Gillette has always made a good razor, one capable of commanding a premium price and maintaining a loyal following, which is an excellent formula for success in any market sector. Procter & Gamble recognized this several years ago and wisely purchased the company to add to its stable of other category-dominating brands.
But sometimes even being the absolute best in your category isn’t enough.
Marketing takes place in a dynamic environment, and what makes the environment dynamic is the constant interaction of the forces in the environment. Sometimes these environmental forces can be your toughest competition. More on that here if you’re interested.
In this case, the culprit is a socio-cultural force. Procter & Gamble says the reason the sales of razors and razor blades have declined is because more and more of their male customers are sporting beards rather than the clean-shaven look. Beards and goatees are more popular in the current culture, which means less shaving, which in turns means decreased demand for razors. I’m sporting a goatee myself as I write this and I’ve got to say, getting to skip buying so many $20 packages of blades here and there is like getting a raise!
Understanding that forces in the environment are beyond our control is a pretty straightforward concept to grasp, but in your analysis, recognize also that these forces could turn out to be the stiffest competition you face so you can plan accordingly.
In the business world, the rearview mirror is always clearer than the windshield.” – Warren Buffett