In the world of fast-moving consumer goods, innovation has long been recognised as one way of staying ahead of competitors. Another is marketing. Gillette, the US company that dominated the global shaving products market, combines both.
Since it introduced the first twin-blade razor (the Trac II) in 1971, Gillette had launched a razor about every nine years. In 1977 the Atra added a pivoting head. Released in 1990, the Sensors spring-mounted blades promised an even closer shave. Sensor helped Gillette establish dominance over the wet-shave market in North America and Western Europe, with 70 per cent of sales. In 1998 Mach3 was launched as Gillette’s latest wet-shave razor, with the Boston-based company investing more than $1bn (£600m) in the new product, with a $300m advertising budget for the first year alone. ‘Each of these [innovations] is protected by patents, making it next to impossible for competitors to copy’, said Bob King, head of the company’s North Atlantic group.
Gillette installed a production line to reduce unit costs on Mach3. It made the cartridges in a continuous process. This allowed Mach3 to be launched in more than 100 markets by year end 3 a roll-out that had taken more than four years with Sensor. Schick’s four-blade surprise In September 2003 Gillette then found itself on the defensive after Schick launched its four-blade Quattro razor. Immediately, Gillette reacted by filing a suit against Schick. Gillette wanted Quattro banned from the market. ‘An injunction is not the norm’, said David Schlitz, a patent lawyer. ‘It is an extraordinary remedy.’ Despite this Gillette could not block Quattro’s introduction to market; the legal process was long and arduous. Schick was stressing the differences from Mach3, whilst Gillette was trying to focus on the shaving systems’ similarities. As shoppers began buying the four-blade razor, the stakes for both Schick and Gillette started to rise dramatically. Accumulating profits for Quattro would be good news for Schick but only if the company was able to keep them. A judge might have ruled that Quattro earnings belong to Gillette. The case was risky for Gillette as well. If the injunction filing was found to have no basis, a judge could have awarded Schick substantial damages. The patent suit against Schick centred on the position of Quattro’s blades. In developing the Mach3 in the 1990s, Gillette hit upon a way to achieve a closer shave without irritating the skin: the razor aligned blades progressively closer to the skin so that each one cut closer than the last. The patents covering Mach3 3 and there were more than 50 of them at that time 3 described the positioning of those blades in excruciating detail, specifying the ideal millimetres of distance between the blades. ‘The technology applies, whether you’re using three blades, four or five’, says Eric Kraus, a spokesman for Gillette. One obvious question was why Gillette failed to invent the four-blade razor itself. The company had long held that simply adding more blades did not ensure a better product. But Schick said four blades achieved a closer shave, and that its product accomplished this without skin irritation. The case was settled out of court in 2006. In 2005, Gillette released the Fusion Model with five blades.
1. What type of innovation strategy was Gillette following?
2. What type of protection strategy did it use, and how effective was it?
3. Why do you think Schick stole the lead on Gillette? How did Gillette allow this to happen?