Chester Allan, Gillette's country director of Indonesia, needs to decide whether increasing spending in marketing further than 12% of sales may cause a 20-25% increase in knife sales in 1996. In spite of the high market share of 48% and 97% brand awareness (See Show 1) of Gillette-brand blades, the company must target several factors that hinder their growth by switching non-urban population to reduce priced Gillette blades; aimed towards 48% with the urban male population that uses knives to start using blades; and increasing the productivity by simply improving the warehouses with new equipment and picking better, very reliable distributors to be able to eventually decrease expenses intended for the company.
Gillette needs to make profit on increased population and economic growth of Indonesia, containing resulted in improved income amounts and with regard to higher-end goods. However , the populations in rural areas are still not able to afford grooming products, which can be regarded as extravagance products. In addition , government control prohibiting direct import or distribution of goods and different social practices blocking partner human relationships are showing challenges in increasing revenue for Gillette.
Allan should focus on targeting sections that are not yet captured by the market share, which includes urban males who shave with kitchen knives and the rural population that cannot afford the expensive Gillette blades. Metropolitan men who shave with knives are the cause of 80% (total urban guys who shave) X 60 per cent (men who also use knives) = 48% (See Display 2) in the total metropolitan men inhabitants. Since unichip live in an expanding market where there is an increase in per-capita profits, there is a likelihood that this group will be able to spend the money for Gillette cutting blades. In addition , Allan should divert the web marketing strategy towards lower-end blades to target the 65% rural market that uses the competitors' brands. Despite the fact that there is a tendency towards increasing incomes, it might...