In October 1995, Chester Allan, Gillette’s country manager in Indonesia, was developing his unit’s 1996 marketing plan. Once completed, it would be forwarded to Rigoberto Effio, business director in Gillete’s Asia-Pacific group based in Singapore. Each year Effio received and approved marketing plans for the 12 countries in his region, which reached from Australia to China. Once approved by Ian Jackson, Asia-Pacific group vice president, the overall marketing plan-for the region would be reviewed subsequently, along with other regional plans, by Robert King, executive vice president of Gillette’s International Group.
Allan’s plan projected a 19% increase in blade sales in Indonesia in 1996 from 115 million to 136 million. This seemed reasonable given a 17% increase in 1995 over the previous year. With a population of almost 200 million, Indonesia represented an important country in the portfolio of markets for which Effio and Jackson were responsible. Effio wondered whether investment spending in marketing beyond the 1995 level of 12% of sales might further accelerate market development.
Given the growth rates of Gillette’s business in other Asia-Pacific countries, Effio believed that a 25% to 30% increase in blade sales could be achieved in Indonesia in 1996.
STATEMENT OF THE PROBLEM
How rapidly the Indonesian market for blades and razors could or would expand. Should the Indonesian market be allowed to just move along at its own pace? If so, what would that pace be?
Gillette’s mission was to achieve worldwide leadership in its core product categories by developing marketing plan.
* The company emphasized geographic expansion along with research and development, advertising, and capital spending as drivers of growth. * Upgrade the market to higher value products and shaving systems.| * The poorer rural shavers cannot afford Gillette products and buy low-price, low-quality brands such as Tiger and Tatra. * Problems with customs clearances could impact the entire manufacturing cycle. * Shaving was still underdeveloped in Indonesia, but the incidence of shaving was increasing.
* New-product activity and entry into and development of new markets were considered essential. * Research showed that higher-income, urban consumers were increasingly shopping in supermarkets. Most sales of Gillette’s higher priced shaving products were through these outlets.| * The production team carefully planned the timing of materials inputs. Because of distribution and transportation inefficiencies, the need for buffer inventories was substantial. * with rising incomes and improved Gillette distribution and display, consumers are moving to Gillette.|
IV. ALTERNATIVE COURSES OF ACTION
1. There was increasing awareness of Western grooming practices, especially in urban areas, as a result of exposure to foreign media and the increasing presence of multinational companies and their overseas personnel. 2. The liberalization of foreign investment policy had increased private sector involvement in the economy; the central government focused on developing infrastructure in the poorer regions and on human resources.
3. Improving education system ensured that foreign companies would be attracted to the major urban areas, fueling further growth. 4. Gillette headquarters developed television advertisements for use worldwide, with the intent that local voiceovers and local package shots would be superimposed.