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Executive Summary
This paper investigates Gillette, a world leader in consumer shaving products, and its drive
to expand market share in the emerging market of Indonesia in 1995. Analyses are carried
out exploring the macroeconomic environment, the shaving industry, and Gillettes position
in the market relative to internal and external factors. Porters Five Forces and a SWOT
analysis are used to provide more in depth information. Gillettes current marketing
strategy is also reviewed
with reference to the 4Ps: Product, Price, Place and Promotion.
There are many factors affecting Indonesian demand for shaving products. Via its
marketing strategy Gillette can directly influence the shaving habits of consumers. Some
factors however are beyond its control. A distillation of these components in conjunction
with key results from the analyses performed, reveal critical success factors in the areas of
manufacturing, distribution, and communication.
Recommendations are made in regard to those areas.
Gillette should consider
reducing its product variety to focus customer attention. Increasing the marketing spend
should be directed towards reaching first time shavers as well as educating current shavers
on the benefits of premium products. However, increased razor sales cannot occur without
further improvements in production efficiencies as well as enhanced flexibility within its
distribution channels. Income statement projections are provided for 1996. Data is also
provided on increases in sales and sales volume based on current expected projections and
those of 25-30 percent sales volume growth.
1. Introduction
Gillette was founded in 1901, and was the world leader in blades and razors, in addition to
nine other consumer product categories (Quelch, 1996). In 1995, 40% of sales were in
blades and razors, with $600 million USD sales in Asia Pacific. The companys aim was
geographic expansion and growth with the major drivers being research and development,
advertising and capital expenditure. In 1995, entry into and development of new markets
were considered essential.
Gillette entered Indonesia in 1971, and built a local manufacturing facility in 1972. The
majority of the operations revolved around
shaving items, with the double-edge blades accounting for 60% of the value of
manufactured products. The Gillette brand of double-edge blades were renowned for their
high quality and thus in 1995, Gillette Indonesia boasted 48% of the market share. Gillette
expected to capture 50% of the market share in 1996 through a 25-30% increase in blade
sales.
This paper will attempt to explore how demand can be increased for a consumer product in
an emerging market; address the appropriate product line mix and allocation of marketing
