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Gillette marketing plan draft 24 oct2012

  1. 1. Executive Summary Product Analysis Kolter Analysis Wiersema Analysis Value Map Positioning Product life cycle Company Position SW Analysis 11 Sources Competitive Advantage OT Analysis Porter’s Forces Analysis Competitive Advantage Market Share Market Growth Potential MDI vs SDI Situation Analysis Strategic Alternative Final Recommendations (SIVA)
  2. 2.  The strategic opportunity is to develop the Indonesian shaving market, increasing our unit sales to 19% over the next one year and targeting to increase the unit sales by 200% over the next 10 years.  Gillette can easy achieve the 200% increase in unit sales, as the Indonesian shaving market has a big growth potential as current MDI (Market Development Index) is 39%.  Alternatives:  Maintain existing growth plan  Increase market share by 25-30%  Increase spending to enter into female products.  Creative destruction and reallocation of budgets to increase awareness and profitability  Strategic recommendation is spend additional 2% of our revenue on “First Shave Free” campaign, reduce the price of double edge blade by 20%, maintain disposable and system promotions while increasing profitability by 3%
  3. 3. The core benefit of shaving is removing hair The Potential Product is a complete personal experience which is a habitual, daily ritual to feel better and look attractive. Beyond blades, Gillette is providing complete grooming solutions for male and female
  4. 4. Building up this Perceptual idea
  5. 5.  Double Edge Blade has reached a mature market.  Disposable Blades and Shaving Systems will be our future  Disposables & Shaving –systems are innovative, high margin products positioned early in the product life cycle
  6. 6. Strengths:  Globally, the Gillette brand name is synonymous for high quality. Locally, the Indonesian word for blade sounds like Gillette  48% of market share for blades  Superior Technology and Continuous Innovation  Product differentiation to target different segments of the population  Highly efficient local manufacturing plant  Hard earned distribution network Weaknesses:  Lack of rural distribution is missing 73.9 million potential consumers  Global Marketing emphasis not suitable for the Indonesian Markets  Existing distribution network suffers from weak communication networks, poor traffic conditions, lack of distribution service technology and poor cash flow  Local Manufacturing capacity – scope to improve productivity is currently limited
  7. 7. 10 Superior Inputs Superior Operations Local Production Superior Offering, Branding & Positioning Synonymous with high quality – The Best A Man Can Get Superior Technology Innovation Investment Superior Access Effective Distribution Superior Target Developed Premium Price Segment Superior CollaboratorsSuperior Data & Insights Superior Market Research Superior Customer Of which we hold 90%!
  8. 8. Opportunities:  Strong Economic growth – average annual GDP growth of over 7% for more than 20 years  Rural Market represents Blue Ocean opportunity with 68% of total population  Trend setting shavers are looking to ‘trade up’.  Transition higher margin products to local manufacturing plant  Women’s shaving market in the initial stages of development  Low awareness for shaving preparation – further product entrants Threats: Low incidence of shaving in the Asian population Rural distribution might never reach ideal efficiency Inconsistent regional economic growth with 80% of population earning < $10,000/yr High margins invite competition Government regulation prohibits a foreign company from directly importing or distributing its products Cultural practices impacting employee productivity and distributor relationships
  9. 9. Intensity of Rivalry LOW Power of Suppliers LOW Threat of new Entrants LOW Power of Buyers HIGH Substitutes HIGH Mitigate this risk though branding, advertising, and creating system lock-in Mitigate this risk by our strategic product positioning
  10. 10. UNATTRACTIVE AVERAGE ATTRACTIVE WEAK DISINVEST PHASED WITHDRAWL DOUBLE OR QUIT AVERAGE PROCEED WITH CARE TRY HARDER STRONG GROWTH LEADER COMPETITIVEADVANTAGE CATEGORY ATTRACTIVENESS Double Blades Here Saturated High Awareness Cash Cow Disposables here are growing but not as high margin as systems. Yet still a promising market In the Systems category … we are very attractive and the leaders. Offers high margins CASH GENERATOR PROCEED WITH CARE LEADERS
  11. 11. Share Growth Opportunity Limited Growth Very High Growth Potential Growth with Market Development 0 100 50 10050 MDI39% SDI 48%
  12. 12. 20.0% 48.0% 15.4% 16.6% Not shaving customer Shaving knives Using Gillette blades Using competitor blades
  13. 13. Aware Not Aware Not Attractive Attractive High Price Price OK Intend to Buy Don’t Intend No Purchase Purchase 97 % 41 % 12 % 3% 59 % 88 15 % 84 % 96 % 85 % 16 % 4% 60 % 40 % 55 % 4% 1% 45 % 96 % 99 % 59 % 98 % 99 % 41% 1.6% 1% 7.4% 10% 14% 49% 14% 3% .0016% 0.1% 2.5% 3.9% 34% 59% 0.00009% 0.001% 0.019% 0.28% 11.5% 88% Identified Market Leakage in key segment products presents HUGE opportunity for growth
  14. 14. Vision Goals Objectives Develop the Indonesian shaving market though building our total brand value by delivering consumer value faster though innovation & leadership to maintain & increase our market dominance Increasing our Market Share , Brand Awareness, & Profitability while fostering creative destruction getting our customers to ‘trade up’ into more complete shaving systems Improve Rural Distribution, Localization of production to improve margins, Driving customers into new systems, Create a personal care experience Strategic Alt. 1 Strategic Alt. 2 Strategic Alt. 3 Increase our Unit Sales by 19% in 1996, increasing prices by 20% while maintaining budgets and revenue growth Increase our Unit Sales by 19% in 1996, while decreasing Double Edge prices, reallocating budgets, increasing profitability Increase our Unit Sales by 25- 30% in 1996, increasing prices by 20%, budgets, and revenue growth
  15. 15. To Achieve the Top Management’s target 25%-30% … Unit Growth in Sales will provide an inefficient net marketing contribution 1995 1996 (19%) 1996 (25%) 1996 (30%) # Units sold 115 mm 136.9 mm 143.8 mm 149.5 mm Sales Revenue 19.6 mm 27.6 mm 29.4 mm 30.5 mm Marketing Cost % 12% 12% 15.8% 19% Marketing Cost $ 2.4 mm 3.3 mm 4.6 mm 5.8 mm Net Marketing Contribution 17.2 mm 24.3 mm 24.8 mm 24.7 mm
  16. 16. 1995 #1 - 1996 #3 - 1996 Revenue 23 mm 32.2 mm 30.9 mm Net Profit % 20% 20% 23% Net Profit $ 4.6 mm 6.4 mm 7.1 mm Profit Margin 48% Cost to Manufacture Retailers Margin Retail Price 22% Customers Competition Company Cost Experience (Locally) Wholesale Price $0.55$.21 $1.00$0.78
  17. 17. Solution Incentive Value Access Creative Destruction of double edge blades Promoting Men’s Disposables & Systems Introduction of Women’s Shaving Systems Decrease trade discounts into 5% (Focused on Disposables & Systems Decrease price of Double Edge blades Run ‘First Shave Free’ Program (2% Trade Discount Savings) Allocate 9% of Advertising budget between Men’ Disposables & Systems, Women’s Systems & Shaving Products Run In-Store Promotions for above systems w/ remaining 3% Decrease price of double edge blades Increase Disposable & Systems price by 20% Developing 65% of total population through rural distribution & PULL Strategy Increase our access in supermarkets targeting 77% of households
  18. 18. AnyQuestions on our last day of CLASS???

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My MBA presentation for Gillette. Looks like there are some formatting issues with this version...but the content got us top marks in my cohort.

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