PROPOSED BUSINESS STRATEGY

OF SENSODYNE TOOTHPASTE IN INDONESIA

FINAL PROJECT

By:
Presdya Nandi Wardhana Sutiyono
NIM: 29115338

Master of Business Administration Program

School of Business and Management
Institut Teknologi Bandung
2017
 USULAN STRATEGI BISNIS PADA PASTA GIGI SENSODYNE DI INDONESIA

PRESDYA NANDI WARDHANA SUTIYONO

NIM: 29115338

Tanggal Lulus Ujian Akhir (xx/xx/2017)

Tanggal Wisuda (xx/xx/2017)
Master of Business Administration Program,
Institut Teknologi Bandung, 2017
Pembimbing Tugas Akhir: Yudo Anggoro, MSM, Ph.D.

ABSTRAK

Sensodyne merupakan salah satu produk pasta gigi yang di dikelola oleh merk dagang
GlaxoSmithKline. Di tahun 1981 Sensodyne masuk ke Indonesia dengan pasta gigi berbasis
resep dan hanya diperuntukan untuk tujuan medis. Sensodyne memasuki pangsa pasar pasta
gigi regular pada tahun 2002. Sejak awal Sensodyne berdiri pada segmen gigi sensitif,
berbeda dengan pasta gigi lain yang tujuannya untuk membersihkan gigi dan hanya untuk
mendapatkan efek segar. Produk yang dikeluarkan Sensodyne terus berkembang dan
membuat peta persaingan baru di industri pasta gigi dengan merk lain seperti Pepsodent,
Close Up yang merajai pasar pasta gigi di Indonesia. Untuk persaingan di kategori pasta gigi
sensitif, Sensodyne bersaing langsung dengan salah satu varian dari pasta gigi merk
pepsodent, Pepsodent Sensitive Expert (PSE) dan salah satu produk yang baru memulai di
pasar dengan kategori sensitif, Systema. Di tahun 2016, Sensodyne memiliki predikat pasta
gigi sensitif dengan penjualan nomor 1 di Indonesia. Beberapa kekuatan dan kapasitas dari
perusahaan akan ditemukan melalui analisis internal dan eksternal lalu diformulasikan dalam
sebuah strategi menyerang secara tidak langsung kepada kompetitor Sensodyne. Dalam
sebuah strategi tersebut target segmentasi market dan pemasaran secara digital menjadi kunci
dari usulan strategi tersebut.
Kata kunci: pasta gigi, Sensodyne, strategi bisnis, formulasi strategi, analisa pasar,
 PROPOSED BUSINESS STRATEGY:
A CASE STUDY OF SENSODYNE TOOTHPASTE IN INDONESIA

PRESDYA NANDI WARDHANA SUTIYONO

NIM: 29115338

Date of Passing of Final Test (xx/xx/2017)

Date of Graduation Ceremony (xx/xx/2017)
Master of Business Administration Program,
Institut Teknologi Bandung, 2017
Final Project Counsellor: Yudo Anggoro, MSM, Ph.D.

ABSTRACT

Sensodyne is one of the toothpaste products that well managed by GlaxoSmithKline. In 1981
Sensodyne entered Indonesia with prescription-based toothpaste and was intended for
medical purposes. Sensodyne starting to operate the regular toothpaste market in 2002. Since
the beginning Sensodyne was standing on the segment of sensitive teeth, in contrast to other
toothpastes that aim to a basic toohpaste for clean teeth. Sensodyne's products continue to
grow and develop new variants of competition in the toothpaste industry with other brands
such as Pepsodent, Close Up, which had dominated the market in Indonesia. For competition
in the sensitive toothpaste category, Sensodyne competes directly with one of the variants of
the Pepsodent, Pepsodent Sensitive Expert (PSE) toothpaste and one of the new products in
the sensitive category of market, Systema. Since 2016, Sensodyne has a sensitive toothpaste
predicate with sales number 1 in Indonesia. Some of the strengths and capacities of the
company will be found through internal and external analysis then it will be formulated
through an indirect attack strategy to Sensodyne's competitors. Target segmentation and
digital marketing strategy are the key implementation for supporting the strategy.
Keywords: toothpaste, Sensodyne, business strategy, strategy formulation, market analysis.
 LEGALIZATION PAGE

PROPOSED BUSINESS STRATEGY:

A CASE STUDY OF SENSODYNE INDONESIA TOOTHPASTE

By
Presdya Nandi Wardhana Sutiyono

NIM:29115338

Master of Business Administration program

General Management

Approved,
Jakarta. 2017
Final Project Counselor

Anggorb, MSM, Ph.D.

NIP: ll51l002l
 ACKNOWLEDGEMENT

Words of gratitude doth the author send to Illahi Robbi, for it is by His Grace this
final assignment, one of the conditions to finishing studies at the Master of Business
Administration Program at the Institut Teknologi Bandung, can be completed.
Secondly, the author would like to state his thanks to part of SBM ITB Jakarta
Campus, to Mr. Yudo Anggoro, MSM, Ph.D as his counselor and Dr. Yos Sunitiyoso,
M.Eng., Ph.D. as General Management 1 advisor.
Other expressions of grateful will be send to the following creature below
 Mr. Kabul Sutijono for the sponsorship, and Mrs. Sidowiyatni for her
unstoppable love
 All part of GSK Consumer Healthcare (Oral & Skin care Marketing and Trade
Marketing team) for the experiences and data access
 Class of GM 1 and GM 2 SBM ITB Jakarta Campus for the acceptances
 Vikings Brother: Anton Sanjaya, Fadil Mahdi for always be author‘s great
barrier
 RTH Football club Bogor for the support since 2008
 Anastasya Surya Andjaswari for becoming the white ink on black page

Bogor, May 2017

Presdya Nandi Wardhana Sutiyono

 TABLE OF CONTENT

Contents
ABSTRAK ................................................................................................................... ii
ABSTRACT ................................................................................................................ iii
LEGALIZATION PAGE .......................................................................................... iv
ACKNOWLEDGEMENT .......................................................................................... v
LIST OF FIGURES ................................................................................................... ix
LIST OF TABLES ..................................................................................................... xi
LIST OF APPENDICES .......................................................................................... xii
CHAPTER 1 INTRODUCTION .............................................................................. 1
1.1 Background ......................................................................................................... 1
1.2. Company Profile ................................................................................................ 4
1.2.1. Company‘s Description................................................................................... 4
1.2.2. Company Vision & Mission ........................................................................... 4
1.2.3. Scope of Business ........................................................................................... 5
1.2.4. Company Key Employees ............................................................................... 6
1.2.5. SENSODYNE Product.................................................................................... 7
1.3. Problem Statement ............................................................................................. 8
1.4. Research Objectives ........................................................................................... 9
1.5. Research Question .............................................................................................. 9
1.6. Limitation of Research ....................................................................................... 9
1.7. Research Methodologies and Data Collection ................................................. 10
CHAPTER 2 BUSINESS ISSUE EXPLORATION .............................................. 11
2.1 Conceptual Framework ..................................................................................... 11
2.2 Research Methodology...................................................................................... 14
2.2.1. Research Method ........................................................................................... 14
2.3 Data Collection.................................................................................................. 14
2.3.1. Primary Data ................................................................................................. 14
2.3.2. Secondary Data ............................................................................................. 15
2.4 Business Analysis ............................................................................................. 15
 2.4.1. External Analysis .......................................................................................... 15
2.4.1.1 PESTEL Framework ................................................................................... 15
Economic Factors .................................................................................................... 17
2.4.1.2 Porters five Forces ...................................................................................... 20
2.4.3. Competitor Analysis ..................................................................................... 27
2.4.3.1. Pepsodent Sensitive Expert (PSE) ............................................................. 27
2.4.3.3 Systema ....................................................................................................... 28
2.4.4. Competitor Analysis Summary ..................................................................... 29
CHAPTER 3 BUSINESS SOLUTION .................................................................... 32
3.1. Research Result ................................................................................................ 32
3.1.1. Questionnaire Results.................................................................................... 32
3.1.1.1 Demographic ............................................................................................... 33
3.1.1.2 Basic marketing mix element ...................................................................... 36
3.1.1.3. Consumer Behaviour.................................................................................. 39
3.1.1.4. Buying/Purchasing power .......................................................................... 41
3.1.1.6. General Business Strategy for Toothpaste Industry Surveys ..................... 41
3.1.2. Questionnaire Summary Results ................................................................... 42
3.1.3. Interview Summary Results .......................................................................... 43
3.1.4. FGD Results .................................................................................................. 45
3.1.5. Triangulation of the Research Result ............................................................ 47
3.2. Business Strategy Formulation ........................................................................ 49
3.2.1. SWOT Analysis ............................................................................................ 49
3.2.2. TOWS Matrix ............................................................................................... 51
3.2.3. Porter‘s Generic Strategy .............................................................................. 53
3.2.1.1 Current Sensodyne Strategy ........................................................................ 54
3.3. Indirect Offensive Strategy .............................................................................. 54
3.4. Business Model Analysis ................................................................................. 56
3.4.1. Existing Business Model Canvas .................................................................. 57
3.4.2. Proposed Business Model Canvas ................................................................ 62
CHAPTER 4 CONCLUSION & IMPLEMENTATION ...................................... 64
4.1. Conclusion ....................................................................................................... 64
4.2 Recommendation............................................................................................... 65
4.3 Implementation Plan ......................................................................................... 66
 4.3.1 Short Term Plan ............................................................................................. 66
4.3.2 Long Term Plan.............................................................................................. 67
REFFERENCES ....................................................................................................... 69
APPENDICES ........................................................................................................... 71
 LIST OF FIGURES

Figure 1. 1 Toothpaste Consumption Scenario in year 2014 .................................. 2

Figure 1. 2 Market Share Indonesia Toothpaste ..................................................... 3
Figure 1. 3 Market Share Indonesia Oral Care Sensitive Category ……………….4
Figure 1. 4 Sensodyne 24/7 Protection ................................................................. ..8
Figure 1. 5 Sensodyne Repair and Protect .............................................................. 8
Figure 1. 6 Sensodyne Added Benefits category.....................................................8
Figure 1. 7 Sensodyne Rapid Relief Category ........................................................ 9
Figure 2. 1 Strategic Management Process ........................................................... 11
Figure 2. 2 Conceptual Framework ....................................................................... 13
Figure 2. 3 Porter's Five Forces ............................................................................ 21
Figure 2. 4 Vrio Framework…………………………… ..................................24
Figure 2. 5 Pepsodent Sensitive Expert Variant.................................................... 28
Figure 2. 6 Pepsodent Sensitive Expert Campaign ............................................... 28
Figure 2. 7 Systema Variants ................................................................................ 29
Figure 2. 8 PSE Controversial Ads ....................................................................... 30
Figure 3. 1 Slovin's Formula ................................................................................. 32
Figure 3. 2 Domicile of Sensodyne User .............................................................. 33
Figure 3. 3 Domicile of PSE User......................................................................... 33
Figure 3. 4 Age...................................................................................................... 34
Figure 3. 5 Gender................................................................................................. 35
Figure 3. 6 Income ................................................................................................ 35
Figure 3. 7 Brand User Classification ................................................................... 36
Figure 3. 8 Reason to Buy...……………………………….................................37
Figure 3. 9 Place to Buy Toothpaste...…………………….................................38
Figure 3. 10 Brand Exposure ................................................................................ 39
Figure 3. 11 Time for Toothbrushing.................................................................... 40
Figure 3. 12 Size ................................................................................................... 40
Figure 3. 13 Purchasing Power ............................................................................. 41
Figure 3. 14 Current Sensodyne Business Strategy .............................................. 54
Figure 3. 15 Flank Strategy Frame for Sensodyne………………………………..56
 LIST OF TABLES

Table 1. 1 GSK CH Company Employee ............................................................... 6

Table 1. 2 Research Question Final Project ............................................................ 9
Table 2. 1 Summary PESTEL of Dental and FMCG ............................................ 20
Table 2. 2 GSK CH (Sensodyne) VRIO Summary ............................................... 26
Table 2. 3 Summary Competitor Analysis ............................................................ 29
Table 3. 1 Age and Gender ................................................................................... 34
Table 3. 2 Percentage of Toothpaste Brand User.................................................. 36
Table 3. 3 Percentage of Choosing the Brand ....................................................... 37
Table 3. 4 Percentage Place to Buy Toothpaste .................................................... 38
Table 3. 5 Percentage of Purchasing Power .......................................................... 41
Table 3. 6 Likert Scale of Toothpaste Generic Business ...................................... 42
Table 3. 7 Questionnaire Summary Result ........................................................... 42
Table 3. 8 In In Depth Criteria Respondent .......................................................... 43
Table 3. 9 In Depth Interview Result .................................................................... 44
Table 3. 10 FGD Criteria ...................................................................................... 45
Table 3. 11 FGD Timeline Activity ...................................................................... 46
Table 3. 12 FGD result .......................................................................................... 46
Table 3. 13 Triangulation Result ........................................................................... 47
Table 3. 14 Sensodyne TOWS Matrix .................................................................. 51
Table 3. 15 Current Sensodyne Business Model .................................................. 56
Table 3. 16 Proposed Business Model Canvas for Sensodyne ............................. 62
Table 4. 1 Implementation Plan for Sensodyne .................................................... 68
 LIST OF APPENDICES

Appendix 1: Questionnaire draft ........................................................................................... IV

Appendix 2: Interview transcript .......................................................................................... VI
 CHAPTER 1
INTRODUCTION
1.1 Background
Most people do not realize that dental and oral health problems so strongly associated
with other organs and many of them caused by the problem in oral health. Brand
Marketing of Sensodyne Indonesia, GlaxoSmithKline, Dwitya Pramesi Ratna said
that in Indonesia, teeth and mouth is a worrying health problem, these problems are
the first of a list of 10 major diseases that most complaints by the people of
Indonesia. Dwitya add various problems of oral health could from other factors such
as the teeth holes (caries), inflammation of the gums (gingivitis), swollen gums,
inflammation of the tissues supporting the teeth (periodontitis), mouth sores
(stomatitis aphtosa), the breath is not fresh and bad breath (halitosis), stains on the
teeth, the enamel is weak, the buildup of plaque and tartar buildup. Thus maintaining
oral health is very important, especially it relates to personal appearance.
Based on data Unilever Data, 2014 the authors find that 45% of the total population
of Indonesia feels pain on their teeth when eating certain foods, as well as 52% of
Indonesia's population do not realize that they have sensitive. GSK CH Indonesia has
been conducting a research before in 2009 and the result was one in three people of
Indonesia have sensitive teeth. After two years, the ratio increased that people feels
sensitive teeth in 2011.
In terms of oral care completeness, toothbrush and mouthwash are the
complementary product for the key business of oral care industry: toothpaste. As data
on figure 1.1, total consumption of toothpaste in Indonesia is categorized as low in
scope of South East Asia. It indicates that oral health awareness of people Indonesia
still in low category.

1
 Figure 1.1 Toothpaste Consumption Scenario in year 2014

Toothpaste industry in Indonesia is growing rapidly in the last three years in line with
population growth, rising purchasing power and awareness of dental care increased.
According to data from the Ministry of Industry, capacity toothpaste industry has
developed rapidly in the last three years until 2010. The production capacity in 2007
was 50,000 tons per year. Population growth and rising consumer purchasing power
due to increased public awareness of the importance of dental health is estimated to
be the cause of the increased demand for toothpaste. The producers also increased its
capacity to respond to the demand growth. From the data served below Unilever by
its brand Pepsodent has become the market leader in Indonesia toothpaste industry for
over 10 years, and several brands are following Pepsodent with their own image
capturing the market of youth and sensitive.

2
 Market Share Indonesia Toothpaste
2016
70 66.5

60
50
40
30 Sales
20
9.5 6.9
10 6.5
3.2 3.5
0
Sensodyne Pepsodent Close up Ciptadent Formula Others

Figure 1.2. Market Share Indonesia Toothpaste (GSK Internal Data, 2016)
In Indonesia, Sensodyne has entered since the 1980s or 1990s. Indeed, when it
Sensodyne reserved for the medical purpose. Sensodyne began to capture a share of
the consumer goods market in 2002. In 2004 the first Sensodyne advertising. Since
the beginning of Sensodyne is specialized in the segment of sensitive teeth, unlike
other toothpaste producing mainly for regular dental cleaning. Only when we see
opportunities in other segments, such as fresh breath, Sensodyne launched new
variants. All the innovations on Sensodyne made to accommodate the needs of the
owner of sensitive teeth.

3
 Market Share Indonesia Oral Care Sensitive
Category (%)

7%

23% Sensodyne
PSE
Systema
70%

Figure 1.3. Market share Indonesia Oral Care Sensitive Category (GSK internal Data,
2016)

1.2. Company Profile

1.2.1. Company’s Description
GlaxoSmithKline Consumer Healthcare Ltd. (GSK CH) is a manufacturer and
marketer of nutritional and OTC medical products The company is principally
involved in the manufacturing and sale of malt based food products, cereal
based beverages, biscuits, protein rich food and OTC pain relief balms and
acidity relief products. It offers health drinks under the brands of Horlicks,
Boost, Maltova and Viva; analgesics under Crocin and Eno brands; oral care
products under Sensodyne brand; and rubefacients under Iodex brand. The
company operates through three manufacturing facilities located in Punjab,
Andhra Pradesh and Haryana states of India. It operates as a subsidiary of
GlaxoSmithKline plc, a pharmaceutical company based in the UK. GSK CH
is headquartered in Gurgaon, Haryana, India.
1.2.2. Company Vision & Mission
GSK CH Vision is:

4
 “ to combine the best of our Pharmaceutical and Fast Moving Consumer
Goods (FMCG) capabilities to become the world’s first and best, Fast Moving
Consumer Healthcare (FMCH) company, driven by science and values”
GSK CH Missions are:
1. Improve the quality of human life by enabling people to do more, feel
better and live longer
2. Delivering innovative products that help millions of people around the
world live longer, healthier and happier lives
1.2.3. Scope of Business
GSKCH is a health foods manufacturer in India. The company principally
manufactures and markets health drink products, malt based food products,
cereal based beverages, biscuits, milkose baby foods, milk and nutrition bar. It
also distributes analgesics and pain relief balms. The company operates as a
subsidiary of GlaxoSmithKline plc, a pharmaceutical company in the UK. The
company mainly operates in two product categories: nutritional and over the
counter (OTC).
GSK‘s nutritional products include health food drinks, which are offered
under Horlicks, Boost, Maltova and Viva brands. ‗Horlicks‘ is the key brand
of the company in this category. The company markets Horlicks health drinks
under the brands of Horlicks Ninja, Junior Horlicks, Mother‘s Horlicks and
Horlicks Lite. Other products under the Horlick‘s brand include ActiGrow,
Horlicks Nutribar, Junior Horlicks Biscuits, Asha from Horlicks, Horlicks
Cornflake Crunchies Biscuits, Foodles from Horlicks and Horlicks ProHeight.
Horlicks is a health drink especially targeted at school going and growing
children.
GSK also markets OTC drugs and pain relief products which do not require
doctor‘s prescription. It markets analgesic under Crocin brand, which is used
for fever and pain relief. It also markets Iodex Power Cream for back ache
relief and oral care creams under Sensodyne brand. In Indonesia Sensodyne
becomes the main character for GSKCH business, within more than ten

5
 variants has been introduced since 2013, with the latest variants Sensodyne
Repair and Protect.
1.2.4. Company Key Employees
For GSK, their people are their greatest assets. The successful implementation
on culture and people transformation will ensure that GSK CH continues to
lead and shape the consumer healthcare industry in Indonesia. Below is the
GSK CH key employees that operating in global world. The Indonesian
General Manager of GSK CH Pawan Sud has been appointed since 2015.

Table 1.1. GSK CH Company Employee, Canadean (2014)

Name Job Title Board Level

Arun Sehgal Executive Vice President - Human Senior Management
Resource
Deepak Executive Vice President - NHC Senior Management
Gunvante R&D
Ireena Vittal Director Non Executive Board
Jaiboy Phillips Director - Operations Executive Board
Jayant Singh Executive Vice President - Senior Management
Marketing
Jonathan W.Box Director Non Executive Board
Kinshuk Hora Head - IT Senior Management
Kinshuk Hora Head - IT Senior Management
Kunal Kashyap Director Non Executive Board
Mukesh H Director Non Executive Board
Butani
Narendra Vutla Executive Vice President - OTC & Senior Management
Global Resourcing CH R&D
Naresh Dayal Director Non Executive Board
P. Dwarakanath

Pawan Sud General Manager Senior Management

Ramakrishnan Director - Finance Executive Board
Subramanian
Sidharth Singh Executive Vice President - Sales Senior Management
Subodh Chairman Non Executive Board
Bhargava
Surinder Kumar Executive Vice President - Legal, Senior Management
6
 Secretary
Zubair Ahmed Managing Director Executive Board

1.2.5. SENSODYNE Product

According to Copyright Nielsen 2016, Sensodyne is the number one dentist
recommendation and the first best selling brand for sensitive teeth in many
countries around the world, trusted by millions of people. Sensodyne
toothpastes are clinically proven relieving the pain of sensitive teeth and
provide long lasting protection with twice daily brushing.
Sensodye Vision:
“We are dedicated to creating a future where every life is sensitive-free”
In Indonesia, Sensodyne toothpaste has 4 categories product within ten
variants which deliver different benefits for the customer itself. They are
including:
1. 24/7 Protection
a. Sensodyne Freshmint
b. Sensodyne Cool Mint
c. Sensodyne Original

Figure 1.4. Sensodyne 24/7 protection, GSK internal data 2016

2. Repair and Protect
a. Sensodyne Repair and Protect Original
b. Sensodyne Repair and Protect Extra Fresh
c. Sensodyne Repair and Protect Whitening

7
 Figure 1.5. Sensodyne Repair and Protect, GSK Internal Data 2016
3. Added Benefits
a. Sensodyne Gentle Whitening
b. Sensodyne Multiaction
c. Sensodyne Gum Care

Figure 1.6. Sensodyne Added Benefits category, GSK Internal Data 2016

4. Rapid Relief
a. Sensodyne Rapid Relief

Figure 1.7. Sensodyne Rapid Relief Category

1.3. Problem Statement

In the year of 2016, some of the oral care player has been rising their own marketing
and business strategy. Recently one of the aggressive Sensodyne competitor Unilever
by its brand Pepsodent Sensitive Expert (PSE) has boosted marketing strategy by all
kind its channel to keep the market shares closer with Sensodyne. The latest agressive
campaign made in August 2016 by PSE is 30s Digital Ad that has the similar setting
with Sensodyne TV Ad. Therefore GSK CH should consider this action as the

8
potential threat for Sensodyne‘s market share, and the author want to propose some
strategies and actions in order to face this issue.

1.4. Research Objectives

The objective of this research is to answer the problem that is faced by Sensodyne
which is to build suitable strategic business for Sensodyne brand including:
1. Finding on strength, weakness, threat, and opportunity of the company to seek
the company‘s potential in facing the competitor.
2. Keeping Sensodyne as market leader from other aggressive sensitive brand
that might be threaten sensodyne brand.
3. To find how the strategy should be implemented.

1.5. Research Question

Table 1.2. Research Question Final Project

Research Question Action

1 What is the most potential Conduct research on the external and
capacity/resource from GSK CH: by internal environment of GSK CH
its brand Sensodyne to keep leading
in the industry?
2 What Strategy is the best solution Conduct research on the various
for GSK CH ? alternative of business and corporate
strategy

1.6. Limitation of Research

This research only analyze from business strategy sight and focused more on GSK
CH marketing strategy. Finance and operations will not be included as part of the
research, but will be analyzed generally to increase author‘s understanding about the
company‘s condition. This project also limited to other GSK CH category in
Indonesia: Wellness, Nutrition, Topical Pain, and Respiratory but not limited to Oral
Care for especially Sensodyne Toothpaste.

9
1.7. Research Methodologies and Data Collection
In conducting this research, primary and secondary data as well as qualitative
and quantitative data are used.

 Qualitative: do the the observation and have an in-depth analysis with

brand manager of Oral Care category to get deeper understanding in
current toothpaste industry
 Quantitative: By making questioner to strenghten its external, internal
and business analysis that might be become an input

10
 CHAPTER 2 BUSINESS ISSUE EXPLORATION
2.1 Conceptual Framework
In order to have systematic research it is important that author must put the
conceptual framework. A conceptual framework ―lays out the key factors, constructs,
or variables, and presumes relationships among them‖ (Miles & Huberman, 1994:
440). The main objective of this final project is to develop the proper business
strategy for GSK CH to keep Sensodyne product is on the top of the market from the
aggressive competitor.
According to Ketchen and Short (2016) on the book of Mastering Strategic
Management, there are four components of strategic management process,
 Understanding strategy & performance
 Environmental & Internal Scanning
 Strategy Formulation
 Strategy Implementation

Understanding Environmental & Strategy Strategy

Strategy &
Internal Scanning Formulation Implementation
Performance

Figure 2.1. Strategic Management Process

Understanding strategy & performance is about knowing deeper the situation on the
company, product and industry, at this case is toothpaste industry. To get more deeper
analysis on current condition of those components, the author conduct a qualitative
research from brand manager of oral care & skin category from GSK CH Indonesia
by doing in depth interview.
Environmental scanning divides into two forms: External and Internal. The external is
a method for understanding condition that affected by trends, regulations, etc. For this
case toothpaste industry and dental health care become the specific focus for
environmental analysis. The internal scanning can be defined as internal analysis

11
through potential company‘s resources. Those of resources then will be analyzed by a
proper tools in strategy formulation section.
Strategy formulation is the formation of several strategies with the result of internal
and external analysis with using a proper tools. Strategy implementation is the next
step after strategy formulation that will be implemented in the company itself for
better company performance.
To answer author‘s first research question about the most potential resource from
GSK CH to maintain Sensodyne‘s product on the top of industry, the author will
analyze the external through PESTEL Analysis and Porter‘s five forces. Hence for the
internal the author will conduct the analysis using VRIO analysis.
On the strategy formulation step, the author establish process of several strategy
based on the result of external and internal analysis. The author will answer the
second question from this research by using the suitable strategy in order to achieve
research goals. The last step for building this research is making the strategy
implementation, the result of this final project will be informed to the stakeholder of
the company.

12
 Problem
Statement

Study
Objectives

External Environment
Analysis :
Internal Environment
Analysis : - PESTEL Analysis
- VRIO Analysis - Porter’s 5 Forces
Analysis
- Competitor Analyis
SWOT Analysis,
Generic Strategy &
TOWS Matrix

Indirect Attack Strategy Proposed Business

Strategy Formulation Model Canvas

Implementation
Plan

Figure 2.2. Conceptual Framework

13
2.2 Research Methodology
2.2.1. Research Method
In this research the author use both the quantitative and qualitative.
a. Quantitative Methodology
Quantitative emphasize objective measurements and the statistical,
mathematical, or numerical analysis of data collected through polls,
questionnaires, and surveys, or by manipulating pre-existing statistical data
using computational techniques (Babbie, Earl R. 2010). The author conduct
quantitative method through questionnaire that distributes in area of Jakarta
Bogor, Depok, Tangerang, Bekasi and also outside of Jabodetabek.
b. Qualitative Method
Qualitative research is a method of inquiry employed in many different
academic disciplines, including in the social and natural sciences, but also in
non-academic contexts including market research, business, and service
demonstrations (Denzin, Norman K.; Lincoln, Yvonna S. 2005). Qualitative
method that applied in this research through In depth Interview to get a deeper
analysis about internal condition. More, the author use Focus Group
Discussion in order to get deeper analysis from external analysis besides
questionnaire.
2.3 Data Collection
2.3.1. Primary Data
Based on Fink on its book Conducting Research Literature Reviews, Primary
data is original data collected for a specific research goal (Fink, A. 1998). The
type of information is obtained directly from first hand sources. In this
research, primary data that will be used are:
 In depth interview
 Questionnaires

14
2.3.2. Secondary Data
Berg on its book Qualitative Research Methods for the Social Science defines
Secondary data is a data that originally collected for a different purpose and
reused for another research question (Berg, B.L. 2001). The author use
secondary data from :
 GSK CH marketing internal data
 Published annual report
 Internet searches or libraries (Books and journals)

2.4 Business Analysis

Oral Care industry in Indonesia has grown fast in the past several years to follow the
trend of population growth and the increase in the purchasing power of the people
and improvement of the people's awareness of tooth health. Oral care recorded
slightly slower current value growth in 2015 than in 2014 due to the relatively high
penetration of essential products such as toothbrushes and toothpaste. Rising
consumer sophistication is resulting in increased focus on oral care products, with
consumers looking to maintain adequate oral hygiene. Supported by improved
disposable incomes, consumers were willing to invest in advanced oral care products,
including toothpaste which offers complete benefits, thus boosting overall oral care
current value sales. In terms of sensitive teeth segment is highly developed, then
many other players who want to get into this segment as well.
2.4.1. External Analysis
In the section of external analysis the author conducts three types analysis:
PESTEL analysis to analyze the general environment, Porter‘s five forces to
analyze the industry of toothpaste and also competitor analysis.
2.4.1.1 PESTEL Framework
Frank Rothaermel by his book Strategic Management Process, defines
framework that categorizes and analyzes an important set of external forces
(political, economic, technological, ecological, and legal) that might impinge
upon a firm. These forces are embedded in the global environment and can

15
create both opportunities and threats for the firm (Rothaermel, 2013:141).
PESTEL is needed to analyze the current general condition of GSK CH in
order to run the business itself.
Political and Legal factor
The political factors environment describes the processes actions of
government bodies that can influence the decisions and behavior of firms
(Rothaermel, 2013:141).
The legal environment captures the official outcomes of the political
processes as manifested in laws, mandates, regulations, and court decisions.
These in turn can have a direct bearing on a firm's bottom line.‖ (Rothaermel,
2013: 145).
Indonesia government by Ministry of Health has the huge involvement in
addressing the issues especially in dental caries. According to data Badan
Penelitian dan Pengembangan (Litbang) Ministry of Health of Indonesia,
dental caries and gum problem is the largest fact of whole dental problem.
From 2007 to 2013, the prevalence of caries in the population increased from
43.4% to 53.2%.
National Policy Document 2010-2025 Dental and Oral Health explained that,
in the period 2000-2009 shows that managing dental and oral health efforts is
not clear enough which causes dental health care program planning is not
listed on a national strategy health department. This is certainly an impact of
the incomplete records of dental health problems in Indonesia so that the state
of dental health in Indonesia is not be able to determine those problems. The
document profile of Health of Indonesia 2007 is only have one variable to
conduct, that is the percentage of residents who complained of toothache by
5.9% as the national average. This shows that the development of and oral
health still need to be boosted.
Therefore, Ministry of Health had prepared the regulation for handling the
situation in the future through Keputusan Menteri Kesehatan Republik
Indonesia No. 284 / Menkes / SK / IV / 2006 about dental health care service

16
 standards and mouth. By this regulation Indonesia focus to reduce all the oral
health problem and lift up the service and standards for every medical
institution.
Economic Factors
The economic factors in the external environment are largely macroeconomic,
affecting economy wide phenomena. Managers need to consider how the
following five macroeconomic factors can affect firm strategy: growth rates,
interest rates, levels of employment, price stability (inflation and deflation),
currency exchange rates (Rothaermel, 2013: 141)
According to Kantar World Panel data on its 2015 survey, currently
consumers are more selective in FMCG products due to rising prices of these
products. In the third quarter of 2016 It is also the answer why growth is not
as fast as the previous period. Industry growth for fast moving consumer
goods or consumer goods with a turnover (sales) rapidly in Indonesia in the
third quarter of this year amounted to 4.8% outpace Asia, amounting to 3%.
Through data from Ministry of Trade of Indonesia quoted by Director of
Billateral Dr Djatmiko Bris Wicaksono, As the growing rate of growth of
spending, which reached 11.8% in the period from 2010 to 2015 and the
average growth of the FMCG retail industry reached 10.8% in 2015. The
positive growth also extends to areas outside Java and rural areas are
experiencing effective surge in demand for logistics in these regions.
However, although there is a positive trend, there are a number of variations
in annual growth for certain products, such as the food industry recorded a
growth of 38% per August 2016 but only 12% for industrial equipment
maintenance of the household. Overall, FMCG products have successfully
contributed 18.5% to the national GDP in 2016; and this figure is expected to
reach 30% by 2030.
Social cultural factor
Sociocultural factors capture a society's cultures, norms, and values. Because
sociocultural forces not only are constantly in flux but also differ across

17
groups, managers need to closely monitor such trends and consider the
implications for firm strategy‖ (Rothaermel, 2013: 144).
Social analysis on FMCG business can be determined through an analysis of
economic factors above. These are closely linked to changes in consumer
behavior caused partly by the following factors:
a) The increase in people's incomes.
b) Shopping habits on a daily, weekly, and monthly with the times and
the needs and desires of consumers.
c) The occurrence of impulse buying is high enough
d) Want the convenience and ease of things desired by consumers as a
cheap price and promotional programs.
Indonesian consumers have specific consumption patterns, health care and
security, to bring happiness to consumers, and offers convenience. Currently
Indonesian consumers prefer products that offer FMCG products with organic
ingredients, natural, products that contain antibacterial, antioxidant,
antipollution, and contain a variety of health benefits.
Technology Factor
Technological factors capture the application of knowledge to create new
processes and products (Rothaermel, 2013: 144).
In the event of Consumer Connection 2016 seminar titled Smart Growth,
which was attended among FMCG industry, CEO of Kantar Worldpanel Asia,
Marcy Kou said there are three things that make up the determinant of FMCG
industry in the future.
a) digital sales
b) the transformation of the structure of retail
c) consumer behavior towards a variety of products

For digital-based sales in Indonesia at this time, the growth of e-commerce

has been developed by leaps and bounds but only for certain products. As for
FMCG is still less than 1%. The future could be a consideration for

18
manufacturers, at least to introduce products to the public. Based on data
Kantar World panel 2016, the contribution of e-commerce in South Korea to
the total FMCG purchases reached 16.6%, with growth of 35%. Not only in
Korea, e-commerce is also growing rapidly in China with growth of 47% and
Taiwan with growth of 31%.
Currently active users of social media in Indonesia reached 65 million people,
this number represents the second largest number in Asia after China. Various
applications with a variety of uses continues to grow rapidly. Supposedly
these developments into consideration for manufacturers to invest more, on
digital media.
Ecological Factor
―Ecological factors concern broad environmental issues such as the natural
environment, global warming and sustainable economic growth. Managers
can no longer separate the natural and the business worlds; they are
inextricably linked. ―(Rothaermel, 2013: 145).
Based on WWF data on the event ‗Hari Linkungan Hidup 2015‘, The world
population is expected to reach 9.3 billion by 2050. It is envisaged that the
consumption growth rate will have an impact on the ecological footprint and
threaten biodiversity. Without efforts to reduce the exploitation of natural
resources and excessive consumption, Indonesia will inevitably face the
scarcity of natural resources and environmental degradation.
Consumers have the power to require that manufacturers provide products that
are environmentally friendly. Do not doubt our power as consumers, choosing
only friendly to nature conservation.
Consumers are now able to choose some of the more environmentally friendly
products, such as wood and paper-based products labeled with Forest
Stewardship Council (FSC), palm oil based products labeled with the
Roundtable on Sustainable Palm Oil (RSPO) and seafood products that are
environmentally friendly. Other products that use environmentally friendly

19
 technology can also be an alternative, such as hybrid technology for
transportation, as well as products of recycling.

Table 2.1. Summary PESTEL of Dental and FMCG

Political & Legal Economic Socialcultural Technology Ecology

Number of dental FMCG industry Consumer trend in e-commerce Chemical in
caries in Indonesia boosting the choosing FMCG becomes the hype terms of
increase up to 10% Indonesian GDP product based on trend in the way ingredient and
from 2007-2013 several factors: how consumer production still
Rural areas is a big organic, natural, and buy the product can be threaten
Keputusan Menteri business opportunity eco friendly. for the
Kesehatan Republik for toothpaste Number of Social environment
Indonesia No. 284 / market penetration Media usage is
Menkes / SK / IV / overwhelmed People has
2006 about dental concerned about
health care service how to choose
standards and mouth. eco friendly
product

Conclusion
Opportunity & Opportunity Opportunity Opportunity Opportunity and
Threat Threat

2.4.1.2 Porters five Forces

Porter's model aims to enable managers not only to understand their industry
environment but also to shape their firm's strategy. As a rule of thumb, the
stronger the five forces, the lower the industry's profit potential—making the
industry less attractive to competitors. The weaker the five forces, the greater
the industry's profit potential—making the industry more attractive. The
model's perspective is that of the manager of an existing (incumbent) firm
competing for advantage in an established industry. Managers need to

20
 position their company in an industry in a way that relaxes the constraints of
strong forces and leverages weak forces. (Rothaermel 2013:151)

Threat New Entry

(High)

Bargaining Power Bargaining Power of

Supplier (Low) Rivalry Buyer (High)
(High)

Threat of Subtitute
(Moderate)

Figure 2.3. Porter‘s five forces

Threat of Entry (High)

Entry barriers are obstacles that determine how easily a firm can enter an
industry. High entry barriers can correspond to high industry profitability,
assuming there is no excess capacity in the industry (Rothaermel 2013:151).
Unilever introduced its brand extension under Pepsodent brand named as
Pepsodent Sensitive Expert (PSE). PSE is a newcomer in the industry of
toothpaste in the country and significantly raised their named built by
Unilever marketing strategy.
Supplier Power (Low)
The bargaining power of suppliers captures pressures that industry suppliers
can exert on an industry's, and therefore a company's, profitability
(Rothaermel,2013:154).

21
The key player in toothpaste industry in Indonesia has different way to handle
its supplier. GSK CH particularly in Sensodyne brand has no production in
Indonesia, means that every single product is coming from import. It different
with Unilever and Lion which has their own production, means that the
rivalry among supplier is high. In compete with GSK CH, Unilever and Lion
is not consider as the high rivalry in terms of supplying the ingredients.
Buyer Power (High)
The bargaining power of buyers concerns the pressure buyers can put on the
margins of producers in the industry, by demanding a lower price or higher
product quality‖ (Rothaermel,2013:151).
The market share of products GSK CH has covered almost all walks of life,
young and old and GSK CH products are trusted by all Indonesian people.
GSK CH are most preferred by consumers, among others Panadol (category
of wellness), Sensodyne, Polident (category Oral Care), Voltaren (category of
Topical Pain ), Scotts (category of nutrition), Actived (category of
respiratory). As the buyer are also the stakeholder it is important that the
company GSK CH need to Proactively listening to consumer needs, Always
actively seeking feedback, suggestions, and comments of stakeholders,
especially from the public in order to create the company's contribution more
effective, efficient, and well targeted.
Threat of Substitutes (Moderate)
The threat of substitutes is the idea that products or services available from
outside the given industry will come close to meeting the needs of current
customers‖ (Rothaermel, 2013:154).
Replacement products to GSK CH in oral care category that the products are
still made from natural materials. Nature such as herbal and without chemical
ingredients. It is important for the company GSK CH to convince consumers
that the ingredients used to make the product safe for consumption and does
not harm consumers. And always keep improving in the manufacture and

22
 marketing aspects that Unilever products are always available in all parts of
the countryside
Rivalry among competitors (High)
Rivalry among existing competitors describes the intensity with which
companies in an industry jockey for market share and profitability
(Rothaermel, 2013:154).
The most powerful competitor for GSK CH in terms of toothpaste industry is
Unilever by its brand Pepsodent. Pepsodent is the market leader with has
above 50% market share. In order to compete in sensitive category,
Sensodyne only look for PSE. Although PSE considered as new product for
sensitive category, with under brand of Pepsodent, PSE potentially becomes
the high threat for Sensodyne in the next following years.
2.4.2. Internal Analysis
Based on Barney, Jay B, and William Hesterly‘s book, strategic management and
competitive advantage: Concepts, states that the basic strategy process that any firm
goes through begins with a vision statement, and continues on through objectives,
internal & external analysis, strategic choices (both business-level and corporate
level), and strategic implementation (2005: 171-180). In order to define and assess
what are the internal factors from GSK CH, the author will use VRIO analysis.
2.4.2.1. VRIO Analysis
VRIO framework is A theoretical framework that explains and predicts firm-
level competitive advantage. A firm can gain a competitive advantage if it has
resources that are valuable (V), rare (R), and costly to imitate (I); the firm also
must organize (O) to capture the value of the resources. (Rothaermel,
2013:182).

23
 Figure 2.4. VRIO Framework
Resources are valuable when they enable a firm to conceive of or implement
strategies that improve its efficiency and effectiveness‖ (Barney, 1991:106).
Barney on his book stated that resources & capabilities possessed by a firm
can help it to exploit the opportunities and/or neutralize threats (Barney,
1991:106). In term of organizational resource, GSK CH has an effective
planning process especially in marketing division of Sensodyne which
categorized as lean organization. The limited human resources pushed the
employee to cooperate among other divisions. Financially, GSK CH has big
capital that enables it to employ several strategies as well as capable to
acquire tools or equipments that can promote effectiveness in operating its
business In term of organizational resource, not only PT WBI has quite
effective planning process that can lead to efficiency in a project but also good
evaluation and control system that allows PT WBI produce high quality
services.

A competitive advantage can be reached by a firm when a value-creating

strategy implemented by firm not implemented by other firms. By having rare
resources the strategy will be very different from other competitors because
the resource is unique and not possessed by most of competitors (Barney,
1991:106). Technology that is adapted by GSK is considered as rare because
many technologies that is adapted in Sensodyne product is customized to
24
specific ingredient. Innovation that is applied in several product is considered
as flat, this is due to GSK Competitor Unilever that has several variant of
product from many of category. Human capital and reputation is also
resources that are considered rare because human capital employed for GSK
CH to carry out its business should also have ample experience in specific
consumer healthcare sector while reputation for such GSK CH that is
specialized in pharmacist product is also very rare in Indonesia.

Rare in VRIO framework defines as a unique value owned by the company.

The company can only reach SCA if they have an rare organizational
resources. The more difficult and costly for other firm to obtain, develop, or
duplicate the resource or capability, the more sustainably success the company
will be because the competitive advantage will stay without being disrupted.
Financial resource is not costly to imitate resource due to many other
companies can easily get the resource from their investors especially for
related global consumer healthcare industry. This is interrelated with physical
resource where a company can imitate the resource because physical resource
such as buildings and other office assets are abundantly available.
Costly to imitate defines as a specific different resources and that cannot be
obtained by other company. Technological, Innovation, human capital and
reputation are resources that are very costly to imitate. Imitating specific
technology and innovation in engineering consulting industry is expensive
because it requires high technology and deep R&D. Human capital resource is
also very expensive to be imitated because not only it requires high-quality
engineer but also high-experienced engineers which are very limited in
number.
Exploited by organization on this part, the resources and/or capabilities of
GSK CH such as policies and procedures are tested whether or not they are all
well organized to support the exploitation of its valuable, rare and costly to
imitate resources. (Barney, 2008:71). By analyzing all VRIO variables , it can

25
 be concluded that only variant product is difficult to organize, the competition
in consumer goods market makes GSK CH need to be careful to launch and
exploit their new product in Indonesia due to medical and regulatory
assessment.
Table 2.2 GSK CH (Sensodyne) VRIO Summary

Intangible Valuable Rare Costly to Exploited by Implication for

Resources Immitate Organization Competitiveness
Brand Image Y Y Y Y SCA
R&D Y Y Y Y SCA
Human Y Y Y Y SCA
Resources
Skill
Tangible
Resources
Infrastructure Y Y Y Y SCA
Variant of Y T Y T Competitive
product Parity
Financial Y Y Y Y SCA
Performance
Distribution of Y Y Y Y SCA
product

A sustainable competitive advantage (SCA) happens when an organization

acquires or develops un duplicable or surpassable by the competitors. Few
attributes to achieve SCA is determined by successful of company‘s tangible
and intangible resources. Moreover Competitive Parity defines as a range
where you accomplish standard or normal outcomes as compared to others in
your industry. Some of company‘s resources results a failure action so that the
company should deliberate strategy to achieve standard result in particular
area. The table above shows that GSK CH has six (6) sustainable competitive
advantage and, and one (1) competitive parity. The SCA for GSK CH
includes:

26
 1. GSK CH‘s brand image
2. GSK CH‘s R&D
3. GSK CH‘s human resources skill
4. GSK CH‘s financial performance
5. GSK CH‘s infrastructure
6. GSK CH‘s distribution of product

This can be concluded that GSK CH need to be more focus on developing

their product and also the availability of new variant/product. The author will
conduct this internal weakness with TOWS matrix which explained in chapter
3 business solution.
2.4.3. Competitor Analysis
Bergen by the book of Competitor identification and competitor Analysis, defines that
strength and weaknesses measurement of current and potential competitors are the
important key by profiling the competitor. For more efficient and effective strategy
formulation, monitoring and adjustment output, it should have a right one framework.
(Bergen 2014). Sensodyne has three keys competitor in sensitive toothpaste category
that considered as the aggressive brand
2.4.3.1. Pepsodent Sensitive Expert (PSE)
Pepsodent Sensitive Expert comes with a combination of cutting-edge HAP
mineral technology to answer the need to reduce the pain, improve, and
prevent sensitive teeth. Pepsodent Sensitive Expert has four active
ingredients: potassium citrate, mineral HAP as a source of calcium, sodium
monofluorophosphate as a source of fluoride, and zinc to prevent gingivitis.
Unilever launches PSE in 2010 not only to reduce the pain, but also a
solution that can prevent these sensitive teeth coming back in the future

27
 Figure 2.5 Pepsodent Sensitive Expert Variant

TVC Digital/PR
 Interactive digital information on
 Educate people about DH & how website & social media
PSE works
 Introduce Pepsodent’s range of
Sensitive Expert products
(including TB & MW)

Figure 2.6 Pepsodent Sensitive Expert Campaign

2.4.3.3 Systema
Using Japan‘s advanced dental technology, Systema Sensitive Toothpaste
provides sensitivity relief and long lasting Triple Impact Protection for
sensitive gums and teeth. In Indonesia Lion introduces Systema Sensitive in
2016 and comes up with two variant: Systema Sensitive Whitening and
Systema Pro Sensitive. The strengths of Systema Sensitive Toothpaste comes
with triple impact Protection for healthy gums, healthy teeth and long-lasting
protection.

28
 Figure 2.7 Systema variants

2.4.4. Competitor Analysis Summary

From the comparison, Sensodyne still wins in most sensitive category,
especially in terms of market share. But to survive in current toothpaste
industry with regular category, Sensodyne need to prepare several strategies.
For much further detail, author will give the toothpaste comparisons and
compare data taken from internal GSK it.
Table 2.3. Summary competitor analysis
Toothpaste Analysis Competitor Summary
Market Price Product Promotion Place Packaging
Share (IDR)
(2016)
Sensodyne 6.5 22.500- All TV, Minimarket Premium
33.500 sensodyne Digital, ,Hypermar white,
variant In-store ket&Super science
Visibility, market, vizualization,
Activation Pharmacy updated
, typography
Expert,
Pepsodent 2.2 25.700 All PSE TV, Minimarket Visualization
Sensitive Expert variant Digital, ,Hypermar suggesting
(PSE) In-store ket&Super protection for
Visibility, market, sensitive

29
 Expert Pharmacy teeth
as well as
protection for
gum

Systema 0.7 19.000 Systema TV, In- Hypermark Dental root

Sensitive store et&Superm and science
whitening Visibility, arket, based
& Systema activation Minimarket technology
Pro visualization
Sensitive

PSE is kind of product extension under Pepsodent brand. In year of 2016 PSE
has 23% of market share and set the premium price higher than Pepsodent
Basic. PSE has an aggressive promotion through digital and TVC and placed
in the same store with regular Pepsodent toothpaste. In the same year PSE
generates direct attack to Sensodyne by making a semi clone digital
advertisement on youtube with the same of theme of Sensodyne ads. This
situation is considered as an offensive way to distract Sensodyne shares.
Therefore Sensodyne takes several law way to conduct this case by its
regulatory team, but Pepsodent wins the court and free with all its charges.

Figure 2.8 PSE controversial digital ads

30
Lion also introduces its new product, Systema. By having two variants,
Systema Whitening Sensitive, and Systema Pro Sensitive, this product enter
the market segment with market share 0.7 in 2016. This product becomes a
threat for Sensodyne and also PSE through its continually promotion such as
TVC and events. For availability Systema can be found at only at Minimarket
and Hyper/supermarket.

31
 CHAPTER 3
BUSINESS SOLUTION
3.1. Research Result
The author use two kind of research studies: Quantitative and Qualitative to formulate
business. The quantitative is used for determines the external data of this research,
The author uses electronic and manual method of questionnaire questionnaire in some
area includes Jabodetabek and outside Jabodetabek. To make more deeply
understanding about external data, the author also conduct a small Focus Group
Discussion to support this external data. Further, the author also did qualitative
approach by doing in depth interview with Brand Manager and Assistant Brand
Manager and Assistant Brand Manager of Oral Care Category GlaxoSmithKline
Consumer Health Care Indonesia. specific question Author also used experiential and
face-to-face interview.
3.1.1. Questionnaire Results
The author use electronic questionnaire through 200 consumer who lived in
Jabodetabek Area. In this research Slovin‘s formula the author also set margin
error in 10% and confidence level in 95%.

Figure 3.1. Slovin‘s Formula (1960)

32
 The minimum sample from this research generates 200 respondents from total
respondent and population size
3.1.1.1 Demographic
 Domicile
The result shows that following areas are the main contributor from the
consumer living perspective

Sensodyne User based on Domicile

DKI
24% 20%
Solo & Semarang
Yogyakarta
19% 21%
Malang
16% Bandung & Bogor

Figure 3.2. Domicile of Sensodyne User

PSE User based on Domicile

DKI
24% Solo & Semarang
Yogyakarta
4% 53%
Malang
7% 12%
Bandung & Bogor

Figure 3.3. Domicile of PSE User

The data above shows that the majority of respondents comes from other
Jabodetabek, following by DKI Jakarta, Bogor, Depok, Bekasi and Tangerang
at the bottom list.
 Age and Gender

33
Based on the result from 258 total respondents are listed below according to
age and gender.
Table 3.1 Age and Gender
Category Total (Number) Total (%)
Age
 <20 yo 12 4.7%
 20-25yo 226 56.7%
 25-35yo 14 5.4%

 >35yo 6 2.3%

Gender:
 Male 94 36.4%
 Female 164 63.6%

Figure 3.4. Age

34
 Figure 3.5 Gender
From these factors, author can conclude that respondents are dominated by
female gender and age range 20-25yo (which is the age that Sensodyne
targeted).
 Income
The income data is used for tracking the Status Social & Economic the
consumer.

Figure 3.6 Income

Data shown above that 40.3% of the respondents has the income of
Rp.1000.000- Rp.3.500.000, The author conclude that the most of the
consumer is youth people.

35
3.1.1.2 Basic marketing mix element
The marketing mix has been defined as the set of marketing tools that the firm
uses to pursue its marketing objectives in the target market. Thus the
marketing mix refers to four broad levels of marketing decision,
namely: product, price, promotion, and place. (Kotler, 2009)
 Product
Based on Sumarni and Soeprihanto (2010:274), Product is anything that can
be offered to the market that can get attention, demand, can be used, or
consumption that can fulfill wants and needs. Sensodyne has to focus on its
product quality and services, this is due to fulfill consumer satisfaction
instead of their needs. The questionnaire has three top brand of toothpaste
industry in Indonesia, including Pepsodent, Sensodyne, and Close Up. The
author also add the valuable reason for consumer choices. The reason
includes, basic ingredients, affordable price, family choices and other reasons.

User Classification
Sensodyne PSE Close Up Other

4%

6%

28%
62%

Figure 3.7 brand user classification

Table 3.2 Percentage of toothpaste brand user
Product TOTAL (%) TOTAL (Number)
Pepsodent 59.7% 154
Sensodyne 14.3% 37

Close Up 14.3% 37

36
Other 11.6% 30

Figure 3.8 Reason for the choice

Table 3.3 Percentage of choosing the brand
Reason TOTAL (%) TOTAL (Number)
Ingredients 19.4% 50
Affordable price 11.6% 30

Family choices 54.7% 141

Other 14.3% 37

Data shown that Pepsodent has 59.7% and still the leader of toothpaste
industry in Indonesia, it also related with its top of market share data that
already shown in GSK CH internal data. Close up and Sensodyne has the
same position about 14.3%, it is indicated that the target market from both
brands is youth segment. While Other brands shows 11.6% of the total data.
Most of the respondents are enjoyed the the toothpaste because of its family
choices, it is shown from 54.7% from respondents following by the
ingredients about 19.4%, other reason 14.3% and the price 11.6%.
 Price

37
Price refers to decisions surrounding "list pricing, discount pricing, special
offer pricing, credit payment or credit terms". Price refers to the total cost to
customer to acquire the product, and may involve both monetary and
psychological costs such as the time and effort expended in acquisition
(Blythe, Jim 2009).
From figure shown above price has the bottom reason for consumer buying
pattern, it is only about 11.6%. It indicates that consumer is not concern to the
price in terms of choosing a toothpaste.
 Place
Place is defined as the "direct or indirect channels to market, geographical
distribution, territorial coverage, retail outlet, market location, catalogues,
inventory, logistics and order fulfillment". Place refers either to the physical
location where a business carries out business or the distribution channels
used to reach markets. Place may refer to a retail outlet, but increasingly refers
to virtual stores such as "a mail order catalogue, a telephone call centre or a
website. (Blythe, Jim 2009). The author conduct with three top choice
includes, Hyper/Supermarket, Minimarket, General drug store.

Figure 3.9 Place to buy toohpaste

Table 3.4 Percentage place to buy toothpaste
Name Place TOTAL (%) TOTAL (Number)
Hyper/Supermarket 48.4% 125

38
 Minimarket 38.8% 100

General drugstore 8.1% 21

Other 4.7% 12

Data shown that Hyper/Supermarket is the main contributor from the

questionnaire. It has 48.4% and be followed by Minimarket 38.8%, General
drugstore 8.1% and other 4.7%.
 Promotion
Promotion refers to "the marketing communication used to make the offer
known to potential customers and persuade them to investigate it further
(Blythe, Jim 2009). The author conduct several choices of promotion way
includes digital and printed Ad, Event, Friends, Family and others.

Figure 3.10 Brand exposure

From the data above shown that Advertisement is the essential promotion for
the consumer choosing the toothpaste. It has 80.6% of the data, followed by
Event 8.9%, Friend 12%, Family 51.2%, Other 6.6%.
3.1.1.3. Consumer Behaviour
Consumer behaviour is the study of individuals, groups, or organizations and
the processes they use to select, secure, use, and dispose of products, services,
experiences, or ideas to satisfy their needs and wants. It is also concerned with
the social and economic impacts that purchasing and consumption behaviour
has on both the consumer and wider society (Kuester, Sabine 2012).

39
 Times for Toothbrushing
Data shown below is the respondents daily toothbrushing activity in per day.

Figure 3.11 Time for toothbrushing

From the Data shown above the author concludes that suitable toothbrushing
activity is two times per day as it mentioned about 69.4% of whole
respondents, followed by three times per day and one time per day.
 Size (SKU)
Following data is about the size of toothpaste that market offer to the
consumer. The choices includes, 10-50gr (small size), 50-130gr (normal size),
130-190(big size), and above 190gr (jumbo size).

Figure 3.12 Size

The author concludes that 55% respondents enjoy in normal size, while 38.4%
choose big size and followed by small size 4.7% and jumbo size 1.9%.

40
3.1.1.4. Buying/Purchasing power
As data served above, the author concludes that 69.8% respondents choose
normal size of toothpaste one among the other size.
Table 3.5 Percentage of purchasing power
Toothpaste Buying Power SKU (gr) TOTAL (%) TOTAL (Number)
per SKU (IDR)
5.000-10.000 10-50 68.2 176
10.000-20.000 50-130 69.8 180

20.000-30.00 130-190 54.3 140

>30.000 >130 50 129

Figure 3.13 Purchasing power

3.1.1.6. General Business Strategy for Toothpaste Industry Surveys

In this session the author comes up with two main options taken from Porter‘s
Generic Strategy. The respondents must choice between differentiation
strategy or Cost leadership strategy and it is compared with Pepsodent
Sensitive Expert (PSE) as the main competitor. The result will be able to
analyze as the primary data for author.
 Cost Leadership
The author breaks down cost leadership based on Porter‘s generic strategy
into three variables including quality, Economic of scope, and Firms
structure/culture.

41
  Differentiation
In this session the author conducts the questionnaire about for differentiation
strategy. For this strategy authors has four variables to be tested. They are
product feature, customer service, customization, complements.
Table 3.6 Likert Scale of General Business Strategy Surveys
Cost Leadership
Not All Satisfied Not Satisfied Satisfied Very Satisfied Avg
Quality 1 9 41 16 3.07
price 6 36 22 3 2.33
company operation 3 20 36 8 2.73
2.71

Differentiation
Not All Satisfied Not Satisfied Satisfied Very Satisfied Avg
ingredients 1 9 38 19 3.12
customer services 1 21 36 9 2.79
variants 2 16 36 13 2.90
complementary products 3 20 33 11 2.78
2.90

Based on table above the author concludes that Sensodyne is not ready yet to
implement Cost Leadership strategy. The respondent prefers to take the
innovation for Sensodyne toothpaste and should keep the current
differentiation strategy and develop plans from it. Several plans will be
conducted after doing the SWOT analysis and TOWS matrix as a tools
3.1.2. Questionnaire Summary Results
After the author did questionnaire for quantitative research method, author
find some interesting findings that already describe in previous sub-sections.
From all respondents 258 electronic questionnaires author summarize the
answers below:
Table 3.7 Questionnaire summary result
CRITERIA RESULTS
Target  All Gender
Segmentation  SES Middle
 18-25 years old

42
  Lived in Jabodetabek and also outside Jabodetabek.
 Outside Jabodetabek is opportunity for Sensodyne
Behavior &  Pepsodent is most favorite brand for respondents
Marketing  Respondents Do toothpasting 2 times a day
Mix  Normal size (50-100gr) is favorite size of tothpaste
 (IDR) 10.000-20.000 is favorite price in normal size
 Ingredients is the most important in choosing a toothpaste
 Hypermarket/Supermarket is the favorite place to buy
 Digital and Printed Ads is the effective way to attract the brand
Cost  Sensodyne is not ready yet compete with cost leadership due to
leadership in have higher price in Indonesia market
industry
toothpaste
Differentiate  Quality of sensodyne well known than PSE
product  Sensodyne variant is more than PSE variant
 Pepsodent has best customer service, but PSE has not shown yet.
 Sensodyne Mouthwash is more favorite than Pepsodent‘s
Local  Up to 50% total respondents are well known with Sensodyne
Awareness brand
Cost position  Very tight competition with the main competitor PSE

3.1.3. Interview Summary Results

For qualitative approach, author did face-to-face interview with 2 respondents
from internal GSK CH to help author formulate internal and external analysis and
strengthen the proposed business strategy. The respondents are the current GSK
Brand Manager of Oral & Skin Category Indonesia and its Assistant Brand
Manager. Ricky Januar & Ratu Nida Farihah.
Table 3.8 In Depth Criteria Respondent
RESPONDENTS PROFILE
Brand Manager  Promoted as Brand Manager since January 2017
OH & Skin GSK  Start in Future Leader Program GSK CH in 2015 work in
Indonesia overseas division including Trade Marketing, Supply Chain, &
(Ricky Januar)

43
 Trade Marketing
 25 years old
 Graduated from Industrial Engineering ITB in 2014
 Become an expert team for GSK CH for 3 months
 Best future leader 2015

Assistant Brand  Start in Future Leader Program GSK CH in 2016.

Manager OH &  Expert in below the line job and projects
Skin GSK  Graduated from pharmacy Unpad 2015
Indonesia  24 years old
(Ratu Nida F)

Author discovered some interesting insights along the meeting with internal
GSK CH. Despite the fact that, there was some secret data that they couldn't
give, the author still got what the requirement in formulating business strategy
for GSK CH. The meeting result shows that external and internal variable are
imperative for making a legitimate business strategy for Sensodyne. The
respondents said that innovation is the best qualities for Sensodyne to create
the strong brand image. With combination of external and internal analysis in
toothpaste industry, Sensodyne can begin to tap in more extensive section as
Pepsodent and leads the market on the following 5-10 years.

Table 3.9 In Depth Interview Result

CRITERIA RESULTS
External  Technology comes from company GSK CH become the big opportunity for
analysis Sensodyne development
 1 of 3 people Indonesia has a sensitive teeth problem
 Sensodyne pricing in Indonesia lower than other countries
 Recently, regulatory from Ministry of Health Indonesia has confirmed that using
‗sensitive‘ word is undervision
Industrial  Toothpaste is a secondary necessity for Indonesian people

44
Analysis  Target market for GSK CH & Sensodyne is try to aim basic toothpaste
 Therapeutic toothpaste is an alternative choice for Indonesia people
 Sensodyne currently plays in sensitive & therapeutic market
Competitor  Focus Sensodyne still in sensitive and has not try to compete in basic toothpaste
Comparison category
from  50% People in Indonesia is seldom to visit dental care and do dental check.
Sensodyne  Pepsodent is often to create a free dental check
Insights  Pepsodent has brand equity for family based
 Pepsodent focus in basic category, Sensodyne leads in sensitive category
 Pepsodent launchs PSE in order to compete in sensitive category
Internal  GSK has strong R&D
analysis  GSK CH core value: respect for people, transparancey, integrity, patience focus
 Lean organization in fast moving industry
 Complex administration system
 Good at infrastructure and IT for supporting daily work
 Human capital is well selected

3.1.4. FGD Results

Author also do focus group discussion with 12 respondents from Sensodyne
loyal customers in order to help author by giving deeper external analysis.
The author conduct this FGD with the help from IPSOS Indonesia as a
research specialist consultant for GSK CH. For information, author did this
FGD because Below is the respondent general profile:
Table 3.10 FGD criteria
CRITERIA DESCRIPTION
Age Youth segment: 12-35years old, divided into two categories:
 College student: 18-25 years old
 Workers: 26-35 years old
 Lived in Jaboedetabek
Gender Male and female
Sensodyne Sensodyne user with different criteria:
User  Sensodyne loyalist (use Sensodyne more than 1 year)

45
  Therapy for sensitive teeth
Behavior  Aware with Sensitive teeth
 Aware with price,ads, and place to buy it
 Comparing with pepsodent brand especially PSE

Author and IPSOS Indonesia is working together to do the FGD and divide it
into two segments. To arranging the FGD, author made FGD timeline for
GSK CH team and IPSOS Indonesia, so the FGD preparation and execution
went well. Below is the following activities and timeline to prepare the FGD.
Table 3.11 FGD timeline activity

ACTIVITIES DATE
Preparation 24 Sept – 1 Oct 2016
Fieldworks FGD 4 – 7 Oct 2016
Report Analysis 1 Nov 2016

After do the FGD, author and IPSOS Indonesia found some interesting facts
from the participants is very well known with sensodyne toothpaste. The
participants were not only giving some critics but also some suggestions for
Sensodyne to improve and expand its business. Author divided the FGD
results into two categories: Brand measure and Global Expansion. Each
categories divided into two: Sensodyne and Competitor (In this case: PSE as
the main competitor)
Table 3.12 FGD result
CRITERIA RESULTS
Sensodyne  Sensodyne basic (fresh mint and cool gel) is the favorite
Brand variant
Measurement  Sensodyne is well known as therapy for sensitive teeth
 The price still too expensive
 Sensodyne has an elegant and simple packaging
 Sensodyne Repair and Protect has a new hype in youth
segment
 Respondents waiting new variants after Sensodyne Repair

46
 and Protect
Competitor’s  Affordable price for PSE
Brand  PSE is not favorite variant compare to Pepsodent Basic
Measurement (Pepsodent Gigi Berlubang, Pepsodent Aksi 123)
(PSE)  Has more attractive package
 Curious about the result for curing sensitiveness
Sensodyne  Respondents more to know the all product except toothpaste
Global  Respondent consider has premium price for Sensodyne
Expansion  South East Asia is the choice for Sensodyne expansion

.
3.1.5. Triangulation of the Research Result
Author utilize triangulation methods to look at the consistency of findings
produced by various information as above. Triangulation method is aligning
qualitative and quantitative data in a study, elucidate complementary aspects
of the same phenomenon, and often the points were these data diverge are of
great interest to the author and provide some insights (Patton, 1999). Data
triangulation implies the accumulation of records from various respondent in a
prescribed setting, from various stages in the activities of the setting, and if
fitting, from various sites of setting (Banister, Burman, Parker, Taylor &
Tindall, 1994:146).

Table 3.13 Triangulation Result

CRITERIA QUESTIONNAIRE FGD Interview
Target Segmentation  All Gender Youth segment: 12-  Youth
 SES Middle 35years old, divided into segment 18-
 18-25 years old two categories: 25 years old
 Lived in Jabodetabek and also  College student:  Non-
outside Jabodetabek. 18-25 years old sensitive
 Outside Jabodetabek is  Workers: 26-35 teeth is the
opportunity for Sensodyne years old next target

 Sensodyne user  Lived in

Jaboedetabek

47
Customer Behavior  Pepsodent is most favorite  Sensodyne basic  1-3 people of
brand for respondents (fresh mint and cool Indonesia has
 Respondents Do toothpasting gel) is the favorite sensitive teeth
2 times a day variant  50%
 Normal size (50-100gr) is  Sensodyne is well Indonesian
favorite size of toothpaste known as therapy people seldom
 (IDR) 10.000-20.000 is for sensitive teeth to visit dental
favorite price in normal size  The price still too care
 Ingredients is the most expensive
important in choosing a Sensodyne has an elegant
toothpaste and simple packaging
 Hypermarket/Supermarket is
the favorite place to buy
 Digital and Printed Ads is the
effective way to attract the
brand
Cost Leadership  Sensodyne is not ready yet compete  The price still too  Premium
with cost leadership due to have expensive product and
higher price in Indonesia market  Affordable price for classified as
PSE therapeutical
toothpaste.
 Other brand
launchs
therapeutic
toothpaste
Differentiate product  Quality of sensodyne well  Respondents  GSK CH
known than PSE waiting new value:
 Sensodyne variant is more variants after respect for
than PSE variant Sensodyne people,
 Pepsodent has best customer Repair and transparanc
service, but PSE has not Protect y, integrity,
shown yet.  Sensodyne and
 Sensodyne Mouthwash is Repair and patience
more favorite than Protect has a focus
Pepsodent‘s new hype in  Science

48
 youth segment based
 Sensodyne is technology,
well known as and
therapy for innovation
sensitive teeth on
marketing
activity

The author can have a conclusion after completing all the result from
quantitative and qualitative data by triangulation method. All the conclusion
gathered by doing a cross checking between Questionnaire result, FGD result
and Interview result and comes a several categories that will be conduct in
business solution chapters
1. Target segments
2. Customer behavior
3. Key resources and Key Activities
4. Differentiate Product
All the result comes from quantitative and qualitative expresses the similar
conclusions. It means that the data and information that assembled by author
were completing and proven to be comprehensive with each other. It shown
that all the method is comes from comparative analysis which each
interpretation become inconsistence and contradict with each other.
3.2. Business Strategy Formulation
On this part, the author will conduct a framework to formulate the strategy by
making a proper SWOT analysis, TOWS matrix and Porter Generic Strategy.
After that, the conclusion of the analysis will be put in a frame of Indirect
Attack Strategy: Flank Strategy and Proposed Business Model Canvas.
3.2.1. SWOT Analysis
SWOT analysis helps the author to determine the Internal and External
environment by the combination of analysis result. All of Strengths and

49
Weakneses comes from internal environment analysis, while Opportunities
and Threats comes from external environment analysis.

 Strength
1) Sensodyne is Market Leader in Sensitive category of Toothpaste
2) Sensodyne has proven clinically as therapeutic, science based toothpaste
3) Sensodyne categorized one of the premium toothpaste brand in
Indonesia
4) Sensodyne toothpaste has ten variants more than all sensitive toothpaste
 Weaknesses
1) Easy to imitate by other competitor in terms of ingredients
2) Some of the variants of toothpaste and Sensodyne product extension
has not introduced yet in Indonesia due to have medical, regulatory,
and legal check
3) Some products and services are not active due to promotion budget and
weak market penetration and education.
4) Sensodyne is not fully supported by Indonesian Dentist Community
(PDGI), this is due to Unilever has been signed to PDGI contract for
fifteen years
 Opportunity
1) Consumer trend in choosing product based on several factors: organic,
natural, and eco-friendly.
2) E-commerce becomes the hype trend in the way how consumer buy
the product
3) Urban city such in outside DKI in Java is big opportunity for
Sensodyne to grow the market
 Threat
1) Pepsodent brand has the biggest share in Indonesia toothpaste
2) Pepsodent has claimed PDGI (Persatuan Dokter Gigi Indonesia) as its
partner for fifteen years

50
 3) High competition between competitors in sensitive toothpaste category
4) Some new brands penetrates market with therapeutic toothpaste

3.2.2. TOWS Matrix

TOWS matrix is used to develop alternative strategies which can be
implemented. In formulating strategic planning, This matrix also illustrates
how the external opportunities and the threats facing The Company which can
be matched with the Company‘s internal strength and weakness (Whellen &
Hunger 2006:144)
There are four main conceptual distinct alternative strategies, tactics and
actions that are produced by analyze with TOWS Matrix includes:
The WT Strategy (mini-mini). This strategy obtain to minimize company‘s
weakness and avoid the threats.
The WO Strategy (mini-maxi). WO strategies defines to minimize
company‘s weaknesses and to maximize the opportunities.
The ST Strategy (maxi-mini). The ST strategy is used from company‘s
strentgh to deal with threats in the environment and it should be wised to
implement this strategy.
The SO Strategy (maxi-maxi). This strategy optimally maximize both
strength and company‘s opportunity To maximize both, strengths and in order
to have a position where it can .
Table 3.14 Sensodyne TOWS Matrix

INTERNAL STRENGTHS (S) WEAKNESSES (W)

FACTORS 1. Market Leader in 1. Easy to be imitated of sensitive
toothpaste sensitive toothpaste
category 2. Some inactive products and
2. Product with Science b variants due to budget
ased technology 3. Perceived as most expensive
3. Well known as toothpaste brand
premium brand 4.Some variants is stucked by
4. Lots of variants Indonesia regulatory, medical
compare to other and Legal
EXTERNAL competitor 5.Not highly supported by dentist
FACTORS 5. Has the highest budget community Indonesia (PDGI).

51
 injection for marketing
strategy among other
GSK CH products

OPPORTUNITIES (O) SO STRATEGY WO STRATEGY

1.Penetration new segment MAXI-MAXI MINI MAXY
of sensitive in urban  (S1S3S5-O1O3)  (W1-O1O3)
areas Focus on develop Build a particular marketing
2.Consumer trend awareness in urban city strategy to defend the current
choosing Eco friendly in Indonesia segments.
product  (S2S4-O2O3)  (W2W4-O3)
3.High market demand for Develop new variant or Build a proper workflow and timeline
sensitive toothpaste product extension from for upcoming product/variants of
Sensodyne brand in Sensodyne
Indonesia
THREATS (T) ST STRATEGY WT STRATEGY
1.Brand of Pepsodent has MAXI-MINI MINI-MINI
the biggest share in  (S1S3S5-T1T2)  (W1W3W5-T1T2T3T4)
Indonesia toothpaste Keep moving one step Provide premium value customer
industry ahead from PSE by service
2. High competition making proper marketing
between competitors strategy, so that
especially in sensitive Pepsodent not taking over
category toothpaste sensitive category shares
3. New brand with  (S1S2S3-T2T4)
therapeutic toothpaste Partner with other
4.Pepsodent partnered with expertise besides dental
PDGI doctor, could be scientist
or even student
community
 (S1S4S5-T2T3)
Focus on media
engagement to strengthen
Sensodyne brand position
According to the analysis from TOWS matrix, 8 strategies have been
generated, they are:

52
 1. Focus on develop awareness in urban city in Indonesia
2. Develop new variant or product extension from Sensodyne brand in Indonesia
(Maxi-Maxi)
3. Build a particular marketing strategy to catch a specific areas: urban city in
Java island
4. Build a proper workflow and timeline for upcoming product/variants of
Sensodyne (Mini-Maxi).
5. Keep moving one step ahead from PSE by making proper marketing strategy,
so that Pepsodent not taking over sensitive category shares (Maxi-Mini)
6. Partner with other expertise besides dental doctor, could be scientist or even
student community (Maxi-Mini)
7. Focus on media engagement to strengthen Sensodyne brand position
8. Provide premium value customer service (Mini-Mini)

3.2.3. Porter’s Generic Strategy

In a firm's business-level strategy, a strategic position is determined where a
firm‘s strategic profile is based on value creation and cost—in a specific
product market. (Rothaermel, 2012). In his book, Competitive Strategy, Porter
explained a strategy concept called ―Three Generic Strategies‖. It is explained
that in order to be able to be competitive, a company must only choose
strategy: cost leadership, differentiation or focus. (Porter, 1980: 66)
According to the Porter‘s Generic Strategy, Sensodyne brand current generic
strategy can be classified as ―focus differentiation strategy‖.

53
3.2.1.1 Current Sensodyne Strategy

STRATEGIC ANDVANTAGE

Uniqueness
perceived by Low cost position
customer
CURRENT STRATEGY

DIFFERENTIATION
Industrywide COST
LEADERSHIP

FOCUS
FOCUS FOCUS COST
Particular
DIFFERENTIATION LEADERSHIP
segment only

Figure 3.14 Current Sensodyne Business Strategy

Regarding to in depth interview with Sensodyne‘s brand manager,
Sensodyne is positioned as therapeutic toothpaste which still aim the
sensitive market. Sensodyne introduces in Indonesia perceived as
medical use, this reason makes the brand image for Sensodyne is
clinically used for medical therapy.
Currently Sensodyne become the market leader in sensitive category,
but the aggressivity from PSE pushes Sensodyne to develop the
business.
3.3. Indirect Offensive Strategy
The company engages attack strategy to enhance their own position by taking
market share away from its competitor. To attack big company such
Pepsodent, the possible strategy for sensodyne is indirect attacks. Indirect
attack strategy is difficult to detect, particularly in targeting non-core segment
or product.

54
 The author conducts offensive strategy in order to have a counter attack of
PSE in the part of digital advertisement. In this section author only use one
method from part of offensive strategy.
 Flanking Attack Strategy
Flank marketing strategy defines as strategy that capture the market by
targeting competitors weak spots. Flanking attack strategy is proposed to use
for Sensodyne to attack Pepsodent in PSE channel distribution. Currently PSE
has minor share in market of sensitive, and small penetration outside
Jabodetabek, while Sensodyne shows big number of opportunity in several
urban city in Indonesia.
PSE VS Sensodyne
By data served on figure 3.2 and 3.3 above, PSE has a strong weakness in
terms of user classification. This might be a problem of PSE distribution and
less known marketing strategy on those area. Meanwhile, Sensodyne is
already well known on several urban city especially in Java Island. When PSE
offer poor service on that areas, flanking firms could tap on this opportunity
by offering the best services. Sensodyne using this strategy should very
carefully escape from detection of PSE to avoid the retaliation. This is due to
Sensodyne only focus on particular segment which is A and A+ segments.

55
 Sensodyne PSE Consumer
Frontal Strategy

Flank Strategy
Flank Strategy

Figure 3.15 Flank Strategy Frame for Sensodyne

3.4. Business Model Analysis

By using business model canvas, the current business model of Sensodyne Product
can be mapped based on the information derived from the company. Moreover,
proposed business model for Sensodyne will be generated from business model
canvas by analyzing both current business model and other information derived from:
questionnaire result, TOWS matrix, the five major element strategy and generic
competitive strategies.
Table 3.15 Current Sensodyne Business Model

Key Partners Key Activities Value Customer Customer

 Local &  Distribution Proposition Relationships Segments
National  Sell through  Science  Annual  Young
Media Partner Sales based Event professional
 Universities Division toothpaste  On ground 20-30 y.o
 Agencies&  Marketing  Clinically Chill test  Sensitive
Consultant activity relieve the  Sponsorshi teeth
pain p problem
caused by  SES A, A+
sensitive
teeth

56
 Key Resources  Number 1 Channels
 Employee sales on  General
 Technology sensitive Trade
 R&D category  Modern
toothpaste Trade
in
Indonesia

Cost Structure Revenue Streams

 Marketing Activity  Sales
 Trade Marketing Activity  Incremental Sales
 Logistic and QA Activity

3.4.1. Existing Business Model Canvas

 Value proposition
“The Value Propositions Building Block describes the bundle of products
and services that create value for a specific Customer Segment. The Value
Proposition is the reason why customers turn to one company over
another” (Osterwalder & Pigneur, 2010:22).

The value propositions that are offered by Sensodyne products: Science

based toothpaste, Clinically relieve the pain caused by sensitive teeth,
Number one sales on sensitive category toothpaste in Indonesia.
Sensodyne product offers the high quality of toothpaste and it has
production outside Indonesia. It is manufactured from Philippine and
exported to Indonesia in unpacking formed. Then Q&A division makes
sure that the products are well sorted to be distributed by sales team.
 Customer Segment
“An organization must make a conscious decision about which segments
to serve and which, segments to ignore. A business model may define one

57
 or several large or small customer segments”. (Osterwalder & Pigneur,
2010:20).
Based on current business model, Sensodyne customer segment is
Consumer itself with criteria of 20-30 years old, Economic Social Status
rated A and A+, and most of them have problem with sensitive teeth. This
data also strengthen by research questionnaire.
 Channels
“The Channels Building Block describes how a company communicates
with and reaches its Customer Segments to deliver a Value Proposition.
Channels are customer touch points that play an important role in the
customer experience.” (Osterwalder & Pigneur, 2010: 26).
According to Osterwalder & Pigneur, channels serve several functions
which are raising awareness among customers about a company‘s
products and services, helping customers evaluate a company‘s value
proposition, allowing customers to purchase specific products and
services, delivering a value proposition to customers and providing post-
purchase customer support (Osterwalder & Pigneur, 2010: 26). In term of
channels, Sensodyne has two main channels category: General Trade &
Modern Trade.
General Trade classified as basic retail mall scale business targeting the
consumers who do the day to day purchases in small quantity. Sensodyne
plays role in some general trade Small stores & Drug store at traditional
market.
Modern trade refers to a full range of sale methods based on marketing
techniques: for instance in self-service shops you have no more sales
attendants behind a counter. The more expensive goods will be ready at
hand whereas you'll have to bend to reach good with less added value for
the store. Sensodyne taps in some of Modern trade in Indonesia, named as
Hyper/Supermarket and Minimarket.
 Customer relationship
58
 According to Osterwalder & Pigneur, “the customer relationships
building block explains about the types of relationships established
between company and customer segments Osterwalder & Pigneur, 2010:
28). A company is suggested to clarify the type of relationship that it
wants to establish with each Customer Segment. Customer acquisition,
customer retention, and boosting sales are the motivation drivers for
customer relationships.” (Osterwalder & Pigneur, 2010:28).
In order to be able to stay connected with its customers, marketing team of
Sensodyne has an intensive approach to its customer. An annual event has
been implemented from 2015 named as ―BigBang‖. The goal is making
customer closer to the product and the ending of this event company gives
the several prizes including free holiday. To satisfied the customer,
company also gives the experience through ―chill test‖. It is a test for
customer to check her/his sensitive teeth by drinking cold ice water.
Sensodyne also introduces its brand by giving sponsorship for
communities or universities.
 Key Resource
“The key resources building block describes the most important assets
required to make a business model work” (Osterwalder & Pigneur,
2010:34).Furthermore Osterwaler & Pigneur explains: “These resources
allow an enterprise to create and offer a value proposition, reach markets,
maintain relationships with customer segments, and earn
revenues”(Osterwalder & Pigneur, 2010:34).
Sensodyne Key resources is on the: employee power, the power of brand
marketing manager is on the marketing brand and its brand owner. So the
brand owner has to be capable and have sufficient staff to handle those of
works load. Besides employee power, one of Sensodyne strengths is about
its technology, the technology leads sensodyne through current
innovation. For the latest one is ―Novamin effect‖ on Sensodyne Repair

59
 and Protect. The effect not only cure the sensitive teeth but also can repair
the damage teeth.
 Key Activities
“Based on business model generation book that is created by Osterwalder
and Pigneur, the key activities building block describes the most
important things a company must do to make its business model work Key
activities are very important actions for a company must operate
successfully in order to create and offer a value proposition, reach
markets, maintain customer relationships, and earn revenues“
(Osterwalder & Pigneur, 2010:36).
Several activities are done by GSK CH through one of its brand,
Sensodyne. They are including: Distribution, Sales in, and Marketing
activity. Distribution activity covers the activity that involve the division
of logistic inbound and outbdond from GSK sites. Sales in is the next
activity that involve our channel to distribute the products to the end
consumers. Besides supply chain process, there is also marketing and
trade marketing activites of sensodyne that also involve to get the
increasing growth by making an product awareness.
 Key Partners
“The Key Partnerships Building Block describes the network of suppliers
and partners that make the business model work . Partnerships are made
for many reasons for instance: companies create alliances to develop their
business models, reduce risk, or acquire resources. (Osterwalder &
Pigneur, 2010:38).
In terms of partnership, Sensodyne has partnered with several parties in
several types of partnership for several reasons. The details of partnership
of Sensodyne are:
1. Local & National Media Partner
Local and national media are the partner that help all sensodyne
campaign through its Public Relation activity such as launching

60
 product, competitor monitoring, press release, press conference.
The output from partnering media is a PR value and awareness for
brand Sensodyne.
2. Universities
Some of Sensodyne on ground activation requires a dental checker
for checking mouth problem, Sensodyne involves a final grade of
dental faculty student or a fresh graduate from Universities across
Indonesia.
3. Agencies & Consultant
For marketing activity, Sensodyne has several agencies &
consultant that help the message well received to the consumer.
Some of agencies are PR, media investment, IT, on ground
activation/event

 Cost Structure
“The cost structure describes all costs incurred to operate a business
model. According to Osterwalder and Pigneur. There are four
characteristics of cost structures, they are fixed costs, Variable costs,
Economic of Scale and Economic of Scope” (Osterwalder & Pigneur,
2010:46).
The activity that requires cost for Sensodyne are Marketing activity, trade
marketing activity and Logistic and QA Activity. Those are activity
classified as variable cost. Meanwhile the fixed cost is under GSK CH
budget.
 Revenue Stream
“The revenue streams building block constitutes the cash a company
derived from each customer segment. The earning can be generated by
subtracting revenue by cost.” (Osterwalder & Pigneur, 2010:30).
The revenue comes to Sensodyne only have two ways. First, the revenue
comes from Sales that generated from sales division through modern and

61
 general trade and also incremental sales, sales that generated only from
marketing activity.
3.4.2. Proposed Business Model Canvas
The proposed business model is designed to expand the SCA of Sensodyne by
having analyzed the result of research survey, TOWS matrix, the five major
element strategy and Porter‘s three generic strategies and also supported
through business model analysis.
Some of the elements from current business model canvas should be obtained
and added in the propose business model. The author marks the proposed
business model with the red words. There are only 6 elements from business
model that will be upgraded, they are customer segments, customer
relationship, value proposition, key activities, key partners, and cost
structure.

Table 3.16 Proposed Business Model Canvas for Sensodyne

Key Partners Key Activities Value Customer Customer

 Local &  Distribution Proposition Relationships Segments
National  Sell through  Science  Annual  Young
Media Partner Sales based Event professiona
 Universities Division toothpaste  On ground l 20-30 y.o
 Agencies&  Marketing  Clinically Chill test  Sensitive
Consultant activity relieve the  Sponsorship teeth
 E-Commerce  Differentiat pain  Premium problem
 Expertises e between caused by customer  SES A, A+
marketing sensitive service  Urban City
and trade teeth in Java
marketing  Number 1 Island
strategy sales on

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 Key Resources sensitive Channels
 Employee category  General
 Technology toothpaste Trade
 R&D in  Modern
Indonesia Trade
 Comes in
many
variants of
product

Cost Structure Revenue Streams

 Marketing Activity  Sales
 Logistic and QA Activity  Incremental Sales
 Trade Marketing Activity
 Cost for expansion new variants

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 CHAPTER 4
CONCLUSION & IMPLEMENTATION
After having an analysis both external and internal environment of Sensodyne
product and GSK CH in chapter 2 and conducts a research survey result in chapter 3,
finally the business strategy can be formulated in chapter 3. The implementation
strategy from this research is designed to be implemented at the beginning of the year
2018. In order to achieve and increase the current SCA, activities and programs need
to be planned well by GSK CH and Sensodyne itself. The following plans will be
explained in Table 4.1 in this chapter.
4.1. Conclusion
Having conducted the research comprehensively, this research finally can be
concluded, while the research questions that are based on the problem faced by GSK
CH and its product Sensodyne can be answered as well. The detail of conclusion
including the answers of each research question can be explained more detail below:
1. Product and Company Strengths
By having a conduct analysis, the author can answer the first research question about
best resources and capacity that company owned. This can be found on SWOT
Analysis (Strengths),
 Sensodyne is Market Leader in Sensitive category of Toothpaste
 Sensodyne has proven clinically as therapeutic, science based toothpaste
 Sensodyne categorized one of the premium toothpaste brand in Indonesia
 Sensodyne toothpaste has ten variants more than all sensitive toothpaste

Besides product strengths above, author also conclude that internal resources of GSK
CH also categorized as Sustainable Competitive Advantage (SCA), those of resources
including,

 Brand Image
 R&D

64
  Human Resources Skill
 Infrastructure
 Financial Performance (Budgeting)
 Product Distribution

Those capacities and strengths might be kept for company to strengthen the position
of Sensodyne shares in Indonesia and ready to compete with its competitors.

2. Strategy

SWOT analysis and TOWS matrix are the tools for conduct the proper strategy for
Sensodyne Business, and the best strategy in order to compete with sensitive category
competitors is Indirect Offensive Strategy: Flank Attack Strategy. This strategy could
be the best solution for competing the huge brand such as Pepsodent in terms of
service and distribution in particular areas or segments. Flank Attack Strategy is set
due to have a counter-attack digital strategy from PSE in 2016. The author realize that
Sensodyne could not implement the frontal attack to whole Pepsodent brand from this
case, but Sensodyne will have several odds counter attack in terms of digital
marketing strategy to Pepsodent Sensitive Expert (PSE) especially outside DKI
Jakarta.

4.2 Recommendation
Finally, having finished all steps of business analysis and formulating business
strategy, the author gives following recommendations Sensodyne in order to improve
current business, they are:
 Sensodyne must emphasize to conduct marketing effort uses the current
company‘s resources. It is not only to emphasize and focus in marketing
activation, but Sensodyne need to optimize the trade marketing activity and
shows more visibility in Sensodyne channels. Marketing strategy goals to
make an awareness through media,PR activity, and event. While Trade
marketing is only focus in on groud store activation and promo.

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  As a strong R&D company, Sensodyne need to have new variants in
Indonesia and product extension more so Sensodyne business not only rely on
toothpaste but also can have another product. The Sensodyne‘s competitor
starts to develop and expand their business as well, so it is very important to
company by moving forward by creating new segment and develop the
current products.
 Partner with new key partners will help Sensodyne aim new customer
segment. For now Sensodyne perceived as a therapeutic cosmetics/toothpaste,
after partnering with new party, it will change the perspective from sensitive
toothpaste to regular toothpaste like Pepsodent brand. Knowing that
competitors as Pepsodent has already partnering with Indonesian Dental
Community (PDGI), Sensodyne need to have another key partner such as a
dental scientist or academician.
4.3 Implementation Plan
Strategy implementation is all the processes and outcomes that will accrue to a
strategic decision once authorization has been to go ahead and put the decision into
practice (Miller et al., 2004:203). The implementation will be split into two: the
short-term plan and long-term plan. The short-term plan usually requires small
amount of resource and preparation while the long-term plan requires long time
preparation and big amount of resources.
4.3.1 Short Term Plan
 Digital Marketing
Digital marketing strategy is desired to capture potential customer, that have
not been well exposed. In order to increase sales revenue, the market
penetration should be more developed. One of the way increase market
penetration is by creating digital marketing. A digital marketing agency will
help Sensodyne to create a digital advertisement that will be published in
several famous websites while a web developer, a programmer who
specializes in a will help Sensodyne to create a nice looking web-sites so that

66
 the customers will be interested in getting more information regarding
Sensodyne whole products.
 Optimize the third party
Third party such as agencies and consultant are very effective to deliver the
message to end consumers. For now Sensodyne only has PR and media
investment agencies, the next proposed strategy is maximizing the recent
agencies and add more agencies such as creative agencies to handle all related
digital marketing activity.
 Promo Strategy
Promo strategy could be a best solution to cover from Sensodyne price. As we
know that Sensodyne competitor, Pepsodent has several variants category for
toothpaste from different interval of price. Adding promo such as ―Buy One
Get One‖ could be possible way to solve the problem. Promo strategy should
be implemented in proper way and proper time. For example, Promo only has
to be implemented in Ramadhan month and only in one channel: Minimarket.
4.3.2 Long Term Plan
 Product Extension
In order to have diverse business, Sensodyne not only to focus on toothpaste
category, but also need to survive in other oral care product such as
toothbrush, mouthwash, and other dental device. This will help Sensodyne
moving from sensitive category to general oral care product, the goals for this
plan is taking over Pepsodent Shares and terminate the shares from other
sensitive brand, then Sensodyne become a major oral care products in
Indonesia.

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 Table 4.1 Implementation Plan for Sensodyne

Activities Duration Month Description

1 2 3 4 5 6 7 8 9 10 11 12
Short term
Digital 3 Three months starts in
marketing Q2 with evaluation
Third party 3 Q1 to optimize 3rd
involvement party
Promo 2 Only in Ramadhan
month
Long term
Product 12 Required 12 months
of preparation before
Extension
being executed

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 REFFERENCES

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Wadsworth Cengage

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Miles, M. B., & Huberman, A. M. 1994, Qualitative data analysis: An expanded

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Supriyanto, B (2016). Hasil Survei, Pertumbuhan FMCG Indonesia Kalahkan Asia,
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 APPENDICES

Appendix A
Questionnaire Draft
Session 1 : Analysis konsumen
Data Diri (Demografi)
1. Alamat Email
2. Domisili
3. Jenis Kelamin
4. Umur
5. Pendapatan per bulan
Basic 4ps element (Product, Place, Promotion, Price)
6. Merk Pasta gigi apakah yang ada gunakan?
a. Pepsodent
b. Sensodyne
c. Close Up
d. Other
7. Apakah alasan anda untuk membeli merk tersebut?
a. Harga yang murah
b. Kandungan dan khasiat dari bahan dasar pasta gigi
c. Pilihan keluarga
d. Other
8. Di manakah anda biasa membeli merk
a. Hypermarket/Supermarket
b. Minimarket
c. Toko Obat/Warung
d. Other
9. Dari manakah anda mengetahui merk tersebut?
a. Iklan (digital/printed)
b. Acara/Event
c. Teman
d. Keluarga
e. Other
Perilaku Konsumen
10. Berapa kali dalam sehari anda menyikat gigi ?
a. 1x sehari
b. 2x sehari
c. 3x sehari
d. Other
11. Berapa ukuran yang sesuai untuk pastagigi yang anda biasa gunakan?
a. 10-50gr (kecil)
71
 b. 50gr-130 (sedang)
c. 130gr-190 (besar)
d. > 190 (jumbo)

12. Berapa jumlah uang yang anda rela keluarkan untuk membeli buah pasta gigi
ukuran kecil?
a. Rp5.000 – Rp10.000
b. Rp 10.000 – Rp 20.000
c. Rp 20.000 – Rp 30.000
d. >30.000
13. Berapa jumlah uang yang anda rela keluarkan untuk membeli buah pasta gigi
ukuran sedang?
a. Rp5.000 – Rp10.000
b. Rp 10.000 – Rp 20.000
c. Rp 20.000 – Rp 30.000
d. >30.000
14. Berapa jumlah uang yang anda rela keluarkan untuk membeli buah pasta gigi
ukuran besar?
a. Rp5.000 – Rp10.000
b. Rp 10.000 – Rp 20.000
c. Rp 20.000 – Rp 30.000
d. >30.000
15. Berapa jumlah uang yang anda rela keluarkan untuk membeli buah pasta gigi
ukuran jumbo?
a. Rp5.000 – Rp10.000
b. Rp 10.000 – Rp 20.000
c. Rp 20.000 – Rp 30.000
d. >30.000

Session 2 (Business Strategy Assesment)

(Bagi Pengguna Sensodyne harap diisi)
1: Sangat Tidak Setuju
2: Tidak Setuju
3: Setuju
4: Sangat Setuju

Sensodyne Cost leadership assessment vs PSE (Competitor)

(Variable: Quality,Economic of scope,Firm’s Structure/culture)

16. Menurut saya kualitas Sensodyne lebih baik dari PSE
17. Menurut saya harga Sensodyne lebih murah dari PSE
18. Menurut saya perusahaan yang yang memproduksi Sensodyne (GSK) sudah
baik mengatur operasionalnya dibanding perusahaan yang memproduksi PSE
(Unilever)

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Sensodyne Differentiation assessment vs PSE (Competitor)
(Variable: product feature, Customer service, customization, complements)

19. Menurut saya kandungan dan khasiat Sensodyne lebih baik dari PSE
20. Menurut saya pelayanan konsumen dari merk Sensodyne lebih baik dari merk
PSE
21. Menurut saya pilihan varian Sensodyne lebih banyak dari pilihan varian PSE
22. Menurut saya produk lain dari merk sensodyne lebih baik dari produk lain
dari merk PSE

Session 3 (Global strategy assessment)

Bagi pengguna Sensodyne harap diisi

Sensodyne Transnational Strategy

(Variable: awareness masyarakat lokal, cost position, Brand Expansion)

23. Menurut saya Sensodyne sudah dikenal di pasar Indonesia maupun Global
24. Menurut saya harga sensodyne sesuai dengan masyarakat Indonesia
Menurut saya Sensodyne perlu meningkatkan persaingan di pasar Global

73
 Appendix B
Interview Transcript
Research Objectives Interview Name Position Date
Questions
1. To find current  What is current Mr. Ricky Januar Brand February
external factor for external that and Mrs Nida Manager and 20th 1993
Sensodyne affect to Assistant
Sensodyne? Brand
 What is current Manager Oral
industry of Care Category
Indonesia GSK CH
Toothpaste? Indonesia
 How do you
think about one
of Sensodyne’s
competitor
marketing
activity
Pepsodent
Sensitive
Expert?
2. To find Internal  What is current
Analysis factor that GSK CH
owned by GSK CH and Tangible and
Sensodyne team? Intangible
Resources
3. To find GSK CH and  Can you explain
Sensodyne Strengh, us about

74
Weakness, Sensodyne and
Opportunity, and GSK SWOT?
Threat

75