Dollar Shave Club has carved out a nice market niche with its funny videos, low cost products, and strong brand recognition. The company has done quite well, building from zero to a multi-million dollar company. In one year, it has gone from advertising only via viral videos to an estimated $10 million brand advertising campaign on ESPN’s Rose Bowl. But Dollar Shave Club is no longer the only game in town online for razor sales.
Enter a new upstart: 800Razors. The company has an exclusive e-commerce deal for razors featuring Schick blades and projects it can capture 10% of the market in the next 10 years. While its current revenue is estimated at $1 million, there is definitely a market worth fighting for: annual sales are more than $1.8 billion in offline sales of razor cartridges. (Gillette controls 81% of the U.S. razor cartridge business; Schick has 17%.)
Which shave do you prefer? Compare the two companies and decide which approach and product line will win.
Group Activities and Discussion Questions:
- Review key aspects of developing a product positioning map, including determining the axis labels for positioning.
- Review 800razors products and Web site (www.800razors.com). Compare this with Dollar Shave Club (www.dollarshaveclub.com).
- What other products and companies are competitors? Place those on the positioning map.
- Divide students into teams and have each team develop a positioning map for this product.
- Have each team draw their map on the board.
- Debrief exercise.
Source: Ad Age Daily, 1/6/14