Demand for branded goods remains stable

JAKARTA (JP): Indonesia's current monetary crisis has not affected demand for brand-named consumer goods targeted for the middle class, The Castle Group, a business consulting company, stated yesterday.

Castle's chairman, James W. Castle, said demand for brand-name items remained stable even though the country was mired in financial crisis.

"The demand for these middle-class consumer goods remains constant while the demand for luxury goods is declining due to the crisis," he said after launching a book on the Indonesian consumer market.

He noted Unilever, one of Indonesia's biggest consumer good producers, had not faced a decline in the demand for its products.

He added that two Unilever products, Pepsodent toothpaste and Lux bath soap, still dominated the market and enjoyed a strong demand despite the crisis.

"Most people will not change their favorite brands, especially if the products are competitive with other brand prices," he said.

But he said that the demand for luxury items was falling because people were shifting to more economical products.

"The currency crisis will eventually have a major effect on the purchasing power of most Indonesian consumers, and will affect manufacturers of all products, particularly those which sell nonessential goods," he said.

The Castle Group, in cooperation with AC Nielsen SRI (Survey Research Indonesia), launched The Indonesian Consumer 1998, a book which reviews Indonesia's consumer market.

Meanwhile, AC Nielsen SRI president Farquhar Stirling said market leaders would see the economic downturn as an opportunity to consolidate and expand their businesses.

"In the current economic crisis, local and small players find it is more difficult to sell. They will reduce their spending, especially in advertising," he said adding that bigger players would not reduce their advertising spending.

He said the cut in their advertisement budgets could shrink their market.

The condition was an opportunity for major players to increase their market share, he said.

"People will look to other brands because they have to adjust their spending with their economic situation. It's a very good opportunity to take consumers away from other brands by introducing your brands," he said.

The Castle Group specializes in business information, industrial research and economic forecasting. It began with the establishment of PT Menata Prospecta Persada in 1980 and the Hong Kong-based Java Consult Limited in 1985.

The group operated under the names of Business Advisory Indonesia and Business Advisory Strategis until 1993 when it was consolidated under The Castle Group with the formation of PT Jasawenang Citrasempurna.

AC Nielsen was established in 1973 as In Search Data. In 1976 the company joined Survey Research Group and became Survey Research Indonesia in 1982.

The company joined Nielsen International/Dun & Bradstreet in 1994 and starting early this year it operated under the name of AC Nielsen SRI.

The Indonesian Consumer 1998, claimed to be the first comprehensive survey of the Indonesian consumer product market to have been released since the recent currency crisis, contains reviews of key sectors including franchising, advertising, distribution and retail. (gis)