Environmental analysis of Smart Sago (SS) product marketing strategy
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EurAsian Journal of BioSciences
Eurasia J Biosci 13, 207-211 (2019)
Environmental analysis of Smart Sago (SS) product
marketing strategy
Sofyan Samad 1*, Abd Wahab Hasyim 2
1
Faculty of Agriculture, Khairun University, Jalan Batu Angus, Dufa-dufa, North Ternate, Akehuda, North Maluku
97719, INDONESIA
2
Faculty of Economic, Khairun University, Jalan Batu Angus, Dufa-dufa, North Ternate, Akehuda, North Maluku
97719, INDONESIA
*Corresponding author: sofyan.samad1970@gmail.com
Abstract
This environmental study aimed to characterize alternative strategies for marketing of the smart sago
(SS) product by observing the implementation of marketing, segmenting and targeting, and
positioning strategies using a SWOT analysis. Data were collected through observation, interview,
and documentation, and analyzed with data reduction, presentation, and conclusion. The strategy
applied was to segment the market for SS in terms of people commonly divided in regions in North
Maluku with an average age between 30 and 60 years old. The positioning of the product was focused
on the development of the SS product that makes it distinct in terms of flavor and smell, and creation
of a high-quality product. The development of smart sago is seen as the appropriate approach due
to the fact that the business unit will encounter many environmental opportunities and has the
strengths to use those opportunities to its advantage.
Keywords: marketing strategy analysis, product development, smart sago, high-quality product
Samad S, Hasyim AW (2019) Environmental analysis of Smart Sago (SS) product marketing
strategy. Eurasia J Biosci 13: 207-211.
© 2019 Samad and Hasyim
This is an open-access article distributed under the terms of the Creative Commons Attribution License.
INTRODUCTION From the explanation above, development of the
smart sago product (flattened sago) requires relevant
Product development of cassava-based foods is a strategies following the dynamic in consumer taste in the
strength in both local and national markets, for the market environment, developing products with emphasis
cassava is the third main food in Indonesia after rice and on the effort to design safe packaging, appropriate
corn (Kheiry et al. 2013). The demand for cassava- labeling in accordance with product standards, and an
based foods provides opportunities in the market to expiry date. Thus, an integrated marketing plan requires
develop products. Based of BPS North Maluku in 2012, the right marketing strategy approach, as cassava-
high demand for cassava in Indonesia especially North based products are already found in the local market. In
Maluku, is indicated by high utilization of cassava in this study, our smart sago product is distinguished by
North Maluku. The harvest and production of palawija in distinct flavors—strawberry, lemon, mango, and
a district/city with an area of 11.770 Ha generates chocolate—to change perceptions (market) of the
34.621 tons per year, which is directly consumed by product (sago) which has long been distributed in the
people. This strongly promotes interest in developing local and regional market (Zeithaml et al. 2009).
cassava-based products, including the smart sago Product diversification is important in creating a
product, as functional foods. (Bayramlar et al. 2015, cassava-based high-quality product. Furthermore, the
Erbaba and Pınar 2015). strategy involves a range of marketing devices, including
Flattened sago is commonly used in North Maluku product design in accordance with affordable price,
and Maluku and in nearby regions such as Sulawesi and promotion, and effective and efficient distribution. These
Papua. Flattened sago is also commonly marketed are all important factors in developing the smart sago
directly without packaging. Food packaging is tightly product at the local, regional, and national scale.
correlated with hygiene, safety, and eligibility to be Therefore, the suggested marketing activity of the
consumed, and also affects the storage period and ongoing business is to consider the strategy needed to
consumer interest. The flattened sago industry in deliver products to the customer that can be adjusted in
Ternate has not paid attention to such issues. Labelling
in terms of an expiry date is essential for safety. There
are no foods that have unlimited endurance, which Received: September 2018
means all foods will eventually decay (Coles et al. 2003). Accepted: March 2019
Printed: May 2019
207EurAsian Journal of BioSciences 13: 207-211 (2019) Samad and Hasyim
Table 1. Implementation of marketing mix for SS
Product Price Distribution Promotion
- SS is a pastry consumed directly after being dipped in coffee - Pricing was conducted - Simple distribution - Sales promotion: Provide product
or other drinks. Generally, it is shaped into four rectangles. It following consideration consisting of three sample of smart sago to market
has a firm texture, is light, has little taste, and swells rapidly of competitors’ current steps: - Utilize local website and social
when dipped. It uses cassava as the raw material. pricing. 1. Producer media
Procedure: - Penetration Pricing 2. Distributor - Cooperate with government to
• Cassava flour 3. Final consumer participate in exhibition of middle-
• Cakalang fish flour micro business
• Mixing
• Sieving
• Cooking
• Drying
• Final product (Smart Sago)
Source: Managed data
Table 2. Implementation of segmenting, targeting, and positioning of SS
Market segment Determination of target market Positioning
- The SS market segment is people in the - Geography: Ternate is the central marketing - Traditional food-based product.
regions of North Maluku: Ternate, area. - Processed from cassava; laboratory tested to compare
Tidore, South Halmahera, West - Demography: Men and women aged 30 to 60 with current products in market.
Halmahera, North Halmahera, Middle years; employees, public servants and retirees; - Test of level of water, lipids, carbohydrates, and
Halmahera and East Halmahera education from elementary school to doctorate. protein.
- The segment primarily involves men and - Psychography: social, middle upper, middle low. - Distinct flavors and smell make it a competitive product.
women aged between 30 and 60 years. - Lifestyle: consumptive, creative, modern, critical. - Free shipping distribution.
- Durable and practical to carry (travel-friendly), and can
be an alternative to sugary snacks.
terms of both physical and service characteristics. gathering documentation in terms of photos and notes to
Implementation of these strategies (market segmenting support and complete the analysis.
analysis, target market, and product position in the Data were separated into main points, analyzed
market) requires relevant information (Akyürek et al. according to themes and patterns, and then reduced and
2015, Zeithaml et al. 2009). classified. Data were presented descriptively, organized
Management of the marketing mix—consisting of and arranged according to patterns of correlation. A
product, price, distribution channel, and promotion—can temporary conclusion was drawn, which was further
be effectively done by managing product attributes such changed in the next step.
as features, packaging, affordable price in accordance
with the target market, efficient distribution channels, RESULTS
and a promotion platform to achieve segment capacity
SS Marketing Mix
and target market. This study aimed to observe the
The marketing mix elements of a product are
implementation of marketing, segmenting and targeting,
essential for the development of the product. The
and positioning strategies, using a SWOT analysis to
marketing mix for SS is presented in Table 1.
determine alternative strategies for marketing the smart
sago (SS) product. Segmenting, Targeting, and Positioning
Strategies of SS
MATERIALS AND METHODS The three main strategies to achieve successful
marketing are: (i) segmenting; (ii) targeting; and (iii)
This study used a descriptive approach, positioning. Implementation interrelates these three
systematically describing the facts and characteristics of strategies, as shown in Table 2.
the studied object, including the price and distribution
Implementation of SWOT Analysis of SS
model for SS, and comparing these with a similar
SWOT analysis is a measurement of the strengths
product from competitors to consider the pricing plan
and weaknesses, opportunities and threats,
and strategy used for SS. This study was conducted on
encountered by the company. Through a SWOT
SS in Ternate, based on the production of SS obtained
analysis, an overview of the company’s situation can be
through a natural process, from seed screening, to
obtained to assist with its strategy.
cultivation, and production, which is different from the
traditional approach used by competitors in the local SWOT and Product Development Strategies
market. The production aspect requires a development
The next step was data collection. This was done in strategy to fulfill the production plan and capacity. The
three ways: 1) direct observation of the production and SWOT analysis and subsequent development strategy
marketing strategy for SS, comparing the marketing can be seen in Table 3; and SWOT analysis of the SS
model with that for similar products; 2) interviews with development strategy can be seen in Table 3.
the owner of SS and several producers in the local
market to ascertain marketing activities; and 3)
208EurAsian Journal of BioSciences 13: 207-211 (2019) Samad and Hasyim
Table 3. SWOT analysis of SS
Internal Strengths (S): Weaknesses (W):
1. Easy production which doesn’t 1. Lack of tools for quality control plan.
requires sophisticated technology 2. Lack of technical skill in quality control
External 2. Quality control is available
Opportunities (O):
1. There are many suppliers of materials, both local and
(S) – (O) (W) – (O)
regional in the same province
2. Production tools are available
Threats (T):
1. Limited area of cultivation of raw materials in long term (S) – (T) (W) – (T)
2. High cost of supplementary materials
accordance with the new product characteristics in the
DISCUSSION marketing area, especially in the local area.
Based on Table 1, implementation of the marketing As a first stage, the type of promotion used was sales
mix for SS focuses on the idea that smart sago can be promotion, by giving a sample of smart sago to the
directly consumed after being dipped in a drink, as well reseller and another distributor. The promotion was also
as being cooked into a porridge or sweet jelly. Shape, conducted by utilizing the local website and social
size, and color vary depending on its maker or cook; they network to minimize the cost.
are also dependent on the type and color of the starch To increase promotion of SS, it is essential to build a
sago as raw material. Generally, flattened sago is partnership with associated parties such as the
flattened into four rectangles. This food is firm, light, Department of Industry and Commerce, the Department
tasteless, and relatively hygroscopic: it rapidly swells of Cooperatives, and the Department of Tourism to
when it is dipped in drink. Flattened sago contains low participate in bazaars or exhibitions, and to be able to
protein. Flattened sago is made of half-wet/half-dried offer economies of scale. Moreover, there is an order
cassava flour which is gently crumbled. Production of system for smart sago. Referring to Rewoldt et al.
smart sago is performed through many processes. SS (2005), to determine the best method by which to sell a
should consider aspects such as package design, smell, product, the main decision focuses on the most effective
and flavor, and the distinct texture that differentiates it promotion combination. According to Kotler and Keller
from competitors. Cravens and Piercy (2006) states that (2009), there are several forms of promotion that can be
a product is “anything that is potentially valued by a used to deliver a product message to customers.
market target for the benefits or satisfaction it provides, Implementation of promotion is conducted through a
including objects, service, organizations, places, people, range of activities, namely advertising, sales promotion,
and ideas”. publicity, and personal selling. Zeithaml et al. (2009)
Smart sago pricing is set in accordance with the state that advertising is a non-personal presentation
target market. Usually, similar cassava-based products paid to offer a product. The message is spread via
already exist in the local market, therefore the pricing television, radio, newspaper, magazine, outdoors, and
strategy will likely take the target market strategy into the internet. Setiadi (2008) states that advertising is
account without neglecting the real main price composed of six elements: (i) paid communication; (ii)
calculation (Palabıyık et al. 2017). identification of sponsor; (iii) persuasion to affect
The penetration pricing strategy of SS is based on customer; (iv) medium as a platform to deliver the
similar products of fellow competitors and aims to make message to target audience; (v) non-personal; (vi)
the product price lower: a characteristic of the audience as the customer and message target.
penetration pricing strategy is that price is lower than Referring to Kennedy and Soemanagara (2006),
fellow competitors in the market. Price also facilitates the publicity is a tool that strongly affects public opinion of
positioning value of the product or company brand in the the desired situation.
market (Kotler and Keller 2009). According to Tjiptono et As shown in Table 2, looking at implementation of
al. (2008), price is the only element of the marketing mix segmenting, targeting, and positioning of smart SS, to
that provides income to the organization. sell smart sago it is necessary to perform market
Initially, exclusive distribution was chosen as the segmenting in which the market segment for smart sago
distribution channel for SS, in which marketers employ is people commonly divided into regions in North
just one person/specialized mediator to distribute the Maluku: Ternate, Tidore, South Halmahera, North
product in a particular region on the condition that the Halmahera, West Halmahera, and Middle Halmahera.
mediator is not allowed to sell products from other The age segment is between 30 and 60 years, these
suppliers. This requires harmonized cooperation being the people more likely to consume the product in
between the supplier and the mediator. The next stage quantity, as compared to those aged below 30 years.
was selling to the customer through the mediator and A study conducted by Iskandar (2015) reported that
distributor. These two stages were chosen in identifying the customer target consists of geography,
demography (age, sex, and education) and
209EurAsian Journal of BioSciences 13: 207-211 (2019) Samad and Hasyim
Table 4. SWOT analysis of marketing strategy of SS
Internal Strengths (S): Weaknesses (W):
1. Easy production due to availability of materials 1. Low promotion budget
2. Tools that support distribution and marketing 2. Simple promotion plan
External 3. Distinct flavor to increase product value 3. Relatively high cost of the product
Opportunities (O):
1. Local and outdoor markets are widely available East
Indonesians (S) – (O) (W) – (O)
2. Sufficient amount of raw materials
3. Main food for East Indonesians
Threats (T):
1. Many competitors both local and regional
S) – (T) (W) – (T)
2. Smart sago is barely known in market
3. Lack of networking to the market outside.
psychography (social class and lifestyle). Ternate is the Strategy (W)–(O): a) Use food-grade packaging and
main target for SS customers. Ternate is a strategic containers for production, or packaging composed of
place because it is the first capital city of North Maluku. safe materials in accordance with standardized product
Later, North Maluku developed into North Maluku quality.
province, so Ternate was a temporary capital city. Strategy (W)–(T): a) Use simple and efficient quality
Ternate is an archipelago region. Demographically, control by utilizing the limited room available; b) develop
Ternate is populated not only by the native population of technical employment to increase capacity of quality
North Maluku, but also by people coming from Java dan control of SS.
Sulawesi. Those characteristics are therefore taken into Development of SS Marketing Strategy
consideration in the SS target market. Demographic Strategy (S)–(O): a) Utilize available tools to
factors are also included, these consisting of men and accelerate distribution in both local and non-local
women aged 30–60 years that work either as public or markets; b) Utilize available materials to enhance SS
private servants and whose academic background product capacity; c) develop flavor to increase the sale
ranges from elementary school to a doctoral program. value of smart sago; d) take advantage of opportunities
Psychographic factors consist of low- and upper-middle to be a market leader by expanding distribution and
class, and a lifestyle that is largely consumptive, market.
creative, modern, and critical. Strategy (S)–(T): a) Elevate the service by utilizing
The positioning of smart sago aims to place the facilities—i.e. maximize phone service for orders and
product as an excellent local and regional product; complaints; b) optimize promotion activities to introduce
although sago products made from cassava are the new product, and use distributive tools as promotion
currently available in the market, smart sago tools.
emphasizes its distinct flavor and smell. The quality of Strategy (W)–(O): a) Widely use an efficient and
smart sago is different from other cassava-based affordable promotion strategy through a local network to
products because it has undergone scientific tests in the become very familiar among local people; b) suppress
laboratory such as measurement of water, lipids, the distribution cost and supportive materials to
carbohydrates, and protein level. minimize additional outlay that causes higher costs.
To guarantee continuity of smart sago orders in Strategy (W)–(T): a) Increase and maintain product
Ternate, SS also distributes orders without an additional quality to balance against the price of competitors; b)
shipping cost. Another advantage of SS is that this add promotional activities to become well known.
product is not easily broken: it is therefore travel-friendly, The SWOT analysis was used to analyze the
as well as a healthy alternative snack. Analysis of the development of smart sago and its appropriate
production and development of SS used a SWOT marketing strategy. A growth strategy is the appropriate
analysis approach (Tables 3 and 4), that described the approach: the business unit may encounter many
following. environmental opportunities and has strengths to utilize
Production of SS of those opportunities. According to Udaya et al. (2013),
Strategy (S)–(O): a) Select appropriate technology to a tendency in an environment that can be utilized by
generate optimal and more efficient production to fulfill industry is an opportunity. Moreover, Siagian (2012)
production plan; b) select supplier near production states that SWOT is an effective instrument by which to
center (manufacturing location) to assist in monitoring perform a strategic analysis: it encourages the ability in
the quality of materials. strategic decision making to maximize the role of
Strategy (S)–(T): a) Build a partnership with the strengths and opportunities while minimizing
government to free the cultivation area to enhance the weaknesses in the organization and suppressing
capacity of material cultivation; b) quality control to emergent threats. According to Hunger and Wheelen
control materials consumption so that it is optimal and (2003), analysis of the situation is the first stage of
efficient. strategy arrangement. It is also necessary for the
210EurAsian Journal of BioSciences 13: 207-211 (2019) Samad and Hasyim
strategic manager to find a strategic compatibility among distinctive flavor and smell. The quality of smart sago is
external and internal opportunities. different from other similar products, because it is
scientifically tested to measure water, lipids,
CONCLUSION carbohydrates, and protein level.
Implementation of the marketing mix consists of SWOT analysis was used to analyze the
components such as product (tasteful packaging, smell development of smart sago and its appropriate
and flavor, distinct texture), price (penetration price marketing strategy. Thus, a growth strategy is seen as
strategy), distribution (exclusive distribution and direct the appropriate approach due to the fact that the
selling without mediator/distributor), and promotion business unit will encounter many environmental
(sales promotion and local web site/social network). opportunities and has the strengths to use those
The market segment of smart sago is people opportunities to its advantage.
commonly divided into regions in North Maluku: Ternate,
Tidore, South Halmahera, North Halmahera, West ACKNOWLEDGEMENT
Halmahera, and Middle Halmahera. The age segment is The author thank to Directorate General of Higher
between 30 and 60 years, the segment which is Education Indonesia for facilitating this research.
assumed to consume the product highly compared to
those below 30 years. Ternate is the main target for the FUNDING SOURCES
SS customer, who belongs to the low- and upper-middle This research received funding from Directorate
class. Smart sago aims to position itself as an excellent General of Higher Education Indonesia by Masterplan
product in both the local and regional markets. Although for the Acceleration and Expansion of Indonesian
sago products made from cassava are currently Economic Development (MP3EI) Research Program
available on the market, smart sago’s emphasis is on its 2016.
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