Gillette, Schick fight with free razors

By Published on .

Fierce competition between Gillette Co.'s Mach 3 Turbo and Schick's four-bladed Quattro is taking a costly promotional turn as both give away razors that normally retail for as much as $10 and drop coupons for as much as $2.

The free-for-all comes in addition to stepped-up ads by both sides as Schick gains significant ground in the U.S. on its bigger rival for the first time in a generation (AA, Oct. 27).

Schick's sales of razor systems and replacement blades were up 90% in the four weeks ended Nov. 2, according to figures from VNU's ACNielsen Co. reported last week by Banc of America Securities. The Energizer Holdings unit gained 6.7 share points to 14.1% of the $900 million category, as Gillette dropped 6.1 points on a 12% sales decline.

That follows a 3.1-point Schick gain and Gillette loss the prior month, covering only two weeks of Quattro distribution, which began Sept. 22.

Still, doubts about the staying power of Quattro and Intuition, combined with suspicion Energizer will "spend whatever it takes" on marketing to make them succeed and an already strong rise in Energizer's share price, were among factors that recently prompted Banc of America analyst Bill Steele to cut his rating on Energizer from buy to neutral.

getting a handle on it

Gillette reaffirmed in a November conference call it plans to spend an additional $20 million to $40 million on marketing globally to defend against Schick this year and an added $40 million to $70 million in 2004.

But free razor handles look to be a growing part of the stepped up spending on both sides.

Schick dropped a national rebate offer via newspaper coupons Nov. 16 for a free Quattro system. That came after analysts reported in October what appear to be stepped up direct-mail or in-person giveaways of Mach 3 Turbo systems by Gillette.

An Energizer spokeswoman said its rebate program makes sense as a long-term strategy and noted Gillette has offered Mach 3 G-Force starter sets for as low as $1.86 at Wal-Mart, which, combined with a $2 coupon, resulted in some consumers getting 14ยข back.

Gillette has stepped up distribution of free razors in response to Quattro, a Gillette spokesman said, but added that free razors always have been part of Gillette's marketing, including a program that gives free Mach 3 razors to 70% of men who turn 18 each year.

In this article:
Most Popular