Producers make packaging smaller to cope with crisis

Producers make packaging smaller to cope with crisis

By Stevie Emilia

JAKARTA (JP): A woman picked up and observed a 100 gram
Dancow's instant milk econo-pack in a supermarket. She checked
its price against other packages of the same brand that came in
boxes and tins. After a few minutes of pondering, she chose the
smaller package.

"It (the econo-pack) is cheaper," said the mother who has
stuck to the brand for her two children, now 10 and seven years
old, for several years.

"Shifting to another brand is not easy even if the product is
getting expensive... so I have to make some adjustments (to my
spending)," she said.

The woman is only one of millions of Indonesians who have to
think creatively to deal with the devastating economic crisis
that has catapulted prices. Their typical complaint is that the
actual value of their income is plummeting while prices of basic
commodities are skyrocketing.

A survey by market research company PT SRI Nielsen Indonesia
(ACNielsen), conducted during the first half of this year and
disclosed on Sept. 16, found that sales volume of various
essential products dropped 37 percent in the first half of the
year, whereas prices increased 83 percent.

The decrease in purchasing power due to the crisis has forced
households to change their consumption patterns, the survey
report said.

Around 90 percent of households surveyed said they would keep
a budget for vegetables during the crisis, but 57 percent said
they would cut spending on meat, while 50 percent would lower or
eliminate spending on secondary foods like chocolate, crackers
and soft drinks.

To cope with the crisis and achieve their sales targets,
producers have introduced various products in economical
packages, at more affordable prices.

Dancow, for instance, launched its economical packages of 100
grams each: Dancow instant milk at Rp 3,200 per package and
Dancow full cream at Rp 2,900 per package, in August this year.

Compared to other Dancow milk products, such as those which
come in refill boxes, the econo-pack is relatively cheap. For
instance, a box of Dancow's 200 gram instant powdered milk is
sold in supermarkets for around Rp 7,150 per box, while full
cream was sold at around Rp 6,500 per box.

Account executive of Dancow's client service team from Indo-
Ad, Rolita Nasudin, told The Jakarta Post on Thursday that the
econo-pack was targeted at mothers aged between 25 and 39 who
have children that drink milk.

"Basically, we understand the present situation and are trying
to show that we care by doing something for the consumers," she
said. Dancow is produced by PT Nestl Indonesia under license
from Socit des Produits Nestl S.A., Vevey. Switzerland.

Even though the econo-pack is cheaper, she assures consumers
that the quality is the same as that of other Dancow products.

"It's completely up to the consumers whether they buy the
econo-pack or other packages, or whether they will buy milk on a
monthly, weekly or daily basis...," said Rolita, adding that the
new product had received a positive response from the market.

Dancow is not the only product that is offering lower price
packages.

In a busy traditional market in Bendungan Hilir, Central
Jakarta, a grocery seller offers a 200 gram plastic package of
Blue Band margarine at Rp 2,400 per package to her customers.

Compared to a 250 gram Blue Band margarine in its usual
plastic container, which sells at Rp 3,300 each, the smaller
package is more affordable.

"Many of my customers buy it (the new Blue Band package) and
it's good for my business...," said Sri, the sales-lady.

Despite the lower price, consumers still consider the
practical purposes of the products they buy.

Santi, an employee, prefers buying a 250 gram Blue Band
instead of the economical package. "I only go shopping around
twice a month... so I need the bigger package in case I can go
shopping only once," she said.

Prices, she said, were not the only thing that mattered to
her. "Just think, if I have to go to the market more often, I
will spend more on transport, so it's just the same after all,"
Santi said.

Economical packages can also be found neatly arranged in
supermarket shelves.

Tropical cholesterol-free cooking oil, for instance, does not
only offer its product in its usual plastic bottle but in a
plastic refill package as well.

One liter of Tropical cooking oil is sold at Rp 6,555 per
plastic package, while a bottle of the same quantity is sold at
Rp 6,915.

Rinso, which is known for its various package sizes, has also
introduced a 425 gram Rinso cream detergent at Rp 2,790 per
package during its promotional period.

Another Rinso product, a half kilo of Rinso Anti-Noda (Rinso
Anti-Stain), is sold for Rp 5,235.

Cigarettes

Producers of basic necessities are not the only ones who have
been quick to anticipate the needs of consumers during the
crisis.

Cigarette manufacturers have also been responsive after facing
a decline in the number of smokers due to soaring cigarette
prices.

If you take a close look at sidewalk vendors, you may spot a
slimmer 12-pack Sampoerna A Mild cigarette package, which is
offered at Rp 2,100 per pack, while 16-pack Sampoerna is sold at
Rp 2,800 per pack.

"I like buying 16-pack Sampoerna instead of the smaller one
because the price is not too much different anyway," said
Gunawan, a private bank employee.

Sampoerna's associate brand manager, Henny Susanto, told the
Post that the company's targeted market segments for the 12-pack
and 16-pack cigarette were actually not that different.

"The target for our products is youngsters aged between 20 and
30," said Henny.

By introducing the 12-pack cigarette, we mean to tell the
public that customers can still smoke Sampoerna at a relatively
affordable price, she added.

The market's response to the product, which was actually
launched in July 1996 but is only becoming popular now, is `not
bad', she said. "We're considering more promotion (of the 12-pack
cigarette)," Henny said.

Zumrotin K. Soesilo of the Indonesian Consumers Foundation
welcomed the economical package trend in the market as an
alternative for those who have a limited budget during the
crisis.

"For workers, who get their payments on a daily basis and have
to provide cooking oil or milk for their families, the economical
packages are an acceptable alternative," she said.

But consumers, she said, should also be careful in selecting
products that come in smaller packages.

"Economical packages are acceptable depending on the type of
commodity," said the foundation's executive director.

For instance, she said, it is feared that milk in smaller
packages is of low quality or contaminated if milk powder is
packed in a plastic container instead of in tins or boxes.

"Producers should also guarantee the quality of products
introduced in economical packages because so far, many consumers
make their choices because they trust the brand," Zumrotin said.