Discuss three ways that the primary demand for blades can increase in Indonesia
The first way according to which demand blades can grow is the impact of Western shaving practices. Considering that in Indonesia, blade shaving was developed insufficiently until the recent decades, it is possible to anticipate that with the extremely expanding globalization, Indonesians would change their perceptions of grooming practices. At this point, college students and graduates would serve as the key trendsetters. In effect, the primary demand for blades would increase repeatedly.
The second way refers to the offered effectiveness of shaving. This means that once customers would receive the effective blades, the primary demand would be raised. In particular, such options as decreased shaving time, the closeness of shave, and the prevention of cuts are rather essential for the target audience. Furthermore, the possibility to reuse the same blade with the unchanged excellent effectiveness would also attract more customers from Indonesia. In other words, the appearance of innovative blades is likely to create additional demand for them and promote the complete substitute of the traditional knife by the razor blade.
The third way can be identified as the growing role of communication. The mentioned way is likely to boost up the desire of the population to improve its image that, in its turn, would promote the feeling of self-confidence and make people look better. At this point, both men are women may be affected by various advertisings in case the latter are properly-organized and presented with consideration of the local market peculiarities, including its cultural, social, political, and economic factors. For instance, TV, radio, print advertising, and, most importantly, the Internet media may attract customers.
2. Would it be a good idea for Gillette to apply value-based pricing in Indonesia? If yes, explain in detail why (at least 2 reasons) and if not also elaborate in detail why you oppose (at least two reasons).
In the context of Indonesia, value-based pricing seems to be rather advantageous compared to the opposite cost-plus pricing. The strategy of value-based pricing establishes price characteristics, focusing on the benefits the product brings to customers. The first argument that supports the mentioned option is that this way of pricing is pertinent to companies that offer unique products highly valued by the target audience. In the case of Gillette, it supplies a relatively new form of shaving as Indonesians tended to use the knife instead of the razor blade. With the expansion of Gillette on this market, the local customers received an opportunity to try something exceptional and useful. Therefore, it is important to employ value-based pricing to embrace more people and maintain the innovative culture of shaving.
The second reason to use value-based pricing lays in the fact that the Indonesian market consists of two quite different constituents, including urban and rural populations, not to mention that Indonesia is composed of approximately 200 nations. However, focusing on urban and rural areas, one may note that they have a range of differences that make it impossible to apply cost-plus pricing. For example, they have dissimilar income levels, advertising access, awareness of the shaving culture, and some other important aspects. As a result, the mentioned points create some ambiguity in price setting. In this connection, it becomes evident that the marketing strategy and, in particular, price strategy should be based on adaptation to the local market criteria. Each of the mentioned areas should be properly explored and interpreted to make it possible to come up with appropriate pricing that would benefit both customers and the company. Nonetheless, the pricing strategy in both rural and urban sectors should be associated with excellence promotion and the shaving culture creation.