DEVELOPMENT OF YOGHURT MARKET EXPANSION EFFORTS, A Simplified Application in KUEP Taruna Mukti, Ciwideuy

“DEVELOPMENT OF YOGHURT MARKET EXPANSION EFFORTS, A Simplified Application in KUEP Taruna Mukti, Ciwideuy”

By

SITI RUBI ALIYA RAJASA 19004088 NOVRIZAL HARDIONO PRATAMA 19004114

Undergraduate Program School of Business and Management Institut Teknologi Bandung

VALIDATION PAGE

DEVELOPMENT OF YOGHURT MARKET EXPANSION EFFORTS, A Simplified Application in KUEP Taruna Mukti, Ciwidey

By: Siti Rubi Aliya Rajasa ID No: 19004088 Novrizal Hardiono Pratama ID No: 19004114

Management Undergraduate Program School of Business and Management Institut Teknologi Bandung

Validated By

(Ir. Budi Permadi Iskandar) i

ii

“DEVELOPMENT OF YOGHURT MARKET EXPANSION EFFORTS, A Simplified Application in KUEP Taruna Mukti, Ciwideuy” Name: Siti Ruby Aliya Rajasa ID No: 19004088 Name: Novrizal Hardiono Pratama ID No: 19004114 Examination date: 15th August 2007 Graduation date: 27th October 2007 Undergraduate Program, ITB, 2007 Thesis Advisor: Ir. Budi Permadi Iskandar

ABSTRACT Low income communities in most villages of West Java have difficulties in developing their economic condition. They are having risk aversion and at the same instance it limits their business, hinders them to innovate. In order to increase their business capacity, an empowerment from others is needed. Based on this condition, this research will focus on a self-sufficient group in Ciwideuy – West Java, called KUEP Taruna Mukti. They are newly built Small Medium Enterprises that produces yoghurt as their main product, which called Passmilk yoghurt. The research will help them in expanding their market through developing new products, organize product promotion, and evaluate the extent of empowerment of KUEP Taruna Mukti. This research used product testing method to measure the readiness of new products. Then simulated test market method used to measure the product preference and held promotion strategy. After that, explorative methods are used to identify the promotion effectiveness and evaluate the changes in KUEP Taruna Mukti‟s market outlook. The research used simplified application of methods to adjust with the KUEP Taruna Mukti‟s business capacity, so it also could be applied as well by them. The new product development resulted in 4 new products, which are the improvement of KUEP Taruna Mukti previous product. Product testing method approved that all the 4 new products is ready-to-sell in the market. In simulated test market, it was identified that the market preferred 3 new products better than regular products. Promotion strategy in the simulated test market also successfully effective in increasing Passmilk sales in the next following days. Incrementally the new products began to replace the regular products because it generate more sales than the regular products. KUEP Taruna Mukti itself gain more optimism regarding its business futures because the methods used in this reseach are useful by them and also applicable. This result shows that there are some changes in them through empowerment by simplified applications, which is a better market outlook. Keywords: New product development, empowerment, promotion, market outlook, simplified application. iii

iv

“PENGEMBANGAN EKSPANSI PASAR YOGHURT, Sebuah Aplikasi yang Disederhanakan pada KUEP Taruna Mukti, Ciwideuy” Nama: Siti Ruby Aliya Rajasa NIM: 19004088 Nama: Novrizal Hardiono Pratama NIM: 19004114 Tanggal Ujian: 15th August 2007 Tanggal Wisuda: 27th October 2007 Program Sarjana, ITB, 2007 Pembimbing: Ir. Budi Permadi Iskandar ABSTRAK Masyarakat berpendapatan rendah di kebanyakan desa di Jawa Barat memiliki kesulitan untuk mengembangkan keadaan ekonomi mereka. Mereka memiliki ketakutan untuk mengambil resiko sehingga membuat mereka untuk membatasi bisnisnya dan untuk berinovasi. Untuk meningkatkan kapasitas bisnis mereka, diperlukan pengembangan dari pihak lain. Berdasarkan kondisi ini, riset ini akan berfokus tentang kelompok swadaya masyarakat di Ciwideuy – Jawa Barat, bernama KUEP Taruna Mukti. Mereka adalah UKM yang baru terbentuk yang memproduksi yoghurt sebagai produk utama mereka, bernama Passmilk yoghurt. Riset ini akan membantu mereka dalam melebarkan pasar mereka dengan pengembangan produk baru, penyusunan promosi produk, dan evaluasi sejauh mana pengembangan terhadap KUEP Taruna Mukti. Riset ini menggunakan metode tes produk untuk mengukur kesiapan produck baru. Lalu metode simulasi tes pasar digunakan untuk mengukur produk yang paling disukai dan melakukan strategi promosi. Setelah itu, metode eksploratif digunakan untuk mengidentifikasi efektifitas promosi dan evaluasi perubahan-perubahan dalam cara pandang KUEP Taruna Mukti terhadap pasar. Riset ini menggunakan aplikasi yang disederhanakan dalam metode-metodenya agar sesuai dengan kapasitas bisnis KUEP Taruna Mukti, agar juga dapat diaplikasikan oleh mereka. Pengembangan produk baru menghasilkan 4 produk baru, yang merupakan peningkatan dari produk-produk sebelumnya. Metode tes produk membuktikan bahwa keempat produk siap dijual di pasaran. Didalam simulasi tes pasar, ditemukan bahwa pasar lebih memilih 3 produk baru lebih baik daripada produk lama. Strategi promosi dalam simulasi tes pasar juga secara efektif sukses meningkatkan penjualan di hari-hari setelahnya. Secara bertahap produk baru mulai untuk menggantikan produk lama karena lebih banyak menghasilkan penjualan. KUEP Taruna Mukti sendiri memperoleh optimisme lebih terhadap masa depan bisnisnya. Hasil ini menunjukkan bahwa terdapat beberapa perubahan didalam mereka melalui pengembangan dengan aplikasi yang disederhanakan. Kata kunci: pengembangan produk baru, pengembangan, promosi, cara pandang, aplikasi disederhanakan. v

vi

PREFACE

The research of “Development of Yoghurt Market Expansion Efforts, a Simplified Application in KUEP Taruna Mukti, Ciwideuy” is an action-research that purposed to empower KUEP Taruna Mukti through certain methods. The methods are through new product development and promotion strategy for their product, Passmilk yoghurt. Therefore the changes of KUEP Taruna Mukti‟s market outlook also evaluated in the end. This research is a final project which is one of graduation criteria for final year student at SBM ITB 2007 enrollment.

The topic was chosen because of researcher‟s willingness to empower KUEP Taruna Mukti in expanding their product‟s market using this research. Research found that the new product development and the promotion strategy in this research are useful for expanding their market and also increase their sales. The topic will be useful for KUEP Taruna Mukti as a newly built Small Medium Enterprise for its growth.

For this final project completion, here are researcher‟s acknowledgements to whom which gave significant contributions: Ir. Budi Permadi Iskandar, as the researcher‟s final project counselor, for the guidance in final project Mr. Harimukti Wandebori, as the lecturer of SBM-ITB, for the contribution of sampling methods Mr. Uus Permana, as the initiator of KUEP Taruna Mukti, for the big contribution of data All the KUEP Taruna Mukti‟s member for the help in all the researcher‟s activity in the research place, Papakmanggu Hamlet, Ciwideuy, West Java.

vii

viii

DEDICATION

The research of “Development of Yoghurt Market Expansion Efforts, a Simplified Application in KUEP Taruna Mukti, Ciwideuy” could not be completed with the supports from people around researchers. This final project completion is dedicated to: Allah SWT, the God Almighty for the blessings throughout this final project completion. Ir. M. Hatta Rajasa and Drg. Oktiniwati Ulfa Dariah; Aliya‟s parents, for the unconditionally prayers, love and support. Ir. Heri Sosiawan MM and Esti Jayanti, SE; Novrizal‟s parents, for the continuous prayers, love and support. Aliya‟s brothers and sister; Reza, Azima, and Rasyid. Novrizal‟s brother and sister; Riyan and Echi. Families and closest relatives Gading Ramadhan Joedo for being the greatest supporter. Rissabela Putri Rinjani for her continuous encouragement throughout this whole process. Harwin, Ario, Feiral, Caesar, Awan, Riher, Rayza, Ria, Jiew, Tifa, Didoth, Widi, Utha, Pepe, Dimas, Prabu, Chika, Lya, Uki, Dhika for supports. Mbak Ida and Mbak Ju for their patience and helps. All the communities developed by Satoe Indonesia in Ciwideuy. Our colleagues, all the SBM ITB enrollment 2007, 2008, and 2009 Other parties which not mentioned, for any supports.

ix

x

LIST OF CONTENTS

VALIDATION PAGE ..................................................................................... i ABSTRACT................................................................................................... iii PREFACE .................................................................................................... vii DEDICATION............................................................................................... ix LIST OF CONTENTS .................................................................................. xi LIST OF FIGURES .................................................................................... xiii LIST OF TABLES ...................................................................................... xiv LIST OF APPENDICES .............................................................................. xv CHAPTER I - INTRODUCTION ................................................................. 1 1.1 Background .................................................................................... 1 1.2 Research Purpose ............................................................................ 2 1.2.1 Research Objective ........................................................... 2 1.2.2 Research Benefits for KUEP Taruna Mukti ...................... 2 1.2.3 Research Benefits for Researcher ..................................... 2 1.3 Research Scope ............................................................................... 2 1.4 Report Outline ................................................................................ 3 CHAPTER II – THEORITICAL FOUNDATIONS ..................................... 5 2.1 Community Empowerment ............................................................. 5 2.1.1 Community Development Definition ................................ 5 2.1.2 Scope of Community Development .................................. 6 2.1.3 Community Empowering as the Field of the Study ........... 6 2.2 New Product Development ............................................................. 7 2.2.1 Definition of Product ........................................................ 7 2.2.1.1 Levels of Product ............................................... 7 2.2.1.2 Product Attribute................................................ 8 2.2.2 New Product Development Strategy ................................. 9 2.2.2.1 Major Stages in New Product Development ....... 9 2.2.3 Sales Promotion Method to Launch New Products ......... 14 2.2.3.1 Advertising ...................................................... 15 2.2.3.2 Sales Promotion ............................................... 16 CHAPTER III – RESEARCH METHODOLOGY .................................... 19 3.1 Research Method .......................................................................... 19 3.2 Research Design ........................................................................... 21 3.2.1 Entrepreneur‟s Needs Assessment .................................. 21 3.2.2 Developing New Products .............................................. 21 3.2.3 Data Processing .............................................................. 27 3.2.3.1 Results of Product Preference........................... 28 3.2.3.2 Results of Promotion Effectiveness .................. 28 3.2.3.3 The Changes of Entrepreneurial Market Outlook ............................................................................................... 28 3.2.4 Conclusions and Recommendations ................................ 28 CHAPTER IV – DATA PROCESSING ...................................................... 29 4.1 Evolvement of Passmilk Yoghurt Producer ................................... 29 xi

4.1.1 The First Initiatives ......................................................... 29 4.1.2 The Establishment .......................................................... 31 4.1.3 First Products.................................................................. 32 4.1.3.1 Stick Yoghurt ................................................... 32 4.1.3.2 Cup Yoghurt..................................................... 33 4.1.3.3 Sales Performance ............................................ 33 4.2 Financial Performance of KUEP Taruna Mukti ............................. 35 4.3 Product Development .................................................................... 36 4.3.1 New Products ................................................................. 36 4.3.1.1 Strawberry Jelly Cup Yoghurt .......................... 37 4.3.1.2 Melon + Grape Jelly Cup Yoghurt .................... 37 4.3.1.3 Plain Yoghurt + Fruit Jelly Cup Yoghurt .......... 38 4.3.1.4 Mocha Flavored Cup Yoghurt .......................... 39 4.3.2 Results of Product Testing .............................................. 39 4.3.2.1 Product Testing at Kabupaten Office Soreang and Regular Customers at Papakmanggu ............................ 40 4.3.2.2 Decision on New Products................................ 46 4.4 Simulated Test Market .................................................................. 48 4.4.1 Promotion ....................................................................... 48 4.4.2 Simulated Test Market Method ....................................... 49 4.4.2.1 Sampling Result ............................................... 49 4.4.2.2 Pairings of Products.......................................... 50 4.4.2.3 Selling Method ................................................. 50 4.4.2.4 Taking Notes .................................................... 51 4.4.3 Simulated Test Market Result ......................................... 51 4.4.3.1 Strawberry and Strawberry + Jelly Product Comparison ............................................................................. 51 4.4.3.2 Melon and Melon + Jelly Product Comparison . 53 4.4.3.3 Soursop and Plain Jelly Product Comparison .... 54 4.4.3.4 Orange and Mocha Product Comparison........... 55 4.4.3.5 Gender Product Comparison ............................. 57 4.4.4 Promotion Effectiveness ................................................. 59 4.5 Changes in Entrepreneurial Market Outlook .................................. 60 4.5.1 Entrepreneur‟s Market Outlook on June 2007 ................. 60 4.5.2 Entrepreneur‟s Market Outlook on August 2007 ............. 61 CHAPTER V – CONCLUSION AND RECOMMENDATION ................. 65 5.1 Conclusion .................................................................................... 65 5.1.1 New Product Development Conclusion ........................... 65 5.1.2 Promotion Effectiveness Conclusion ............................... 65 5.1.3 Conclusions in Entrepreneur‟s Market Outlook............... 66 5.2 Recommendation .......................................................................... 66 5.2.1 Recommendation of New Products ................................. 66 5.2.2 Recommendation in Promotion ....................................... 66 REFERENCES ........................................................................................... xvii APPENDIX .................................................................................................. xix

xii

LIST OF FIGURES Figure 3.1 – Research Methodology Diagram ................................................. 20 Figure 4.1 – Distribution flow of Stick Yoghurt to small retailers ................... 32 Figure 4.2 – Sales Progress of the old products per day. 23rd July, 2007 ......... 35 Figure 4.3 – The Sample of the Flyers. 25th of July 2007 ................................ 48 Figure 4.4 – Preference Chart for Strawberry & Strawberry Jelly Yoghurt...... 52 Figure 4.5 – Age Range for Strawberry and Strawberry Jelly Customers ........ 52 Figure 4.6 – Preference Chart for Melon & Melon Jelly Yoghurt. ................... 53 Figure 4.7 – Age Range for Melon and Melon Jelly Yoghurt Customers ........ 54 Figure 4.8 – Preference Chart for Soursop & Plain Jelly Yoghurt ................... 54 Figure 4.9 – Age Range for Soursop and Plain Jelly Customers ...................... 55 Figure 4.10 – Preference Chart for Orange & Mocha Yoghurt ........................ 56 Figure 4.11 – Age Range for Orange and Mocha Yoghurt Customers ............. 56 Figure 4.12 – Gender Preference for Passmilk‟s Products 25th of July 2007 ... 57 Figure 4.13 – Male Preference for Passmilk‟s Products. 25th of July 2007 ...... 58 Figure 4.14 – Female Preference for Passmilk‟s Products. 25th of July 2007 ... 58 Figure 4.15 – Post-Promotion Sales Performances .......................................... 60

xiii

LIST OF TABLES Table 4.1 – Sales performance ........................................................................ 34 Table 4.2 – Money Incurred of KUEP Taruna Mukti ...................................... 36 Table 4.3 – Product Testing Result in Kabupaten for Strawberry Jelly Yoghurt ....................................................................................................................... 41 Table 4.4 – Product Testing Result in Papakmanggu for Strawberry Jelly Yoghurt .......................................................................................................... 41 Table 4.5 – Product Testing Result in Kabupaten for Melon Jelly Yoghurt .... 42 Table 4.6 – Product Testing Result in Papakmanggu for Melon Jelly Yoghurt ....................................................................................................................... 43 Table 4.7 – Product Testing Result in Kabupaten for Plain Jelly Yoghurt ...... 44 Table 4.8 – Product Testing Result in Papakmanggu for Plain Jelly Yoghurt . 44 Table 4.9 – Product Testing Result in Kabupaten for Mocha Yoghurt ............ 45 Table 4.10 – Product Testing Result in Papakmanggu for Mocha Yoghurt ..... 45 Table 4.11 – Sales Performance in Cibeureum Market .................................... 59

xiv

LIST OF APPENDICES

APPENDIX A – Interview with Mr. Uus Permana ..................................... xviii APPENDIX B – FGD with KUEP Taruna Mukti........................................... xx APPENDIX C – Definition of Yoghurt ........................................................ xxi

xv

xvi

REFERENCES

Rudito, Bambang & Budimanta, Arif , 2003, Metode dan Teknik Pengelolaan Community Development, Jakarta, ICSD. Kotler, Philip & Amstrong, Gary , 2006, Principle of Marketing, New Jersey, Pearson Education. Churcill, G.A, Jr and Iaobucci, D, 2005, Marketing Research Methodology Foundations, South-Western: USA. Umar, Husein, 2000, Metode Penelitian Untuk Skripsi dan Tesis Bisnis, PT. Raja Grafindo Persada: Jakarta. Annual Report Satoe Indonesia 2006-2007

xvii

xviii

APPENDIX

xix

Appendix A. Interview with Mr. Uus Permana Monday, 6th The questions was whether Mr. Uus have a courage on expanding a new market, how and what are the problems, whether he can implement the methods to a new market, and have he brave enough to take risks on investing. Answers: “...Berani! Sekarang saya sudah merasa lebih yakin bisa jualan yoghurt kemana-mana, saya sudah punya 2 target pasar baru yaitu di Tegal lega, dan di Cibaduyut. Di sana bentuk pasarnya hampir sama dengan di Cibeureum, oleh karena itu menurut saya produk kita bisa dicoba dijual kesana. Tapi mungkin karena dengan jualan kesana berarti menambah pasar baru, maka produksi yoghurtnya juga harus ditambah. Untuk cara penjualan, kami akan menggunakan cara promosi yang kemarin telah didapat dari Ijal dan neng Aliya dengan menggunakan flyers, atau selebaran untuk mengedukasi market akan manfaat dari yoghurt. Selain dari promosi, sebenarnya saya merasa cara penjualan dari kelompok KUEP masih sangat kurang. Kalau saya pribadi merasa sudah bisa „berkomunikasi‟ dengan customer, caranya dengan komunikasi, tatap mata, dan tata krama. Tapi menurut saya itu saja belum cukup, apalagi menurut saya para anggota KUEP yang lain belum semua yang memiliki kemampuan menjual langsung ke customer, ibaratnya sekarang ini keadaan kami masih harus menjemput bola, yang saya harapkan suatu saat dengan diam saja bola sudah menghampiri. Dan untuk mencapai itu, saat ini saya masih membutuhkan bantuan dari luar untuk dapat mengajarkan cara berjualan yang baik kepada para anggota KUEP Taruna Mukti.”

Investasi: “Untuk masalah penambahan produksi setiap hari sebenarnya dari KUEPnya sendiri tidak ada masalah, tapi masalahnya dari supply susu yang terhambat. Dari kelompok pemerah susu sudah tidak membolehkan kita untuk membeli xx

susu lagi dari mereka, padahal dari harga yang biasa mereka jual yaitu Rp 2100, kita berani beli lebih tinggi dengan harga Rp 2500. Jelasnya kenapa saya kurang tau, kemungkinan karena yoghurt kita mulai banyak peminatnya, maka kelompok penjual susu merasa mulai terancam dengan keberadaan produk Passmilk. Akhirnya KUEP mengandalkan susu hasil perahan para anggota grup kami yang juga memiliki sapi perah. Melihat keadaan seperti ini, saya sebenarnya berani beli sapi, tapi kalau beli sekarang sayang karena saat sekarang harga susu lagi mahal-mahalnya jadi harga sapi juga sedang naik. Kalau masalah investasi mah saya berani, dari dulu juga saya ingin sekali invest di sapi dengan orang-orang yang punya ternaknya, modalnya bisa pinjam dari Bank. Saya kalau minjam uang ke Bank dengan bunga 12-14% masih berani, karena sebenarnya banyak juga barang-barang yang harus ditambah untuk penjualan di target baru seperti; cool box, kulkas, dan sealer.”

“Saya pribadi sebenarnya sudah memahami metode yang kemarin dilakukan dalam penerapan produk baru dan strategi promosi. Saya merasa bahwa strategi promosi yang kemarin sangat terjangkau untuk dilakukan di daerah sekitar sini, oleh karena itu saya optimis bisa menerapkan metode tersebut. Saya sangat sadar bahwa tidak bisa selamanya KUEP Taruna Mukti bergantung kepada Satoe Indonesia untuk membantu mengembangkan bisnis ini, dan ilmu yoghurt yang saya miliki ini juga harus dibagi-bagi. Tujuan saya membangun kelompok pemuda ini salah satunya ingin dapat memperkerjakan banyak pemuda sekitar agar dapat memperkecil jumlahnya pengangguran. Sekarang ini saya melihat prospek di bisnis yoghurt sangat cerah, dan saya berani keluar dari kantor tempat saya bekerja saat ini untuk bisa fokus mengembangkan bisnis ini.”

xxi

Appendix B. FGD with KUEP Taruna Mukti The questions was the same with interview, whether KUEP Taruna Mukti members have gain a courage on expanding a new market, how and what are the problems, whether they can implement the methods to a new market, and have they brave enough to take risks on investing.

“ Kita berani untuk pindah ke market baru, tapi kami sangat perlu adanya tenaga marketing yang lebih baik, yang lebih memahami medannya dan menguasai cara-cara penjualan produk ke calon pembeli. Kalau harus rekrut dari orang luar juga tidak masalah, tapi yang penting orangnya harus mau usaha, bertanggung jawab, dan jujur sama kita. Kalau masalah minjam uang ke Satoe Indonesia sebenarnya kita sudah tidak berharap lagi karena menurut kami itu kurang mendidik. Kami sekarang sedang mengusahakan pelegalitasan produk kami dari Depkes RI karena kami takut dengan semakin berkembang luasnya produk kami maka semakin besar pula tanggung jawabnya dari memasarkan produk tersebut. Alasan lain dari legalitas produk juga dengan adanya Depkes RI kami pikir akan memudahkan kami dalam menjual produknya karena masyarakat juga akan semakin percaya untuk membeli yoghurt ini.”

xxii

Appendix C. Definition of Yoghurt Yoghurt is a product which extracted from pasteurized milk, then fermented with certain bacteria until acquires certain acid level, smells and specific taste, with or without other materials addition which is allowed (Indonesian National Standard, SNI, 1992). Yoghurt is a fermentation result, which is defined as food which made with help from enzymes or microbes, until changed bio-chemically which is wanted and could give specific criteria of those food. Yoghurt is one of the oldest milk fermentation product and quite popular around the world. The shape is like porridge or ice cream, but the taste is a bit sourer. The phrase yoghurt came from Turkish, which is Yugurt with the meaning of “sour milk”. Milk which had fermented into yoghurt will be healthier, easier to digest, safer, last-longer, and give better flavor. Yoghurt is one of probiotic drinks group, which means drinks that consists of living microbes that giving benefits inside the digestive system. The dominant microbes in the making of yoghurt is the lactate-acid forming bacteria, there are Streptococcus thermopiles and Lactobacillus bulgaricus. The health values of yoghurt generally higher if compared with fresh milk. It is because degradation of milk components and vitamin forming by the bacteria inside the yoghurt happened since the fermentation process. Yoghurt components are usually 2-3% of fat, 4% of protein and 5% of lactose, and also had calories composition about 54 cal/100 grams. Yoghurt is easier to digest than the fresh milk. In the same amount with the fresh milk, yoghurt could be digested for only 1 hour, therefore fresh milk needs 3 hours to digest. Yoghurt or other fermented milks now used as the therapy for intestinal illness.

xxiii