HBP Gillette Indonesia Case 1
To: Rigoberto Effio, Business Director, Asia-Pacific Group
From: Chester Allan, Country Manager, Indonesia
Date: October 23, 1995
Subject: Gillette Indonesia 1996 Campaign
Gillette is enjoying a dominant position in the Indonesian razor and blade market, but the rate of growth in the market is not satisfactory. Most of the operations have come from double-edge blades shaving products, accounting for 60% of the manufactured products. Brand awareness is up 97%, so it is not necessary to use additional resources on advertising and promotion. In the Pacific area, costumers still consume Gillette products, even though prices are four-times that of local brand competitors Tatra, Super Nacet and Tiger. Competition from low-end, imported double-edged blades from East Europe and China slowed down the segment of customers who have changed from lower-end products to premium product offerings. Gillette’s Red Blade is the brand used most often (55%), of which 80% resulted in sales in 1995. Products innovation, technology and tradition are enough to ensure customer satisfaction. Gillette should invest in sales and distribution efforts instead.
Thirty five percent of the population lives in the four major urban cities of Jakarta, Bandung, Surabaya, and Semarang, with per capita income steadily increasing for the past 20 years. The customer segment of growing college students and graduates entering the workforce makes them especially important since they are trendsetters. We need to improve our advertising campaigns efforts to focus mostly on this segment. Tapping into the trends of young adults with higher incomes will help us gain market share and sales.
The Indonesian shaving market is still underdeveloped. Forty million Indonesian adult men shave about 5.5 times per month, five times less than in the US. Twenty percent of shaving men in Indonesia used 15 blades per year, compared to...