GILLETE INDONESIA

Anupam Mazumdar (317)

Kartik Chaudhary (327)
Sayali phale (337)
Saravana Kishore (347)
Susant Das (357)
Adarsh R (367)

1.

What factors determine the demand for blades? How can demand be
increased?

Factors determining the demand for blade:

1) Stable government is important for a country to help market develop. Political
stability ensures continuity of demand in the markets.
2) Infrastructure facilitates market development. Poor infrastructure leads to low
market penetration of a product and demand does not rise significantly.
3) Economic prosperity of people also contributes to demand for a product. When
people are well-off, they tend to spend more on lifestyle products.
4) Demand for blade is affected by peoples shaving habits. Americans shave 26
times a month whereas Indonesians shave only 5.5 times a month.
5) Demand for blades is subject to growth rate of hair. Asian beard doesnt grow as
fast as Caucasian or Latino beard.
6) Successful advertising can change trends or create new trends.
7) Peoples religious and social beliefs and cultural trends also determine the
demand for blades.
8) Increasing awareness of western grooming practices especially in urban areas as
a result of exposure to foreign media and the increasing presence of
multinational companies and their overseas personnel
9) Pricing of the product
Ways to increase demand:
1) Advertisement generates a pull-effect for a product, which leads to higher
demand from consumers.
2) Placing product at multiple supermarkets and retailers.
3) Appointing more wholesalers to increase efficiency and competition.
4) Approaching saloons to display Gillete products to promote awareness, especially
Sensor.
5) Introduce razor in the low-medium range
2. How is Gillette doing in Indonesia? Has Gillette leveraged its first mover
advantage?
Gillette is growing fast in Indonesia. They were able to create brand awareness with
the male shavers with 97% surveyed knowing the brand. In 1993, it had 28%
market share and in 1995, its market share grew to 48%. However, due to lack of
infrastructure and transport facility in Indonesia, it is unable to price its products at

low rate and hence they are not consumed by low income group. It maintained
dominance in the high segment market by capturing 90% of the market share. Some
key changes in distribution channels like appointment of 23 new distributors has
resulted in 60% sales growth. Diversity and language are other hurdles that Gillette
faces. It has leveraged its first mover advantage and has covered 60000 small kiosks
and mom-and-pop shops. It is also selling products through supermarket chains.

3. How should Gillette accelerate the development of blade market in

Indonesia?
It can increase sale by aggressive advertising on products like disposables and
system blades and making them popular among youth, middle and upper class
consumers. It can increase the number of distributors to reach out to hitherto
untouched customers and compete hard for double edged blade market with
Chinese and Eastern European rivals in the market. In 1993, it appointed 23
distributors and next year its sales grew by 60%. So, the market has immense
potential and it can tap it by increasing penetration through developing a efficient
distribution network. Although supermarkets account for only 5% for sales by
volume, by value it accounts for 8% share because high segment customers buy
high priced products from supermarkets. Aggressive advertisement on lifestyle
trends can boost sale in this market segment.