Creativity is needed to ensure survival

Jonminofri Nazir, Contributor, Jakarta

Manufacturers and traders of particular products are involved in a real war in the market. The war comprises fierce battles in pricing policies, marketing strategy, customer service and creative tactics. Finally, those having the highest degree of creativity come out as the winners.

Today's consumers are highly aware of the quality aspect and smart enough to choose products with good quality at reasonable prices. So quality is not negotiable, meaning that it is no longer competitive to downgrade your quality in order to reduce the selling price. Whenever consumers are in doubt about the quality aspect, they immediately demand reliable after sales service.

The following is a story of two products that are in a tight competition in the market: computer hardware and the mushrooming laundry service in Jakarta. Both products need a high level of creativity to beat their competitors. War in computer prices: The competition is obviously very tight, because the market is full of a large number of branded and unbranded desktops for customers to choose from. As both use similar components, the quality is perceived as not being too different.

Before visiting a computer shop today, within seconds customers can get information on prices from certain websites, such as www.bhinneka.com.

Based on the information on prices and specifications, the customer then hunts for a lower-priced product in computer malls. As the customer requests the components specified on the website, the quality is undoubtedly the same. This way it is impossible for the manufacturer or his distributor to get a good profit margin.

Though often disappointed, distributors do not have much of a choice.

Here is one example. One distributor of branded computers, ProKing in Ratu Plaza, complained that the profit margin for selling a Rp 10 million computer was illogical. "We earn less than Rp 100,000 per unit," said Yanti, one of the sales executives, while mentioning a brand that is frequently advertised.

The disappointment of the distributors and computer stores stem from the fact that they have to bear, among other things, the rental, transportation and many other costs. The manufacturers, on the other hand, argue that the profit margin has to be kept low due to tight competition and the high cost of advertising.

Almost all computer brands face similar conditions. While keeping the prices low, they target a higher sales volume to cover the advertising and promotional costs.

However, to survive amid the fierce competition, manufacturers and distributors resort to tactics that are highly creative.

Asus, the manufacturer of a well-known computer mainboard, for example, heavily advertises computers containing components of the Asus brand at drastically low prices. The strategy here is clearly targeted at high sales volume so as to thereby beat their competitors.

Asus products have to be purchased in stores that have been appointed as their partners, otherwise computers with similar specifications sold elsewhere have a higher price tag. War in Laundry Quality: Well-known laundry companies rely on their brands and huge number of outlets to win in the competition. But small companies, using high creativity, are still able to steal away a part of the customers and expand their business quite fast.

Suroso, with his CNN (Clean and Neat) brand, is one good example how a small company can flourish. His market is indeed limited, as this relatively new company currently serves three large hotels and two apartments.

His marketing method can be categorized as being simple. "I sent my customers just introductions and quotations," said the man, who retired as a police officer two years ago.

Today, his laundry machines are working at full capacity -- around 20 hours daily -- and for the time being he has to reject other major customers.

Before achieving success, Suroso had to find some creative ways, especially of taking care of quality and customer service. Suroso conducted intensive research before deciding on the location for his laundry machines. His research involved various aspects, most importantly regarding the quality of the water. He found out that Central Jakarta and most business areas in the city were not appropriate due to the low quality of the water. The location he finally selected was approved by a laboratory.

From various sources, Suroso also learned a great deal about other quality aspects pertaining to the laundry business. After making certain that he could give the best to his customers, only then did he invest hundreds of millions of rupiah in the business.

In today's era of cutthroat competition, it is highly unlikely that a business will survive without a certain level of creativity. Many examples abound. A large number of the cafes that emerged after the country's economic crisis had to close down. Likewise, in the print media, numerous newspapers and magazines that suddenly appeared like mushrooms over the past three years have also gone bankrupt.