Demand for branded goods remains stable

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)