Gillette Co.: is price standardization possible for razor blades?
In the battle to out-blade the competition, Gillette’s latest creation, a five-bladed razor called Fusion, leapfrogs the Schick Quattro by one blade and aims to provide an even closer shave to the millions of men who apparently are having trouble with only three or four blades. Fusion (launched in September 2005) is the first entirely new men’s razor system from Gillette since Mach 3, which was launched in 1998.
Gillette’s previous flagship razor, the Mach 3, has three blades while the Schick Quattro has four, but Gillette president James Kilts insists this latest ‘innovation’ has nothing to do with the competition: ‘The Schick launch has nothing to do with this, it’s like comparing a Ferrari to a Volkswagen as far as we’re concerned …
There was never a plan to go to four.’ Fusion has one more blade than the Quattro sold by rival Schick, a unit of Energizer Holdings Inc., plus a trimming blade on the back of the pivoting cartridge for shaping facial hair, trimming sideburns and shaving under the nose
QUESTIONS
1. Evaluate the price level of Gillette’s Fusion.
2. Discuss whether it is possible for Gillette to standardize pricing across borders for its new fiveblade, Fusion. Which factors would favour price standardization and which factors would favour price differentiation?
