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Gillette Indonesia | Tan | 1

Factors that Determines the Demand for Blades


There are a number of reasons that could affect the demand for blades. including urbanization,
western culture, luxury item, shaving incidence, distribution network, market development.
Indonesia has an averaged GDP of more than 7% for more than 20 years, the country was also to
maintain the annual growth of 6.2% and expand the manufacturing sectors by 9.4% per year.
Along with the steady growth, Indonesian customers may begin to develop their shaving habits.
Secondly, there was increasing awareness of Western grooming practices, as a result to foreign
media and increasing presence of MNC. Thirdly, many Indonesian regarded grooming products
as luxury items, they were less willing to spend their wages on these products. Fourthly, Asians
beard grows slower than Caucasians even in a fully developed market. The distribution networks
play an important role
Exhibit 1: Alpen Bank Cost of Acquisition - All Classes
Response
Unit
Prospect
Cost
Reached
Rate
Direct Mail
0.50
2,500,000
3.000%
Take One
0.10
2,000,000
2.500%
FSIs
0.05
3,500,000
1.500%
Direct Sales
(10 Sales Person)
3,000.00
60,000
2.500%
Branch Cross Sales
1.00
50,000
50.000%

Qualification
Rate
60.0%
30.0%
30.0%

Conversion
Rate
85.0%
85.0%
85.0%

Total
Cost
1,250,000.00
200,000.00
175,000.00

Co
Cu

60.0%
90.0%

85.0%
85.0%

30,000.00
50,000.00

Total

1,705,000.0
0

Total
Cost

Co
Cu

Appendix:
Exhibit 2: Alpen Bank Cost of Acquisition Affluent (& Most Affluent) only
Unit
Prospect
Response Qualification
Cost
Reached
Rate
Rate
Direct Mail- Affluent
Only
0.50
1,250,000
3.000%
60.0%
Take One- Affluent Only
0.10
2,000,000
2.500%
15.0%
FSI- Affluent Only
0.05
3,500,000
1.500%
15.0%
Direct Sales
(10 Sales Person)
3,000.00
60,000
2.500%
60.0%
Branch Cross Sales
1.00
50,000
50.000%
90.0%

Conversion
Rate
85.0%
85.0%
85.0%

625,000.00
200,000.00
175,000.00

85.0%
85.0%

30,000.00
50,000.00
1,080,000.0
0

Total

Gillette Indonesia | Tan | 2

Exhibit 3: Alpen Revenue Analysis


Middle Class (MC)
Potential and Qualified (P&Q)
Cardholder
Percentage of the classes
Total P&Q Cardholder
Interest Revenue
Other Revenue
Annual Revenue

18,600,000
18.20%
3,385,200
37.13
23.50

Total P&Q Cardholder


Total Revenue of P&Q Cardholder
Revenue Per Card Holder (ALL)
Revenue Per Card Holder (A+MA)

86.63
36.75
60.63
205,244,676.0
0

Total Revenue of Classes


8,574,600
1,052,749,02
6
122.78
163.31

Affluent (A)
18,600,00
0
15.00%
2,790,000

Most Affluent (MA)


18,600,00
0
12.90%
2,399,400
148.50
61.25

123.38
344,230,200.0
0

209.75
503,274,150.0
0

Gillette Indonesia | Tan | 3

Exhibit 4: Alpen Credit Card Budget- All classes


All Classes
FY1
Number of Customer
Old Customer
*New Customer
Total Customers
Revenue Per Customer (Exhibit 3)
Variable Costs Per Customer:
** Direct Variable Cost- New & Old
Acquisition Cost- New (Exhibit 1)
Total Variable Cost- Per Old Customer
Total Variable Cost- Per New Customer
Contribution Margin- Per Customer:
Contribution Margin- Per Old Customer
Contribution Margin Per New Customer
Total Contribution Margin

FY2

FY3

FY4

0
50000
50000

50000
50000
100000

100000
50000
150000

150000
50000
200000

122.78

122.78

122.78

122.78

20.00
18.70
38.70

17.50
18.70
17.50
36.20

15.00
18.70
15.00
33.70

12.50
18.70
12.50
31.20

84.07
4,203,621.35

105.28
86.57
9,592,386.00

107.78
89.07
15,231,150.64

110.28
91.57
21,119,915.28

Fixed Costs:
Advertising Cost
2,000,000.00
2,000,000.00
2,000,000.00
*** Fixed Overhead
5,000,000.00
5,750,000.00
6,500,000.00
Net Profit
-2,796,378.65
1,842,386.00
6,731,150.64
Cumulative Profit Over Years
-2,796,378.65
-953,992.65
5,777,157.99
* Assumption: Alpen gains 50,000 credit card customer every year over four-years period
** Assumption: Direct Variable Cost decrease 2.50 per credit card holder for every increase of 50,000 customers
*** Assumption: Fixed Overhead Cost increased 750,000 for every increase of 50,000 customers

2,000,000.00
6,500,000.00
12,619,915.28
18,397,073.27

Gillette Indonesia | Tan | 4

Exhibit 5: Alpen Credit Card Budget- Affluent and Most Affluent only
Affluent and Most Affluent Only
FY2
FY3

FY1
Number of Customer
Old Customer
*New Customer
Total Customers
Revenue Per Customer (Exhibit 3)
Variable Costs Per Customer:
** Direct Variable Cost- New & Old
Acquisition Cost- New (Exhibit 2)
Total Variable Cost- Per Old Customer
Total Variable Cost- Per New Customer
Contribution Margin- Per Customer:
Contribution Margin- Per Old Customer
Contribution Margin Per New Customer
Total Contribution Margin

FY4

0
50000
50000

50000
50000
100000

100000
50000
150000

150000
50000
200000

163.31

163.31

163.31

163.31

20.00
18.31

17.50
18.31
17.50
35.81

15.00
18.31
15.00
33.31

12.50
18.31
12.50
30.81

145.81
127.50

13,665,712.34

148.31
130.00

150.81
132.50

21,331,438.15

29,247,163.96

38.31

125.00
6,249,986.54

Fixed Costs:
Advertising Cost
2,000,000.00
2,000,000.00
2,000,000.00
*** Fixed Overhead
5,000,000.00
5,750,000.00
6,500,000.00
Net Profit
-750,013.46
5,915,712.34
12,831,438.15
Cumulative Profit Over Years
-750,013.46
5,165,698.88
17,997,137.03
* Assumption: Alpen gains 50,000 credit card customer every year over four-years period
** Assumption: Direct Variable Cost decrease 2.50 per credit card holder for every increase of 50,000 customers
*** Assumption: Fixed Overhead Cost increased 750,000 for every increase of 50,000 customers

2,000,000.00
7,250,000.00
19,997,163.96
37,994,300.99

Gillette Indonesia | Tan | 5

Exhibit 6: Breakeven Formula- All Classes


Breakeven 0
= (Old Customer Contribution Margin * 50,000 Old Customer)
+ (New Customer Contribution Margin * X New Customer) - Total Fixed Cost
0 = (105.28 * 50,000) + (89.07X) - 7,750,000
X= 27,910.63 of New Customer
Number of Breakeven = 77,911 customer
Exhibit 7: Breakeven Formula- Affluent and Most Affluent Only
Breakeven 0
= (Old Customer Contribution Margin * 50,000 Old Customer)
+ (New Customer Contribution Margin * X New Customer) - Total Fixed Cost
0 = (145.81 * 50,000) + (127.50X) - 7,750,000
X= 3,604 of New Customer
Number of Breakeven = 53,604 customer

Exhibit 8: Breakeven Formula with 5,000,000 Accumulative Profit All Classes


Breakeven 5,000,000 Cumulative Profit
= (Old Customer Contribution Margin * 50,000 Old Customer)
+ (New Customer Contribution Margin * X New Customer) - Total Fixed Cost
5,953,992.65= (105.28 * 50,000) + (89.07X) - 7,750,000
X= 94,831 of New Customer
Number of Breakeven with 5M Profit = 144,831 customer

Exhibit 8: Breakeven Formula with 5,000,000 Accumulative Profit Affluent and Most Affluent only
Breakeven 5,000,000 Cumulative Profit
= (Old Customer Contribution Margin * 50,000 Old Customer)
+ (New Customer Contribution Margin * X New Customer) - Total Fixed Cost
5,750,013.46 = (145.81 * 50,000) + (127.50X) - 7,750,000
X= 48,702 of New Customer
Number of Breakeven with 5M Profit = 98,702 customer

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