Articles

Proposed Marketing Strategy to Increase Revenue Through Product Differentiation (Case Studyat Cement Inc.)

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The cement industry is currently facing intense competition due to the lack of significant recovery in retail demand following the COVID-19 pandemic, coupled with an increasing number of competitors. This has resulted in a surge in oversupply, reaching up to twice the demand, and a decline in utilization to 52%. In order to survive, cement companies release their own economy brands, including Cement Inc. In 2020, Cement Inc. released its fighting brand in Java to fight the eco-brands, using their current premium brand from Sumatra, Semen PDG. Cement Inc. will also release Semen MDK in late 2022 to counteract market confusion about Semen Padang. The total number of brands to compete in the last decade has increased tremendously due to the rising eco-brand trend. In three years, Cement Inc.’s fighting brand portion has grown to 24.6%, indicating a shift in the market towards more economical products. This situation is leading to a decrease in the Cement Inc. revenue, as there is no product differentiation between the premium and fighting brands.

We conducted this study to explore potential solutions to increase revenue by implementing a fighting brand strategy that incorporates product differentiation. The research address three critical questions: (1) What is the internal and external analysis? (2) What is the proposed recommendation for marketing strategy to increase for Cement Inc. through product differentiation of Fighting Brand? (3) What is the implementation plan for the marketing strategy?

The investigation began by examining the cement market condition, evaluating Cement Inc.’s strengths and weakness, as well as the market’s opportunities and threats, using quantitative and qualitative approach to investigate internal and customer’s understanding about the difference between main brand and fighting brand, as well as the expected differences. By the internal and external analysis, the study proposed the new segmentation, targeting, and positioning to propose the new marketing strategy using marketing mix 4Ps through product differentiation for fighting brand to increase Cement Inc.’s revenue in both premium brand and fighting brand. This study limited on retail market in Java, which is characterized by intense rivalry.

Proposed Marketing Strategy to Increase Revenue for PT. Pipa Tanpa Kampuh Indonesia in Seamless Steel Pipe Industry

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PT. Pipa Tanpa Kampuh Indonesia (PTKI) is one of the industrial companies for manufacturing seamless steel pipes in Indonesia which has the ability to produce the final product Oil Country Tubular Goods (OCTG) and pipelines (Linepipe), which are used to support operations in the upstream oil and gas industry. The Company currently has an average Local Content of 27.11% for High-Grade products and 21.02% for Low-Grade products. The plant most likely produces products with the High-Grade type, where the market demand for this product gradually decreases every year. It was affecting the Company’s revenue which decreased in recent years; moreover, the utilization of the installed production capacity has also decreased. Therefore, the Company is attempting to penetrate the market for Low-Grade products, which requires developing an effective marketing strategy to compete in this highly competitive market segment. This research conducts internal & external analysis of the Company using PESTEL analysis, Porter’s 5 Forces, competitor analysis, and customer analysis with interviews are used to conduct external analysis. Meanwhile, Porter’s Value Chain analysis, Segmentation-Targeting-Positioning (STP), Marketing mix 7P, and internal management interviews are used to conduct internal analysis. Further analysis was carried out using the SWOT, TOWS matrix and Root-cause analysis (RCA) with the Five Why’s method. According to the analysis, it can be concluded that PTKI’s customers respect the existing regulations, particularly those regulating the use of domestic products, and they expect a fast delivery time for Low-Grade products. Therefore, it may be recommended to the Company that product differentiation be considered to increase local content and do strategic stocking of materials commonly used in Indonesia.