Gillette Indonesia

Gillette Indonesia

Recommendation

Indonesian blades market is on the early stage and there is a lot of potential to grow

Recommendation is

1. to make investment based on gross sales focusing in products with  high level of awareness such as:

• Gillette Couture and Sensor and Goal II for male and female_ For High and Middle class  
• Goal II and Gillette Goal Red_ For Low middle and Low class

1. Train and educate distributors and salespeople
2. Develop flexible distribution channels  
3. Concentrate target on college students and graduates as a great trendsetter who are entering workforce.

Brief introduction of the situation

Founded in 1901 Gillette is the world leader in blades and razors and in 9 other consumer product categories. The company’s mission is to achieve worldwide leadership in its core product categories. New-product activity and development of new markets, as well as geographic expansion driving “to think global, act local” were considered essential in Gillette’s strategy.

With almost 200mln population, Indonesia represents an important country in Gillette’s portfolio.

Indonesia is a young and attractive market at its early stage with a high growth potential.

Chester Allan Gillet`s country manager in Indonesia was developing 1996 marketing plan to present his business director Rigoberto Effio.

Allan`s plan projected 19% increase in blade sales in Indonesia in 1996, however Effio believed in achieving up to 30% increase in this domain.

Analyzes of the situation and the recommendation on strategy is presented below.

Industry situation

Indonesia Population was 196m, 35% living in towns and 65% in rural areas.

The GDP growth over 7% since last 20 years but inflation expects to be 12% in 1996.

 Indonesia is governed by one   president since 1965 with no sign of change in 1996.

The five major urban centers represent 60% of Gillette’s in Indonesia Jakarta, Bandung, Surabaya, Semarang (all located in Java), and Medan(located in Sumatra) expected to be the cities with most of the sales: altogether 35m habitants.

40% of men who shaved use store-bought blades. The rest use dry or wet knives.

The average number of blades by the 20% of the shavers, who always used blades, was 15.

The average of an occasional user was 4.

Lifestyle and values 66% of urban adult men have been shaving with an average of 4.5 times in 1993 in 1995 the average grew to 5.5 times per month

Over two million new Indonesians workers expected each year.

Distribution channels have issues such as

• Indonesian regulations prohibited foreign company from directly importing or distributing its products
• Week communication and poor traffic conditions

Gillette in Indonesia

Gillette entered the Indonesian market in 1971 with double edge blade razor and cartridge and some other products, with an highly automate plan near Jakarta employing around 68 full time and 73 casual workers. It covered almost 50% of the market share which was a remarkable achievement and was also to some extent successful in creating the market of shavers.