MARKET ENTRY STRATEGY FOR NEW BUSINESS LINE: A CASE STUDY OF SEMEN INDONESIA'S MORTAR PRODUCT

• Main Author: Destani, Tara
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/47613
• Institution: Institut Teknologi Bandung

In the midst of challenging condition in national cement industry where supply is much higher than demand, pre-mix mortar market consider attractive to be tapped in. Conventional customers that commonly using batch-on site method for mortar application result to promising market growth potential. Yet, have significant challenge strong top of mind market leader is and limited stock-keeping in the retailers due to immature pre-mix mortar industry condition. With mentioned challenges, the writer will analyze and create recommendation in the final project focused on two aspects of product pricing strategy and go-to-market strategy considering channel centric industry condition. The approach will be using external and internal analysis tools by Porter Five Forces, Ansoff Matrix and BCG Matrix. In product pricing strategy formulation, the writer will consider product interrelationship and overall product price positioning while to develop go-to-market strategy, the writer will be using market coverage model as reference. In practice, there are two different customer segment in pre-mix mortar industry which are retail and project segment. The use of pre-mix mortar is more common in project segment rather than in retial segment due to its ease of application product benefit. In retail segment, customer education process remains a key challenges as current customers are still considered as conventional customers which are more preferred for batch-on-site mortar application. Partner selection in distribution is the key success factor for product penetration, thus distribution scheme in go-to-market strategy implementation plan consider as highly important. For price positioning determination, the concept implementation of Application matching and Vertical trade-off needs to be consider due to customer’s preferences for each sub-application product can be differed. For sub-application product that are fall into Vertical trade-off pricing condition due to the ease of product substitution with other product, conventional batch-on-site for instance, it is found that the attitude of the customers towards premium price pre-mix mortar product tends to be more sensitive. Different case with sub-application product which fall into Application matching pricing condition, normally customers will be having less sensitive attitude towards premium price brand. Through market domination parameter which is estimated market share, it is proven that premium price brand still had the ability to dominate the market in certain sub-application product. In the implementation plan, product pricing strategy should started by overall positioning strategy determination where price positioning become one of the parameter to strengthen the strategy implementation. In accordance to premium brand process development where price positioning also become one of the parameter to strengthen the strategy implementation, lower price positioning in comparison to competitor will create downside risk in brand premium-ness perception. Thus, sales promo program to push the product penetration in the market should be implemented considering the fact as a new comer in the industry. Product distribution also a challenge in the pre-mix mortar industry. Partnering with distributors is preferable move to reach the market better, especially for retail segment. For project segment, considering internal company strategy where account payable also needs to be consider for certain customers segment. Thus the role of financing partner from distributors should be consider. There will be issue in product flow risks between one channels to another as the price gap between them relatively high. Different distributors appointed for each channel is the solution yet, ensure distributor’s the infrastructure capability is needed to be done, especially for project distributors.