With Lather of Ads, Gillette Seeks Sharper Edge

Even Gillette Co., which touts its shaving line as “the best a man can get,” evidently thinks it can do better.

Obsessed with maintaining its commanding lead in the $1.5-billion U.S. wet-shaving business, Gillette on Tuesday announced a $300-million marketing blitz for a new razor that took the company five years and $750 million to develop.

The razor, named Mach3, represents a big gamble for Gillette. The company must convince legions of men now using its top-selling Sensor and competing products to trade up to a razor that has three blades and costs 35% more.

Consequently, Gillette is going all out to get Mach3 into the hands of consumers. Besides hyping the razor in MTV-style ads replete with sonic booms and images of jets, Gillette is readying a marketing blitz that includes cents-off coupons to encourage men to give the razor a try.

Gillette says Mach3 uses specially aligned, thinner blades with a “diamond-like coating” to slice through hair with less force. The razor also pivots forward, and has a blue, lubricating strip that fades when it’s time for a new cartridge.

“The magic that separates us from our competitors is that we push closeness, safety and comfort all at the same time,” said John Darman, Gillette’s vice president of male shaving.

Mach3 represents a considerable investment for Gillette. To mass-produce the razor, it reconfigured its south Boston factory, incorporating expensive robotics to speed up the assembly process. It built a new warehouse, installed computers that detect faulty razors and developed technology that is expected to generate 35 patents.

Mach3 is the first razor Gillette has launched since 1990, when it introduced its top-selling Sensor shaver. The two-blade Sensor, which cost $275 million to develop, has generated more than $6 billion in sales.

By the end of 1999, Gillette plans to have spent a staggering $270 million on Mach3 advertising, more than was spent to launch such high-profile products as Coca-Cola’s New Coke or McDonald’s Arch Deluxe hamburger. Microsoft set the record for promotional spending, shelling out an estimated $1 billion to tout Windows 95 software, which retails for more than $100.

Analysts said that considering the amount invested in Mach3, Gillette can ill afford to cut corners on its promotional effort.

“Since this is a $750-million investment, it would be foolish for them to put $5 million into advertising,” said J.P. Morgan analyst Michael Grant, who believes Mach3 will sell well. “There might be some sticker shock, but guys are always looking for a better razor. Plus, Gillette has a track record of convincing consumers to trade up to better products through marketing.”

To recoup its investment, Gillette is charging consumers up to $7 for the new shaving system and as much as $6.80 for four replacement cartridges.

At a news conference Tuesday, Gillette moved forward with the public relations component of its marketing plan, showing a souped-up and blaring video of jets soaring through the sky. A company executive unveiled the product by pulling a white sheet off an oversized model of the new razor, then pointing out its features.

Gillette also showed its macho Mach3 commercials, created by BBDO. Like the PR video, the television spots have a high-performance, aerodynamic theme with jets and sonic booms. In those ads, a man emerges on what appears to be a space station and demonstrates the new shaver. The commercials use Gillette’s slogan, “The best a man can get.”

The print ads, meanwhile, explain the technology behind Mach3, which means three times the speed of sound. They will appear in leading national publications as well as major newspapers. Gillette will launch its television, print, radio and outdoor advertising campaign in August, after Mach3 hits U.S. store shelves in July.

Analysts believe Mach3 could boost Gillette’s market share in the nation’s $1.5-billion wet-shaving category. Gillette commands about 70% of the U.S. shaving market, and its shaving products comprise about 30% of the company’s $10 billion in annual revenue.

Wall Street has been eagerly waiting to learn about the new shaving system, which Gillette has been touting for months, but keeping details of the product secret. When word got out that Gillette was about to publicly display the product for the first time, the Boston-based company’s stock rose $3.69 on Monday. But it slid $4.13 to $120.25 Tuesday on the New York Stock Exchange.

“Obviously, there are risks if people don’t think the shaver is good or if they are satisfied with their current shavers,” said Maureen Carini, an analyst at S&P; Equity Group.

Gillette believes it has a sure thing. In extensive testing of the product, it found that users prefer Mach3 over Sensor by almost a 2-to-1 margin. The gap widened when Mach3 was tested against various Schick brands, Gillette’s primary competitor.

Even with the pricing markup, about half of those surveyed said they would definitely buy Mach3.

“This broad-based appeal is indicative of a power brand,” said Sharon Keith, Gillette’s vice president of marketing and research. “We’re confident that the Mach3 will meet or beat Sensor’s extraordinary performance.”

Even if Mach3 meets Gillette’s expectations, it won’t have the same impact on the company as the two-blade Sensor, analysts said.

“Gillette was a lot smaller then,” Carini said. “So even if it has incremental sales increases, it’s not going to be a big piece of business.”

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Gillette’s $300-million advertising campaign for its new three-blade razor tops several notable product launches but still falls well short of Microsoft’s billion-dollar introduction of Windows 95. Advertising budgets for select product launches:

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Brand Manufacturer Advertising budget Windows 95 Microsoft $1 billion Mach3* Gillette 300 million Arch Deluxe McDonald’s 200 million Olestra Procter & Gamble 100 million Total toothpaste Colgate 100 million New Coke Coca-Cola 100 million Lexus Toyota 75 million Colorstay hair color Revlon 40 million Tavist sinus medicine Novartis 12 million

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*The Gillette campaign is to run from May 1998 through December 1999.

Sources: Times and wire reports

Researched by JENNIFER OLDHAM / Los Angeles Times