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4.Gillette Indonesia: case questions13
The Gillette Company has effectively entered the razor blade market in the main parts of Indonesia. Even though there is still a lot of potential for growth, it faces stiff competition, as well as a looming leftover portion of the untapped Indonesian market. Analysing the Indonesian razor blade market, boosting the demand for Gillette razors, and using market penetration and diversification strategies to increase sales will be the basis of our marketing strategy.
The shaving market in Indonesia is still underdeveloped compared with the Western market, where 60% of shaving men in Indonesia use dry or wet knives. Hence, Gillette should show potential consumers the benefits of shaving with a razor blade. The per capita income of an Indonesian has also been increasing over the years especially in the areas of Java and Bali. Thus, this leads us to some main key points: * People with low income to trade up and start using disposables * People who is already using double edge or disposables but that the shaving per month is to be increased * Medium - High income people who shaves with disposables to be traded up to systems or who already uses systems, but are not using shaving preps
Our objectives are to aim for a deeper penetration of the urban Indonesian market, better positioning in lower income Indonesian bracket and diversification in the women’s shaving market. Thus, we will provide marketing programs, which include: * Development of supermarket channels for better distribution and long-term growth * Education campaigns to improve shaving incidence rates
* Advertising campaigns created to attract the Indonesian women into specially designed Gillette products
In addition to the above programs, if Gillette upgrades to higher-end products, reduces its cash conversion cycle, and uses culture focussed marketing, it can greatly strengthen its position in the Southeast Asian Market.
During the mid 90s, Gillette was a world leader in blades, razors, and nine other consumer products; it was also characterized by high brand awareness. It had constant growth between 1990 and 1995 in terms of sales (9%), net income (17%), and earnings per share (18%). Market summary
In 1995, an average of 40 million adult men in Indonesia shave about 5.5 times per month, compared to 12 times per month in Hong Kong. However, the Indonesian market was characterized by significant differences among the consumers caused by several factors like the challenging geographical distribution of the population and the different consumer habits. The following paragraphs will explain the relevant factors identified in the Indonesian market. Geographic
Indonesia is an archipelago of 15,000 islands with a population of 196 million of people in 1995 that speak more than 250 languages and dialects. 35% of them reside in towns, while the remaining 65% of the total population reside in the Java and Bali islands, which covers only about 7% of the land. Jakarta, Bandung, Surabaya, and Semarang are the four largest cities in Indonesia, and all of them are situated in the island of Java. Economy
In the last twenty years, Indonesia averaged an annual gross domestic product (GDP) growth rate of over 7%; from 1998, the five-year economic development program called Replita encouraged growth in non-oil related industries. The 75% of the GDP produced in Java and...