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Key Marketing Issues Facing Gillette Indonesia - Case Study Example

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Indonesia has a large poor population living in the rural areas and a small wealthy population living in the urban areas. Gillette is an international company and a world leader razor and blades for shaving men. Gillette entered Indonesia in 1971and established a wide market presence…
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Key Marketing Issues Facing Gillette Indonesia

Download file to see previous pages... 1). The company sought to satisfy its domestic and export market. As such, the company manufactures high quality razor blades and shaving systems (Quelch & Bartlett 2006, p. 360). Its target market includes adult urban males who include the working class and college students who manifest western grooming habits (Kanter & Dretler 1998, p. 60-68). However, the company faces immense competition from Tatra, Tiger, and SuperNacet companies that manufactures low-end double-edged blades (Harvard Business School 1998, p. 1). Gillette Indonesia operates in developing countries (Ricardo-Campbell 1997, p. 59) and hence records immense growth from the population and prosperity in Indonesia where shaving is relatively new. The company is already planning to implement a sales price increase (Sarah Ellison & Forelle 2005, p. 1). However, Indonesians only shave 4-9 times in a month. Subject to the fact that the incidence of shaving is relatively low in Indonesia, Gillette Indonesia is having problems in meeting its growth targets. Gillette must consider raising the awareness on shaving and personal grooming to improve the frequency of shaving, to support Gillette’s sales increase. Situational Analysis Gillette Indonesia seeks to grow and satisfy its domestic market as well as its export targets in developing nations. The company is struggling to capture its market share in Indonesia and focuses on expanding its market. However, shaving and personal grooming is not a priority and many people consider it as a luxury. Gillette Indonesia Financial Analysis In 1996, Gillette Indonesia sought to increase its sales by 25%, which necessitated for an effective marketing plan. Indeed, by 1995, Gillette Indonesia had a 48% unit share in Indonesia and the company sought to increase this percentage to 50% in 1996 (Harvard Business School 1998, p. 5). By this time, the overall market had approximately 40 million urban men over 18 years old that shave where about 13 million people in Indonesia used Gillette blades. Notably, the shaving incidence in Indonesia was at an approximated average of 5.5 times per month, which was much lower than the incidence in other countries like U.S. However, with a view of increasing and maintaining profits, Gillette increased its prices, which resulted to a 2% growth of unit sales in the market (Herath & Park 1999, p. 1-35). Actually, the company had a sales value of $23 million and net profit of $4.6 million with its 48% market share in Indonesia. There are two types of Gillette target customers where the premium customer is a male Indonesian in the growing income class of greater than $10,000 household income. On the other hand, the standard customer belongs to the income class of less than $10,000 household income (Harvard Business School 1998, p. 3). Moreover, the economic conditions in Indonesia are on the rise with the average annual GDP growth standing at 7% in 1995 (Harvard Business School 1998, p. 3). As such, the demand and sales for Gillette blades is likely to increase in the future if the economic growth rate persists. Therefore, to increase the sales by 25%, the company must devise an effective marketing plan to segment and target its customers (Herath & Park 1999, p. 1-35), which is seemingly very challenging in a country where many people consider shaving and persona l glooming as a luxury. Gillette Indonesia SWOT Analysis Strengths Gillette Indonesia specializes in the manufacturing of high quality razor blades and shaving systems, which contributes to the competitiveness of the company (Kanter & Dretler 1998, p. 60-68). It offers a wide range of ...Download file to see next pagesRead More
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