Strategic Marketing Case Assignment

GILLETTE INDONESIA
Section A- Group 11

1. What factors determine the demand for blades? How can demand be
increased?
Demand for blade is driven by following factors:
(a) Growing presence of professionals working in MNCs in Indonesia who are
motivated by their western counter part for a clean-shaven look.
(b) Increased in urbanization and income level
(c) Increase in education levels
(d) Religious belief: In some communities growing beard is a sign of following
doctrines
(e) Increased focus on female hygiene
Demand can be increased by
(a) Partnering with movie production houses to show actors with clean
shaven-look
(b) Advertisement to show that clean-shaven look is preferred by women as
compared to bearded look
(c) Promoting benefits of using Gillette blade over traditional knives
(d) Generating demand by increasing its distribution presence
2. How is Gillette doing in Indonesia? Has Gillette leveraged its first
mover advantage?
Gillette is growing fast in Indonesia. They were successful in creating
brand awareness among the male shavers at 97%. GI had 28% market in
1993 share which grew to 48% in 1995. It garnered revenue of $23 million
and a profit of $4.6 million in 1995. GI has 90% of the premium priced
segment of the blade market. However, due to lack of infrastructure and
transport facility in Indonesia, GI is unable to price its products at a low rate
and hence they are not consumed by low income group. It maintained
dominance in the high segment market by capturing 90% of the market
share. Some key changes in distribution channels like appointment of 23 new
distributors resulted in 60% sales growth. Diversity and language are other
hurdles that Gillette faces.
Gillette leveraged its first mover advantage. GI was able to increase the
shaving incidence and brand awareness despite being underdeveloped in
Indonesia. Market Research showed a 97% brand awareness and 55% brand
used most often ratings for Gillettes Goal Red Blade. This set up high

barriers to entry for new competitors. It covered 6000 small kiosks and mom
and pop shops. It is also selling products through supermarket chains.
3. How should Gillette accelerate the development of blade market in
Indonesia?
Indonesia Market
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As about 60% of the men who shaved used dry or wet knives, it
represents an opportunity for Gillette to tap into
o Appropriate advertising campaigns highlighting the benefits of
using blades over knives can possibly increase the share of blade
users
Company should focus more on increasing the sales of costly products
such as disposables and system blades in well-off regions of Indonesia
(Java and Bali); in 1995 these categories formed a small part of the total
Indonesia revenue
o Marketing campaigns with focus on working population of these
areas should be a priority
Gillette should promote cheaper double edged blades in rural areas where
people have low income
o Focus should be on Gillette Gold Red blade owing to its high profit
margin
Gillette will have to gradually remove the perception of shaving products
as luxury grooming products and convey the idea that it is supposed to be
a part of routine.

4. Refer the contribution calculations for Allan 1996 (E) growth

estimates of 19% in the excel template attached. You may calculate
the contribution of different products for Effio 1996 (Estimates) for
27.5% growth. Further, prepare an income expense statement for
1996 (as in Exhibit 4) based on revised 27.5% growth estimate of
Effio.

GI_Group
11_Q4.xlsx