The company said it is presenting plans for less intense promotional programs for its Duracell brand to retailers in 2003 and wants to spend more of its marketing dollars on its recently launched "Trusted Everywhere" campaign from new agency Acme Idea Co., Norwalk, Conn.
Third quarter income up 20%
The discussion came as Gillette reported third-quarter net income was up 20% to $296 million, with earnings per share up 18% to 33 cents. Cost savings from restructuring and efficiency programs drove most of the growth for the quarter, which saw sales rise 2% to $2.17 billion. Gillette's ad spending rose 1% to $160.6 million globally.
The sales increase was driven in part by success of Mach 3 Turbo men's razors, which have captured a 23% dollar share of the U.S. market since their April rollout, the company said.
Duracell sales were down 4% to $482 million, but profits were up 41% to $78 million as the company moderated some of its recent promotional spending in the U.S.
Gillette remains concerned about "heavy competitive promotional activity" from Energizer Battery Co., Rayovac Corp. and private-label makers, and plans to match rivals on price promotion in the all-important fourth quarter, said Chris Jacubik, vice president of investor relations. But Duracell is also presenting plans for lower trade promotion spending in 2003 and hopes to shift its marketing mix to consumer advertising, he said.
Earlier this year, executives of Energizer and Rayovac blamed Gillette for the intense promotional spending that has sapped ad dollars from the category in the past year.