Gillette C/O Duracell!

The Harvard Business School Publishing case study article by the Design Management Institute Illustrates Gillette's acquisition/merger of Braun AG Corporation. However, a much recent initiative is the merger/acquisition of Duracell by Gillette. This merger has helped Gillette achieve numerous economies of scale and a sustainable competitive advantage that supports the core competencies of the Gillette razor/toothbrush category industry with combined qualities and values of Duracell batteries. In the United States we are fortunate to be able to question ourselves as to What If? How Come? and So What? if mergers and acquisitions take place.

A brief to the facts history of Gillette and Duracell will give readers a straightforward perspective as the last blog of IsmailsInsidersInsights for my Marketing 442 Product Management course with Professor Dr. Paul Dwyer.

Gillette has introduced a number of new razor shaving systems during the last 30 years, beginning with the Trac II shaving system in 1971 and followed by a new system in 1977 known as the Gillette Atra. Between 1977 and 1988, new disposable razors with pivoting heads are twin blades were introduced along with an updated version of the original Trac II razor. Then, in 1990, the company introduced the Sensor shaving system and followed its release several years later with the Sensor Excel and the Sensor for Women. In 1998, Gillette brought another new shaving system to the market: the Mach3 razor. In 2001, the Mach3 and the Sensor were the top two shaving systems in the United States. At the beginning of 2001 is when the Gillette company finally diversified its businesses to in include more than razors. The business segments included but not limited to: personal-grooming products, small appliances, oral care products and portable power.

Duracell, on the other hand, and before its acquisition by Gillette, had been the leading producer of alkaline batteries in the United States. Between 1991 and 1996, the company had experienced consistent growth in revenues of about eight per cent per year and had increased total revenues by 46 percent during that time frame. The company also increased operating margins by more than 75 percent. At the time, 20 percent of Duracell's sales were outside of the United States.

The Gillette and Duracell merger came into existence because of two separate distinct divided categories of batteries that probably seemed attractive for Gillette to pursue. Batteries can generally be divided into two separate categories: primary and secondary. It is important to note that these categorizations do not necessarily refer to a battery's use in a device. Instead, they mainly refer to the battery's ability to be recharged. Primary batteries could not easily be recharged so they were made for one-time use; once the battery had discharged its energy, it was discarded. One the other hand, secondary batteries were those that could be recharged multiple times over the course of their life. Primary and secondary batteries each offered their own advantages and disadvantages. Primary batteries tended to hold their charge for longer amounts of time and were less expensive than secondary batteries. However, secondary batteries had a higher energy density and were more usable in extreme temperatures. The difference between these batteries often came down to their applications.

Primary batteries mainly consisted of alkaline and zinc-carbon cells. Companies such as Duracell concentrated on the disposable market because they believed that consumers were more apt to want a convenient, no hassle, portable power source.

Secondary batteries consisted of lead acid, nickel-containing (NiCd and NiMH), and lithium-ion batteries. Lead-acid batteries were most commonly found in automobiles and other transportation uses. Nickel-containing and lithium-ion batteries were used in electronic consumer products that utilized a rechargeable battery. Lithium batteries have increased in popularity for high drain devices such as laptop computers and cellular phones due to their energy density and weight. However, most other rechargeable consumer products used a nickel-containing secondary battery.


By acquiring Duracell, the future seems bright for Gillete (with its previous acquirement of Braun AG and Oral-B). Strategic alliances with the above mentioned brand names has and will continue to develop and nourish a strong foothold for Gillette Corporation with the razor, toothbrush, and batteries consumers markets with a globalized international awareness.

Volumetric Conjoint Analysis!

The Volumetric Conjoint Analysis research case study article by co-authors Jaehwan Kim of The Leeds School of Business at The University of Colorado at Boulder; Greg M. Allenby of The Fisher College of Business at The Ohio State University; and Peter E. Rossi of The Graduate School of Business at The University of Chicago illustrates artistically that Conjoint Analysis by definition states that it is a statistical technique used in market research to determine how people value different features that make up an individual product or service. With this in mind, why cannot there be a Volumetric Conjoint Analysis? The quantity of any good demanded by consumers is dependent on the attributes and benefits of an offering, the rate at which marginal utility of the offering decreases, and the availability of substitutes.

Traditional conjoint models are designed to make market share predictions and are difficult to adapt to modeling volume data. Recently, a new demand model is proposed in which product attributes are related to satiation parameters, allowing for volume predictions and identification of product line configurations that maximize profits.

In order to estimate quantity demanded for various product configurations, rather than simply market shares, volumetric data are collected in some conjoint surveys. However, while (laten) linear models provide accurate estimates of marginal utility part-worths for ratings and choice data, their use with volumetric data is problematic. Volumetric data reflects the expected demand for the alternative product under investigation, often expressed in terms of multiple purchases.

For discussion purposes, consider, for example the consumption of soft drinks. Even though if a particular household is brand loyal, demand is often reported in terms of multiple container types and volumes for a specific time period (e.g. two liter bottles and three six-packs). On the contrary, another approach to modeling volume data collected in a conjoint survey would be to use a count regression model such as a Poisson regression. A separate Poisson regression could be fit to the quantity responses for each product configuration presented. The difficulty with this approach is that the linear Pisson regression function does not accomodate satiation effects and the assumption of independent Poisson regression limit substitution possibilities.

In summary, the eventual goal of a volumetric conjoint analysis is to make optimal policy recommendations which are difficult to justify using an ad hoc statistical specification.

New Airport Security RFID Techology!

The Richard Ivey School of Business at The University of Western Ontario case study article by Sohail Lalani in c/o Professor Robin Ritchie illustrates Dexit Inc.'s invention of an electronic payment system consisting of Radio Frequency Identification Technology (RFID) appealing to the Canadian payment system market. Similar and previous innovations with payment system ease of use and convenience led by Exxon-Mobil through their own RFID technology U.S. initiative of the so-called "Speedpass" system has led to current innovations with biometrics and smart card technology consisting of using RFID technology.

Recent examples of the users of biometric technologies are The International Airport of Mexico City, Dubai International Airport and Municipality, and The Federal Aviation Administrations (FAA) who already use the technology capabilities to increase the security threat level at their respective airports.

The International Airport of Mexico City utilizes the biometrics technology in order for significant authentication capabilities needed at the credential level, scalable credential issuance procedure for future expansion, and the biometric solution allows precise access control to restricted areas, virtually eliminating the possibility of counterfeiting. In addition, biometrics and RFID technology combined provides size and complexity, multi-factor authentication, secure credentials, and scalable solutions with the latest technology for Mexico City's airport.

The Dubai International Airport utilizes the BITAQUE ID management system which provides a smart card technology at new so-called "electronic gates" (eGates) at the Dubai airport. This system is designed to reduce delays and enable registered passengers automated entry or exit through the airport. With air travel on the increase in the Middle East and a heightened need for security at all airports, The Dubai Naturalization and Residency Department acknowledged/recognized the need to introduce electronic gates to speed up access through Dubai International Airport.

The Federal Aviation Administration (FAA) has begun a pilot test program at the John F. Kennedy Airport in New York (JFK), Washinton-Dulles International Airport, and others etc., will work with biometric and security systems provider SECURCOM International to test a biometric program, BIOPASS. Under the program, select frequent fliers will bypass security hassles by using their boarding pass and a smart card that contains their fingerprints.

This type of research, evidence, and credibility provides a clear and straightforward credible forecast of a so-called "prediction" of the future of the airline industries and airports around the United States that an organized RFID development systems integrated with feasibility, accessibility, and usability can account for accurate credibility, validity, and authentication with reasonable severe security.

A possible endeavor for America's airports can be somewhat of an "EZ-Tag" toll system for airport security. The differentiating factor can indeed be segmentation of passengers who do and do not require further checks or interrogation to whiz by security checkpoints through the use of a sensor-installed prototype device that can be deposited into bins at the departure gate before boarding the flight. Also, for international flights a quick express- "RFID sensored device" checkout can be installed at customs and immigration checkpoints where inquiries are not required for potential U.S. Citizens and various Civilians and/or Military Personnel.

We rest our hopes and desires at the hands of the inner Marketing Demon!!!