This document provides a case study on Gillette's operations in Indonesia. It discusses Gillette's history of entering the Indonesian market in 1971 and establishing a manufacturing plant. By 1995, Gillette had captured 48% of the razor blade market in Indonesia. The document performs a SWOT analysis of Gillette Indonesia and identifies opportunities to increase razor blade demand through improved marketing and promotion strategies tailored to Indonesian culture.

1. Gillette Indonesia Case Study
Marketing Management Unit MKTG1289
Group 2 - Alhadi Almusawi, Jeremy Barnett, Angela Collard, Naomi Ebert Smith & Blake Gray

2. Company Introduction
An established household name
Innovator in razor technologies
World leader in personal hygiene products
Promotion by triumvirate of sporting stars (Woods, Fedrer, Henry)
Diversified product range
Company buyouts: product diversification/elimination
Global expansion - new markets

3. History
2005 Proctor & Gamble acquired The Gillete Company
1996 + 5 yrs produce 230 million blades p/year
1996 increase production 168 million blades, 50 million to export
1995 manufactured 150 million blades, 46 million exported
1972 manufacturing plant established
1971 Gillette entered Indonesia
1901 The Gillette Company founded in Boston, Massachussets

4. Has Gillette Enjoyed a First Mover Advantage?
Yes, through effective market entry!
Market entry with significant investment
Established manufacturing plant for local and export sales
Brand equals high quality blades
‘Gillette’ used to mean blade in Indonesian
Significant market share

5. SWOT Analysis
Strengths Weaknesses
✦ Increase Western grooming practices ✦ Inappropriate global advertisements
✦ Large population ✦ High manager turnover
✦ 48% market share by 1995 ✦ Cultural behaviour creates manager/
✦ Effective distribution system distributor problems
✦ Local and export manufacturing ✦ Legal system less supportive outside
✦ Brand = high quality Jakarta
✦ Rising incomes, more sales revenue ✦ Intense competition for supermarket
✦ Effective marketing campaigns shelf space
✦ Antiquated distribution methods
✦ Many different languages spoken

6. SWOT Analysis
Opportunities Threats
✦ Over 7% GDP growth in 20 years ✦ Lower quality products by competition
✦ Stable political system (BIC and Bagus)
✦ Economic improvements ✦ Grooming products a luxury
✦ Increase in per capita income ✦ Main competitors are cheaper
✦ Two million people to enter workforce ✦ Low shaving incidents and slow growing
✦ Population earning income growing beards
✦ Shaving incidents of 5-10 times per ✦ Government regulations on direct
month + population + per capita income = distribution or direct imports of products
increased sales

7. What factors determine demand for razor blades?
Desire to improve image
Influence of western grooming practices
Trend-setters - college students and graduates
Influences on razor purchase:
Effectiveness (closeness of shave,
reduced shaving time, no cuts etc.)
Shelf Life (re-usability without reducing
effectiveness)
Affordability (value for money)

8. How is Gillette doing in Indonesia?
Sales Market Penetration
In country shaving product sales 97% brand awareness
of $19.6 million in 1995
55% of the brands used most
Projected in-country shaving often
product sales of $27.6 million in
90% of the premium priced
1996
segment
Total sales revenue expected to
60% rise in sales through
increase by 40% in 1996
implemented distribution
Profit from operatons forecast at methods
20% in 1996
Production & Supply
Processes & efficiencies reduce production time
Capacity increased
Female razors - customs issues

9. How can demand be increased?
Increase customers and frequency of use
Market blade over knife advantages
Inferior quality blades: show disadvantage
Market to women
Consider introduction of budget product
Market complementary products (e.g. shaving creams)
Unfashionable: stubble

10. Recommendations & Solutions - Top 11
Advertising & Promotion
1. Persuade customers to shave more often
2. Upgrade to higher-end products
3. Strengthen promotional presence at POS
4. Good relationships with supermarket segment
5. Incentives for supermarket shelf space
6. Gifts, lucky draws, coupons and redemption systems
7. Culturally appropriate marketing in local language
8. Promote use of shaving creams and other products
9. Targeted promotion to female segment
HR and Training
10. Overcome misunderstandings re: different cultural behaviours
11. Empower sales team to:
Help distributors update distribution methods
Educate distributors and local market about shaving concepts