Gillette Case Essay

President, youthful business development, Gillette arctic Razor Division (SRD) Problem Ralph needs to reach company targets for earnings harvest-festival for his department by developing a new business product. Ralph has commissioned an extensive investigation into the blank cassette attach foodstuff and he views this market as poised for substantial growth and opportunity over the long-term range of ten to fifteen years.Ralph feels that his division is well positioned to recruit the market through utilization of its many another(prenominal) center field strengths. Market Overview The current blank memorialize market segment has many weaknesses, such as, lack of widespread distribution, lack of media coverage, poor product let out and packaging, and lack of a true market leader. These weaknesses in the blank cassette attach market are all areas where Gillette has developed strong core competencies in their Safety Razor Division.The blank cassette show market is segmente d into threesome distinct product markets Professional quality, Standard Quality, and Budget Quality and inside those segments there are recording lengths of 30, 60, 90 and 120 minute cassette tapes. Binghams consultants have focused on the 60-minute cassette tape market in particular. Gillette Safety Razor Division Decisions Gillette has four product options 1. ) do not enter market. 2. ) enter overlord tape market 3. ) enter monetary standard tape market. 4. ) enter the budget tape market.The professional quality market offers the sterling(prenominal) margin on products, but it is withal the smallest segment in the market. The professional segment will also have the most competitor as more established tape springrs enter the market. As such, the fierce competition may potentially saturate the market and decrease the margins on these tapes and answer it less appealing in the long run. Alternatively, standard tape market has moderate margins, but is a highly growing segment and is touch on for a market leader, such as a company resembling Gillette.Lastly, the budget market has the lowest profit margins, the highest volume sales, but also requires a high volume of sales in order to be profitable callable to the significant fixed costs associated with manufacturing. Gillettes manufacturing constraints make it difficult for Gillette to enter the budget product market and Gillette would not indispensableness to damage its defacement name by affiliating with a lower blockade product such as the budget quality tapes. (See appendix for decimal analysis) Recommendations & ConclusionsThe Gillette Safety Razor division should enter the Standard Quality 60-minute cassette tape market and target the teenager and student market as it is a growing segment and offers much potential. Gillette should distribute the tapes using their established convey and wholesalers. Gillette should promote this new line through an aggressive advertising class as a high stand ard quality tape superfluous from the defects of budget cassette tapes and with greater quality than the average standard tape. Gillette should leverage its brand name to promote the quality and value of these tapes.Gillettes pricing for the standard quality tapes should be priced at the regular retail price with the tendency that consumers will choose Gillettes product and pay more than the discounted brands due to Gillettes high quality and brand name. In this scenario, Gillettes monthly break-even quantity would be 518,758 units and it would make a monthly profit of $92,867 if it guardedly sells 750,000 units/mo. in year one. Annualized, the companys net profit would be $1,114,400 at 9,000,000 units sold.