ENHANCING FRANCHISING STRATEGIES FOR IMPROVED MARKETING PERFORMANCE AND MARKET DIFFERENTIATION (CASE STUDY OF PT SUGAKU KREATIVE INDONESIA)

• Main Author: Alvina Natesa, Callista
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/79796
• Institution: Institut Teknologi Bandung

In the modern economic landscape, the prominence of micro, small, and medium enterprises (MSMEs) has become increasingly evident, especially since the 1998 crisis, during which they demonstrated remarkable resilience and embarked on a trajectory of consistent growth. Among the array of business models available, franchise businesses have emerged as a preferred option for many MSMEs, offering anticipated benefits such as improved financial performance, a supportive work environment, and better survival prospects compared to alternative organizational forms. The franchise system, known for its manifold advantages including promising business prospects, established brand recognition, improved financial accessibility, and the appeal of entrepreneurial independence, has gained prominence. However, despite these advantages, a recurring challenge arises—the inconsistent implementation of cohesive marketing strategies across diverse franchisees. Sugaku, a franchise specializing in Math Educational Learning services focusing on Mathematics and Abacus learning, has been operational since its inception in 2017. Despite successfully opening 13 branches throughout Indonesia within the first year, the company struggles with achieving sustainable profitability and attracting a significant number of franchisees. Sugaku has actively embraced technological advancements, strategically leveraging hybrid learning models during the upheaval of the COVID-19 pandemic, and aims to further enhance the educational experience post-pandemic. However, amidst these commendable efforts, the organization faces obstacles such as limited progress in branding and marketing strategy, an underperforming social media presence, challenges in adapting to local markets due to insufficient research, and the ongoing struggle to establish a distinctive competitive edge for optimal marketing performance. This research aims to identify root causes through a comprehensive analysis, employing a balanced mix of quantitative and qualitative methods—surveys and indepth interviews, respectively. Surveys were carefully crafted to explore franchising and service evaluations, involving 34 existing Sugaku franchisees. Simultaneously, in-depth interviews were conducted with the company's cofounders, facilitated through face-to-face interactions and structured questionnaires. Root cause analysis, spanning diverse dimensions including the company, industry, competitors, existing franchisees, potential customers, human resources, and the broader business environment, revealed various challenges such as communication ii issues, supply chain complexities, technology development, spatial constraints, product limitations, and intense competition contributing to Sugaku's business dilemmas. The proposed business solutions stem from a meticulous external analysis covering PESTEL, Competitor, and Consumer dimensions, coupled with an internal scrutiny encompassing STP analysis, 7P, and Value Chain analysis. The strategic implementation of the marketing mix within the SWOT, TOWS, and business model canvas framework is advocated, emphasizing detailed branding efforts supported by integrated marketing communication. This holistic approach includes market research initiatives, social media optimization, and promotional branding to strengthen the marketing strategy and digital presence, crucial imperatives in the rapidly evolving technological landscape. Complementary strategies involve initiatives for brand recognition and expansion, aimed at achieving seamless synergy with local market adaptation. Finally, recruiting seasoned human resource experts is recommended to enhance the curriculum and optimize branch allocations. The envisioned outcome of implementing these multifaceted strategies is a proactive resolution of Sugaku's business challenges, paving the way for a gradual, yet sustained, ascent towards meeting performance expectations over time