Analysis on Gillette Indonesia Case

CASE ANALYSIS: GILLETTE INDONESIA

EXECUTIVE SUMMARY

Gillette Indonesia operates in developing countries so that Gillette benefited from the growth of population and prosperity. On the other hand, the activity of shaving is not yet a part of daily activity for most people. Gillette also faces problems of distribution and local cultural issues.

The main problems faced by Gillette Indonesia is the brand used the level is far below the level of brand awareness, thus requiring a significant increase in sales. Country manager of Gillette Indonesia projected sales increase of 19% in quantity and 40% in value.

This projected increase obviously needs to be supported by good marketing activities. Indonesia's population grew about 1.5%, and GDP per capita grew about 7%, so naturally, Gillette's target market is also growing rapidly. But there must be a marketing effort to attract novice users to use the Gillette products. Another problem is the frequency of shaving of the Indonesian people is still very low at 5.5 times per month, compared to Hong Kong 12 times. Gillette has to conduct a campaign to raise the frequency of shaving, so that it can support the sales increase.

Budget for the marketing activities amounted to 9% of sales, it is relatively high percentage compared to the average company in its class. With good marketing efforts, in 1996 sales increase of 19% can be achieved, and in the same time the projected profit can also be reached: $ 6.44 million (Appendix 1).

COMPANY DESCRIPTION

Gillette is a world market leader in men’s grooming products, especially razor and blades. This company entered Indonesia in 1971 with a very successful market penetration; even the Indonesian word for blade is “silet”, clearly rooted in “Gillette” itself. One year later, Gillette built its plant to fill the domestic need and export, as well.

In 1995, they held 48% of market share with sales value of $23 million and net profit of $4.6 million. With the growth of the market and...