Indonesia is a country with a large, poorer rural population and a smaller, wealthier urban population. Shaving is relatively new to Indonesia, therefore there is tremendous growth potential for companies like Gillette. We base our recommendations for Gillette's marketing strategy on a 3 C's analysis Company: Gillette has positioned itself as the manufacturer of high quality razor blades and shaving systems. These blades' quality is reflected in their sale price, up to 4x what competitors charge.
Gillette has captured a substantial portion of the urban market, which has Western influence and exposure to the multinational companies and their personnel. Gillette's advertising strategy is working well in urban areas and the company is already planning to implement a 20% sales price increase in 1996. Gillette's focus to date has been on the urban market, with products and promotions relevant to those customers. Customer: In Indonesia, 65% of the population lives in rural areas and 35% live in or near metropolitan centers. The economic conditions in Indonesia are continuously improving with an average annual GDP growth of 7%.
Those in Indonesia who shave do so 4-9 times in a month; due to differences in physiology, this is unlikely to increase. Projected income distribution shows the population with yearly income > $10,000 is expected to increase from 15. 9% to 20. 6% from 1995 to 2000, and that the percentage of people in the lowest income bracket (< $2,000 annual income) is expected to fall from 34. 4% to 25. 9%. Many Indonesians who live in rural areas do not yet shave. However, as shaving awareness increases (and Western cultural influences grow), there is a tremendous growth potential in the rural areas based on the size of the market.
Competitors: The brands like Tiger, SuperNacet, Tatra are well-known competitors for this double-edged razor blade products. These products are less expensive and have lower quality than Gillette’s products. There are other brands like Bic and Bagus for disposables, but Gillette currently dominates this market with 90% of the market share. Gillette faces formidable competition in the simple blade product market, but could leverage its strong distribution and marketing channels as a competitive advantage.
Recommendation: Based on the 3 C's analysis, we recommend the following: * Be a first-mover in rural markets, with appropriate products and promotions such as free razors and small packages of affordable blades, including an inexpensive educational campaign with appropriate materials. * Build brand affinity now, and sell rural customers higher end products as incomes grow. While building brand affinity, be careful to be sensitive to local norms, customs and beliefs to avoid alienating potential customers.Indonesia