The Gillette Case
Since the distribution cost is high and the economic condition didn’t allow everyone to afford a high quality Gillette razor. Most of those who can afford it live in the big cities. Therefore, due to the distribution issue and average low income in rural area, I would focus the marketing resource on urban area. In this situation it is better to focus in increase in switching from knives to blades. At this point introducing a “face” by having a popular local celebrity identify with Gillette in order to increase sales by association.
Urban men who shave with knives account for 80%*60%= 48% of total urban men population. Since urban men are our target customers, half of them are a very big number. This group can afford high quality Gillette blades and they already have the habit to shave. Thus, it would be relatively easy to market these people for higher profit. Have samples to be distributed through the supermarkets, universities, and even at the workplace. They can also introduce free sampling stands for customers to experience the benefits of Gillette and thus increasing brand identity loyalty and word-of-mouth.
No need to change the product line if they work on a 3-line product in order to target all the different income segments: high quality (rich); middle line and lowest line for the lower literacy areas. No need to spend on brand awareness since they have 97% awareness with 55% usage. Since Gillette is a reputable company worldwide in the Indonesian market they should concentrate in doing a one-time reduction on its prices in order to reach the rural area customers. It is understandable that reducing the sales price would also reduce their operations profit but that can be fixed by also reducing advertising and that way the net profit can be re-establish.
They can also achieve a 10% plus increase in sales from other marketing activities besides advertising and promotions in doing market penetration and introducing females