Gillette
Gillette is an American brand of safety razors and other personal care products including shaving supplies, owned by the multi-national corporation Procter & Gamble. Based in Boston, Massachusetts, United States, it was owned by The Gillette Company, a supplier of products under various brands until that company merged into P&G in 2005. The Gillette Company was founded by King C. Gillette in 1901 as a safety razor manufacturer.
Under the leadership of Colman M. Mockler Jr. as CEO from 1975 to 1991, the company was the target of multiple takeover attempts from Ronald Perelman and Coniston Partners. In January 2005, Procter & Gamble announced plans to merge with the Gillette Company.
The Gillette Company's assets were incorporated into a P&G unit known internally as "Global Gillette". In July 2007, Global Gillette was dissolved and incorporated into Procter & Gamble's other two main divisions, Procter & Gamble Beauty and Procter & Gamble Household Care. Gillette's brands and products were divided between the two accordingly. The Gillette R&D center in Boston, Massachusetts, and the Gillette South Boston Manufacturing Center, still exist as functional working locations under the Procter & Gamble-owned Gillette brand name. Gillette's subsidiaries Braun and Oral-B, among others, have also been retained by P&G.
History
Inception and early years
The Gillette company and brand originate from the late 19th century when salesman and inventor King Camp Gillette came up with the idea of a safety razor that used disposable blades. Safety razors at the time were essentially short pieces of a straight razor clamped to a holder. The blade had to be stropped before each shave and after a time needed to be honed by a cutler. Gillette's invention was inspired by his mentor at Crown Cork & Seal Company, William Painter, who had invented the Crown cork. Painter encouraged Gillette to come up with something that, like the Crown cork, could be thrown away once used.While Gillette came up with the idea in 1895, developing the concept into a working model and drawings that could be submitted to the Patent Office took six years. Gillette had trouble finding anyone capable of developing a method to manufacture blades from thin sheet steel, but finally found William Emery Nickerson, an MIT graduate with a degree in chemistry. Gillette and other members of the project founded The American Safety Razor Company on September 28, 1901. The company had issues getting funding until Gillette's old friend John Joyce invested the necessary amount for the company to begin manufacturing. Production began slowly in 1903, but the following year Nickerson succeeded in building a new blade grinding machine to relieve bottlenecked production. During its first year of operation, the company had sold 51 razors and 168 blades, but the second year saw sales rise to 90,884 razors and 123,648 blades. The company was renamed to the Gillette Safety Razor Company in 1904 and it quickly began to expand outside the United States. In 1905 the company opened a sales office in London and a blade manufacturing plant in Paris, and by 1906 Gillette had a blade plant in Canada, a sales operation in Mexico, and a European distribution network that sold in many nations, including Russia.
First World War and the 1920s
Due to its premium pricing strategy, the Gillette Safety Razor Company's razor and blade unit sales grew at a modest pace from 1908 to 1916. Disposable razor blades still were not a true mass-market product, and barbershops and self-shaving with a straight razor were still popular methods of grooming. Among the general U.S. population, a two-day stubble was not uncommon. This changed once the United States declared war on the Central Powers in 1917; military regulations required every soldier to provide their own shaving kit, and Gillette's compact kit with disposable blades outsold competitors whose razors required stropping. Gillette marketed their razor by designing a military-only case decorated with U.S. Army and Navy insignia and in 1917 the company sold 1.1 million razors.In 1918, the U.S. military began issuing Gillette shaving kits to every U.S. serviceman. Gillette's sales rose to 3.5 million razors and 32 million blades. As a consequence, millions of servicemen got accustomed to daily shaving using Gillette's razor. After the war, Gillette utilized this in their domestic marketing and used advertising to reinforce the habit acquired during the war.
Gillette's original razor patent was due to expire in November 1921 and to stay ahead of an upcoming competition, the company introduced the New Improved Gillette Safety Razor in spring 1921 and switched to the razor and blades pricing structure the company is known for today. While the New Improved razor was sold for $5 – the selling price of the previous razor – the original razor was renamed to the Old Type and sold in inexpensive packaging as "Brownies" for $1. While some Old Type models were still sold in various kinds of packaging for an average price of $3.50, the Brownie razors made a Gillette much more affordable for the average person and expanded the company's blade market significantly. From 1917 to 1925, Gillette's unit sales increased tenfold. The company also expanded its overseas operations right after the war by opening a manufacturing plant in Slough, near London, to build New Improved razors, and setting up dozens of offices and subsidiaries in Europe and other parts of the world.
Gillette experienced a setback at the end of the 1920s as its competitor AutoStrop sued for patent infringement. The case was settled out of court with Gillette agreeing to buy out AutoStrop for 310,000 non-voting shares. However, before the deal went through, it was revealed in an audit that Gillette had been overstating its sales and profits by $12 million over a five-year period and giving bonuses to its executives based on these numbers. AutoStrop still agreed to the buyout but instead demanded a large amount of preferred stock with voting rights. The merger was announced on October 16, 1930, and gave AutoStrop's owner Henry Gaisman controlling interest in Gillette.
1930s and the Second World War
weakened Gillette's position in the market significantly. The company had fallen behind its competitors in blade manufacturing technology in the 1920s and had let quality control slip while over-stretching its production equipment in order to hurry a new Kroman razor and stainless steel blade to market in 1930. In 1932, Gillette apologized for the reduction in blade quality, withdrew the Kroman blade, and introduced the Blue Blade as its replacement. Other Gillette introductions during the Depression years were the Brushless Shaving Cream and an electric shaver that was soon discontinued due to modest sales.In 1938 Gillette introduced the Thin Blade, which was cheaper and about half the weight of the Blue Blade, even though it cost almost as much to manufacture. The Thin Blade became more popular than the Blue Blade for several years during the Second World War due to high demand of low-cost products and the shortage of carbon steel. Beginning in 1939, Gillette began investing significant amounts on advertising in sports events after its advertising in the World Series increased sales more than double the company had expected. It eventually sponsored a radio program, the Gillette Cavalcade of Sports, which would move to television as well as that medium expanded in the late 1940s. While the Cavalcade aired many of the notable sporting events of the time it became most famous for its professional boxing broadcasts.
Though competition hit Gillette hard in the domestic market during the Great Depression, overseas operations helped keep the company afloat. In 1935 more than half of Gillette's earnings came from foreign operations and in 1938 – the worst of the Depression years for Gillette, with a mere 18 percent market share – nearly all of the company's $2.9 million earnings came from outside the United States. AutoStrop's Brazilian factory allowed Gillette to start expanding into the Latin America. In England the Gillette and AutoStrop operations were combined under the Gillette name, where the company built a new blade manufacturing plant in London. In 1937, Gillette's Berlin factory produced 40 percent of Germany's 900 million blades and retained a 65 to 75 percent share of the German blade market.
The Second World War reduced Gillette's blade production both domestically and internationally. As a result of the war, many markets were closed off, German and Japanese forces expropriated the company's plants and property, and Gillette's plants in Boston and London were partially converted for weapons production. In 1942, the War Production Board ordered Gillette to dedicate its entire razor production and most blade production to the U.S. military. By the end of the war, servicemen had been issued 12.5 million razors and 1.5 billion blades. Gillette also assisted the U.S. Army in military intelligence by producing copies of German razor blades for secret agents venturing behind German lines so that their identities wouldn't be compromised by their shaving equipment. The company also manufactured razors that concealed money and escape maps in their handles, and magnetic double-edge blades that prisoners of war could use as a compass.
Recovery from the war and diversification
During the post-war years, Gillette began to quickly ramp up production by modernizing its major manufacturing plants in the United States and England, expanding the capacity of several foreign plants, and re-opening plants closed during the war. The company opened a new plant in Switzerland and began manufacturing blades in Mexico City. Sales rose to $50 million in 1946 and in 1947 Gillette sold a billion blades. By 1950, Gillette's share of the U.S. blade market had climbed to 50 percent. During the 1950s, the company updated and in some cases moved some of its older European factories: the Paris factory, for example, was moved to Annecy.In 1947 Gillette introduced the Gillette Super Speed razor and along with it the Speed-pak blade dispenser the company had developed during the war. The dispenser allowed the blade to be slid out of the dispenser into the razor without danger of touching the sharp edge. It also had a compartment for holding used blades.
In 1948 Gillette bought the home permanent kit manufacturer The Toni Company and later expanded into other feminine products such as shampoos and hair sprays. In 1955 the company bought the ballpoint pen manufacturer Paper Mate and in 1960 they introduced Right Guard aerosol deodorant. Gillette bought the disposable hospital supplies manufacturer Sterilon Corporation in 1962.
Television advertising played a big part in Gillette's post-war growth in the United States. The company began TV advertising in 1944 and in 1950 it spent $6 million to acquire exclusive sponsorship rights to the World Series for six years. By the mid-1950s, 85 percent of Gillette's advertising budget was used for television advertising. The company also advertised the Toni product line by sponsoring the TV show Arthur Godfrey and His Friends and the 1958 Miss America contest and its winner.
Although Gillette's immediate priority after the war was satisfying U.S. demand and later diversifying its domestic business, the company pursued expansion in foreign markets that showed potential for growth, such as Latin America and Asia. However, the Cold War restricted Gillette's operations in many parts of the world and closed entire markets the company would have otherwise entered in Russia, China, Eastern Europe, Near East, Cuba, and parts of Asia. More and more countries demanded local ownership for foreign enterprise in exchange for continued operation or entry into their markets. Outside the U.S. and European markets, Gillette spent time and money building manufacturing facilities and distribution networks in anticipation that the markets would eventually be opened up and nationalistic restrictions lifted. Some of Gillette's joint ventures included a 40 percent Gillette 60 percent Malaysian mini-plant operation that began production in 1970, and an Iranian manufacturing plant with 51 percent government ownership. The Iran plant was one of Gillette's largest and most modern factories until the Iranian Revolution of 1979 when Ayatollah Khomeini rose into power and American businesses were targeted as enemies of the new government, forcing Gillette to abandon the operation and withdraw from the country.