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.