Gillette Case Study Hbr

Topics: Marketing, Indonesia, Rural Pages: 5 (1410 words) Published: February 1, 2012
Division A Group 5
Gillette’s Marketing Strategy for Indonesia
Executive summary
The analysis has been done to achieve the country manager, Chester Allan’s objective to increase the market share by 19% through identifying the new customer segments, and increase brand loyalty. The problems faced while achieving the objective are as follows: * The rural population in Indonesia is unaware of the modern shaving trends and therefore do not add to the total sales of the company. With time, when the urban market will get saturated, the rural market will become the only option for the company to expand their sales. Therefore, the company has to find some means to penetrate and increase the awareness among the rural population. * The awareness of the Gillette brand is high among the urban population but not many use it regularly. Even though a higher percentage of population has tried the brand but not many have been converted as loyal customer. * The frequency of shaving is too low among the Indonesian population as compared to other countries. * Gillette’s major competitors are imported lower end brands, which come from Eastern Europe and China. Gillette’s prices are sometimes too high as compared to its competitors. * The distribution and transportation system in Indonesia are not suitably developed. There is no direct control and profit from the distribution system due to the government regulations. The transportation and logistics channels are not reliable and therefore, inventories have to buffer in larger quantities. The company has to expand into the untapped territories in order to stay as a leader. Company has following options to increase its growth: * Spread the awareness among the rural population on shaving and convince them to shave them for the first time. * The number of incidences of shaving among the existing customers should be increased to increase rate of purchase of the products. * The company should target the college students and fresh graduates. * The existing customers should be encouraged to use the higher end products.

Corporate Strategy
Gillette is a world leader in blades and razors and many other consumer product categories. It\s mission is to achieve worldwide leadership in its core product categories. The company emphasized geographic expansion along with research and development, advertising and capital spending as drivers of growth. Development of new markets and new products were considered essential. Its expansion strategy required its manager’s to think globally and act locally. Analysis of Indonesian Market (3 C analysis)

a. Company analysis
The awareness of the company Gillette brand is huge. It is an existing global leader and has the resources and technology to expand into virtually any market. The company has modern technology and has good business processes. It has a huge market share in the premium priced segment. On the other hand, the company faces a bigger issue of the week distribution and transportation infrastructure. The global advertisement strategies cannot be used for the Indonesian market. The scope to improve the manufacturing capacity is limited too. b. Customer analysis

Population of Indonesia is almost 200 million. Company’s major customer base is among the urban population. Apart from this, the company has 90% of the market share of the premium segment. The rural population is not aware of the modern methods of grooming and therefore shaving for them is a luxury and not a necessity. The women shaving products have been introduced recently and are slowly capturing the market. Among the urban population, the incidences of shaving are lesser as compared to other developed countries. The standard of living of the people is below average as majority of the population earns below $10,000. c. Competitor analysis

The imported lower end brands from East Europe and China are the main competitors of Gillette in Indonesia. The...
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