They were half a world a way from Cincinnati, but Procter & Gamble executives learned something a few years ago watching a man shave while sitting barefoot on the floor in a tiny hut in India. He had no electricity, no running water and no mirror.
The 20 U.S.-based executives observed the man in 2008 during one of 300 visits they made to homes in rural India. The goal? To gain insights they could use to develop a new razor for India.
The visit kicked off the 18 months it took to develop Gillette Guard, a low-cost razor designed for India and other emerging markets. Introduced three years ago, Guard quickly gained market share and today represents two out of every three razors sold in India.
The story of how Guard came to be illustrates the balance companies must strike when creating products for emerging markets: It's not as simple as slapping a foreign label on an American product."That, for me, was a big 'a-ha,'" Alberto Carvalho, vice president, global Gillette, a unit of P&G told the Associated Press. "I had never seen people shaving like that."
India long has been an attractive country for U.S. companies looking for growth. It has 1.24 billion people. And its economy is bustling: India's annual gross domestic product growth was 3.2 percent in 2012, according to the World Bank, compared with 2.2 percent in the U.S. the same year.
Still, India's widespread poverty presents challenges for companies used to customers with more disposable income. India's per capita income is just about $124 a month, compared with $4,154 in the U.S., according to the World Bank.
Gillette has sold razors in India for over a decade. The company had 37.3 percent market share in 2007, selling its high end Mach3 razor, which costs about $2.75, and a stripped down Vector two-bladed razor on the lower end, which goes for about 72 cents.
Now, if P&G would only use that insight and develop an inexpense razor for established markets. Nobody making less than $50,000 a year wants to spend his hard earned cash on a $12 razor that needs refills...even if it's "the best a man can get."