Why P&G entered the male skin care market
- Leverage product expertise: P&G has developed significant skin-care expertise and manufacturing capacity through the Olay brand. As a result, the company can use existing manufacturing facilities, supply chains and technical know-how to build its male skin care line.
- Leverage Gillette's brand: Skin care is a natural complement to Gillette's core line of shaving products. P&G paid $57 billion to acquire Gillette in 2005. Today Gillette is a $7 billion-plus business that commands about 50% of the global market for male grooming products. Because Gillette's brand is so strong, launching a new Gillette line requires little new advertising and media spending to create awareness. And Gillette can cross-promote skin care products with its shaving portfolio.
- Broaden portfolio: Gillette has famously pursued an "up-tiering" strategy based on continually releasing new product versions at higher price points in order to compensate for the slow growth of its consumer base. The classic example is Gillette's multiple blade shaving systems (Mach 3, Fusion et al).