Gillette Indonesia Case Study
What factors determine demand for blades? There are many factors that determine demand for blades. The most basic factor is how many times a week someone shaves per week. If a person does not shave often, then they will not buy blades as often because their blades will not dull out as quickly. The quality of a blade will also play a role. If the quality of a blade is not good, it will dull out quickly. This can generate demand for higher end blades, which is where Gillette can capitalize on generating demand for their blades. Another factor is what appears in the media.
When people consumers watch movies and television commercials and see good looking, well groomed actors, they will follow suit and emulate the actor’s appearance. Western grooming habits are becoming more noticed in Middle Eastern and Asian society, the clean cut look is becoming a desirable look. The only way to obtain this look is by shaving. This will obviously generate demand for blades. The race of a person plays a huge role in the demand for blades. It’s a fact that people of the Asian race do not grow facial hair as quickly as people of Middle Eastern descent.
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If you don’t have to shave as often, then you will not buy blades as often. Regions where the population of men grows hair quicker are area’s where demand for blades will be higher. A country’s economy plays a large role in demand for blades. When businesses can operate at full capacity, there are more people employed. People need to look clean on the job to maintain a professional image. Shaving is a huge part of this image, as one cannot be taken seriously with a messy beard- especially in dealing with people from other countries. Lastly, the amount of education people have about shaving will affect demand.
Simply put, if people do not know how to shave, then they will not do it. If people do not shave, then they will not buy the products. Education on shaving is so important when building a market, because people will not buy products that they don’t know anything about. People will just go on with their lives because nothing has changed. 2. How can demand be increased? Demand can be increased in a number of ways. The case study states that “college students and graduates entering the work force were especially important trend setters”.
This is especially true. People in this age demographic embody what humans are at their prime- they are young and vital and at the age of finding wives. By showing older people that they can look and feel younger by shaving, you can get the older generation of adults hooked on shaving. They will be surrounded by the younger generation in the work place, and even at home. Product demos are another great way to increase demand. This is a great way to educate the public on what shaving is and how to do it.
By showing people that shaving is easy, and the outcome of looking good, people will want to start shaving. From this, demand will rise. Lastly, by giving away product, you can increase demand for blades using a pull strategy. The Gillette brand of blades is known for its high quality but is four times more expensive than some of its competitors. By giving away some free product you can get people hooked on the concept of shaving. Once the blades dull out, people may not want to give up the look and will be forced to buy more. 3. How is Gillette doing in Indonesia?
Gillette seems to be very successful in Indonesia. Out of the three countries Indonesia, Malaysia, and Australia, Indonesia sold the most blades at 115 million units. Indonesia also does not have a very developed blade market. While competition for Gillette does exist, the quality of their products is not very good. With an economy on the rise in Indonesia people would be able to afford the higher cost of higher quality blades to shave with. Gillette also had a 90% segment of the premium-priced market with 97% brand awareness in Indonesia. 4.
Has Gillette enjoyed a first mover advantage? Gillette has absolutely enjoyed a first mover advantage in Indonesia. Because Gillette was the first company to move into Indonesia, it was able to establish itself as a high end blade company before companies like BIC could. They had a product line that covered all price points, making their products affordable, and had the facilities to mass produce and the distribution chain to make the products available. In 1993, Gillette would capture 28% market share in the blade market, which would then increase to 48% in 1995.
This is a very substantial increase in market share that Gillette may have not been able to establish their name and products since 1971. 5. How should Gillette accelerate the development of the blade market in Indonesia? The case study states that Gillete mainly segmented to men ages 18 and older. People generally hit puberty around the age of thirteen years; why not get them to use Gillette products earlier? I believe Gillette should resegment their marketing strategy towards the 18 and under age cohort. By doing so, older people will still catch on to the trends of the young.
However, by introducing Gillette products to people while they are still young and impressionable is a great way to get them hooked on Gillette products for life. Gillette will create a sustainable market because once the new generation of 18 and under begins to have kids, the Gillette brand will stay in use within the family for each proceeding generation. If kids are shaving while still in middle school and high school, then it makes it very easy for Gillette to push proper hygiene through the school system.
This presents a great opportunity to show impressionable teenagers how to shave, so that education of the products points them in the direction of purchasing Gillette products so that they can do it on their own. Product placement in television shows and movies is also very important. By creating clean shaven, suave looking characters that use Gillette products, teenagers and adults will want to emulate similar looks. Doing so will develop a pull effect where the consumers realize that in order to look like the celebrities, they will need Gillette blades to shave.