Case Guide Discussion Questions

Topics: Revenue, New product development, Marketing Pages: 3 (543 words) Published: November 6, 2014


Gillette Indonesia
1. What factors determine the demand for blades? How can demand be increased? Shaving habit, knowlodge of shaving, % of men, % income, traditional way of shaving (making similar) Increase awareness of products, make shaving known (secluded areas), improve in advertising, educate people got shaving,

2. Prepare an income statement projection for Gillette Indonesia shaving products, similar to Exhibits 3 and 4 in the case. Be prepared to explain the logic of your projection.

Gross revenues from shaving products90%
Less: Trade discounts5%
- Net revenues 85%

Less: Variable manufacturing costs35%
Variable selling costs (commissions)2%
Variable distribution costs6%

=Gross margin42%

Less: Advertising10%
Promotion and Merchandinsing3%
General sales/adm. Costs14%

Profit from operation15%

The decrease in price will create new demand, so the 5% loss in profit from operations will be balanced with the new market of 20%, distributed by 10% of new consumers and 10% of market share.

3. How is Gillette doing in Indonesia?

Growinfg slow – it is in the Early stage and has a lot of potential to grow – recent liberation of foreign investment, good growing balance of wealth population, has to product locally because of the regulations.

4. Given the Gillette experience does it make sense to talk about a global market?

Cisco Systems
1. Describe some of the risks in new product development for high technology products. 2. What were the risks using Chinese contract manufacturing from the start? 3. What metrics and research could help Cisco contain its risks? 4. What role does the assessment of competitor moves play in Cisco’s decision process?

Sephora Direct
1. Assuming she receives the additional funding, how should Bornstein allocate her budget across the various digital categories? Given that the additional...
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