1. 2011Indiana University South Bend [INDONESIA] Brought to you by: Taylor Sipotz, Ray Sears, Garrett Walker, and Caitlyn Burke
2. Executive Summary Carbon’s Golden Malted brand mixes are a high quality and easy to prepare product.Only premium ingredients are used – ensuring only the finest tasting products. There is noproduct of this kind – premium style waffles – in the Indonesian market. A comprehensiveexploration of the market has been finished and is included in the following report. It will betterequip Carbon explore new opportunities to work with local partners in the Indonesian market fortheir mutual benefit. A cultural analysis of Indonesia exposed information that contains critically importantimplications – with regards to entering a new market. Included are the behavioral patterns ofconsumers – cultural, religious and, most importantly, dietary habits. It was revealed thatIndonesians do not consume waffles – in a traditional western sense – and center most of theirmeals around rice with sides and garnishes of vegetables and meats. This fact influenced the selections of our target market – which will be explored infollowing sections. The efforts of Carbon will be directed to the cities of Bali and Jakarta. Thesetwo locations are the most populated in Indonesia and natural have the highest rates of economicactivity; and more important, they host the lion’s share of expenditures from internationaltourists. International tourism is a strong in Indonesia and is a driver of economic growth in Baliand Jakarta. Tourists of Indonesia represent the target consumers that Carbon is going to reach inthis market. They account large expenditures and their tastes are suited to the premium wafflesand pancakes produced by Carbon’s Golden Malted. Because of this, four and five star hotels inBali and Jakarta will be the target market. Four and Five star hotels host the highest percentagesof foreign consumers in Indonesia.
3. Bali will be the primary target market and Jakarta will be the secondary. 25% to 30% ofall foreign arrivals to Indonesia come directly to Bali and an equal amount venture there fromother regions – after arriving and then traveling to Bali. Bali also has roughly 30% of the fourand 5 star hotels in Indonesia; and, 70% of their occupants are foreign. Jakarta has slightly morehotels and occupants than Bali; but, only 30% of the occupants are foreign to Indonesia –justifying Jakarta as the secondary target market. The distribution and supply chain in Indonesia has been described at archaic andcomplicated. This makes it crucial to establish a strong relationship with a quality and reliablefreight forwarder and distributor. They will be able to handle the logistics of getting Carbonmixes to the end consumer. We have selected Maersk as the freight forwarder to transit ourproduct to Indonesia. Maersk is the world’s largest ocean carrier firm and will get our product toPT SukandaDjaya. They are a division of PT Diamond cold storage and will be our distributor inIndonesia. They are the largest distributor in Indonesia and are trusted by clients such as: Hunts,Laughing Cow, Yoplait, Pillsbury, and more. Promotion of Carbon Golden Malted will be crucial for the diffusion of our product inthis market. Tradeshows will be utilized as the primary source of the promotional efforts. TheFHT Bali and PROPAK tradeshows are the prime events. Both are international exhibitions forthe food service industry and are attended by key players in our target markets. We will utilizethese tradeshows to promote product awareness. Once it has been decided to export to the Indonesian market, specific product packagingadjustments will be required. The labels will have to be changed to meet Indonesia specificationsand other requirements are reported in the appropriate sections to follow.
4. An analysis of the market potential – with regards sales volume and revenue – has beencompleted and shows the lucrative opportunity that Indonesia presents to Carbon. Potentialannual sales are $3 million and $1.3 million in Bali and Jakarata respectively. Figures are basedon assumptions that consumers potentially eat three waffles per day, each case produced 222waffles, and Carbon sells the cases for $40. Introduction New Carbon is a highly successful business from South Bend, Indiana, looking to expandfurther its international reach. The company distributes waffle irons on loan in return for aparticular amount of Carbon’s Golden Malted pancake and waffle mixes purchased per waffleiron. New Carbon is seeking to expand its success to a new market by developing a uniquemarketing plan for Indonesia. The Indonesian market offers significant opportunities for New Carbon to sell itsproducts. Most importantly Jakarta and Bali, home to tourism and travel within Indonesia, offera wealth of hotels and restaurants to distribute the product to. Many hotels in these areas alreadyembrace Western style cuisines. Continuing growth of free trade in Indonesia provides favorablemarket conditions. Western style waffles do not currently exist in the Indonesian retail market,and are mainly offered at hotels and tourist destinations. Distribution throughout Indonesia givesNew Carbon a potential first-mover advantage. New Carbon would reap the benefits of being afirst-mover in this market, gaining distributors and building long-term business relationships thatwould be difficult for a competitor or follower to match. Indonesia Country BackgroundGeographical SettingLocation
5. Indonesia is a grouping of more than 17,000 islands located near the equator but only6,000 are inhabited. The country shares land boundaries with Papua New Guinea, East Timor,and Malaysia. With its many islands it also shares water borders with countries through straitswith Singapore, Malaysia, Philippines, and Australia.Climate Located with close proximity tothe equator, Indonesia maintains aconstant tropical climate, but is cooler inthe highland regions. This translates intotwo main seasons in Indonesia: dry and monsoonal wet seasons. The average annual rainfall inIndonesia is between 70-125 inches in the lowlands and anywhere up to 240 inches themountainous (highland) regions are located. Wind gusts cause the western straits and channelsto be dangerous to mariners (Indonesia – Climate, 2011).Language Bahasa Indonesia is the national language and the language of most writtencommunication, business, media, government, and education. It is important to note that locallanguages, most commonly Javanese, are still very important in many areas. English is the mostwidely spoken foreign language (Learning Bahasa, 2011)Population and Demographics As of July 2009, the Bureau of East Asian and Pacific Affairs recorded that theIndonesian population consisted of 240.3 million people. The annual estimated growth rate was
6. 1.136%. The Indonesian life expectancy is estimated to be 70.76 years old (The World Factbook,2009).Distribution of PopulationRace or Ethnicities Two of the main ethnicities in Indonesia are Javanese and Sundanese. Other groupsinclude: Malay, Chinese, and Madurese.Geographic Locale The 240.3 million people inhabiting the area make it the world’s fourth most populousnation as well as one of the most densely populated areas in the world. Java is the mostpopulated island in the world with an estimated 124 million people as of 2005. Highly populouscities include the capital, Jakarta, with an estimated 9.6 million people, Surabaya with 2.8million, Bandung with 2.4 million, and Medan with 2.1 million.Economic Statistics and ActivityHousehold Income The per capita income of Indonesians was most recently estimated to be $4,394 in 2010.In the same year, the estimated number below the poverty line was 13.33%. Indonesia is acountry that ranks high in power distance there is a strong separation of people based on rank,including income. In result more emphasis may be placed on status and not price when makingpurchases (The World Factbook, 2009).Labor Force and Size The 2010 estimated unemployment rate in Indonesia was 7.1%. The unstable labormarkets and poor compensation for workers have been cited for reducing the competitivenessand attractiveness of Indonesia as a country to invest in.The workforce then consists of 111.5
7. million people, broken up into three categories; services, agriculture, and industry (The WorldFactbook, 2009).Major Industries and GDP The GDP in Indonesia is facing a period of exponential growth. In 2009, GDP was $539billion, in 2010, it was $707 billion, and the estimated GDP for 2011 is $823 billion. The annualgrowth rate was 4.5% in 2009, 6.1% in 2010, and isestimated to be 6.2% in 2011. Inflation isrising with 2009 inflation recorded at 2.8%, 7% in 2010, and is expected to be 7.3% in 2011(Report for Selected Countries and Subjects, 2011).Indonesia GDP Consists of: Natural resources: Oil and gas, bauxite, tin, copper, silver, gold, and coal. Agricultural products: Timber, rice, coffee, palm oil, and rubber. Manufactured goods: Furniture, paper products, footwear, garments, electronic goods, and automobiles (“Indonesia”, 2011).Tourism In 2007, Indonesia saw 4.9 million international tourist arrivals. Of the 4.9 million, 2million came to visit the Bali Island alone. The ten most popular tourist destinations in Indonesiainclude Bali, West Java, Central Java, East Java, North Sumatra, Lampung, South Sulawesi,South Sumatra, Banten, and West Sumatra. Jakarta, the nation’s capital, and the Island of Baliare two major shopping destinations. Bandung also is a popular shopping destination,particularly for fashion products among Malaysians and Singaporeans. (“Most Visited”, n.d.) Particularly in Bali, food is an important factor in the tourism industry. Bali not onlyoffers traditional Indonesian dishes to draw tourists in, but a variety of international foods aswell. Mexican, Italian, Japanese, and Continental cuisines are available. Even McDonalds andKFC, and other American style restraints can be found in Bali.
8. Indonesia hosts several Western Hotels including: two Marriott hotels and two Ritz-Carlton hotels in Jakarta, a Marriot in Surabaya, and Marriot Courtyard, Holiday Inn Resorts,and a Hard Rock Hotel in Bali. Those that offer free breakfast have a buffet selection thatincludes traditional, English (tea and decadent pastries), Asian, Western, and other internationalcuisines. They have restaurants in the hotel that serve full breakfasts to order, an extensivebreakfast buffet, or a la carte menu that features Balinese and international (Western included)dishes. The Hard Rock Hotel even serves their famous burgers as part of their Western cuisine.Infrastructure Indonesia’s infrastructure is made up of navigable waterways, roads and highways,railways, pipelines, and air transport. Indonesia’s thousands of islands make their watertransport very important, and common. A lot of times Indonesians will move items amongislands on merchant marine vessels. Sea transport is extremely important for their economicgrowth for domestic and foreign trade. Indonesians road transport system has a total length of 473,759 km as of 2008. There is arailway system that has four unconnected networks on Java (most populated island), andSumatra. These railway systems are used mostly for moving commodities in bulk, and longdistance passenger traffic. Air transport also plays a critical role for connecting the thousands ofislands for trade and transportation. Unfortunately, the air transport system is not very safe inIndonesia, and is actually one of the least safe in the world. Indonesia has 21,579 km of navigable waterways, andabout half of these waterways are found on the island ofKalimantan, and the other half is divided among Sumatra, andPapua. The waterways in Indonesia are very well developed,
9. and each major island has at least one significant port city.Foreign Investment In 2009, Indonesia received roughly $4.8 billion in foreign direct investment (FDI) -down from $9.3 billion in 2008. This is a relatively small figure, in comparison with China,Japan, India, and other countries that see FDI of up $70 billion per year. Indonesia has a strongcredit history and is in good faith with each of the major rating agencies.Import and ExportIndonesia’s imports totaled 127.1 billion in 2010 thatis a 29.58% increase from last year.Imports include: Machinery and equipment Chemicals Fuels A variety of foods Imported goods are required to go through import duties mentioned in the IndonesianCustoms Tariff. Food regulations are based on national standards, sanitary inspections,registration of processed foods by the National Agency of Drug and Food Control, and foodlabeling. Tariff rates on food imported items are no higher than 5% with few exceptions, andrequired registration of the items can take up to six months. Import duty calculation is based onCIF which is the landing cost in any Indonesian port including freight and insurance. An incometax of 2.5% is issued on CIF value imports. Value added tax (VAT) is issued on a majority ofgoods including imports at a rate of 10%.Import document requirements include the following: Import declaration Performance invoice Commercial invoice Certificate of origin
10. Bill of Landing Insurance certificate Packing listIndonesia’s current agreements regionally and worldwide are: AFTA (ASEAN Free Trade Agreement) APEC (Asia-Pacific Economic Cooperation) WTO (World Trade Organization) Exports totaled 158.2 billion in 2010 which is a 24.39% increase from 2009. The US foodand agricultural exports to Indonesia is steadily on the upward and is the 8th most prevalentexport market for US agriculture products. VAT is 10%.The highest export commodities shipped out of Indonesia include: Oil and gas Electrical appliances Plywood Textiles RubberElectrical Requirements Indonesia has an electrical requirement of 110/220 V. This means that internationalvoltage varies throughout the country, from 100 to 160 V, and 200 to 260 V. The appliancescoming from the United States are typically 120 V range. The two options available for usingappliances such as a waffle iron in Indonesiaare: International Voltage Adapter- If the voltage in the country is the same as the appliance is manufactured for, but the outlet it different then an international voltage adapter will come in handy. The adapter allows the user to plug in a device that is customized for a certain type of outlet. International Voltage Converter- These converters are designed to change the voltage from a certain amount to another. These typically cost from $10 to $20 US dollars.Daily Life and Lifestyles The dynamics of Indonesian families are comprised of immediate and extended familymembers. Frequently occurring natural disasters cause the loss of family members and homes to
11. be common leading to more extended families. At a young age children learn how to helparound the home, looking after the elders and helping with any chores that might be asked ofthem. It is important for the children to lighten the load on the older family members, and thefamily in general because Indonesians commonly have such large families living under one roof.Religion and its Impact Religious diversity in Indonesia is a result of religious freedom in the country. However,the majority of the population is Muslim. Other religions include: Protestants, Catholics,Hindus, Buddhists, and Confucianism. Monotheism prevails as the dominant ideology for mostIndonesian religions. Religion exerts a strong influence on kinds of foods eaten and advertisedin Indonesia.Diet and Nutrition Indonesian food is influenced by Chinese, Indian, and Western cultures – making it adiverse mixture. Chinese and Indian cultures have had a strong impact on the spices used andboth the serving and presentation methods of foods. The west has contributed influence to thestructure and types of meals served in Indonesia; however, most dishes are tailored to better suitthe preferences of Indonesians’. A typical meal in Indonesia will consist of steamed rice alongwith two sides of fish, beef, chicken, or vegetables (sometimes insoup) all of which are served together. A common side dish is sambal(picture to right), which is a spicy condiment made from fresh chilies,dried shrimp paste, lime juice, sugar, and salt. For breakfast, Indonesians might have a simple plate of fresh fruit. This plate mightinclude ripe papaya, rose apple, and watermelon. Porridge of vegetables, fried rice, fried banana,
12. and chicken soup are also common breakfast dishes. During lunch and dinner Indonesians haverice as their main dish, and enjoy potatoes, shrimp and vegetable salads. Lastly, commondesserts include fresh fruits such as coconuts, mangos, bananas prepared in a variety of dishesbut with a sweet flavor. SWOT Analysis Strengths Weaknesses Brand name Non-diverse product offerings Strong presence in U.S. markets Financial stability Simple to prepare Opportunities Threats Tourism Culture and religion Penetration of Indonesian market Climate First mover advantage Geography Shipping issues and risk Tango Waffles (New Carbon Company, 2010) StrengthsBrand name Carbon Golden Malted Pancake & Waffle Mix offers a premier brand and the finest since1937. Golden Malted Mix offers premier quality products with a brand name people know andtrust across the states as well as where it is distributed in foreign states. A patented blendingprocess and recipes offer consistency in its products.Strong presence in U.S. markets
13. The Golden Malted brand products such as the waffle iron and mixes are sold in PuertoRick and 16 foreign countries along with all 50 states. Since 1937, New Carbon Company, Inchas experienced profitable success and long term distributor relationships that will be relied on tomake impacts in Indonesia. Their strong presence can be contributed by the company’sdedication to its customers regularly.Financial stability Since 2002, President/CEO Rick L. McKeel has help New Carbon Company, Incincrease sales from $12million to $34 million annually. Since the increase in sales, New CarbonCompany, Inc has grown from 31 employees in 2004 to 76 in 2010. This company was notaffected by the Recession; in fact the last two years have been the company’s best years.Simplicity The company’s products are simple and quick to make. Pancake mixes consist of onlyfour readily available mixed ingredients and to be cooked in the waffle iron which runsapproximately four minutes. WeaknessesNon-diverse product offeringThe New Carbon Golden Malted product line consists of pancake, waffle, and vanilla conemixes. There are recipes that utilize the pancakes and waffles in ways that can be seen as a lunchor dinner food; but, they are still pancakes and waffles. The majority of consumers are going tosee those as breakfast foods. Also, New Carbon lists, on the website, recipes for cakes, cookies,and muffins. Those two - muffins anyways - are breakfast foods. So in short, the weakness is thenarrow variety of products offered by Carbon’s Golden Malted. Opportunity
14. Tourism Indonesia is a location that receives a lot of tourism due to its tropical climate andgeographic setting. The islands, water sports, and weather attract people from all over the world.Many of the tourists come from locations that are likely to be accepting of Belgian style waffles.Tourist destinations – hotels, restaurants, shopping, amusement parks, etc. – will be the primarytargets for this marketing strategy.Penetration of Indonesian markets It is crucial to successfully penetrate the Indonesian market and introduce this kind ofproduct to the native people first because it could have a monopolistic effect. If New Carbon candevise a strategy that might include new recipes to accommodate more to the Indonesians tastefor food, then New Carbon could dominate the waffle and pancake market in Indonesia.Although penetrating this market will not be easy, it is possible and could prove to be veryprofitable for New Carbon in the long run.First-mover advantage New Carbon has an opportunity to be the first company to introduce Belgian style wafflesto Indonesia. The Indonesian natives do not eat pancakes or Belgian style waffles. As the firstentrant New Carbon can build relationships with distributors and gain a control of resources thatfollowers may not be able to match. ThreatsCulture and religion American style breakfast foods are not incorporated in their culture. Indonesians do notprefer sweet tastes for breakfast; and, they do not eat much bread or bread-like products.Instead, Indonesians tend to favor rice as their substitute.
15. Customs of the Muslim religion will make it difficult for Indonesians to accept Westernideology; which, in turn, will make it more challenging to get Indonesians to accept the idea ofeating American style waffles for breakfast.Climate Indonesia maintains a constant tropical climate that includes high levels of humidity.This puts long term storage of our product at risk; unless, it is properly stored at cool temperatureaway from humidity. While most restaurants and hotels New Carbon will target will haveadequate storing environments, in some of the more impoverished urban areas, the storing of ourproduct may not be in cool place - potentially causing the product to spoil. Consumption ofspoiled Golden Malted products can have serious negative implications for the New Carbonbrand name.Geography Indonesia consists of many islands. With the breakup of the geography, manysubcultures exist. A uniform campaign would not be practical because of the cultural differenceswithin the country. It is not possible to just consider one Indonesian market but instead mustconsider the many submarkets within Indonesia.Shipping issues and risk New Carbon will be shipping their product by boat to the various harbors all overIndonesia. Security and inspections at Indonesian ports will not be as stringent as in the UnitedStates – leaving their product at greater risk. Ports are managed by 4 different Indonesian PortCorporations that are numbered I – IV. Each has jurisdiction over various regions of the country,with I representing the far west, and IV the far east. New Carbon will need to be aware of thedifferent levels of security and safety at these ports, and be knowledgeable to whether certain
16. jurisdictions handle specific issues differently. New Carbon needs to be prepared in the case thattheir product comes up missing at these ports, or gets damage during the un-loading process.Tango Waffles Tango Waffles makes breakfast biscuits and that are the most similar product to waffleseaten in Indonesia. Tango Waffles could be viewed as New Carbons direct competition in theIndonesian markets. Tango Waffles is being produced in Indonesia and can be found commonlythroughout country. It is possibly that word “waffle” will be strongly associated with the biscuitsand not the Golden Malted products – making the New Carbon product seem more taboo.Realizations and actions to counter this problem will be important when marketing in differentlanguages. Marketing PlanTarget Market New Carbon’s efforts in Indonesia will be in the food service sector; more specifically,hotels. Hotels attract consumers that are in Indonesia for both business and pleasure.International tourism accounts for a significant portion of imported food demand, in Indonesia.Tourist Industry New Carbon will target the tourism industry as international tourism is a major driver ofdemand for food imports in Indonesia. Key areas will be those that attract high volumes oftourist activity: our primary and secondary target markets are Bali and Jakarta, respectively.Nearly 25-30% of all tourist arrivals to Indonesia fly directly to Bali and an equal amount oftourists venture to Bali after coming to Indonesia by a port on a different island.Hotels
17. Hotels and high-end western restaurants make up 60% of imports destined for foodservices; and, hotels use about twice as much imported food as restaurants. At top class hotels,roughly 15% of the food used is imported. The premier target market is the 4 and 5 star hotel sector – accounting for adisproportionate amount of the imported food; and, an estimated 25% of the starred hotels are 4or 5 stars. Three star hotels would be a prime target for market penetration – along with orfollowing the 4 and 5 star establishments. Bali accounts for almost 20% of the starred hotel rooms in Indonesia (not only 4 and 5).In 2010, there were 170 starred hotels in Bali which consisted of 21,133 rooms and 32,892 beds.Those hotels saw 19,699 customers per day and 15,501 were foreign – 78% and, the averagedaily room occupancy rate for starred hotels in Bali was 60 in 2010. Jakarta has statistics that are similar to that of Bali; 160 starred hotels with 27,685 roomsand 38,485 bed. Those establishments saw 22,376 customers per day – more than Bali – but,only 6,644 were foreign – 30%. The statistics indicate that Bali attracts more foreign patrons;but, New Carbon will still look to penetrate the market in Jakarta.Shopping Malls Indonesia’s major cities, including Jakarta and Bali, have experienced a booming growthof new shopping malls. Plaza Indonesia, located in central Jakarta, features the Grand Hyatt andJakarta’s most fashionable shopping. It is at the top end of the market and attracts the wealthiestand most affluent shoppers. Centers like Plaza Indonesia continue to be the focus of newconstruction throughout Indonesia. Tourists flock to upscale shopping centers and make themprime targets for the distribution of New Carbon products.
18. Product StrategyProduct Positioning Strategy Carbon’s Golden Malted will position their Original Carbon Malted Pancake and WaffleMix product as a premium breakfast food to be served in restaurants and hotels. Our mix will beassociated with consistent quality.Product Competitive Advantage Our product has a competitive advantage because of the waffle irons that will besupplied. As long as the consumer purchases a set amount of waffle mix cases then the waffleiron will be loaned out at no additional cost. Maintenance and repairs will also be supplied freeof charge for the irons. This will set us above competitors because of the cost saving benefits tothe users of the irons.Packaging The labels of our product will have to be changed to meet the following requirements inIndonesia. All food packaged for sale must be labeled using: The Indonesian language. Roman text. Arabic numerals Writing that is firmly affixed and clear so as to be easily understood by the communityThe minimum requirements for the information on the packaging label include: The name of the product. Net weight or net volume - using metric units. Name and address of the manufacturer or importer. Registration number. Composition or a list of ingredients. Date of expiry. Production date or production code. Promotional Strategy
19. The message we want our promotional campaign to convey is that we sell a premiumbreakfast food that is superior to our competitors. Our objective is to have our potential clientsrealize that there is a demand for our product in the Indonesian restraint, hotel, and tourismindustry. An advantage of this strategy is that we will be the first company to sell this kind ofpremium breakfast food in Indonesia giving us a first-mover advantage. We hope to capitalizeon the fact we are the first entrant to this market and gain control of resources, building longterm business relationships with our distributors that our competition or follows will not be ableto match. We will be focusing our promotional efforts towards major hotels across Indonesia, butmore specifically in Bali and Jakarta. Bali has more westerners and tourism, and Jakarta iswhere most of the economic activity takes place in Indonesia. Bali’s hotels are a good choicebecause the westerners and tourists are more likely to already be custom to eating this type ofbreakfast meal. Jakarta’s hotels are occupied more by people coming in town for business, butJakarta is a popular tourist destination as well. Bali has an exceptionally high average hotel occupancy rate of 58.86% recorded for2010. Jakarta is the capital city of Indonesia, and is located in northwestern Java. The averageoccupancy rate for central Java is 41.01% recorded in 2010. Indonesia has roughly 1000 hotelsgiven stared ratings, and of those 1000 about 22% of them are 4 or 5 star hotels. Our target forour promotional campaign will be the 4 or 5 starred hotels.Trade Shows The best way for us to introduce our product and gain clientele will be throughshowcasing our product at trade shows. This will create awareness of our product in Indonesia,
20. and hopefully allow us to penetrate this market successfully. We have selected two trade showsin Indonesia that we believe are the most appropriate for showcasing our product. The most important trade show for us to showcase our product will be at the FHT Bali –Food, Hotel & Tourism Bali which is held at the International Convention Center in Bali. Thistrade show is held every two years. This next trade show will be held from March 1 st throughMarch 3rd of 2012. This is an international exhibition for equipment, food, beverages, andservices to support Indonesia’s tourism and hospitability industries. Bali International Convention Center Phone: +62 361 771906Kawasan BTDC Fax: +62 361 772047Nusa Dua Web: http://www.baliconvention.com/Bali, 80363 Email: firstname.lastname@example.org/Indonesia Date: March 01 – 03, 2012 We believe it would also prove beneficial to attend the PROPAK Indonesia trade showthat is held at the Jakarta International Expo (JIExpo). Last year this tradeshow had a recordattendance, which means this should maximize our exposure to potential clients (RecordAttendance, 14 December 2010). This trade show involves international food processing andpackaging machinery, as well as a materials exhibition. This trade show take place once a year.The next trade show date has yet to be announced, but is expected to be in December of 2012.Jakarta is where most of Indonesia’s economic activity takes place. This is why we also thinkit’s very important we attend this trade show as well. We want to present in trade shows that bestsuit our product, and take place in cities that are our target market. Jakarta International Expo Phone: +62 (21) 266 45 000/131GedungPusatNiaga Lt. Fax: +62 (21) 657 000 101 Arena PRJ Kemoyoran Web: http://www.jiexpo.co.id/Jakarta, 10620 Email: email@example.com/Indonesia Date: TBA
21. Distribution Strategy (Macro)Port of Origin / Destination New Carbon will utilize the services of Maersk, in order to export to Indonesia. Thecontainer shipments will leave Apm Terminal-Berth 88 in New Jersey via the Maersklinecontainer vessels. The Warnow, a Maersk feeder vessel will assume responsibility of theshipments in Malaysia at PalebuhanTanjungPelepas Terminal. Cargo will be landed at TanjungPriok (Jakarta’s port) and then warehoused and shippedto their destinations. The port also has developed container ports which handle cargo effectively.TanjungPriok handles the majority of imports to Indonesia and offers the best methods of furtherdistributing New Carbon’s flour mixes.Documentation RequiredMaersk supplies New Carbon with shipping instructions – listed are the mandatory items needed: B/l No. (Bill of Lading for Ocean Transport or Multimodal Transport) Insurance of Duplicate Bill of Lading Bill Type Auto NVOCC or Non-Auto NVOCC Port of Loading Place of delivery Shipment details: o type of packages o description of goods o container and seal number o gross weight and measurements. Distribution Strategy (Micro) The supply chain in Indonesian is “archaic tangle of restrictive arrangements employingsub-wholesalers, wholesalers and distributions in between the manufacturer and importer andretail outlet and restaurant. The chain is difficult to understand and expensive to use: large
22. distributors not only transport goods, assume risk, get involved in promotions and negotiate retailmargins charging up to 30% of the retail price.”Channel of Distribution Due to the complexities of the Indonesian supply chain, New Carbon will need theassistance and local knowledge and leverage of an Indonesian distribution company. PTSukandaDjaya will be that company. They are the largest distribution company in Indonesia – adivision of PT Diamond Cold Storage. PT SukandaDjaya has 17 major distribution hubs thatfeature both cold and dry storage; and, one is located in Jakarta. They will receive the Carbonshipments and deliver them direct to clients(Indonesia Central Bureau of Statistics, 2009).Contact information is listed below: PT SukandaDjaya Phone: + 62 21 640 5678 Fax: +62 21 640 2861JL PasirPutih Raya kay, 1 Web: www.sukandadjaya.comAncolTimurJakarta, 14430Indonesia Pricing Strategy New Carbon sells to distributors at different levels. New Carbon sells to its distributors ata case price of $40 USD and the case weighs 30 pounds. The distributor will then have asuggested case price to his or her client between $120 and $140 USD per case which is a grossprofit margin of approximately 40%-60% per case. The distributors’ customers’ gross profitmargin is approximately 400%-600% per waffle. New Carbon also has a minimum pricingstructure: that includes 300 cases, 20 irons and two Better Butter dispensers. The Original Mix ispriced at $33 USD per case and each of these cases entitles the buyer 224 waffles in total. Thejust add water mix is sold at $37 USD per case and yields 222 waffles (NEWCO International,
23. n.d.). Selling at a price that is worthy to the final customer will be important to gain and keepmany customers to New Carbon. Factoring in premiums and give-a-ways to enrich relationshipswith customers will be important. The distributor has to add shipping and insurance charges because the price quoted byNew Carbon’s is based on FOB. New Carbon pays for the transportation of the goods to the portof shipment and the loading costs. The buyer pays for the transport cost, insurance, unloading,and the transportation from the arrival port to the final destination. The minimum weight of a shipment will equal 300 cases X 30 pounds per case = 9000pounds. A specific tariff is a given amount per unit of weight and gauges other measurementssuch as quantity: Rp 6,000. per kilogram under the matrix system. 9000 pounds = 4080kilograms. 4080 kilo grams X 6,000 Rp = 24,480,000 Rp’s. 24,480,000 rupiahs = $2715.47USD. NO. 1045 describes waffles and wafers that are imported into Indonesia. There is a 10%value added tax to waffles and wafers. BEA MASUK/ % import duty (Embassy of, 2010). Participating in a trade shows generate leads quickly, effectively get businesses in frontof potential customers, and is an opportunity to create a good first impression. A budget between$5,000 - $10,000 should be set aside to cover a booth and other expenses such as display aids,traveling, promotion, and personnel expenses. A floor plan at the Food, Hotel, & Tourism Eventin Bali will cost $299, $354, and $364 per square meter for options 1, 2, and 3 respectively(Pamerindo Indonesia, n.d.). There are no current rates for space listed for the PROPAK tradeshow. Option 3 will be the preferred choice providing great first impressions, allowing for thebest presentation of New Carbons Golden Malted Waffles. This is the only option with enough toallow seating for clients to sample the products.
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25. 14. FHT Bali – Food, Hotel & Tourism Bali 2012 (2011, November 28). Trade Shows Directory: Exhibitions, Conferences & Trade Shows World Wide. Retrieved from http://www.eventseye.com/fairs/f-fht-bali-food-hotel-tourism-bali-4947-1.html15. ProPak Indonesia 2011 (2011, November 28). Trade Shows Directory: Exhibitions, Conferences & Trade Shows World Wide. Retrieved from http://www.eventseye.com/fairs/f-propak-indonesia-2221-1.html16. Pamerindo Indonesia. (n.d.).Cost of Participation.Welcome to Food, Hotel & Tourism Bali. Retrieved from http://www.fhtbali.com/17. Trade Resources, Import Export Services. (2011). International Trade in Indonesia: Resources for your trade in Indonesia. International Trade Services, Distributors and Reports on GlobalTrade.net. Retrieved from http://www.globaltrade.net/international- trade-import-exports/m/c/Indonesia.html18. NEWCO International: Exclusive Worldwide Distributors of New Carbons Golden Malted Pancake & Waffle Mix. (n.d.).Newco International, LLC. Investment Opportunity/International Distribution [Handout].Retrieved from class.19. Carbon Company. (n.d.).Golden Malted.Golden Malted. Retrieved from http://www.goldenmalted.com/