Published on March 22, 2009
Gillette Indonesia Case Study Marketing Management Unit MKTG1289 Group 2 - Alhadi Almusawi, Jeremy Barnett, Angela Collard, Naomi Ebert Smith & Blake Gray
Company Introduction An established household name Innovator in razor technologies World leader in personal hygiene products Promotion by triumvirate of sporting stars (Woods, Fedrer, Henry) Diversiﬁed product range Company buyouts: product diversiﬁcation/elimination Global expansion - new markets
History 2005 Proctor & Gamble acquired The Gillete Company 1996 + 5 yrs produce 230 million blades p/year 1996 increase production 168 million blades, 50 million to export 1995 manufactured 150 million blades, 46 million exported 1972 manufacturing plant established 1971 Gillette entered Indonesia 1901 The Gillette Company founded in Boston, Massachussets
Has Gillette Enjoyed a First Mover Advantage? Yes, through effective market entry! Market entry with signiﬁcant investment Established manufacturing plant for local and export sales Brand equals high quality blades ‘Gillette’ used to mean blade in Indonesian Signiﬁcant market share
SWOT Analysis Strengths Weaknesses ✦ Increase Western grooming practices ✦ Inappropriate global advertisements ✦ Large population ✦ High manager turnover ✦ 48% market share by 1995 ✦ Cultural behaviour creates manager/ ✦ Effective distribution system distributor problems ✦ Local and export manufacturing ✦ Legal system less supportive outside ✦ Brand = high quality Jakarta ✦ Rising incomes, more sales revenue ✦ Intense competition for supermarket ✦ Effective marketing campaigns shelf space ✦ Antiquated distribution methods ✦ Many different languages spoken
SWOT Analysis Opportunities Threats ✦ Over 7% GDP growth in 20 years ✦ Lower quality products by competition ✦ Stable political system (BIC and Bagus) ✦ Economic improvements ✦ Grooming products a luxury ✦ Increase in per capita income ✦ Main competitors are cheaper ✦ Two million people to enter workforce ✦ Low shaving incidents and slow growing ✦ Population earning income growing beards ✦ Shaving incidents of 5-10 times per ✦ Government regulations on direct month + population + per capita income = distribution or direct imports of products increased sales
What factors determine demand for razor blades? Desire to improve image Inﬂuence of western grooming practices Trend-setters - college students and graduates Inﬂuences on razor purchase: Effectiveness (closeness of shave, reduced shaving time, no cuts etc.) Shelf Life (re-usability without reducing effectiveness) Affordability (value for money)
How is Gillette doing in Indonesia? Sales Market Penetration In country shaving product sales 97% brand awareness of $19.6 million in 1995 55% of the brands used most Projected in-country shaving often product sales of $27.6 million in 90% of the premium priced 1996 segment Total sales revenue expected to 60% rise in sales through increase by 40% in 1996 implemented distribution Proﬁt from operatons forecast at methods 20% in 1996 Production & Supply Processes & efﬁciencies reduce production time Capacity increased Female razors - customs issues
How can demand be increased? Increase customers and frequency of use Market blade over knife advantages Inferior quality blades: show disadvantage Market to women Consider introduction of budget product Market complementary products (e.g. shaving creams) Unfashionable: stubble
Recommendations & Solutions - Top 11 Advertising & Promotion 1. Persuade customers to shave more often 2. Upgrade to higher-end products 3. Strengthen promotional presence at POS 4. Good relationships with supermarket segment 5. Incentives for supermarket shelf space 6. Gifts, lucky draws, coupons and redemption systems 7. Culturally appropriate marketing in local language 8. Promote use of shaving creams and other products 9. Targeted promotion to female segment HR and Training 10. Overcome misunderstandings re: different cultural behaviours 11. Empower sales team to: Help distributors update distribution methods Educate distributors and local market about shaving concepts
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