Costly marketing strategy but fruitful in long term

Costly marketing strategy but fruitful in long term

By Burhanuddin Abe
Contributor
Jakarta

Only a couple of years ago wheat flour was a generic or
unbranded commodity, but today go to any supermarket and you will
find various brands to choose from, including Cakra Kembar (Twin
Wheels), Segitiga Biru (Blue Triangle), Kunci Biru (Blue Key),
Gunung Bromo (Mount Bromo), Roda Biru (Blue Tire) and many
others.

Just like all fast-moving consumer goods, flour has turned
into a branded product complete with all the marketing activities
required to establish it in consumers' minds, similar to the
current brand positioning enjoyed by Nike shoes or gowns with the
Yves Saint Laurent label.

There was a time when only products manufactured by Bogasari
Flour Mills dominated the local market. However, the antimonopoly
policies issued by the government several years ago have given
rise to other manufacturers. Hence, this giant corporation has
had to embrace modern marketing, including serious branding and
big-budget advertising to face its competitors.

Going all out in its advertising and promotional campaign,
Bogasari Flour Mills is also sponsoring a popular television
program on cooking that is aired by a television station within
the same group of companies: Indosiar. Due to its high ratings,
the program, Sajian Bersama Bogasari (Delicious dishes presented
by Bogasari), was recently taken over by another station, RCTI.
What is interesting is that a huge number of noodle and martabak
(crepe filled with spices, egg and pieces of meat) vendors are
among those who watch the show and purchase the flour.

To cater to this segment, dangdut singer Ikke Nurjanah was
hired for its advertisements. The time slot of the program is
also appropriate, being aired right after the boxing matches,
which is a favorite sport for many small-business owners.

Philip S. Purnama, the senior vice president and chief
commercial officer of Bogasari Flour Mills, acknowledged that
maintaining a leadership position was not easy as it required the
most effective marketing strategy. However, the MBA graduate of
Harvard University, through his aggressive marketing, succeeded
within four years in increasing the company's sales sixfold to Rp
6 trillion.

Starting with three brands, the company -- one of the world's
largest flour manufacturers -- currently dominates the domestic
market with a 70 percent share with its 30 brands. Subsequent to
the deregulation of the State Logistics Agency (Bulog), Philip
said the company had to face a bigger challenge in the wake of
globalization and the tough worldwide competition.

"In fact, we have been quite prepared for this major
challenge, including the ASEAN Free Trade Area," Philip said.

Branding is now used not only for flour-based products, but
also for other commodities that were previously generic products,
like sugar and salt. Garam Gurih (Delicious salt) is one of the
brands available here, while for sugar one recently introduced
brand is Gulaku (My sugar).

Previously unimaginable, most supermarkets now carry no fewer
than 20 different brands of eggs. Similarly, just like imported
fruits, local fruits are also marketed in brands. This means that
farmers or their marketers are now more confident about the
consistent quality of their products.

Branding has been long recognized as one of the most important
elements in marketing. In the category of commodities like flour,
sugar, salt, etc., according to noted Indonesian marketing expert
Hermawan Kartajaya, branding has also become one of the most
effective strategies for singling out a product and making it
stand out among the commodity crowd.

Ask any marketing director or brand manager and every one of
them will say that making your brand stand out is not easy as it
requires patience, consistency and persistence. Above all, it is
not cheap. However, in the long run, establishing a brand is a
profitable investment.

The huge budgets for marketing communication, which often
range in the billions of rupiah, seem extravagant at first
impression. However, such amounts of money are generally only
about 1 percent of estimated sales figures. So it should come as
no surprise just how heavy the bombardment of ads is for the
products of major corporations like Bogasari, Gudang Garam,
Unilever and so forth.

In today's era of globalized marketing, modern marketing that
includes branding and marketing communication is unavoidable. It
is the most effective tool for transforming a brand into an
asset, which will be useful not only for the domestic market but,
more importantly, for penetrating international markets.

"Our country badly needs companies who are willing to
establish major brands that in time will turn into a kind of
asset for the nation in today's highly competitive world,"
Hermawan concluded.