How P&G won the Indian market by being customer-obsessed
In 2005 P&G acquired Gillette to expand their male grooming business.
This was not a small acquisition - Gillette had annual sales of $11bn and employed over 30,000 people.
For the acquisition to return value to shareholders P&G needed to bring something to Gillette - something Gillette couldn’t have an as independent company - and one of those was true global scale.
One of their strategic choices was to increase sales by expanding into emerging countries - India in particular.
To be successful in this new market P&G knew that they had to design a new type of razor that would be specific to this market, whereas Gillette lacked some of this experience and capability.
After a three day planning session with their scientists and market research teams from around the world, Chip Bergh who was running the blades and razors business, gave them a clear direction,
“The first thing I want you to do is spend two weeks in India. I want you to live with these consumers. I want you to go into their homes. You need to understand how they shave and how shaving fits in with their lives.”
A British scientist sheepishly put his hand up,
“But Chip, why do we need to go to India? We have plenty of Indian men who live near our facility in Reading. Why can’t we just recruit them?”
Bergh reiterated that they would need to see consumers in their own world and sent the team to India.
A couple of months later the same scientist sought him out,
“Now I completely get it”, he said,
“You can look at pictures in the books, you can hear stories, but its not until you are there [that you understand].
I spent three days with this one guy, shopping with him, going to the barber shop with him, watching him shave.
Now I really understand the company’s statement about improving consumers’ lives.
I was so motivated and inspired, I designed the first razor on a napkin flying back to London.”
It was only by being in India that the scientist could understand that in India men were unable to shave with a basin of warm running water. Most had to make do with a small cup of cold water.
Without hot running water to clean the razor the normal blades got clogged making shaving more difficult.
The new razor would only have one blade protected by a safety comb and an easy rinse cartridge - all sold for around 5% of the cost of the top end Fusion Pro-Glide products.
The Gillette Guard
A simplified design that could be produced at a fraction of the cost
Within three months the Gillette Guard (as it became called) was the best-selling razor in India, winning through P&G’s ability to innovate, and through deep consumer understanding.
Don’t stop listening when you reach Product Market Fit
When you found a startup and hunt for product market fit customer interviews are central to finding a product that customers are prepared to pay for.
Steve Blank’s "Four Steps to the Epiphany” and Eric Ries’ “The Lean Startup” mandate constant customer interaction - get out of the office and speak to real customers.
But many companies fall into the trap of losing this habit once they have found PMF and raised their Series A.
“We know everything now - no need to speak to more customers”
Two of the easiest mistakes to fall into:
We have PMF in territory/segment A, therefore we must have it in territory/segment B.
Acquiring a company that has revenue therefore they must already have PMF.
I have worked in multiple companies where we fell into both of these traps.
We launched in a new country and couldn’t work out why the product wasn’t flying off the virtual shelves like it was in our domestic market.
We acquired a company to have a second product and couldn’t work out why our happy customers weren’t biting our hands off for it.
The lesson from the P&G story is that both of these are flawed assumptions.
Gillette was a very successful business with $11bn of revenues.
P&G could have just assumed that they could roll their existing razors out to a new territory - but they knew that wasn’t the right approach - they needed to be customer-centric.
Each new segment of customers, for each new product, needs to be treated like its own startup.
As you expand your TAM to drive incremental revenues never lose that hunger for customer feedback that you relied on to get started.
The P&G/Gillette story is recounted from the excellent book “Playing to Win - How Strategy Really Works” by AG Lafley and Roger Martin.
Get started
Whenever you are ready, there are three ways that I can help you accelerate your revenue.
Buyer Experience Audit - I’ll impersonate a buyer researching your segment and company and let you know what I find. Ideal for planning your Revenue Operations strategy.
Business Model Design Workshops - I’ll work with you and your team to design or refine a business model for a new or existing product.
RevOps Impact Playbooks - I’ll help you implement one or more tactical processes across your revenue teams - content, referrals, testimonials, adoption and more.