Answer 1:

The demand of blades is largely determined by the following parameters.

Demographics: Since shaving is done by adult males, the proportion of adult males in the total
population will affect the demand of blades.
Economic condition: A man in rural setup is far less likely to use a Gillette shaving blade than a person
in an urban setup. Hence, the number of men in urban setup also matters.
Price of product: The price of the product matters a lot since there are competitors like Tatra, Super
Nacet and Tiger. Customers can switch to rivals if the price of Gillette blades is too high.
Western influence: The grooming practices of men in the west, if promoted in India, can have an impact
in the awareness and demand of blades.

To increase demand, we can try the following.

Pricing: The pricing has to be competitive in the market. An analysis of the income level of adult men
needs to be done to understand the affordability of these people.
Brand awareness: Media must be leveraged to promote the blades amongst the urban and rural
population.
Market segmentation: Gillette must target specifically a particular age group. The target mass can be
18-25 years old or 25-50 years old. A particular segment can be targeted through advertisements to
increase demand.
Product differentiation: The variety of double-edge blades, disposables and system blades can help
Gillette create a differentiation in its products and increase the demand for its products.

Answer 2:
Gillette has grown in Indonesia. Its first plant manufactured only 75 stock keeping units in 1972, but
manufactured 150 million of them in 1995. The growth analysis is as follows.

Blade 1995 1996E Growth(E)

Production (million units) 150 168 12%
Sales (Volume million units) 115 136 19%
Sales (Value million $) 19.6 27.6 40.81%
Market share 48% 50% 4.17%

 Gillette’s market share has increased from 28% in 1993’s blade market to 48% in 1996.
 According to Exhibit 5, there is 97% brand awareness, 85% ever used and 55% brand used most
often rating of Gillette’s Goal Red product, as compared to 42-59% of the rivals. Other products
also have a good brand awareness.
 The production (from 150mn to 168mn) and the exports (from 46mn to 5mn) also increased.
  Gillette is also planning to increase sales by 19% in 1996. The production lines and 23
distributors can help in this regard.
 However, Gillette also faces tough competition from its low-cost rivals, since they provide blades
75% cheaper than those of Gillette.
Gillette’s first-mover advantage has certainly helped it to capture a large market segment, which is 48%
currently. However, 60% of the sales happened in the top 5 metropolitan cities (Jakarta, Bandung,
Surabaya, Semarang and Medan).
The high cost of the products prevents people in rural setting to buy them. Consequently, penetration in
rural market is low and this is one area which can be targeted.

Answer 3:
For Gillette to accelerate the development of blade market in Indonesia, it needs to understand the market
first using a PESTL analysis and then use SWOT analysis to find how it can contribute to the growth.
 Political Legal
All reforms and policies has to be approved by Certain regulations prevent foreign companies
President from directly importing and distributing
Market stable and in continuity products

Social Technological
Standard of living has improved. Cycle time from placement of order to product
32.9% of population is above $5000 income reduced by 7 days
segment
65% of supermarket shopping is done by people
of income segment > $5000

Economic
Per capita income has increased
Non-oil industries encouraged
GDP growth > 7% for 20+ years
Push to Foreign investment and provate sector
Expansion of non-oil manufacturing by 10.3%

SWOT analysis
 Strengths Weaknesses
Variety of products (differentiation) Communication gap between sales manager and
distributor. Direct communication is not
World leader in blades and razors- brand image
preferred.
Consistent profits for 5 years.
High priced goods
Network of business and regional operational
Distributors lack enough sales persons and
units worldwide
storage facilities
50 facilities in 24 countries

Opportunities
Government giving a push to foreign
investment and non-oil/gas manufacturing by
10.3%
1999 survey shows that 80% of people above 18
years shaved. So, the tarhet segment is large.
Threats
Low-cost product manufacturers in the same
segment, like Tatra, Super Nacet etc.
Competition for shelf space increasing.
"Some supermarkets were imposing slotting
allowances on suppliers of up to 80% of a
new product's cost for shelf space."
Long-period (45 days') credit to distributors
instead of timely payments
Wholesalers use antiquated accounting, and
ppor facilities. They are focused only on
turnover, rather than profits.

Gillette can try the following for development of market.

 Create brand awareness amongst the youth, especially college-students. The youth is most
attracted towards quality and personal grooming.
 Cost can be reduced a bit, so that competitors can be tackled in rural backgrounds.
 Special offers, schemes, discounts etc. can be tried to push people towards shaving.
 Advertisements by celebrities can help to push people for shaving. Such ads will use
‘Attractiveness’ and ‘Credibility’ factors of Source in the Persuasion matrix.

Answer 4:

Excel file attached below and also included in zipped file:

 Arijit
Goswami_259_Gillette Indonesia.xlsx