Article on "Why is Gillette so successful" by Shruti Agarwal

 Why is Gillette so successful?

 – The Marketing Case Study

Shruti Agarwal, Roll No.: 235

B.Com Semester IV , Session 2020-23

INTRODUCTION:

Gillette is an American brand of men’s grooming and other personal care products including shaving supplies, owned by the multi-national corporation Procter & Gamble. You must be seeing this brand’s advertisements every day on your TV screens and when it comes to beard shaving and men’s personal care, the top most name that strikes your mind is – Gillette. Gillette is used by almost 750 million men in more than 200 million countries. Do you know how Gillette became one of the market leaders in the world?

MARKETING STRATEGY OF GILLETTE:

In 1921, when new competitors started entering the market, Gillette saw a massive decline in its product sales by 20% by the end of 1921. It was when Gillette needed to come up with a good marketing strategy to boost its sales. Gillette tweaked its pricing model and called it a ‘Razor Blade Strategy’. There are two complementary products attached to the strategy. The primary product is the razor and the secondary is the blades. Gillette reduced the cost of its razors and started selling them at an ultra-cheap price and low margins and strategized to sell blades at a higher profit margin. To understand it in a simpler way, Gillette let the customers do one-time purchases (razors) at a lower price and won them over as loyal customers. Now the same customer will come back, again and again, to purchase the high-price margined blades for the use of razors that was bought earlier. That’s how Gillette started making a recurring profit from the sale of blades even after selling the razors at low-profit margins. This amazing marketing strategy followed by Gillette made them huge sales with an increase of 127% by the end of 1922, i.e in just one year, Gillette was able to increase its sales by 127% as well as retain its customers for future sales.

CONCLUSION:

This massive increase in sales for the company serves as an inspiration for many other companies today. Companies like Sony use this same pricing model for selling PlayStation in the market and makes recurring profits by selling CDs and game subscriptions. Amazon Kindle also uses this same strategy by selling its kindle at a lower margin and sometimes even at a zero profit margin and retains its customers for its increase in demand for E-book subscriptions.

Therefore, we can conclude some important pointers from Gillette’s Razor Blade Strategy:

1. Razor Blade Strategy is a pricing model in which one good is sold at a low or zero profit margin and its complementary good is sold at a higher profit margin.

2. This strategy helps the companies in maximum consumer retention and recurring profit through the sales of their secondary product.

3. There is an example of a camera-selling company called Kodak, which used this same strategy by selling cameras at a lower margin and hiked the prices of the film rolls. But after a certain point in time, this strategy backfired on the company’s profits and incurred huge losses due to less demand for film rolls and the rise of digital cameras.

Reference links:

https://youtu.be/YRYLPeWCOP0

https://en.wikipedia.org/wiki/Gillette

https://www.forbes.com/companies/gillette/?sh=4419a0dc10a0

Article on "Unicorn Startups" by Saima Sarwar

 Unicorn Startups

Saima Sarwar, Roll No.- 53

B.Com Semester VI, Session 2019-22

Introduction

In Business, the word “Unicorn” is defined as those privately held start-up companies valued at over US$1 billion. This term was first used and get popularised in 2013 by venture capitalist Aileen Lee who choosed the mythical animal to represent the statistical rarity of such successful ventures. There are more than 1,000 unicorns around the world, as of March 2022, according to CB Insights. Collectively, they are valued at $3,516 billion total. Start-ups worth over $1 billion are called unicorns because they are so rare often, these companies have seen skyrocketing success, which has launched them into almost a mythical category, since they are so rare.

Main Content

With the development of technology, the number of global startups has been increased. Among the startups, firms that achieve $1 billion or more valuation are especially called unicorns to describe the rarity of highly successful startups. Becoming one of the unicorn startups brings notable growth with respect to a chance of financial capital and reputation because it is clear evidence of the firm’s potential competitiveness. Unicorn startups are generally of small size, which facilitates strategic decision making and implementation of quick practical measures. Their founders and leaders are usually experienced entrepreneurs, who have often dealt with high-risk situations and failures. They are financed by venture capital companies, which pressure them for quick development of a new business and foster innovation and launching of new products and services. Innovations offered to target audiences are digital, which reach the market leveraged by digital platforms widely spread ideas and information through social networks; that is much faster than traditional businesses that struggle and invest in the conventional marketing of products and services.

Unicorns are able to respond dynamically to adversity, especially because they can adapt BMI (Business Model Innovation) for making specific digital innovations as solutions to meet market needs quickly. This is because the business model is built around a single digital platform or software, which is very fast and cheap to develop and promote.BMI in digital startups is a gap in literature. It is an important step for digital startups to survive in the initial stage of their journey but should not be restricted to that phase. 

It is continuously necessary, especially for adopting innovative strategies or redefining the strategy to withstand crises by seeking economic results different from those already used. While work from home during pandemic fueled the growth of digital business in India, the incident also resulted in a long unicorn list. Mainly three factors, a thriving digital payments ecosystem, large smart phones user base and digital-first business models, have come together to attract investors. Tech companies, which have become household brands, are contributing to the unicorn boom in India as smartphone penetration and digitization of commerce in every aspect of life has increased manifold during the pandemic. Besides fintech, e-commerce grocery, SaaS and marketplace players are contributing the most to unicorn universe.

As of 05th May 2022, India is home to 100 unicorns with a total valuation of $332.7 Bn. The year 2021, 2020, and 2019 saw the birth of the maximum number of Indian unicorns with 44, 11, and 7 unicorns coming each year, respectively. COVID-19 has caused a great amount of socio-economic suffering globally, but during this time, the resilient Indian Entrepreneurs have worked effortlessly to not only contribute to the economy but to also contribute toward COVID-19 relief efforts. Indian unicorns are also exploring the public listing avenues as a next step to realize the growth potential. Some one of big unicorn names that offered an IPO include Zomato, Nykaa, PolicyBazaar, Paytm and Freshworks, while many are already in line such as Delhivery, Mobikwik and CarDekho. Today, 1 out of 10 unicorns globally have been born in India. Overall, 2021 is experienced an exponential boom when it comes to startups entering the unicorn club. This is a testament to the vibrant startup ecosystem present in India. Till date, 2022 has witnessed the birth of 14 unicorns with total valuation of $ 18. 9 Billion (As of 05th may 2022).

Conclusion

In conclusion, Unicorn startups are the most popular and widely used term nowadays; besides this it has a great impact on socio- economic growth and development. With the increase in digital world, the need of innovative startups which makes the life much easier is necessary. Innovative startups are establishing with promising ideas, in which investors are interested in investing their funds and this all resulted in the birth of unicorn startup worth $1 billion. And its rarity is decreasing day by day because of rapid increment in number of unicorns nowadays. In terms of the number of unicorn startups, India ranks third position after US and China in the whole world, which shows the passion for growth, success and development that Indian startups have. In upcoming years, we are expecting many more startups to enter in the unicorn list.

Reference- Google

Websites- Wikipedia, investopedia, CBinsight, investindia

Article on " MBA Chai Wala " by Aashi Kumari

 

  MBA CHAI WALA

(an aspiration to learn in top B-schools to becoming a guest speaker in IIMs)

Aashi Kumari, Roll No. 02

B.Com Semester IV, Session 2020-23

Like we all know that India is country which has a large number of youth and they are working so for keeping them active and energetic there is a famous beverage in INDIA ‘TEA’.

Many people found opportunity in this segment and started their business in ‘TEA’. The one of the famous and well-known entrepreneur is a Prafull Billore also known as MBA CHAI WALA.

He is a graduate from bachelor of commerce and while prepearing for MBA in finance. He started working for other companies than he found that why to work for others if I can become an owner of myself so he started a TEA STALL with 8,000 rupees which he borrowed from his father and the first day of TEA STALL was went terribly wrong and then he started approaching customer by talking them politely in English it attracts the people that a chaiwala is speaking in English. It gains so much popularity through social media, it includes a special corner in his stall for job seeker people where they can give their details and if the persons is required they can approach them. His motive not to earn only from their business but also providing employment to the person.

It gains the popularity because of the name and many people calls it a last option for not getting place in a MBA but Prafull says that a MBA stands for Mr.Billore Ahmedabad chaiwala and not Masters in Business Administration.

It was started in a 2017 and built an empire of 3 crore by selling tea. Now they are having a turnover of 5 crore and the net worth in 2021 was more than 5 crore. It has a 50+ total outlets in many major cities of India and it targets to cross 200 outlets by the end of 2022. MBA chaiwala also takes an order to set up a stall in weddings and any other functions which takes place in India.

It has a bright future ahead because TEA is a drink which consume by the all age groups of INDIA. Now Prafull is willing to start his own Tea Leaf brand and his solo aim is to provide a local Tea theela a great business idea and to help in expanding their business.

In his initial days he only make a 150 rupees but now his per day income is approx. 1.38 lakhs and the monthly income is approx. 42 lakh and their turnover per year is approx. 5 crore. The total net worth of Prafull is 30 million he is one of the youngest millionaire entrepreneur of India who become millionaire by selling tea.

Reference Website: 

www.gkhub.in

en.wikipedia.org

www.mbachaiwala.com

 

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