gillette group 1 sec f

7/27/2019 Gillette Group 1 Sec F

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Gillette case

Group 1

Sec F (PGP 17)

Ankita Roy PGP17-311

Harsheen Jammu PGP17-321

Parul Singh PGP17-331

Rohan Gautam PGP17-341

Susnato Lahiri PGP17-351

Sandeep S FPM07-11S


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Case Analysis Note SubmissionEach group is required to submit a two/three page case analysis note in MS word (notPPT) for specified cases. You should ensure that your analysis addresses the preparation questions. The

first page of the case analysis note should include:Major decision issues in the case

Recommendation/inferences on the major issues.Summary of Analysis (quantitative and qualitative) supporting the recommendationRemaining one / two pages should be used to present detailed analysis / calculations to support your

recommendations. You may use additional excel worksheet if required to include calculations, if required.

Major issues

1. Distribution issue and complexity in Indonesialow penetration in local market2. Rural areas and low segment peoplethere is low sales and revenue3. High threat of substitute in low income areas esp. rural ones because Gillette is 4 times as

costly as the nearest competitor

4. Advertisements were targeted specifically to urban male customers5. Lack of managerial talent and job fluctuations for better opportunities6. Wholesalers not competent and had poor distribution and storage facilities.7. Supermarkets became unviable demanded 80% cost as slotting allotments8. Promotional offers not in place9. Products except for the double edged did not have sufficient sales10. Indonesia is a Muslim predominant country customers not shaving11. Indonesia law prohibited direct import and distribution

Recommendations

1. Tap the low segment market2. Come out with a low cost variety product that can cater to the lower and middle income level

people as well

3. Advertisements and promotions in local vernacular, first time discounts and promotionaloffers including coupons and lottery systems which worked in Indonesia

4. Packaging can suit the mood and culture of the local people and the local place boasting of15000 island and 250 regional dialects.

5. Market penetration is abysmally lowa. For example, all figures pertain to the period of 1995

Total population of Indonesia in 200m

Total shaving population was 40 % ie 32 million

Out of this 40 % used razors and blades for shaving ie 12.8 m

Now Gillettes share was 48 %, ie approx 6.4 m


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Hence 6.4 m people out of a total population of 200 million presently use Gillette

razors. Hence the present market capitalization is very less and there is a huge

potential to tap the market esp the lower segment.

6. Better compensation for managers engaged in distribution and sales of the product.

Quantitative Analysis

Shaving population above 18 years s 80% of 40m = 32 m

Avg no of shaves per month = 5.5

Total no of shaves per month = 176

Sales of total blades in 1995 = 115 m (this is 48 % of total market)

Total market = 240 m in 1995 (20 m per month in the same year)

Avg no of shaves per blade per month = 9 (approx)

Expected figures for the year of 1996

Avg no of shaves per month has increased to 6

And Avg no of shaves per blade per month has reduced to 8

Therefore, total no of shaves per month = 32 * 6 = 192 m shaves

Hence total no of blades in a month = 192 m /8 = 24

Hence in an year avg no of blades used is 24 * 12 = 288 millionNow since the market share of Gillette in 1996 is 50 %, 144 m blades of Gillette can be used as per the

estimation of Mr.Effio

This figure will stand even closer to the expectation of Mr Effio if few more customers can be tapped.

Attached Excel sheet

gillette group 1 sec f

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