Butter is a well-known food ingredient that are made from animal fat. It has rich flavor and aroma. However, butter can be substituted by margarine because margarine has similar texture with less expensive and longer shelf life. Margarine is made from vegetable fat and contains at least 80%-90% of fat [1]. On Figure 1, margarine consumption is increased annually which was started from 2012 and rose significantly in 2017. This indicates Indonesia margarine market may have potential growth in the future.

PT Asianagro Agungjaya (AAJ) is a business unit in Apical Group. It is operated in downstream palm oil industry producing edible oil such as cooking oil, shortening, CBS, CBR, and margarine. Products are sold to B2B as well as B2C. One of the products in AAJ named Vitas sachet margarine is discussed in this paper. Vitas sachet margarine was first launched several years ago. Nevertheless, based on the observation of internal management team, the problem of Vitas sachet margarine is low sales revenue.

Main Objectives

The objectives of this research are to assess factors affecting customer purchase decision through marketing mix and formulating marketing strategy for Vitas sachet margarine to increase sales revenue.

Literature Review

Marketing mix is used to understand marketing tools that is utilized by the firm in order to produce the response it wants in target market [2].

CBBE is used to describe how the brand positioning can create intense and active loyalty relationship with the customers [3]. Keller et al. [3] defined how to build a brand resonance to customers. Building a brand consists of four stages that answer four main questions as follow. These four stages are like ladder meaning that the steps must be done in sequence.

Brand Identity

Brand identity is the first stage and the basis of a brand to answer who the brand is through brand identification with customers and brand associations in customers’ minds with a particular product benefit, or customer needs.

Brand Meaning

Brand meaning is the second stage answering what the brand is through firmly establishing the totality of brand meaning in the minds of customers. Brand meaning is depicted through brand performance (tangible brand associations) that is experienced directly from customers and brand imagery (intangible brand associations) that is seen from direct experience before, advertising, and any source of information.

Brand Response

Brand response is the third stage of pyramid answering what about the brand is, how the customers feel/think about the brand. In this stage, customers will form their own judgments and feelings toward a brand.

Brand Relationship/Brand Resonance

The fourth stage is to answer what kind of associations and how much of connections would the customers like to have with a brand. In this stage, brand response is converted to create brand resonance with behavioral loyalty, attitudinal attachment, sense of community, and active engagement.

Netnography is a specific way to conduct qualitative social media research with an extensive amount of detail to accommodate and combine data collection operations of investigation, interaction, immersion, data integration, and interpretations [4].

SWOT analysis provides a leader to assess the current situation and future prospects and gives insights that come from internal analysis of company’s strength and weaknesses with external analysis on opportunities and threats to devise strategic implications [5]. Opportunities occur when a trend plays to the strength of a firm [6]. Weakness in other resource areas can fail the strategy execution as well [7]. Therefore, SWOT analysis must connect internal environment of the company with external environment by answering a set of strategic questions [5].

TOWS matrix is formed by linking internal factors (strengths and weaknesses) to external factors (opportunities and threats). Both external and internal analysis which has been captured during SWOT analysis assist to produce strategic alternatives. Strategic alternatives process is divided into four quadrants [5]:

• Strength-Opportunities quadrant (top left) for offensive alternatives to take advantage of external opportunities using internal strength

• Weaknesses-Threats quadrant (bottom right) for defensive alternatives to eliminate/minimize internal weakness that will make external threats into a reality

• Strengths-Threats quadrants (top right) to use internal strength to minimize the likelihood and effect of an external threats

Weaknesses-Opportunities quadrant (bottom left) to boost internal weakness to improve its ability to take advantage of an external opportunity.

Figure 1: Margarine consumption per capita in Indonesia, Ministry of Agriculture [21]

In order to meet customer needs, company has to understand customer behavior and preference which can be done through marketing research. Understanding customer behavior can assist the company to fulfil customer needs in every component of marketing mix. In this case, marketing mix shall be the framework in proposing the solution for the issue. TOWS matrix and Customer Based Brand Equity (CBBE) will be the complementary tools for implementing the strategy.

Marketing research is mainly categorized into two which are exploratory and conclusive research design [8]. In this study, the research will be designed for exploratory research. Data collection is categorized into two which are primary data and secondary data. Primary data will be collected through the combination of quantitative and qualitative research. While secondary data are an economical and quick source of background information while primary data are come by the researcher for the specific purpose of addressing the research problem [8]. Secondary data will be gathered through online browsing, government sources, other researches/journal and also company’s internal information.

Quantitative Method

Online survey is distributed through Google form which was conducted from 4th February 2022 to 10th February 2022 to understand the consumption habit and customer preference towards margarine as well as brand awareness of Vitas sachet margarine. The target population in this research is male or female who consumes margarine as the researcher wants to examine whether the company has chosen the right target market or not. The sampling units will be woman/man who lives in west and central region of Indonesia based on the distribution area of the company currently. The respondents are expected from generation X, generation Millenial, and generation Z. The sampling method in this paper is non-probability sampling method (convenience sampling technique). The sample size of the survey is determined based on population proportions by using Slovin formula below [9]. N stands for total population, e equals to error tolerance, and n is to describe number of sample size. The total population is 176,657,814 [10]. The error tolerance in this research is 10%. From the formula above, the author figured out the calculated sample size around 100 respondents. However, 150 people were participated upon the execution which are mainly lived in west region of Indonesia:

Respondents were asked in general about product, place, price, and promotion of margarine by using important scale (Likert scale). In this paper, the output data from the questionnaire is Likert scale data [11].

Qualitative Method

According to Nalendra [9], the sample size of in-depth interview is around 10 people. Netnography shall be supporting data to see their behavior and understand their point of view towards some margarine brands in digital space since most moms who consume margarine shared in their communities online.

Data Processing and Analysis

Data is analyzed by using Microsoft Excel to obtain mean and standard deviation for each Likert scale. The interpretation of Likert scale is adapted from Table 1 as the basis for mean classification. Other than that, qualitative data is compiled using Histogram for descriptive analysis.

Findings

Quantitative Method

150 people were participated upon the execution which are mainly lived in west region of Indonesia. The participants of the survey are 48% of male and 52% of female. More than half of the respondents work as employee (81%) with the income above Rp3.500.000. 

Based on the survey result, about 66% of the respondents use margarine for bakery, stir frying, and cooking egg/meats. This is in line with case study from Lesmana [12] who demonstrated that there is an increase in Blueband margarine consumption during festive season which had 135% growth in pre-festive and 16% growth in festive season. This finding indicates that Indonesian people usually become seasonal baker. On the other hand, 34% of the respondents do not consume margarine frequently due to health reasons, their preference to use butter than margarine (because aroma of butter usually is stronger than margarine). 

On Table 2, 99 respondents agree that the vitamin contents, aroma, and taste are the important attributes that margarine should have. Overall mean of product’s attributes is still within the range that all attributes are generally important. The most important attribute based on the survey are vitamin content, aroma, and taste. Vitamin content is highlighted in the packaging and during promotion. The respondents who frequently use margarine were asked to choose texture (that can be more than one choice) and color of margarine. Most of the frequent users prefer to purchase soft texture and easy-to-melt margarine with light yellow. This is slightly different with the study from Krause et al. [13] where the softest texture and darkest colors is the most desirable characteristics for margarine lovers.

The respondents also were asked about the expected packaging and size of margarine and their preference is shown in Figure 2. Most respondents prefer to purchase 200 grams sachet margarine. Besides, there are few customers who wants to buy 15 kgs margarine in box as well which may signal that margarine use other than daily cooking.

Most respondents who are millennials generation tend to purchase margarine at the convenience store. Thus, this can be a sign for the marketing team to ensure the distribution channel up to convenience store.

Based on the survey, respondents mentioned source of information about margarine brands like TV/radio advertising, it is one of the most commonly used method, especially from the competitors. Second, recommendation from other people and social media ads can increase consumers’ brand awareness nowadays. This is in line with the book titled “Marketing 4.0 Moving from Traditional to Digital”. Kotler et al. [14] said that customers are socially connected with one another in the digital economy which is called consumer community confirmation. 

Figure 2: Respondents preference of margarine packaging

Table 1: Scoring Likert scale of the survey [20]

Table 2: Attributes of products that affecting purchase decision

Table 3: Attributes of promotion that affecting purchase decision

Table 4: Attributes of price that affecting purchase decision

Figure 3: Marketing funnel of Vitas sachet margarine

Since customers will not listen to brand, recommendation from families, friends, or relatives is more trustworthy. Moreover, the usage of social media increase in millennials and Z-generations, thus the advertisement also slowly shifts from TV/radio to social media. This is agreed by 99 respondents that TV/radio ads are neither/nor important factor. On Table 3, price reduction is considered as the most important factor that attract consumer to buy margarine. Second, bundling margarine products with other products such as cooking oil is one of the strategies that is used in AAJ.

In terms of price, respondents agree that higher price means customer will get better quality and taste of margarine. On Table 4, overall mean for price factors is 3.67 which means that respondents agree that price is one of the important factors on purchase decision of margarine.

On the evaluation of brand awareness of Vitas, it is found that only 37 out of 150 respondents know about Vitas’ sachet margarine, which means only 25% people aware about Vitas brand. 7 of 37 respondents knows Vitas due to their jobs. 18 of the 37 respondents has purchased Vitas’ sachet. Marketing funnels on Figure 2 is used to explain the situation from awareness to purchase. Conversion rate from brand awareness to purchase action is 49%. Several reasons for not purchasing Vitas sachet from some respondents are difficult to find and packaging is not attractive.

Based on the customer analysis, it demonstrated that brand awareness of Vitas sachet margarine is very low which is around 25%. After the author interviewed some respondents to gain qualitative feedback. Initially, some respondents failed to recognize Vitas brand due to its similarity of name with forVita brand. When the author showed the packaging of each brand, most respondents recognized forVita brand rather than Vitas brand. One respondent can recognize Vitas brand, but she can’t recall where did she see Vitas brand before. She can easily recognize and recall forVita since it is available in many places. This clearly give signal that Vitas brand currently is in the stage on building brand identity and brand meaning. Brand awareness of Vitas is still very low due to there is no prior exposure of Vitas brand. In addition to that, the conversion to purchase/ever tried stage is also reduced by 49%. When the customers only recognize the Vitas brand without ever trying it, consumers’ differential response can’t reside in their memory that prove brand imagery is not strong enough. Since the steps on building a strong brand is started from having a brand identity as the foundation of brand resonance pyramid, the root causes of low brand awareness basically are related to Segmentation, Targeting and Positioning (STP) and marketing mix.

Qualitative Method

In netnography analysis, most community members have their own recommendation on margarin brands such as Blue Band Cake and Cookies, Royal Palmia, Palmia, and even their secret mixture between margarin and butter. They usually use margarine in the snack recipe. It indicated that the margarin has been a small part of the Indonesian food, especially for snack where its taste vary from crispy and salty in the first place, then spicy and sweet in accordance with Indonesian food culture map [15]. However, based on the observation, it showed that margarin still can be substituted with cooking oil as well for the ingredients. This is in line with the findings in market survey.

The environmental analysis that has been conducted during primary and secondary data collection is summarized through SWOT analysis on following Table 5.

All strategic alternatives will be further elaborated on Table 6. The selection process of strategic alternatives being proposed solution are through root cause analysis. Strategic alternatives have to be able to answer all root causes based on the findings during survey and interview before. Root causes that are obtained as follow:

• Products: Obsolete packaging design, color selection of the packaging is similar with competitors (which can be seen in competitor analysis), and the resemblance name with competitors

• Place: low distribution channels

• Promotion: less direct experience on ground promotion, limited ads in media and digital market

To answer the core problem and root causes, following strategic alternatives shall be elaborated further on each marketing mix and CBBE:

• To increase brand appealing through competitive price which will be done through brand building first

• To optimize digital marketing, bundling price with existing products, collaborate with other brands and online moms cooking community, increase product availability through all distribution channels, and redesign product packaging will be further explained in proposed marketing mix section

• To highlight product differentiation through increasing brands awareness of Vitas is elaborated in proposed STP section

Customer Based Brand Equity (CBBE)

Based on findings during market survey, it is clearly indicated the company is in the first stage on building Vitas sachet brand. From customer analysis previously, Customers did not get repetitive exposure about who the Vitas brand is and  they  misunderstood  the  brand  name with competitors. 

Table 5: SWOT analysis

Table 6: TOWS matrix

Figure 4: Proposed development for building Vitas brand     

Brand performance (style and design) still lag behind competitors. Brand imagery is in the progress to be built. The core problems still dwell on building brand salience and brand meaning. Brand building strategy shall amplify the foundation of brand pyramid through well establishing brand positioning and values first which will be elaborated in the next section.

Other than that, the grand design of Vitas brand building is depicted on Figure 4. Good brand equity can lead to higher offline purchase intention. The steps on building brand equity are as below:

• Brand Salience: First, to identify product benefit in the packaging which has been stated currently. Second, to emphasize product application during promotion so that brand can be associated in customers’ mind

• Brand Meaning: Based on the survey, the most important product attributes are vitamin content, aroma, and taste. Brand meaning is built by improving brand performance first, then upgrading brand imagery. First step is updating product packaging which highlight the vitamin content. Second, ensuring Vitas brand delivers right value to new mothers that using Vitas brand can be a caring form for family. This will be elaborated during promotion program in marketing mix

• Brand Response: Once the brand meaning on the second stage is well-built, the company has to obtain customers’ thought and feeling towards Vitas brand. If customers’ response is not in line with the expected judgment and feelings below, the company can rectify the strategy

• Brand Resonance: The main objective of building Vitas brand are to get the loyalty within mom’s community which can be converted to sales volume eventually

Proposed Marketing Mix Product

Brand Name and Logo

In customer analysis, some respondents misunderstood Vitas brand with for Vita brand due to its similarity. The change on brand name may have great impact for internal company and customers since Vitas brand is used by company for other products extension for B2B. Thus, logo may be changed to attract customers and build a stronger brand. Jiang et al. the shape effect of logos by changing the angularity or circularity of a brand logo can activate consumers’ mental associations with hardness and softness, and subsequently shapes their judgments about the product and company. Foods in the round font can be considered hedonic or pleasure-oriented [16]. 

Packaging

Based on internal interview, it is known that Vitas sachet margarine has been launched a decade ago, however the packaging has not changed much. Moreover, based on the interview during customer analysis, it is found that consumers pay attention with the packaging and ask about the differentiation from the beginning. Packaging is important since customers’ first impression and perception is built through the packaging. The product characteristic is also reflected through color selection in packaging. Current study mentioned that slight modification on Front of Pack (FOP) can attract consumer’s attention [17].

Place

According to Snapcart Research, 50% of Indonesian online shoppers now are millennials, 31% gen-Z, and 16% Gen X [18]. Since online purchase increases significantly after pandemic and it is quite relevant for millennials and gen-X as new moms, distribution channels may be expanded into e-commerce for groceries such as Sayurbox, Tanihub, Happyfresh, or Astro. The customers’ intention to purchase all food ingredients and groceries in one-stop shopping application can assist Vitas brand to be nearer with target market and attract more consumer demand. In addition to that, based on the interview one respondent, margarine product that is consistently available in store is an important driving factor of her purchase decision. Product availability can improve a brand image as having strong supply chain.

Promotion 

Advertising

Since many studies reported that consumers in many product categories make a final brand decision in the store. For example, by having a banner in the store’s parking area, it can boost the sales volume [3]. The company can analyze where is the area that has highest sales volume of Vitas, then place a banner at the nearest point of convenience store and gain the brand recognition. Following up banner placement, sales promotion at the same time can be given to attract customers to buy Vitas for the first time. Based on the survey, it showed that price reduction is the most important promotion than social media ads. Second, respondents also consider bundling a product with margarine is important as part of promotion. Thus, company can offer more discount price and gift bundling as sales promotion strategy. For examples, customers can get 12% discount with minimum spending IDR 120.000 during national online shopping day.

Online Marketing Communications

The company can promote Vitas through landing page of each online marketplace. Each marketplace usually has special day to focus on particular product category. At this time, AAJ can place running ads. Besides that, company can also participate in interactive promotion activities such as Goyang Shopee, Tokopedia WIB, Bukalapak Shake-a-ton, and so on. Moreover, currently the firm has not advertised in TV yet and still focus to advertise Vitas in Instagram and Facebook. It can be improved by entering Youtube and creating cooking tutorial as well so that consumers can have the best use of Vitas sachet. Based on survey by Jakpat in 2017, 54% of Indonesian subscriber watched tutorial video content in Youtube [19]. From netnography analysis, it indicated there are various Youtuber who give cooking recipes and tutorial as well. This can be done by cooking collaboration with famous chef to strengthen brand salience.

Events and Experiences

To deliver brand meaning properly, brand campaign through many events needs to be conducted so that consumers may have memorable experience with Vitas brand. Company can hold monthly events about family healthiness with margarine consumption since some respondents see margarine as unhealthy product and contain high cholesterol. It also can be Q&A session in live Instagram events. Second, the company also can conduct a competition event that underline supplementary food for mother’s milk (MPASI) recipe to reach new moms which usually have baby born. From those events, collaboration between brand and consumers can happen. 

This research is expected to give insights for all readers who is working in margarine market. Fence, in the future, the researcher suggests to conduct conclusive marketing research with focused on particular target market (new mother with aged 25-35 years old) in all Indonesia or other countries.

With the Since the core problem of low revenue of Vitas sachet margarine comes from low brand awareness, the steps on increasing and building a strong brand is started from having a brand identity as the foundation of brand resonance pyramid. Based on the market survey, the root cause of low brand awareness generally is related to marketing mix 4Ps which are product, place, and promotion. Brand building initiatives are focused on the redefining the STP and improving marketing mix which have been explained in previous section.

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