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Egypt Marketing Presentation

 

A. GOALS AND OBJECTIVES:

BELGIUM

Gillette decided not to venture into Belgium.

The Belgium market is small. The country’s population is about 10.5 million people in total and assuming roughly half of the population is male, leaves the company with a very small market. Likewise, factors such as economic, personal, social, cultural, and psychological factors will further decrease the potential consumer pool.

Additionally, Belgium is divided into three distinct groups each settled in different regions of the country. This region divisiveness goes even further into language, social and political rifts. Belgium has three official languages – Dutch, French, and German. Consequently, television ads and road signs are different in terms of language and context from the north to the south. Each group even has its own political party and a pervasive attitude of “them” and “us”. With this in mind, it would be difficult to develop a cohesive marketing plan for the country.

Moreover, the people of Belgium are precarious when it comes to products and companies. On the uncertainty avoidance index, Belgium scores a 94 meaning it is difficult for the people of Belgium to trust. This is perhaps due to the many Belgium takeovers. Sadly, the country’s strategic location has been the cause for several occupations by neighboring countries. As a result, its history has affected consumer behavior. Therefore, Belgium citizens seek expert knowledge and teaching to adopt a product or company.

Overall, Belgium is not a market Gillette should venture into because it is a small market, difficult to campaign, and consumers are very uncertain.

NIGERIA

Gillette ruled out entering into Nigeria when considering an international marketplace.

The population is large and growing, expected to be about 177 million people by July 2014 (Nigeria). However, Nigeria is still a developing country with 68% of the population living in poverty. This 68% of the population lives off of less than $1.25 per day. This is not an ideal marketplace considering over half of the population is unable to afford Gillette’s product.

Also, considering the unemployment rate is 23.9%, disposable income is another factor why the consumer is unable to purchase Gillette razors. (The World Factbook: Nigeria)

Corruption is another factor why Nigeria was not chosen. There are three tribes in three regions of the country that divide the country and create conflict making it difficult to conduct business without free trade and interference from groups.

Additionally, five major languages are spoken in Nigeria, of that only 2.7% speak English. The barrier and division are too substantial to be able to develop a cohesive marketing plan (Wolfram).

Ultimately, Nigeria is a country that is still developing and not the leading choice of investment for Gillette.

SPAIN

One of the major factors why Spain was not selected as a country to export Gillette razors was due to la crisis,, meaning ‘the crisis’ in Spanish. This refers to the current financial meltdown of Spain, and several other European nations such as Italy, Greece, and Portugal.

Currently, Spain is not adequate for foreign investment. Not only is it a saturated market with ample razor options, but Spain has the highest unemployment rate in a developed world with Greece not far behind. Roughly 56% of young people (<25 years old) in Spain are unemployed or grossly underemployed. It is so awful that they have been nicknamed “the lost generation.”  The unemployment rate for the country at-large is around 26.3%, which relates to more than 6 million Spaniards out of work. The total unemployment rate went from 8% in 2008 to the current state. Needless to say, that is a colossal increase in less than 5 years. Subsequently, 21.1 % of Spaniards are living below the poverty line and 47 million middle-class citizens are at risk of falling below.

Consequently, having a volatile economy, high employment and a great percentage of the population living below the poverty line puts Spain out of the competition.

EGYPT

Egypt was chosen for the following reasons.

The country has a large potential customer base. For Gillette razors, the ideal target market is males between the ages of 15 to 55 years old. Presently, Egypt has an expected population of 88 million people by July of 2014. Of this, it is estimated 25 million people of the population fits the target market.

Another reason why Egypt was chosen is its growing Gross Domestic Product (GDP). As of 2012, Egypt’s GDP was about $257 billion US dollars, of which, 37.5% was industry driven (The World Factbook: Egypt). With over one-third of their GDP due to the industry sector, Gillette will help Egypt’s economy and boost sales in a new market.

Another reason Egypt is a market for Gillette is the access and availability to reach consumers. Sitting on the tip of Africa between two continents, the country has access to both the Mediterranean Sea and the Red Sea. Additionally, the Suez Canal allows for easy trading between these two bodies of water which would be an ideal route for Gillette to import products. Moreover, 90% of Egypt’s population lives along the Nile River Delta. This channel way of the river running from south to north cuts directly through the country. Taking in all of these geographic factors, Gillette has various access points which will help the company reach consumers easily.

An important cultural aspect taken into account is the country’s long history of shaving. Shaving is popular for Egyptians in both ancient and present times. It is not only a personal hygiene standard, but a survival tactic to keep cool under Egypt’s desert climate. Culturally, most of the population has a tendency to follow the trends of upper society. Egyptian men prefer a clean-shaven appearance, apart from a mustache, which only serves the purpose of showcasing masculinity. Additionally, “no one in Upper Egypt will shave their mustaches…if you don’t have one they consider it emasculating” (Elmeshad). Since Egypt is a highly masculine society, Gillette has an opportunity to sell the MACH3 product line of male razors given the company keeps in mind these cultural factors. Gillette needs to tap into this historical and cultural background and leverage it as a strong selling point.

1. SWOT ANALYSIS

STRENGTHS

Gillette’s main strength is its strong established brand. King C. Gillette founded Gillette in 1901 with the invention of the safety razor. The safety razor was revolutionary for its time considering shaving was originally done by the use of straight edge razor. Since then, the company has expanded its empire and now offers a diverse product line with razors of different styles and blade ranges. The company also expanded its product line to include shaving cream, razors, razor refills, and deodorant.

Gillette has two centers specifically dedicated to research and development. These centers are used to test and develop cutting edge razors to further aid top of the line premium razors. A manufacturing center in Boston, known as Gillette World Shaving Headquarters is “the technological center for developing and manufacturing the newest wet shaving technology platforms, using state of the art proprietary technology…” (Proctor & Gamble). This proprietary technology has created unique and difficult to imitate manufacturing processes, providing both a valuable asset and significant competitive advantage for the company.

Gillette’s other strength is its marketing efforts. Since its beginnings, the razor company has partnered with famous athletes to promote the name and brand. In 1910, the company began running print ads with baseball player Pittsburg Pirate’s infielder Honus Wagner and from that point forward, Gillette’s partnership with the sports world grew. In 1942, Gillette created the Gillette Cavalcade of Sports and held exclusive rights to sponsor certain sporting events. This strategic alignment is key to the company’s success and has worked well for bringing in male consumers who idolize athlete figures. It should be noted that among Egyptians’, soccer is their favorite sport and Gillette should utilize its established alignment with professional athletes to capture Egyptian sports fans. In this way, the company would be able to maintain its brand image while expanding into a promising international market.

WEAKNESSES

A weakness of Gillette is its product position. Made with the strongest material, designed by the best technology, and ranked first among its competitors, Gillette razors are considered a premium product (Euromonitor: Statistics). This product position will pose a challenge for the company’s appeal to the lower income portion of Egyptian consumers. Taking this into account, the disposable line of razors Gillette, specifically the ‘Gillette MACH3’ model, would be ideal to introduce in Egypt.

OPPORTUNITIES

Gillette’s brand expansion into international waters will have a significant impact on the brand. Currently, Gillette in the United States is the dominant razor brand. Adding the resources gained from the 2005 Gillette-Proctor & Gamble merger, the company has a big opportunity to extend its reach and expand its market share on a global scale. The company has the resources, assets, and established brand name to gain competitive advantage and yield high gains.

THREATS

A current threat for Gillette is an Egyptian razor company called Lord International. Similar to Gillette, the Lord Company offers a wide array of razor models and blades. However, the product quality and technology is not up to par to Gillette, but what it lacks in quality, makes up in market dominance. Founded in 1930, Lord Company has established several manufacturing facilities in the city of Alexandria and is backed by generation’s worth of brand loyal customers. Its current Egyptian market share is 21.8% in the men’s grooming division, ranking first in the country. (Euromonitor: Statistics)

2. FORM OF ENTRY

The country’s biggest export is petroleum; crude petroleum (17%), petroleum gas (8.4%), and refined petroleum (8.1%). The closest leading export is gold at 5.2% of all exports. Its biggest imports are refined petroleum (12%), petroleum gas (6.1%) and wheat (3.5%). Due to its close proximity and ease of access to the Mediterranean Sea, Italy is the country’s top trading destination (8.9%), followed by India (6.4%), Germany (5.8%) and USA (5.6%). (World Factbook)

With a total of 21 ports, Egypt is a country with many access points. Please view list and map image below for name and location of ports.

Egyptian Ports:

Abu Qir

Abu Zenima

Adabiya

Ain Sukhna

Alexandria*

Damietta*

El Dekheila

El Meks

Geisum Terminal

Hamrawein

Kosseir

Maadiya

Mersa el Hamra

Nuweibah

Port Said*

Ras Burdran

Ras Sudr

Sidi Kerir Terminal

Suez Canal*

Za’farana Terminal

Zeit Bay Terminal

*One of the four largest ports in Egypt

egyptian-ports-1

 

Access to Egypt is easier from the Atlantic to the Mediterranean Sea when importing merchandise. The largest port is Port of Alexandria, located in the northernmost part of the country. Several other large ports include Port of Damietta, Port Said, and the Suez Canal, which is a favorable importing location due to its connection to the Mediterranean Sea and the Red Sea. Importing to these four large ports could have long-term benefits if and when Gillette looks to expand its reach to the Middle East.

B. MARKET ANALYSIS

DEMOGRAPHIC

Egypt is estimated to have a population of 87 million people, ranking 15th in the most populous nation in the world. Cairo, Giza, and Alexandria are the most populous Egyptian cities, located at the heart of the river. It has a growth rate of 1.84 and a replacement rate of 2.87, meaning the population is increasing at a slow, but constant pace. The country’s official and primary language is Arabic, but English and French are also widely understood.

Egyptians themselves are warm, outgoing people with a distinct sense of humor. They have a respect and liking for foreigners, and a deep sense of tolerance for other races and nationalities. However, strict religious governmental policies make it religiously intolerant. There is also high power distance and distinct classes amongst individuals.

There are about 17 million households in Egypt with an average of 4.4 people per household. Most live on 40,000 sq. km. of arable land on the banks of the Nile River and a small amount of the population inhabit the vast Sahara Desert. Two of the most densely populated Egypt cities, Cairo and Alexandria, is home to over 50% of its country’s citizens. (World Factbook)

Islam, Christianity, and Judaism are the only three religions officially recognized by the state. According to the CIA World Factbook, Egypt’s population identifies in the following religious groups; 90% Sunni Muslim, 10% Christian, and a minimal amount are Jewish.

In literacy, about 70% of the population over 15 years of age can read and write. School enrollment is 97.8% of the youth attend primary school, 70% in secondary, and 28.8% in tertiary education. For Egyptians, education is compulsory from the ages of six to fifteen, and free up until university. (World Factbook)

The average age of the country for males and females is 24.7 and 25.4 years, respectively, with a median age of 25.1 years. Young people, those under 30 years of age, make up 63% of the population while 13% of the population is over 45 (World Factbook). With such a significant skew in population age, it is worth noting this has put a strain on Egypt’s economy. Termed the “youth bulge,” unemployment in Egypt amongst young people with a college education is 10 times higher than it is for those with minimal education. This has led to the 2011 Egyptian protest by young people who are frustrated at the lack of opportunity in the country. (LaGraffe)

Egyptian-population-2011

ECONOMIC   

In the last decade, the combination of poor living conditions and lack of employment opportunities pushed Egyptians to demand economic reform to attract foreign investment and overall growth. Improvement, however, has been held back by considerable deterioration, particularly by the rule of law as measured through property rights and freedom from corruption. Its uneven reform progress has largely stalled in recent years, and as a result, scores for investment freedom and financial freedom have fallen back.

The country’s lack of progress in advancing economic freedom has trapped many of its citizens in poverty and economic stagnation. Many industries experienced slow growth and declining employment including the country’s strongest three sectors; construction, tourism, and manufacturing. The overall slowdown of economic activities throughout Egypt during the year increased the unemployment rate in Egypt to 13% in 2012, according to the Central Agency for Public Mobilization and Statistics (CAPMAS). Of those who were unemployed, 78% of them had high school or university degrees.

According to the CIA World Factbook, Egypt currently scores 34.8 in the GINI coefficient, ranking overall 116th in the world for income inequality. This score means Egypt is a country with a great disparity between the rich and the poor. It is trailed closely by Pakistan, Armenia, Cyprus and Estonia.

The GDP in Egypt was $257.29 billion US dollars in 2012. Per capita, the GDP was last recorded at $3,187.31 US dollars in 2012, ranking 28th in the world. Agriculture accounts for 14.5% of GDP, Industry accounts for 37.5%, and services for 48%. The GDP with purchasing power parity in Egypt was last recorded at $6,600 US dollars in 2012.

According to CAPMAS, inflation in Egypt is currently at 10.2%. General food and beverage prices increased by .2% in January of this year, though prices have dropped by 16.1% in February of last year according to CAPMAS. In an effort to stabilize the inflation rate, the Central Bank of Egypt (CBE) will attempt to raise interest rates in order to encourage more private savings and reduce demand on products.

Egypt does not yet boast a strong middle class in terms of GDP per capita. For this case, a middle class can be defined as exceeding $3,900 in GDP per capita. Currently, Egypt earns $3,157 per capita. With purchasing power parity (PPP) applied, the GDP PPP for Egypt increases to about $6,600 US dollars, making it a strong candidate for a growing middle class. (World Bank)

Egypt currently holds membership in many regional trading organizations. It has been a member of the World Trade Organization since June of 1995. It is also a member of the Developing 8 Countries (D8), the Common Market for Eastern and Southern Africa, and it entered the second wave of membership in Global System of Trade Preferences among Developing Countries (GSTP). Membership to other notable world organizations includes OAPEC, IMF, OIC, UNISFA, FAO, G-15, G-24, G-77, IAEA, WHO, WIPO, WMO, and UNESCO, among many others. (World Factbook)

INFRASTRUCTURE

Egypt has a well-developed infrastructure in modern areas. The CIA World Factbook reports the current road network in Egypt spans 137,430 km, with 126,742 km paved and 10,688 km unpaved. Additionally, there is over 838 km of the expressway. The railway system spans over 5,083 km long with 62 km electrified. Additionally, there are 83 airports in total with 72 paved and 11 unpaved as well as, seven locations for heliports. Also, 95% of its population lives on 5% of the land. This is due to Egypt’s rougher, less developed southern areas, especially areas farther away from the Nile River. (World Factbook)

Egypt launched its first state-run broadcast in 1960. State-run channels hold a monopoly over television broadcasting. Egypt’s main channels are broadcasted throughout the state and are administered by the Egyptian Radio and Television union. The state-owned Nile TV is a propaganda channel that promotes tourism. Satellite channels are strictly regulated by the Ministry of Information. (Trading Economics)

According to the CIA World Factbook, Television is consumed at least four hours a day by 40% of the population daily. The internet is used daily by 39% of the population and 41% has internet-enabled mobile devices. The most frequent users of the internet and mobile services are people between the age of 15-24 at 56% usage, 25-34 at 47% usage, and 35-44 at 33%. Internet access per day is estimated to be 165 minutes and 73 minutes on mobile daily.

CULTURAL

The majority of historical events have occurred at the Nile River Delta where the vast majority of the population is concentrated.

The Egyptian Revolution of 1952, a key historical event, abolished the then constitutional monarchy and established a republic. The Free Officers Movement heard the people’s cries for a military coup whose ruling king was living a very lavish lifestyle that was negatively impacting Egyptian society. Mismanagement of the country’s finances, political and economic policies and overall freedom was crippling the country. The military opposition succeeded in overthrowing the new king and with a new republic in place, the new president worked to quickly reform the government, improve Egyptian infrastructure, and liberate the Egyptian marketplace. (BBC)

The 1960s construction of the Aswan High Dam is another critical historical event that improved the lives of Egyptians. As noted earlier, most Egyptians live near the Nile Basin and many are poor laborers and farm workers. The dam’s construction, a cooperation between Egypt and Russia, helped supply Egypt with drinking water, water storage, enhance agriculture and generate electricity. The impending regulation of the Nile River with Lake Nasser yielded Egyptians great amounts of water and income.

After winning the Africa Cup of Nations, Egyptian nationalism was reinvigorated during an otherwise turbulent political time. This victory proved Egypt can win football games and it quickly became a metaphor for the country; slow, anemic start to become a high-powered, up-tempo victory paralleling the country’s slow progression into modern society. (BBC News)

During the Egyptian Revolution of 2011, millions of citizens demanded the overthrow of Egyptian President Hosni Mubarak’s regime. Grievances of Egyptian protesters focused on legal and political issues including police brutality, the state of emergency laws, lack of free elections and freedom of speech, corruption, and economic issues including high unemployment, food price inflation and low wages. Violent clashes between security forces and protesters resulted in at least 846 people killed and 100,000 injured. (Al Jazeera)

COMPETITIVE ANALYSIS

Gillette faces competition from Lord Precision Industries SAE, Marico, other brands, and local barbers.

Based in Alexandria, Lord Precision is an established company since 1930. A leader in the disposable razor market with a market share of 28.2%, they offer low prices and products for both men and women. Through active promotion, the Lord Company has dominated the men’s razor market, but in recent years Lord has lost share due to high product prices. Lords premium razors are priced at 130 EGP, equivalent to $18.43 USD. Additionally, the company has over 15 retailers in different continents. Retailers for the company include Rite Aid, Tesco, and Leader Aid. (Company Overview of Lord Precision Industries S.A.E.)

Marico is an Indian company operating for a little more than two decades. A top razor company, it’s been able to gain market share with low prices and a wide distribution range. The company’s target market are low-income males, which they have captured a large portion of due to their low prices. They have retailers in over 25 countries both in Asia and Africa. (Marico Limited)

Other brands tend to be higher-priced brands which have been quite unsuccessful. The main problem is consumers are searching for economically better products due to the unstableness of the currency. Even so, consumers in Egypt are purchasing lower priced imported goods. (Hair care in Egypt)

Another Gillette competitor is local barbershop’s which men primarily use for face grooming. An objection people may have is an uncertainty of an unrecognizable brand, which tends to be avoided, even sampled. Barbers are seen as grooming experts, therefore, utilizing barbers can build reliability and trust for a product.

Introducing Gillette MACH3 as a quality product will evenly compete with other premium product lines and enter the middle tier market. Placing Gillette in the middle market will also ease the brand to enter the lower tier market. (MACH3 Gillette Mach3 Cartridges 10ct).

HISTORIC CONTRIBUTIONS

Egypt has a distinctiveness within the region because of the development of major civilizations in the Nile Valley.

After the Pharaonic and Greco-Roman periods, Christianity came to Egypt and it essentially became a Christian country. In the sixteenth century, Egypt became part of the Ottoman Empire. On the eve of modernization, Napoleon and the French army conquered Egypt in 1798. Shortly after, the British expelled the French from Egypt in 1801 and the Ottoman military leader Muhammad ‘Alī Pasha and his troops took over in 1805. Muhammad ‘Alī Pasha remained the ruler of Egypt until his death in 1849 and his descendants ruled until the overthrow of the monarchy in 1952 (Culture of Egypt). Working under the nominal authority of Muhammad ‘Alī Pasha descendants, the British occupied Egypt in 1882.

In the aftermath of World War I, the main nationalist political party, the Wafd, was born out of unrest for Egyptian independence. Agitation from Egyptians resulted in Egypt’s independence in 1922 and the establishment of a constitution in 1923. This amounted to internal self-government under King Fu’ād with an elected parliament and a prime minister. In 1936 and 1937, further treaties with the United Kingdom led to international recognition of the country’s independence, and it joined the League of Nations in 1937.

Egypt was the scene of major battles in World War II, and the country formally joined the war in its last year, 1945. At this time, Egypt also joined the United Nations and helped found the Arab League. (Culture of Egypt)

In 1952 the “Free Officers” from the Egyptian army forced King Farouk, son of King Fu’ād, to abdicate. A year later the monarchy was abolished to be replaced by a republic. Colonel Gamal Abdel Nasser emerged as the strongman of the new regime and became president in 1954. The new regime initiated many new social policies in Egypt. This was a genuine revolution that shared power and wealth more equally with all elements of the population and encouraged education for the masses. (Culture of Egypt)

RELIGION

Although Egyptians are very open and tolerant to foreigners, the political and governmental structures in place facilitate religious intolerance and sometimes persecution of its own citizens. Egypt is highly ethnocentric, leading to religious, gender, political and governmental inequality.

Islam is practiced by the majority of Egyptians and governs their personal, political, economic and legal lives. The central belief in Islam is oneness with God, whose truths were revealed through the prophet Muhammad. The Prophet Muhammad is seen as God’s last emissaries to bring revelation to all of mankind. As Moses brought the Torah and Jesus the Bible, Muhammad brought the last book, the Quran. The Quran and the actions of the Prophet (the Sunnah) are used as the basis for all guidance in the religion.

Among certain obligations, Muslims have to pray five times a day – at dawn, noon, afternoon, sunset, and evening with Friday being the Muslim holy day. During the holy month of Ramadan, all Muslims fast from dawn to dusk and are only permitted to work six hours per day. Fasting includes no eating, drinking, cigarette smoking, or gum chewing. Each night at sunset families and friends gather together to celebrate the breaking of the fast that continues well into the night. (Culture of Egypt)

According to the Pew Research center, Egypt has the highest religious restrictions in the Middle East-North African region. Laws set in place encourage stigmatization of certain religious groups as dangerous sects or cults. The Egyptian government is allowed to use force against religious groups and prohibits Muslims from converting from Islam to other religions. Egyptian Muslims encourage criminalizing apostasy (converting from Islam to another religion) and 88% say converting away from Islam should be punishable by death compared to 28% in other parts of the world. (Sahgal)

A public opinion poll showed many Egyptian Muslims recognize the lack of religious freedom in the country. Fewer than 50% of Egyptian Muslims described themselves as “very free” to practice their religion and many recognize non-Muslims are not free to practice their religion.

The second largest religious group in Egypt are the Copts, native Egypt Christians. Here’s an example of the current situation for Copts in Egypt:

“The Egyptian government discriminates against the Copts and hampers their freedom of worship: it enforces onerous restrictions on building or repairing churches; applies religiously discriminatory laws and practices concerning family law, conversion, and education; restricts Copts from senior government, military, and educational positions; and subsidies media which are used to attack Copts.

The police at the local level frequently harass and sometimes even persecute Christians, particularly converts. In 1998, police detained up to 1,200 Copts in the village of el-Kosheh. Many were tortured, beaten and subjected to electric shock. This is exacerbated by terrorist violence and the imposition of an extortionate “tax” on thousands of Copts, primarily in Upper Egypt. According to the International Coptic Federation, the situation facing Copts in Egypt has worsened over the past three decades.” (http://www.religioustolerance.org/rt_egypt.htm)

In Muslim society, women have a minor role in everyday life. Mouna Mounir Rizk, secretary-general for the Women’s Committee of the Free Egyptians Party said “41% of women here in Egypt are in charge of their families; they are the ones carrying their families. They are finding it increasingly difficult since the revolution to support their families, and the places they are being forced to live are horrible.” (Molloy)

Not many girls attend school and even so, families prefer to send boys to school while the girls stay home and learn to help their mothers. According to the World Economic Forum, women end up passing their male counterparts in postgraduate education regardless of their situation and 65% of master’s and doctoral graduates in Egypt are women. (Molloy)

RITUALS

Rituals mark the different stages of life.

Egyptians celebrate a naming ceremony normally one week after a baby’s birth; it is a mixture of Islamic (or Coptic) and “traditional” elements. All boys are circumcised, generally as infants, and girls are usually also “circumcised” before they reach puberty. Marriage is a major focus of Egyptian culture and considered a contract.

After a death, Muslims try to bury the body the same day. Condolences are paid immediately, and again after forty days and after a year. Muslims believe in the soul, distinguishing it from other non-corporeal aspects of the person such as the double, the brother/sister, and the ghost. The “soul” exists before birth and after death, while some of the other aspects disappear with death or only appear at death. (Culture of Egypt)

SYMBOLS

The three Giza pyramids represent the most important and obvious visual symbol of the Egyptian nation. Other symbols derive from the country’s Islamic heritage. The nineteenth-century Mohammed Ali mosque built on top of a medieval citadel is visible from different parts of Cairo. Of more architectural significance are the Ibn Tulun and Sultan Hassan mosques in Cairo and the Qaitbey mausoleum and school in the northern cemetery.

One other important symbol is derived from the country’s geography: the Nile River. The Nile is invoked in different contexts, each representing a facet of the country’s identity or prevalent themes of the culture. It is associated with immortality, romance, or glory (the construction of the high dam). In recent years, Nile cruises have become a favored tourist attraction, and “cleaning up the Nile” has become an environmental slogan.

The flag is an abstract tricolor, with black standing for the past of oppression, red for sacrifice, and white for the future. A centerpiece of a falcon completes the design. Reflecting a sense of Arab unity, the flags of several other Arab countries have the same colors. (Culture of Egypt)

CULTURAL VALUES

The Islamic religion is a critical component in Egypt’s social structure. This is a kinship culture with little social identity and kinship plays an important role in all social relations. The male is the leader of decision making, but every individual is always subordinate to the family, tribe, and group or collective. Leadership and identity come from a person’s lineage and his or her ability to protect the honor of the extended family.

The family is the cornerstone of an individual’s social identity. An individual’s honor is intricately entwined with the reputation and honor of everyone in their family. Security is found in family loyalty and absolute submission to Islamic law.  The most deeply held values – honor, dignity, and security – are available to an individual only as part of a larger kin group. Thus a man’s word is considered his bond and to go back on your word is to bring dishonor to the whole family. (Morrison)

RESULTING BEHAVIOR AND ATTITUDES

Egyptian’s are open to information that does not conflict with Islamic values. They are open to Western ideas more so than people in other Muslim countries and most are trained to think associatively, process information from a subjective, experiential perspective. (Morrison)

Yet, Islamic law is to be adhered in all situations and trust brothers and cousins before outsiders.

SOCIAL CLASS

There is an enormous gap between the wealthy and the poor. The culture encourages deference of the weak, poor, or subaltern to the rich and powerful, in terms of speech, posture, and acquiescence. Differences among individuals and families are represented by income level or source of income. Also presented in choices of consumption style – housing, transport, dress, language, education, music, and the like. There is a growing middle-class aspiring for a home, car, marriage, and family life, while one-third of the population is below the poverty line. (Culture of Egypt)

CONSUMER BEHAVIOR

Egyptian’s tend to show preference toward well-known brands. When faced with the task of differentiating and choosing among products and brands, most will usually go with the word-of-mouth or recommendation of a trusted source. Formation of preferences facilitates consumer decision making, but this takes a while to achieve due to a collective society with high uncertainty avoidance.

C. MARKET MIX

PRODUCT STRATEGY

Features:

Gillette MACH3 is an advanced disposable razor allowing users to shave hair with fewer strokes. The product features three premium precision blades, a rubber handle, and a comfort guard allowing for more accurate shaving while protecting the skin. Indicator lubrication strips situated at the edges of the razor change white to indicate dullness of blade and an open back razor allows for easy rinse.

Assortment of the Product:

The MACH3 is assorted in packages of three and five razors. The product strategy is to compare the two product assortments and see which yields the highest sales. This will allow Gillette to gather consumer insight on Egyptian purchase preference and purchase frequency of razors. The company will gather results from sales using a time frame of six months to one year. This will help establish which product assortment, the three or five razor package, is the best fit in the Egyptian market. The decision will be determined by looking at sales.

Packaging:

MACH3 is sold in premium packaging. The front of the package includes both the Gillette and a large P&G logo. This makes it easier for consumers to easily identify it as part of the P&G Company for immediate brand trust and to accelerate the buying decision. The cardboard backing with plastic overlay and the package size number, either three or five, makes it easy for consumers to see the product and quantity. On the back, a features description with a close-up blade diagram to provide visual understanding. The package language includes English, French, and Arabic, which are spoken throughout Egypt.

Branding:

A P&G logo is used to easily identify the well-known worldwide international corporation and using it will associate Gillette with P&G. Besides this, the slogan “Shave like a Pro” will appear on the front of the package. This slogan will be used for traditional and digital campaigns.

PRICING TACTICS

Our strategy is to establish a high initial price for the MACH3 using skimming and premium pricing tactics. Heavy expenditure on promotion and incentives, both digital and traditional media and endorsements will be used to channel members.

A skimming strategy will have several advantages in a slow maturing market. At the top of the demand curve, price responsiveness is low. In the absence of any close substitutes, cross-elasticity will be low providing an opportunity to fluctuate the price. This factor will help the product make significant inroads into the market.

The current exchange rate of 1 Egyptian Pound (EP) is $0.14 USD, the product will be sold at $85.71 EP, the equivalent of $12.00 USD. This is the current premium razor cost of a Lord razor.

The premium pricing strategy will be used to segment the market. During the initial stage, the target audience is non-price-conscious customers. Later on, the product price will be lowered to $10.00 USD for three months to tap into the mass market. After the three month introductory stage, the two dollar discount will be removed and the product will be priced the same as the competition. If the price is too high, it will be brought down to $10.00 USD again. Keeping the product price artificially high will encourage favorable perceptions among buyers by tapping into a buyer’s tendency to believe expensive items represent exceptional quality and distinction.

PLACEMENT STRATEGY

Cairo, Alexandria, and Giza are three cities that are integral to the placement strategy. Cairo boasts a population of close to 8 million people, Alexandria about 4 million people, and Giza 2.5 million people. With the major portion of the Egyptian population in these cities, it’s important to reach critical mass in these regions quickly. Important cities to also note are Port Said and Suez, which are port cities that receive a lot of imported goods. (World Factbook)

Focusing on major distribution centers such as supermarkets, hypermarkets, and convenience stores in these cities is essential. A major supermarket company is Metro Market with 39 locations. The revolutionary retail hypermarket, Carrefour, a French chain with 21 locations, and convenience stores and barbershops will be used to distribute the MACH3 in Egypt. (Maldonado)

PROMOTIONAL TACTICS

Several promotional tactics will be used to introduce the MACH3 razor. The goal is to expose and expand reach of the product brand

Trade Activities:

Trade shows, such as the Egypt Shop Fair in Cairo, is a great opportunity to present the performance of the MACH3 razor. This specific trade show exhibition is visited by major supermarkets, hypermarkets, and general stores in search of purchasing new products. It is a great place for the company to start building relationships with potential consumers, vendors, and distributors by setting up an experiential station where people receive free shaves. (Egypt Shop Fair). Demonstrating the performance of the razor, visitors will see the quality and ease of use of the product.

Consumer Advertising:

Guided by the slogan “Shave like a Pro.” consumer advertising will focus on building strong ties with the sports industry, specifically soccer since it is the most popular sport in Egypt. Using pro-soccer players will help stimulate interest with soccer spectators, enthusiasts, and the general public. Additionally, when advertising across various platforms, campaigns should focus on delivering a series of Egyptian stories from people of different backgrounds.

Popular pro-soccer players playing in Egypt’s top national club, Ahmed Hegazy and Mohamed Salah, are examples of potential endorsers of the razor. Young with fresh faces, these athletes will help target the young Egyptian demographic. By emphasizing their roots and communities, the product brand will feel more local and humanized. This will contribute to one of our goals, which is gaining the trust of small communities and creating positive word-of-mouth for the MACH3 and Gillette.

A series of campaigns will take place on traditional and digital platforms. About 89% of Egyptian households own a television and of this, 40% watch television an average of four hours per day. There is also a growing base of television owners and with that, increasing viewership (Countries Compared by Media). On the other hand, 39% of Egyptians use the Internet and this number is steadily growing as the country develops.

Taking into account this information, the intention is to tell riveting stories on television that continue on social media, primarily YouTube. Our goal is to create eye-catching, powerful stories to stimulate strong interest in the product.

Consumer Promotions:

A country that has flourished on a culture of trade and bargaining, Egyptian consumers enjoy getting a good deal. With this insight, offering a $2 off promotion coupon will stimulate consumers to try the product. Coupled with promotions of free samples in barbershops, small markets, and malls, we want to decrease the feeling of a purchasing risk in potential consumers.

As mentioned earlier Egyptians frequently visit local barbershops and view barbers as hair experts, therefore utilizing barbers in promotional locations will help ease consumer hesitance to try the product.

D. BUDGET AND RESOURCE REQUIREMENTS

The total capital requirement to launch Gillette MACH3 in Egypt is $480,000.00 USD for one year; of which $180,000.00 will be allocated to materials capital and $300,000 to business operations. All things being equal, this plan foresees fixed and variable costs for exporting 60,000 units of Gillette razors to Egypt.

 

Materials (Fixed Costs + Variable Cost) = Cost/Unit
1) Stainless Steel Blades 8 Step Process $2.50 – $3 p/blade $8.00 in the U.S.
2) Coatings of Diamond-like Carbon Majority of Production done by MFG

(3) Razors

Per Unit

3) Lubricating Polymer Layer Shipping
4) Plastic Portions (handle & blade cartridge) Special Packaging

($30, 000 + $50,000) / 10,000 Units = $8.00 /Unit

The venture would cost $960,000 for two years of initial operation. This capital will be used towards material purchase, manufacturing, packaging, logistics and shipping expenses.

As Gillette’s marketing planners, it’s essential to ensure the operation is fully capitalized and address all financial shortfalls to ensure a successful exporting operation. Under a realistic scenario, selling the product for $12.00 USD with a profit of $4.00 USD per unit the operation should have over $240,000.00 in sales profit in one year. Even with the worst-case sales scenario, selling the product for $10.00 USD for a profit of $2.00 USD would yield a profit of $120,000.00 USD and reach a net worth break at the end of year four ($120k x 4yrs= $480,000.00). On a linear projection, the entire financial debt will be retired by the 5th year and everything from that point on will be net profit.

TANGIBLE RESOURCES

Rare Valuable Not easily imitated Non-substitutional
Product lines

X

X

Razor design

X

X

Product scope (brands)

X

X

X

Global presence

X

X

X

Financials / Equity

X

X

X

Organizational structure

X

Gillette has many tangible resources at hand. The company with its two large research and development facilities and patented technology is both valuable and difficult to imitate. Adding the width and depth of its product line, global presence, and brand, the company is non-substitutable considering only firms with a plethora of resources are able to establish such international presence. More so with the merger with P&G.

INTANGIBLE RESOURCES

Rare Valuable Not easily imitated Non-substitutional
Brand reputation

X

X

X

Innovation

X

Quality reputation

X

X

Creative marketing

X

X

Reputation with suppliers

X

X X

Gillette has an intangible resource in the company’s established brand. A majority of its assets come down to quality reputation and creative marketing, which fall under both rare and valuable. The company is really unique in both its brand reputation and reputation with suppliers. These two resources are not easily imitated and entering Egypt’s marketplace, these resources in time will show the Egyptian people the quality of the product and brand. The reputation of the company rests on the introduction and if done properly Gillette will be a household name.

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