Caso Gillete

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Harvard Business School

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Rev. November 12, 1997

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Gillette's Launch of Sensor

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Early in 1989, John Symons, head of Gillette's North Atlantic Shaving Group, was reviewing the strategie plan for the launch of the Sensor razor (seeExhibit 1). After more than 10 years of development, Gillette had already sunk more than $75 million for R&D and $50 million for capital equipment into the project. Sensor was now less than a year away from launch but if Symons had his way, an even greater amount of expenditure for the launch lay ahead. Specificaily, Symons planned to mount a global advertising blitz costing more than $100 millionand to build two plants simultaneously, in Boston and in Berlin, Germany. Together with investments in building up inventory, the launch, as envisioned by Symons, might cost Gillette another $150 million. Not everybody agreed with these aggressive plans. Sorne thought that Gillette should launch Sensor more graduaily, starting in a few markets, gauging reactions, adjusting its marketing campaignaccordingly, and building up awareness of the product over time--an approach that might reduce by more than half the launch costs that remained to be committed. Others, worrying about cannibalization, wondered whether it might be premature to launch a new product in January 1990. Gillette's Atra and Good News! razors were undisputed leaders in the cartridge and disposable segments respectively, andeach had just finished a year of record sales and profits. And a few even questioned the wisdom of placing so much emphasis on an advanced (and expensive) cartridge product in a market where low-cost disposable razors had steadily been taking share away from cartridges. As one manager expressed it, "The question is whether you put ail your eggs in one basket or recognize a segmented market."Gillette's CEO, Colman Mockler, Jr., who promoted Symons to his present position in early 1988, was monitoring the launch closely. According to Mockler, risk management was one of Gillette's strengths: "We're prudent. We aggressively pursue opportunities, and we avoid excessive risks." Symons did not believe that his launch plans involved "excessive risks." He did know, however, that Giilette'smanagement team needed Sensor to be a clear winner to stave off further pressure from disgruntled shareholders.

The Wet Razor Industry
Although the history of shaving dates back to ancient Egypt, daily shaving did not become common until the early twentieth century. The first raz ors were "wet" in the sense that they used water, soap, or sorne other shaving preparation, to smooth the shaving surface.With the advent of electrieity, "dry" (electrie) raz ors, had also been introduced. Electrie raz ors were safer than wet
Doctoral candidate Benjamin Est Y prepared this case in collaboration with Professor Panknj Ghemawat as the basis for class discussion rather than to illustra te either effective or ineffective lumdling of an administrative situation. The case was prepared from public sourcesonly. Much of the historicaf'materialLittle Brown and Company, 1978).book, King C. Gillette: The Man and His Wonderful ShavingDeviee (Boston, Mass.: comes from Russell B. Adams'

Copyright © 1991by cali President and Fellowsof Harvard College. To order copies or request permission to reproduce materials, the 1-800-545-7685r write Harvard BusinessSchool Publishing, Boston, MA 02163. No o part ofthis publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form of Harvard BusinessSchool. permissionor by any means-electronie, mechanical, photocopying, recording, or otherwise--without the

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Gillette's launch of Sensor

razors since they did not nick the skin but were more costly and did not give as close a shave. Their...