Case Analysis: Gillette Indonesia

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Case Analysis: Gillette Indonesia Introduction: Gillette, the world leader in blades and razors was founded in 1901 in Boston. It is well known for the quality of its razor blades and in many countries like Indonesia and also Brazil when a person wants to buy a razor blade they actually call the razor blade Gillette despite the brand you are buying, So strong it's the brand and the first mover advantage of Gillette that people call the product Gillette even if they buy a razor blade from Bic and any other brand. The Situation: Gillette Indonesia, in the person of Chester Allan - Country manager, is forecasting the 1996 sales and growth. Allan's expected sales growth for 1996 is an increase of 19% . However, for Rigoberto Effio (Gillette Business Director Asia - Pacific), the sales growth could increase even more from 25% to 30% if the investment in marketing investment would increase beyond 1995 level of 12%. Indonesia is growing economically, its government has established a 5 year development plan called Replita which goals are to maintain GDP growth, expand manufacturing sector and to expand the nonoil/gas component of manufacturing. With these goals being set, an economic progress can be noticed, like an increase in per capita incomes, improved standards of living. With all this economic growth coming for the next 5 years, still most of the populations do not shop in Supermarkets, which is a "headache" for Gillette regarding distribution, because Gillette has to focus on the small distributors with low power purchase, and in 1995 the only accounted for 5% of the shaving products sales in units and only 8% in value. But this 5 year plan can change drastically the entire Indonesia and probably in the next 5 years more and more people may change their habits and shop more in the supermarkets, and so helping the distribution of Gillette products. Also, other

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