MILFORD, Conn. -- How do you build upon a category management effort that has already sharpened your company's shelf strategy and earned you the position of category captain at the likes of Target, Revco and Food Lion?
For Schick here, the shaving products group of Warner Lambert, the next strategic focus is on using principles based on consumer insight to hone promotions and build the category further.
This week, Schick's headquarters sales force and brokers begin presentations of "Cutting Edge II," a program designed to do for retail promotions what its Cutting Edge Category Management program did for shelf sets last year, said Steve Lutz, director of field sales for Schick.
"We see that our big opportunity now is in advising the trade on promotion," he said.
Details of Cutting Edge II were presented to key members of the Schick sales organization June 2. Within days they were to begin calls on key accounts, which are timed to gain the company a chance to participate in marketing planning for 1996.
The original Cutting Edge Category Management program, which Schick launched a year ago this July, set out to prove that when becoming category captain is the goal, size isn't everything.
As a distant No. 2 competitor in the wet shaving category behind Gillette, which controls roughly a 60% share in the United States, Lutz said, "We had to establish ourselves with retailers as a manufacturer with a point of difference."
Working with Meridian Consulting Group, Westport, Conn., Schick designed a strategy aimed at showing retailers
an alternative to Gillette's category-dominant approach. Research analysis showed that retailers were not satisfied with profits of the wet shaving section, said Michael Shinall, co-managing director of Meridian.
Field experience and the results of preliminary research indicated that "retailers have a desire for another competitor," said Lutz.
Since it held less than a 12% market share going into the effort, Schick needed a powerful rationale to support its contention that it deserved a "seat at the table" at major retail accounts. It also faced great internal pressure for results from its corporate parent, which had made the decision to be a "player" in the razor and blades category.
"Schick needed to show immediate results in year one," said Shinall. "That is why the company elected to attack the shelf sets first."
Said Lutz, "In 1993 we didn't even have a strategy as to how to put product into the rack."
With help from Meridian, which coordinated several "match-scan panel analyses" of shaving category performance in order to probe consumer behavior, Schick developed a shelf set methodology that it said offered retailers significant added profitability.
Principles included a proper balance of space for men's and women's products with a defined women's section; alignment of competing items into premium and value tiers, and a "cascade" arrangement, with the most profitable shaving systems at eye level and its disposables below.
Schick's No. 1 objective was to get a "seat at the table" with its major retail partners, said Shinall. "It recognized the importance of category management as a vehicle to strengthen credibility with the trade, to introduce consumer-based category principles and to grow Schick and category volume and profit."
The approach helped Schick make significant inroads with key accounts this year, and it is now serving as category captain for such major retailers as Revco, Stop & Shop, Wakefern, Target and Food Lion, Lutz said.
In the past 11 months, shaving has emerged as the fastest-growing consumer products division at Warner Lambert -- and it is close to becoming the most profitable, said Lutz. Sales increased 23% to $135 million in fiscal year 1994 vs. 1993. For the first four months of this year, business is running 25% ahead year-to-year, although he added that he anticipates closer to a 15% increase for the full year.
Much of that growth has been fueled by the booming women's segment, particularly Schick's Silk Effects shaving system, which was introduced last fall. Sales in the entire wet shave category grew dramatically in 1994, led by the women's segment. According to figures from Information Resources Inc. supplied by Schick, the women's segment expanded by 36.2%, while men's products also grew a healthy 8% in dollars.
More importantly from Schick's perspective, its market share grew from 12.6% to 13.8% for the year ended 1994, according to IRI figures.
Almost from the moment the original Cutting Edge program was unveiled last summer, the company knew it had a winning approach, Lutz said. "Our first call was on Food Lion. It resulted in new distribution. From Warner Lambert's perspective, they saw a payback almost immediately."
Schick also scored a nearly immediate hit with Target Stores. "First thing we recommended to them was that we toss out three of our own items," Lutz said. That brought us almost instant credibility. Now we have got a planogram that reflects our strength and promotional support throughout the year."
For the coming year, Cutting Edge II builds upon the foundation of consumer segmentation, shelf management and retail distribution established last year, he said.
Schick's is one of a growing number sales forces that have a hybrid go-to-market structure, Lutz said. While headquarters handles key account groups for the top 300 accounts, the company employs brokers to call on many mid-sized and most smaller accounts. Those efforts are backed by telemarketing, and third-party merchandise services also are employed.
In Cutting Edge's second year, Schick will continue to emphasize the women's segment, where it has strong product technology, and it will persist with its message about optimizing shelf sets.
A major thrust will be layering on a set of promotion principles for retailers, enabled by Schick's go-to-market structure.
"We can provide learning as to how to promote permanent shaving systems in their vehicles," said Lutz. "For example, it is better to promote the razor and the refill together."
He added, "We've taken the approach that national promotions don't work. Some events have to happen on a national basis, but beneath that we must provide one to three menu-based options.
"On the West Coast, for example, prepriced events don't work."
Finally, he said, a key issue is promotion timing. Schick's people will be urging retailers to move outside the two-week span that has been typical in the men's segment. A key objective is to encourage separate promotional programs for Schick products vs. Gillette's.