Gillette Indonesia

Strategic Market Planning

For Product Success

Factors Determining Demand for

Blades

Incidence of beards
Speed of beard growth
Acceptability of Stubble
Womens shaving practices
Urbanization
Adoption of western business practices
Disposable income
Availability of product
Affordable pricing
Advertising and promotion

How to Increase Demand for

Blades
Blade sales depend on
No of shavers, their frequency of shaving and the
average shave per blade: Increase in first two
and a decrease in the last will raise primary
demand for the blade.
Strategies can revolve around: Persuading Nonshavers to shave; Persuading shavers to use
store bought blades; Persuading store bought
blade users to shave more often; and
Persuading shavers to reduce their number of
uses per blade

Gillette in Indonesia: Doing Well?

It has built its market share up to 48% with
a full product line that has not had to be
locally adopted
It holds 90% of the premium price segment
Gillette, after a false start, now has an
excellent distribution and sales
organization in place
It has taken the Indonesian opportunity
seriously, investing in a production plant

Gillette in Indonesia: Doing Well?

? Sales of the Indonesian subsidiary reached $23
million in 1995, but this represented only 4% of
Gillettes $600 million in blade and razor sales in Asiapacific
? Effio believes the country managers 1996 19% sales
growth objective is too conservative and that 25-30%
growth could be achieved.
? Exhibit 5 indicates limited brand awareness on all
expect the basic Gil Goal red blade.
? Despite the plant managers best efforts, output will
fall short of demand, assuming exports are
maintained at the current rate. Capital Investment for
plant expansion appears to have been postponed.

Gillette: First Mover Advantage

Gillette has set up a manufacturing plant in
Indonesia so that it can offer low-priced entry-level
double-edge blades to build primary demand.
Brand awareness can be built in an emerging market
when advertising rates are very low.
Distribution outlets can be locked up because small
kiosks and mom-n-pop stores probably stock only a
single brand and they will tend to stock the highest
share brand.
Gil can offer low-priced entry-level blades along with
higher-priced shaving systems to which users can
be shifted overtime.

How should the market be

developed?
Two Questions are Critical!
How much emphasis should be placed on
educating customers to build primary
demand and secondly how much
emphasis on promoting the higher end
systems to trade-up existing users.

New User Education!

There is still an opportunity to build
primary demand through attracting new
users (40% do not use blades)
Most Indonesians are still too poor to trade
up to systems.
Most blade distribution outlets are not
capable of stocking and merchandising
systems.

For Emphasizing Systems

Builds Gillettes Image, especially in
Urban areas
Gillettes systems are differentiated, its
double-edge blades are not
Enhances Gillette Indonesias profitability
as percent of sales
Trades up consumers who are already
loyal to Gillette.