Indonesia Marketing Plan

THE C4 BLADE TEAM

DMITRIYHISHAM

JACOBKHALID

RENUKANOUR

Agenda

Executive Summary Product Analysis

Kolter AnalysisWiersema AnalysisValue Map PositioningProduct life cycle

Company Position SW Analysis11 Sources Competitive AdvantageOT AnalysisPorter’s Forces AnalysisCompetitive Advantage

Market ShareMarket Growth PotentialMDI vs SDI

Situation AnalysisStrategic AlternativeFinal Recommendations (SIVA)

Executive Summary

The strategic opportunity is to develop the Indonesian shaving market, increasing our unit sales to 19% over the next one year and targeting to increase the unit sales by 200% over the next 10 years.

Gillette can easy achieve the 200% increase in unit sales, as the Indonesian shaving market has a big growth potential as current MDI (Market Development Index) is 39%.

Alternatives: Maintain existing growth plan Increase market share by 25-30% Increase spending to enter into female products. Creative destruction and reallocation of budgets to increase awareness and profitability

Strategic recommendation is spend additional 2% of our revenue on “First Shave Free” campaign, reduce the price of double edge blade by 20%, maintain disposable and system promotions while increasing profitability by 3%

Shaving and More……..

The core benefit of shaving is removing hair

The Potential Product is a complete personal experience which is a habitual, daily ritual to feel better and look attractive.

Beyond blades, Gillette is providing complete grooming solutions for male and female

Building up this Perceptual idea

Gillette: The Best A Man Can Get

As Product Leaders Gillette provides the Best Shaving Products in the market

Our Product Lines are positioned to capture each segment of buyers

Leading with continuous innovation

Double Edge Blade has reached a mature market.

Disposable Blades and Shaving Systems will be our future

Disposables & Shaving –systems are innovative, high margin products positioned early in the product life cycle

We are Market Leaders with 48% market share and superior technology

Strengths: Globally, the Gillette brand name is

synonymous for high quality. Locally, the Indonesian word for blade sounds like Gillette

48% of market share for blades

Superior Technology and Continuous Innovation

Product differentiation to target different segments of the population

Highly efficient local manufacturing plant

Hard earned distribution network

Weaknesses: Lack of rural distribution is missing

73.9 million potential consumers

Global Marketing emphasis not suitable for the Indonesian Markets

Existing distribution network suffers from weak communication networks, poor traffic conditions, lack of distribution service technology and poor cash flow

Local Manufacturing capacity – scope to improve productivity is currently limited

10

Deep Dive: Our competitive position STRONG across all segments

Superior Inputs

SuperiorOperations

Local Production

Superior Offering, Branding & Positioning Synonymous with high quality –

The Best A Man Can Get

SuperiorTechnology

Innovation Investment

Superior AccessEffective Distribution

Superior TargetDeveloped Premium Price Segment

Superior Collaborators Superior Data & Insights Superior Market Research

Superior CustomerOf which we hold 90%!

Opportunities: Strong Economic growth – average

annual GDP growth of over 7% for more than 20 years

Rural Market represents Blue Ocean opportunity with 68% of total population

Trend setting shavers are looking to ‘trade up’.

Transition higher margin products to local manufacturing plant

Women’s shaving market in the initial stages of development

Low awareness for shaving preparation – further product entrants

Threats:Low incidence of shaving in the Asian population

Rural distribution might never reach ideal efficiency

Inconsistent regional economic growth with 80% of population earning < $10,000/yr

High margins invite competition

Government regulation prohibits a foreign company from directly importing or distributing its products

Cultural practices impacting employee productivity and distributor relationships

Higher disposable income and lifestyle choices offer opportunities to ‘trade up’

Our Threats are mitigated through branding and product positioning

Intensity of Rivalry LOW

Power of Suppliers

LOW

Threat of new Entrants

LOW

Power of Buyers HIGH

SubstitutesHIGH

Mitigate this risk though branding, advertising, and creating system lock-in

Mitigate this risk by our strategic product positioning

Strong Competitive Advantage to position individual product lines to serve its purpose

UNATTRACTIVE AVERAGE ATTRACTIVE

WEAK DISINVEST PHASED WITHDRAWL

DOUBLE OR QUIT

AVERAGE PROCEED WITH CARE TRY HARDER

STRONG GROWTH LEADER

COM

PETI

TIVE

AD

VAN

TAG

E

CATEGORY ATTRACTIVENESS

Double Blades HereSaturated High Awareness Cash Cow

Disposables here are growing but not as high margin as systems. Yet still a promising market as we are growth leaders

In the Systems category … we are very attractive and the leaders. Offers high margins

CASH GENERATOR

PROCEED WITH CARE

LEADERS

Relative Market Share

Share Growth Opportunity Limited Growth

Very High Growth Potential Growth with Market Development

0

100

50

10050

MD

I 39

%

SDI 48%

Targeting shaving knives combined with…

20.0%

48.0%

15.4% 16.6% Not shaving customer

Shaving knives

Using Gillette blades

Using competitor blades

Aware

Not Aware

Not Attractive

Attractive

High Price

Price OK

Intend to Buy

Don’t Intend

No Purchase

Purchase

97%41%12%

3%59%88%

15%84%96%

85%16%4%

60%

40%

55%4%1%

45%96%99%

59%98%99%

41%1.6%1%

7.4%

10%

14%

49%

14%

3%

.0016%

0.1%

2.5%

3.9%

34%

59%

0.00009%

0.001%

0.019%

0.28%

11.5%

88%

Identified Market Leakage in key segment products presents HUGE opportunity for growth

Vision, Mission, Goals, Objectives

Vision

Goals

Objectives

Develop the Indonesian shaving market though building our total brand value by delivering consumer value faster though innovation & leadership to maintain & increase our market dominance

Increasing our Market Share , Brand Awareness, & Profitability while fostering creative destruction getting our customers to ‘trade up’ into more complete shaving systems

Improve Rural Distribution, Localization of production to improve margins, Driving customers into new systems, Create a personal care experience

Strategic Alt. 1

Strategic Alt. 2

Strategic Alt. 3

Increase our Unit Sales by 19% in 1996, increasing prices by 20% while maintaining budgets and revenue growth

Increase our Unit Sales by 19% in 1996, while decreasing Double Edge prices, reallocating budgets, increasing profitability

Increase our Unit Sales by 25- 30% in 1996, increasing prices by 20%, budgets, and revenue growth

Targeting a 19% Growth rate provides best net marketing contribution

To Achieve the Top Management’s target 25%-30% … Unit Growth in Sales will provide an inefficient net marketing contribution

1995 1996 (19%) 1996 (25%) 1996 (30%)

# Units sold 115 mm 136.9 mm 143.8 mm 149.5 mm

Sales Revenue 19.6 mm 27.6 mm 29.4 mm 30.5 mm

Marketing Cost %

12% 12% 15.8% 19%

Marketing Cost $

2.4 mm 3.3 mm 4.6 mm 5.8 mm

Net Marketing Contribution

17.2 mm 24.3 mm 24.8 mm 24.7 mm

Harvest our Double Edge + Increase Disposables & Systems = Higher Profitability

1995 #1 - 1996 #3 - 1996

Revenue 23 mm 32.2 mm 30.9 mm

Net Profit %

20% 20% 23%

Net Profit $ 4.6 mm 6.4 mm 7.1 mm

Profit Margin

48%

Cost to Manufacture

Retailers Margin

Retail Price

22%

Customers

Competition

Company

Cost

Experience (Locally)

Wholesale Price

$0.55$.21 $1.00$0.78

3.3 million dollars will be allocated to implement our tactical marketing plan

Solution

Incentive

Value

Access

Creative Destruction of double edge bladesPromoting Men’s Disposables & SystemsIntroduction of Women’s Shaving Systems

Decrease trade discounts into 5% (Focused on Disposables & SystemsDecrease price of Double Edge blades Run ‘First Shave Free’ Program (2% Trade Discount Savings)Allocate 9% of Advertising budget between Men’ Disposables & Systems, Women’s Systems & Shaving ProductsRun In-Store Promotions for above systems w/ remaining 3%

Decrease price of double edge bladesIncrease Disposable & Systems price by 20%

Developing 65% of total population through rural distribution & PULL StrategyIncrease our access in supermarkets targeting 77% of households

Thanks

Any Questions on our last day of CLASS ???