FORTUNE -- This year Gillette debuted a 30-second television spot that will go down in the annals of razor blade marketing. Actor Brandon Quinn begins by telling the audience that Gillette sent him around the world to see how long he could shave with a single ProGlide cartridge. After gallivanting through what looks like the African Savanna, Paris, and some Asian rainforests, he tells viewers what Gillette never had: That the company’s blades last up to five weeks.
Gillette has always been famously tight-lipped when it came to blade life. Ask them anything else about shaving, and you got a thorough response. Did you know the average male takes 150 strokes per shave? Or that men’s faces include 10,000-15,000 hair follicles? Or that 10% of male shavers replace their blades according to the calendar, while the rest of us go by feel?
But broach the subject of blade life and you got a long list of reasons why it wasn’t possible to estimate. Until now. “This is most specific we’ve been,” says Gillette spokesman Damon Jones.
Gillette never advertised blade lifebecause it never had to. The brand, owned by Procter & Gamble (pg), grew into the leading men’s shaving line not because its blades lasted forever but because they were better, period. They were better because Gillette spent more than anyone else to make them that way -- it didn’t hesitate to cough up $1 billion developing the Mach 3. And Gillette never mentioned blade life because it was better if the consumer didn’t know. By not knowing exactly how long (or short) a blades’ lifespan, the customer might replace it more often than necessary.
And that’s often what they did. After disposables lost their luster, Gillette introduced the two-bladed Sensor in 1990, then the three-bladed Mach3 in 1998, then the six-bladed Fusion line in 2006. By then its market share figures exceeded 80% in the lucrative U.S. market, and yearly sales of replacement blades and razors were approaching $1 billion.
As blade counts rose, so did replacement cartridge prices. Which was fine when the economy was humming. But now as it limps along, Gillette’s market share has taken a hit -- its hold of the U.S. replacement cartridges market slipped by 3 percentage points from 2010 through the first quarter of 2012. Jones says Gillette reacted with the new ad. “One of the things we wanted to do was to help reframe the value perception of our brand,” he says. Translated from PR-speak: Gillette needed to give men another reason to pay more for its blades.
Gillette contends its pricing is competitive with rivals like Schick. But the average price paid for a pack of Gillette’s replacement blades today is $18.04, far higher than the $15.32 industry average and nearly $8 more than what Energizer Holdings’ (which owns Schick) customers pay for a pack, according to SymphonyIRI Group.
Gillette’s market share losses also come as it battles a retro razor craze. Men’s publications have urged readers to pull out their grandfather’s old razors, which use a single, inexpensive razor blade. “First off, shaving with straight razors makes you seem like a badass,” says Brett McKay, who founded men’s blog The Art of Manliness and shaves with his grandfather’s 1960s Schick safety razor. “But second, it’s a better value. You buy a razor once, you keep it sharp, and you never have to buy cartridges again.”
Reliable market share numbers don’t exist for retro shavers, but not only have GQ, Esquire, and Details featured the products, more than 45,000 members of the online forum Badger & Blade post daily about shaving with century-old razors.
New competitors have also tried to chip away at Gillette. The upstart subscription service Dollar Shave Club charges as little as $1 a month for mail-order replacement blades. After winning $1 million in venture capital from Silicon Valley hotshots like Kleiner Perkins and Andreessen Horowitz, Dollar Shave grabbed national headlines with its amusing YouTube ad in March that takes a swipe at Gillette spokesman Roger Federer. Co-founder Mike Dubin, 33, doesn’t want to encourage a David vs. Goliath story. But the former NBC page who started Dollar Shave Club last year in a Los Angeles digital incubator does say, “Are the big guys ripe for taking a couple potshots at? Yeah.”
Does Gillette risk mixing messages by emphasizing value (one cartridge last five weeks!) with premium razors? Of course. But between the billions it spent on R&D and the millions it spends each year studying consumer behavior, the brand should come out ahead. “They benefited from a culture where we were pretty quick to dispose blades, now they’re saying we don’t have to,” Bryant University professor Michael Roberto says. “My gut says these folks know what they’re doing.”
A shorter version of this article appeared in the June 11, 2012 issue of Fortune.