Gillette Indonesia Essay

2364 WordsJan 24, 201510 Pages
“Gillette Indonesia” Case Analysis Core Issues and objective of the report The core issue is: Can Gillette increase sales in 1996 at a rate that satisfies regional Asia-Pacific Growth Plans? If the answer is yes, how can this be achieved that? To answer this question, closer look at the current situation in Indonesia and the market trends is required. Background: The shaving practice is in a developmental stage in Indonesia. This is mainly driven by increase in shaving incidents in urban areas by 24% on average during the last two years (1993-1995). This rate is calculated as follows: Shaving incidents in 1995: 40 million (urban men above 18) * 80% (who shaved) * 5.5 (shaving times/month) = 176 million/ month Shaving incidents in 1993: 40 million (urban men above 18) * 66% (who shaved) * 4.5 (shaving times/month) = 119 million/ month Total growth during the last two years (1993-1995) = 176/119-1 = 48% Average potential market expansion rate per year = 24% To get better understanding of the market, below is a calculation of the Shaving Blades market size: Total number of consumers (in urban areas) = 40 million * 80% (who shaved) = 32 million consumer Background: Total store-bought blade consumers = 32 million * 40% = 12.8 million Always use blades (32 million * 20%) = 6.4 million consumers Occasional users remaining consumers = 6.4 million consumers Total number of blades by urban area consumers in a year = 6.4 m * 15 (Blades) = 6.4 m * 4 (Blades) = 96 m blades sold = 25.6 m blades sold Total urban area market volume (1995) = 122 million blades However, the case doesn’t provide any information about rural areas market size or consumption, which is a large market (65% of the population live in rural areas and accordingly number of men above 18 yrs should amount to 74 million) which is a segment of potential. At this point, 1995 Market

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