Post on 15-Aug-2015
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 ???