Gillette in Indonesia

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GILLETTE INDONESIAN

Given the information and the projections for 1996 behavior of the Indonesian market, Should Chester Allan implement his strategy based on increase only sales, instead of focusing efforts on market development (marketing, promotion, supply chain) aside of sales, just as Rigoberto Effio suggests?

BACKGROUND

GILLETE
Since its creation in 1901, Gillette has established a solid worldwide leadership as a producer of razors and blades, as well as other consumer product categories. Their spread of wholesalers, retailers and other distributors covers over 200 countries. A strong strategy of operations has been the expansion dividing the operations in region management with drivers such as R&D, advertising, and capital spending as drivers. The approach the company management required is to “think global, act local”

Gillette’s strategy for emerging markets:
Introduce shaving concept.
Higher value products and shaving systems.
Decide product mix.
Marketing push.

Gillette sales in Indonesia are as follows:

Table 1
GILLETTE in Billions of dlls
$
%
Total Sales
6,800,000,000.00
100.00%
Razor sales
2,720,000,000.00
40.00%
Asia- Pacifica razor sales
600,000,000.00
22.06%
Top 5 cities sales
$360,000,000.00
60.00%

Indonesia Market

The Republic of Indonesia is constituted of more than 15000 islands and the Population distribution is as follows:

Table 2
INDONESIA
%
Quantity
Lived in towns
35.00%
68,600,000.00
Lived in rural areas
65.00%
127,400,000.00
Total population
100.00%
196,000,000

The Indonesian government had a series of measures to keep a certain pace of growth within the country. One of these measures was the creation of Replita (Five Year Development Plan), applicable in 1996, is to maintain an annual growth of 6.2%. Also, over the years the government had facilitated Foreign Direct Investment to develop manufacturing infrastructure. This also enables that 2 Million new entrants to

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