Case Study on

Gillette Indonesia
Authored By: Debashish Sengupta
EPGP-11-032
1)What factors determine the demand for blades? How can demand be increased?
Below are some of the factors influencing the demand for blades:
 Increasing number of MNC’s and overseas personnel

 Increasing Awareness of Western Grooming practices

 Foreign Tourist
 Rising influence of Western media
 Rate of growth of beard
 Rising GDP
 Culture and religion
 Growing Population
 Gender ratio
 Number of times people shave
 Quality of blades

The demand can be enhanced by encouraging and making sure that the people who shave with
conventional knifes start using shaving blades. Approximately 48 %(80% of 60%) use conventional knives
for shaving. An advertising campaign to target urban men to adopt shaving blades as compared to Knives
would be easier and highly productive. Awareness of Western grooming practices can help increase the
frequency of shaving per month.

2)How is Gillette doing in Indonesia? Has Gillette leveraged its first mover advantage?
Gillette is doing well in Indonesia which can be supported by below facts:
a. Increase in blade sales by 17% in 1995 over the previous year
b. Profitable growth has been achieved over the past 5 years.
c. 9% annually growth in sales, where the GDP grew at 7%
d. Increase in market share from 28% in 1993 to 48% in 1995
Gillette has to some extent leveraged its first mover advantage. Being one of the first players to set up
market and still have just about 28% of market share is a bit of a letdown. The growth rate over the past
few years however indicate its efforts to gain market share. It commands 90% share of premium segment,
which it had developed.

3)How should Gillette accelerate the development of blade market in Indonesia?

Gillette can accelerate the development of the blade market in Indonesia by persuading customers to
shave for the first time i.e encouraging college going students and men just entering the workforce as
they are usually the trendsetters. Through its campaigns, it can try to encourage people who already
shave to shave more frequently. Existing shavers can be encouraged to upgrade to more sophisticated
shaving practices by offering exchange discounts when they trade in their existing shavers.

The urban areas are likely to respond with increased demand if proper stimulus is provided. This can
happen by training salespersons and distributors to upsell. Establishing a good distributor network and
helping them stock the products to reduce the gap between order & delivery to the end user can also
help accelerate the development of blade market.
4)Refer the contribution calculations for Allan 1996 (E) growth estimates of 19% in
the excel template, attached. You may calculate the contribution of different products
for Effio 1996 (E) for 27.5% growth. Further, prepare an income expense statement
for 1996 (as in Exhibit 4) based on revised 27.5% growth estimate of Effio.
(You are required to come with your laptop/tablet to work in the plan in class).