Summary Statement
Gillette should work proactively to meet its global vision of being a world leader in the Indonesian shaving market by targeting a growth of 30 %. This can be achieved by adopting aggressive marketing strategy in these areas namely: increased supermarket penetration, targeting hitherto untapped rural market and product repositioning.
Situational Analysis
Context: Gillette is on the throes of capturing 50% of the market share in Indonesia and market expansion is a priority. However, personal grooming products are regarded as a luxury by many.
Company: A world leader in consumer product categories like blades and razors, Gillette aims at expanding its business operations and dominate all markets it has operations in. In Indonesia where incidence of shaving is relatively low, it is facing challenges in meeting its growth targets.
Competition: It faces direct competition from low end double edged blades manufactured by companies like Tatra and also from disposables manufactured by Bic etc. Indirectly, dry and wet knives are potential competitors as they are being used by a large chunk of shaving population.
Collaborators: Collaborators are the distributors, wholesalers, retailers and supermarket chains. It deploys 23 distributors spread across the key provinces. Relationship management, recovery of dues and working capital flows are key concerns in distributor relationships.
Consumers: Most of the present consumers fit the ‘urban male over 18 yrs’ category. College students and workforce entrants are trendsetters and are influenced by western grooming habits.
Market size
Table 2 shows that in 1995 around 13 million people in Indonesia use Gillette blades across urban and rural areas. And table 3 estimates the total available market for Gillette. Accounting for local religious customs and conception about shaving, it can be deducted that at least 15 million (20% of 72) are potential costumers for Gillette in Indonesia. This huge untapped market suggests that more effort needs to go in marketing for Gillette.
Alternatives
Proposed changes in the distribution channel
Option 1: Reduce the number of intermediaries in the distribution channel. (Rejected)
Current chain: Manufacturer – distributor- wholesaler – retailer
Each intermediary adds his markup to the cost and as a result by the time the product reaches the consumer it becomes comparatively expensive. However in the past alternative distribution strategies have failed to meet the consumer needs. The large geographical spread of the target population, lack of distribution service technologies and immature market all add to the need of maintaining the status quo.
Option 2: Impart knowledge of optimum selling strategies to the sellers.
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Rajagopal. "International Journal of Retail & Distribution Management." Emerald. Emerald Group Publishing Limited, 2011. Web. 21 Feb. 2014
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