zorlk 23 23 22 3 flaL lade
1opaz 70 70 70 0 flaL lade



kAL (kf|ohms Agency L) Cllde Maglk 3 3 4 1 1 lade
Cllde ulLra 13 13 10 3 2 lade
Cllde ace 6 6 3 1 2 lade

Ch|nese Unrfne roucs lasLlc Slngle
8lade
7 3 4 flaL lade
SLeel slngle 8lade 16 10 6 flaL lade