Developing Products For An Emerging Market: Classic Case Study

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An October 2013 article by Mae Anderson of Associated Press is an interesting case study in “doing your homework” when you design a product for a specific marketplace. Although it has nothing to do with power electronics there is an interesting lesson here.

The story revolves around Procter & Gamble’s Gillette Division that makes razors. About 18 months ago Gillette was interested in developing a low-cost razor for India and other emerging markets. The story of how the new “Guard” razor evolved shows how companies to deal with new product when creating products for emerging markets. It's never as easy as just putting a foreign label on an American product.

Gillette wanted to increase its market share in India. To achieve that goal they had to design a razor that met the needs of the Indian marketplace. On a visit to India they saw a man who was shaving while sitting barefoot on the floor in a small hut. He had no electricity, or running water, and even no mirror. Another challenge, India’s per capita income was bout $124 a month, compared with the U.S. where it was over 300 times more. At that time in india Gillette’s high end razors were selling for about $2.75 and it low end Vector version was $.72. Needless to say, the high end razor was out of the reach of the rank and file population.

Anderson noted that “Gillette had stumbled once before with its early version of the Vector in 2002. The version of that razor had a plastic push bar that slid down to unclog the razor. The bar was added because Indian men have thicker hair and a higher hair density than their American counterparts. Adding to that, they often shave less frequently than American men, so they wind up shaving longer beards.’

Boston-based Gillette came up with a new product that they decided to test by using Indian students at MIT, instead of the more costly approach to actually going to India. The MIT student response was good. However, when they did travel to India the new razor got a much different reaction. The MIT group used running water to clean the razor, but in India men shaved with a cup of water and the razor became clogged.

Following that incident, Gillette sent 20 engineers and developers to India for three weeks. “They spent 3,000 hours with more than 1,000 consumers at their homes, in stores and in small group discussions,” Anderson said. “They observed people's routines throughout the day, sometimes staying late into the evening. They also hosted small group discussions.” In addition, they asked what was wanted, why they wanted to shave, and how often.

The group found that families often live in huts without electricity and share a bathroom with other huts. “So men shave sitting on their floors with a bowl of water, often without a mirror, in the dark morning hours. As a result, shaving could take up to half an hour, compared with the five to seven minutes it takes to shave in American households. And Indian men strain to not cut themselves,” Anderson pointed out. In the U.S., razor makers were focused on providing a close shave, but Indian men were more interested in not cutting themselves.

With this first hand knowledge, Gillette began development of a new razor specifically intended for the Indian market. This led to development of five prototypes. They tested features like handles, the ability of the blade to cut hair and how easy it was to rinse. The resulting razor had only one blade instead of two to five blades in U.S. razors. The handle was designed to allow the user to easily grip it. And, they added a hole in the handle’s base so it can be hung up. Also added was a small comb by the blade to allow for Indian hair growth that tends to be thicker it U.S. counterpart.

Inevitably, the next hurdle was to determine the manufacturing cost so the razor could be sold at the right price. They minimized the number of components and made the razor’s hzndle hollow, which made it lighter and cheaper to make.

As a result, the new Guard costs about one third to make as its predecessor, the Vector low-price Indian razor before Guard. “Gillette sells the Guard for 15 rupees, or 34 cents, and each razor blade is 5 rupees, or 12 cents.”

Anderson noted, “to successfully sell products overseas, particularly in developing markets, companies must tweak them so they're relevant to the people who live there. And often, that means rethinking everything from the product's design to its cost. More companies will have to consider this balancing act as they increasingly move into emerging markets such as India, China and Brazil to offset slower growth in developed regions such as the U.S.”

Discuss this Blog Entry 3

on Oct 31, 2013

Making goods to be thrown away after a single use could be a bad idea for the emerging countries (or the whole globe?). After all Egyptians and Romans used razors thousands of years ago and were used to sharpen them.

on Nov 9, 2015

I liked the way how they minimized the number of components and made the razor's handle hollow. It looks really nice and lighter.I am here not only to discuss the razor, but also to say my praise to best-essays-writers.org. The high quality is guaranteed.

on Apr 11, 2016

Low-cost, single-use razors are a must. Otherwise what are you gonna shave your balls with? P.S. Don't shave your genitals after taking Viagra! www.mhrc.cc/ed-medications/

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