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Gillette Indonesia case

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Ylenia Pasquale

on 7 March 2013

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Transcript of Gillette Indonesia case

Gillette Indonesia Case Letizia Bucci 651871
Elisa Greco 652121
Ylenia Pasquale 647011 General view on Indonesia: Gillette is the world leader in blades and razors and its mission is to achieve worldwide leadership in its core product categories. "THINK GLOBAL,
ACT LOCAL". With a population of almost 200 million, Indonesia represented an important country in Gillette's portfolio. Indonesia is a young and attractive market at its early stages with an high growth potential. Teething troubles: The shaving frequency is 5.5 times per month: less if compared with 12 times per month in Honk Kong and 26 in USA. Shaving is underdeveloped in Indonesia: from a 1995 survey, about 80% of urban man over 18, shaved. 1st GAP: Many Indonesian are not users! INFLUENCE ON
SHAVING INCIDENCE: PRO CON Increase of awareness of Western habits;
Youngest entering workforce: trendsetter. Cultural barriers: Muslim religion;
Genetic barriers: Asian beards grow slower. The 4 Ps of Marketing Mix: Gillette's product line:
System Blades Core product: double-edges Objective:
19% increase in blade sales in Indonesia in 1996 from 115 m to 136 m, with expected revenues of $ 27,6 m from sales and a gross margin of 46% 3rd P: Place Distribution is one of the most complex challenge for Gillette in Indonesia for different types of barriers: GEOGRAPHICAL: Indonesia is an archipelago of more than 15,000 islands;
REGULATORY: Indonesian regulation forbidden a foreign company from directly importing or distributing its products;
INFRASTRUCTURAL: poor traffic conditions, lack of distribution service technology. Gillette appoints 23 distributors dispersed across the country and thanks to this in the year following sales rise by 60%.
Gillette wants to deeper enter in the biggest supermarket chains such as Hero and Metro. In this way it can get higher margins with a direct negotiation.
But to be efficient in Indonesia, Gillette has also to reach the 60,000 kiosks and mom-and-pop shops. existing. Gillette spend 9% of gross Sales on advertising and 3% on consumers promotion and merchandise: $2 million is the advertising budget for shaving products in 1995.
Media advertising is addressed to urban male consumers.
Special promotion is instead addressed to members of executive clubs, golf tournaments or workers in specific office buildings. Cost Analysis *

Profit= Revenues-Costs Conclusions In order to achieve its objectives, Gillette should: Train and educate distributors and salespeople;
Try to recruit very talented people to carry out the business;
Enter and penetrate the market of rural areas;
Develop the distribution in supermarkets' chains;
Increase sales of high-margin products in urban areas (5 major cities). Thank you for your attention! revenues: 100 - 10= 90 trade discounts total costs: 36 (manufacturing)+
2 (selling)+
6 (distribution)+
9 (advertising)+
3 (promotion,merchandise)+
total 70 profit from operations: 90 - 70= 20 * Gillette Indonesia: percentage Income Statement for shaving products, 1995. 4th P: Promotion 2nd P: Price Gillette's prices are relatively expensive, in fact they are 4 times those of competitive products. Gillette is planning to increase its prices of 20%.
Gillette adopts different positioning concerning the "Double-edges" and the "Disposables". The graph explains the positioning. 1st P: Product
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