Marketing Strategy to Penetrate the Low Income Segment with Kiwi Sachet as A Pilot Project
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Institusion
Sekolah Tinggi Manajemen Ipmi
Author
Syamsudin, Zulkarnaen
Wahyudi, Triyono A.
Ardiansyah, Imam
Prayogo, Melynda
Hariyadi, Lukman
Hidayat, Fachry
Sasono, Heru
Wahyudi, Triyono A.
Ardiansyah, Imam
Prayogo, Melynda
Hariyadi, Lukman
Hidayat, Fachry
Sasono, Heru
Subject
H Social Sciences (General)
Datestamp
2022-09-22 07:57:54
Abstract :
The market trend of consumer goods in Indonesia seemed to be contradicts to what happened in the developed country like united states where less packaging would be more appreciated by consumer because of economic or environmental reason. In Indonesia now days, the market especially the low class segment is becoming more fond of small packaging because of the economic (affordable) or the convenience reason. Because of this trend, and also because of the fact that this market size is quite promising, many manufacturers of consumer goods penetrate the market with small packaging like sachet, from filled seal, or mini pack. The two major players in this market are Unilever (sunsilk, dimension, brisk, and citra) and P&G (rejoice, pantene). The total deman in low class segment, the D and E class in Indonesia is very huge. According to the statistical year book 1996 of Indonesia published by 'biro pusat statistik' (Central Statistical Bureau); more than 95% of Indonesia total population or 190 million people have Rp. 300,000 monthly per capita expenditure that categorized as a D and E class segment. Our survey on four sachet body care products : shampoo, powder, hair cream and body lotion, indicated that the market potential for those products is more than Rp. 821 billion. Because of the above mentioned reason, PT Kiwi Indonesia, as a market leader in shoe polish market and well known of its product 'KIWI shoe polish', wants to expand the market penetration by introducing the Kiwi shoe polish in sachet for one usage only. Despite the existing good leadership position, PT Kiwi Indonesia had never had thorough experience in launching some small packaging products. This study has been conducted to facilitate PT Kiwi Indonesia to grab the whole picture of this unique market and applying those facts and findings to the Kiwi sachet launching program. To generate a better recommendation, the IPMI's GFP team had developed three surveys; channel survey, consumer survey, and retailer market test. We have discussed two major issues prior to the decision making and the development of the marketing strategy; the market potential and the cannibalization effect on SP-15 would vary and depend on the consumer user profile. If most SP-15 users are routine users and came from C class then there would be a very minimum cannibalization effect of even nil. On the other hand, if the consumers profile indicates that most Sp-15 users are non routine users and came from D and E class, then the cannibalization effect would be very big. Despite these range, the market potential that can be grabbed from the D and E class will generate more sales than the cannibalization revenue. The market potential for Kiwi sachet would be as big as Rp. 123 billion. Came from the working D and E class population only. Launching of Kiwi sachet is a big opportunity for KIWI to penetrate and expand the existing market to the huge potential low class segment. Not only the launching of this product would make KIWI as a first mover in this segment for shoe polish and get the expanding revenue and profit, but also make KIWI able to create a more sustainable basis for the company's future revenue and profits's stream. Along with the growth of Indonesia economic, in the long run, as the D and E class people elevated to the higher income level, They will still retain the brand awareness, recall, prefer and use KIWI in other sizes. In order to have a successful launching of Kiwi shoe polish sachet, we suggest some strategies in marketing mix (4p's strategy). In term of product, there should be a modification in volume to 3 ml. from previous 5ml., and the packaging should be equipped with more figures to show how to use the shoe polish and also to show where and how to tear the sachet. The amount of sachets per hanger should also be reduced from 3 dozens to 1 dozen only to induce the small retailers willingness to try and buy the product. In term of pricing strategy, we suggest to lower the price from Rp 250/sachet, as it had been planned before, to Rp 200/sachet at retailer level with retailer's margin about 35%or buying price Rp. 1,700 per dozen. In distribution aspect, the main consideration is using a 'separated saleperson' outside the existing team to sell and distribute the sachet directly to small 'toko warung or 'kios" that have not been covered by existing sales persons and Kiwi's distributor fleet. The new sales person team should be provided with motorcycle fleet as part of the bottom up approach in the penetration strategy. In addition to this strategy, kiwi should still maintain and build better relationship with the wholesalers as major sourcing goods for most retailers. Kiwi shoe polish sachet is a new product not only in term of packaging but also in term of product characteristic. The product is made of cream (the existing kiwi shoe polish products are paste and liquid) with sachet packaging. The important consideration to launch this unique pro
The market trend of consumer goods in Indonesia seemed to be contradicts to what happened in the developed country like united states where less packaging would be more appreciated by consumer because of economic or environmental reason. In Indonesia now days, the market especially the low class segment is becoming more fond of small packaging because of the economic (affordable) or the convenience reason. Because of this trend, and also because of the fact that this market size is quite promising, many manufacturers of consumer goods penetrate the market with small packaging like sachet, from filled seal, or mini pack. The two major players in this market are Unilever (sunsilk, dimension, brisk, and citra) and P&G (rejoice, pantene). The total deman in low class segment, the D and E class in Indonesia is very huge. According to the statistical year book 1996 of Indonesia published by 'biro pusat statistik' (Central Statistical Bureau); more than 95% of Indonesia total population or 190 million people have Rp. 300,000 monthly per capita expenditure that categorized as a D and E class segment. Our survey on four sachet body care products : shampoo, powder, hair cream and body lotion, indicated that the market potential for those products is more than Rp. 821 billion. Because of the above mentioned reason, PT Kiwi Indonesia, as a market leader in shoe polish market and well known of its product 'KIWI shoe polish', wants to expand the market penetration by introducing the Kiwi shoe polish in sachet for one usage only. Despite the existing good leadership position, PT Kiwi Indonesia had never had thorough experience in launching some small packaging products. This study has been conducted to facilitate PT Kiwi Indonesia to grab the whole picture of this unique market and applying those facts and findings to the Kiwi sachet launching program. To generate a better recommendation, the IPMI's GFP team had developed three surveys; channel survey, consumer survey, and retailer market test. We have discussed two major issues prior to the decision making and the development of the marketing strategy; the market potential and the cannibalization effect on SP-15 would vary and depend on the consumer user profile. If most SP-15 users are routine users and came from C class then there would be a very minimum cannibalization effect of even nil. On the other hand, if the consumers profile indicates that most Sp-15 users are non routine users and came from D and E class, then the cannibalization effect would be very big. Despite these range, the market potential that can be grabbed from the D and E class will generate more sales than the cannibalization revenue. The market potential for Kiwi sachet would be as big as Rp. 123 billion. Came from the working D and E class population only. Launching of Kiwi sachet is a big opportunity for KIWI to penetrate and expand the existing market to the huge potential low class segment. Not only the launching of this product would make KIWI as a first mover in this segment for shoe polish and get the expanding revenue and profit, but also make KIWI able to create a more sustainable basis for the company's future revenue and profits's stream. Along with the growth of Indonesia economic, in the long run, as the D and E class people elevated to the higher income level, They will still retain the brand awareness, recall, prefer and use KIWI in other sizes. In order to have a successful launching of Kiwi shoe polish sachet, we suggest some strategies in marketing mix (4p's strategy). In term of product, there should be a modification in volume to 3 ml. from previous 5ml., and the packaging should be equipped with more figures to show how to use the shoe polish and also to show where and how to tear the sachet. The amount of sachets per hanger should also be reduced from 3 dozens to 1 dozen only to induce the small retailers willingness to try and buy the product. In term of pricing strategy, we suggest to lower the price from Rp 250/sachet, as it had been planned before, to Rp 200/sachet at retailer level with retailer's margin about 35%or buying price Rp. 1,700 per dozen. In distribution aspect, the main consideration is using a 'separated saleperson' outside the existing team to sell and distribute the sachet directly to small 'toko warung or 'kios" that have not been covered by existing sales persons and Kiwi's distributor fleet. The new sales person team should be provided with motorcycle fleet as part of the bottom up approach in the penetration strategy. In addition to this strategy, kiwi should still maintain and build better relationship with the wholesalers as major sourcing goods for most retailers. Kiwi shoe polish sachet is a new product not only in term of packaging but also in term of product characteristic. The product is made of cream (the existing kiwi shoe polish products are paste and liquid) with sachet packaging. The important consideration to launch this unique pro
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