Gillette aims to fill in the gap between its “higher end” razors and “lower end” razors by dropping prices on a few of its “higher end” razors, to up to 20%. The problem with this strategy is that a double digit price drop might undermine the perceived value of the razors. It could create an idea that a “high end” razor is nothing but “middle range” razor with a significant mark up, and that consumers were paying a higher price than the real value. This could create a feeling of distrust and unfairness towards the “higher price” razors that did not get a cut in price and the brand itself. Furthermore, based on the Monroe Model, a decrease in price could also lead consumers to assume that the quality on those “high end” razors also decreased, because of the relationship between price and quality. An alternative to the lowering price strategy could be removing some of the “higher end” razors and replacing them with “middle range” razors. This way, there would be no price decrease to affect consumer’s perception of fairness and quality. This strategy, however, requires products to be removed from the product line and time for designing the new products, which can be expensive and time consuming. Because of this, the alternative solution is only recommended in case Gillette is willing to wait to regain market share and increase
Gillette aims to fill in the gap between its “higher end” razors and “lower end” razors by dropping prices on a few of its “higher end” razors, to up to 20%. The problem with this strategy is that a double digit price drop might undermine the perceived value of the razors. It could create an idea that a “high end” razor is nothing but “middle range” razor with a significant mark up, and that consumers were paying a higher price than the real value. This could create a feeling of distrust and unfairness towards the “higher price” razors that did not get a cut in price and the brand itself. Furthermore, based on the Monroe Model, a decrease in price could also lead consumers to assume that the quality on those “high end” razors also decreased, because of the relationship between price and quality. An alternative to the lowering price strategy could be removing some of the “higher end” razors and replacing them with “middle range” razors. This way, there would be no price decrease to affect consumer’s perception of fairness and quality. This strategy, however, requires products to be removed from the product line and time for designing the new products, which can be expensive and time consuming. Because of this, the alternative solution is only recommended in case Gillette is willing to wait to regain market share and increase