[ ]Brought to you by: Taylor Sipotz, Ray Sears, Garrett Walker, and Caitlyn Burke

2011

Indiana University South Bend

Executive Summary

Carbon’s Golden Malted brand mixes are a high quality and easy to prepare product.

Only premium ingredients are used – ensuring only the finest tasting products. There is no

product of this kind – premium style waffles – in the Indonesian market. A comprehensive

exploration of the market has been finished and is included in the following report. It will better

equip Carbon explore new opportunities to work with local partners in the Indonesian market for

their mutual benefit.

A cultural analysis of Indonesia exposed information that contains critically important

implications – with regards to entering a new market. Included are the behavioral patterns of

consumers – cultural, religious and, most importantly, dietary habits. It was revealed that

Indonesians do not consume waffles – in a traditional western sense – and center most of their

meals around rice with sides and garnishes of vegetables and meats.

This fact influenced the selections of our target market – which will be explored in

following sections. The efforts of Carbon will be directed to the cities of Bali and Jakarta. These

two locations are the most populated in Indonesia and natural have the highest rates of economic

activity; and more important, they host the lion’s share of expenditures from international

tourists.

International tourism is a strong in Indonesia and is a driver of economic growth in Bali

and Jakarta. Tourists of Indonesia represent the target consumers that Carbon is going to reach in

this market. They account large expenditures and their tastes are suited to the premium waffles

and pancakes produced by Carbon’s Golden Malted. Because of this, four and five star hotels in

Bali and Jakarta will be the target market. Four and Five star hotels host the highest percentages

of foreign consumers in Indonesia.

Bali will be the primary target market and Jakarta will be the secondary. 25% to 30% of

all foreign arrivals to Indonesia come directly to Bali and an equal amount venture there from

other regions – after arriving and then traveling to Bali. Bali also has roughly 30% of the four

and 5 star hotels in Indonesia; and, 70% of their occupants are foreign. Jakarta has slightly more

hotels and occupants than Bali; but, only 30% of the occupants are foreign to Indonesia –

justifying Jakarta as the secondary target market.

The distribution and supply chain in Indonesia has been described at archaic and

complicated. This makes it crucial to establish a strong relationship with a quality and reliable

freight forwarder and distributor. They will be able to handle the logistics of getting Carbon

mixes to the end consumer. We have selected Maersk as the freight forwarder to transit our

product to Indonesia. Maersk is the world’s largest ocean carrier firm and will get our product to

PT Sukanda Djaya. They are a division of PT Diamond cold storage and will be our distributor

in Indonesia. They are the largest distributor in Indonesia and are trusted by clients such as:

Hunts, Laughing Cow, Yoplait, Pillsbury, and more.

Promotion of Carbon Golden Malted will be crucial for the diffusion of our product in

this market. Tradeshows will be utilized as the primary source of the promotional efforts. The

FHT Bali and PROPAK tradeshows are the prime events. Both are international exhibitions for

the food service industry and are attended by key players in our target markets. We will utilize

these tradeshows to promote product awareness.

Once it has been decided to export to the Indonesian market, specific product packaging

adjustments will be required. The labels will have to be changed to meet Indonesia specifications

and other requirements are reported in the appropriate sections to follow.

An analysis of the market potential – with regards sales volume and revenue – has been

completed and shows the lucrative opportunity that Indonesia presents to Carbon. Potential

annual sales are $3 million and $1.3 million in Bali and Jakarata respectively. Figures are based

on assumptions that consumers potentially eat three waffles per day, each case produced 222

waffles, and Carbon sells the cases for $40.

Introduction

New Carbon is a highly successful business from South Bend, Indiana, looking to expand

further its international reach. The company distributes waffle irons on loan in return for a

particular amount of Carbon’s Golden Malted pancake and waffle mixes purchased per waffle

iron. New Carbon is seeking to expand its success to a new market by developing a unique

marketing plan for Indonesia.

The Indonesian market offers significant opportunities for New Carbon to sell its

products. Most importantly Jakarta and Bali, home to tourism and travel within Indonesia, offer

a wealth of hotels and restaurants to distribute the product to. Many hotels in these areas already

embrace Western style cuisines. Continuing growth of free trade in Indonesia provides favorable

market conditions. Western style waffles do not currently exist in the Indonesian retail market,

and are mainly offered at hotels and tourist destinations. Distribution throughout Indonesia gives

New Carbon a potential first-mover advantage. New Carbon would reap the benefits of being a

first-mover in this market, gaining distributors and building long-term business relationships that

would be difficult for a competitor or follower to match.

Indonesia Country Background

Geographical Setting

Location

Indonesia is a grouping of more than 17,000 islands located near the equator but only

6,000 are inhabited. The country shares land boundaries with Papua New Guinea, East Timor,

and Malaysia. With its many islands it also shares water borders with countries through straits

with Singapore, Malaysia, Philippines, and Australia.

Climate

Located with close proximity to

the equator, Indonesia maintains a

constant tropical climate, but is cooler in

the highland regions. This translates into

two main seasons in Indonesia: dry and monsoonal wet seasons. The average annual rainfall in

Indonesia is between 70-125 inches in the lowlands and anywhere up to 240 inches the

mountainous (highland) regions are located. Wind gusts cause the western straits and channels

to be dangerous to mariners (Indonesia – Climate, 2011).

Language

Bahasa Indonesia is the national language and the language of most written

communication, business, media, government, and education. It is important to note that local

languages, most commonly Javanese, are still very important in many areas. English is the most

widely spoken foreign language (Learning Bahasa, 2011)

Population and Demographics

As of July 2009, the Bureau of East Asian and Pacific Affairs recorded that the

Indonesian population consisted of 240.3 million people. The annual estimated growth rate was

1.136%. The Indonesian life expectancy is estimated to be 70.76 years old (The World Factbook,

2009).

Distribution of Population

Race or Ethnicities

Two of the main ethnicities in Indonesia are Javanese and Sundanese. Other groups

include: Malay, Chinese, and Madurese.

Geographic Locale

The 240.3 million people inhabiting the area make it the world’s fourth most populous

nation as well as one of the most densely populated areas in the world. Java is the most

populated island in the world with an estimated 124 million people as of 2005. Highly populous

cities include the capital, Jakarta, with an estimated 9.6 million people, Surabaya with 2.8

million, Bandung with 2.4 million, and Medan with 2.1 million.

Economic Statistics and Activity

Household Income

The per capita income of Indonesians was most recently estimated to be $4,394 in 2010.

In the same year, the estimated number below the poverty line was 13.33%. Indonesia is a

country that ranks high in power distance there is a strong separation of people based on rank,

including income. In result more emphasis may be placed on status and not price when making

purchases (The World Factbook, 2009).

Labor Force and Size

The 2010 estimated unemployment rate in Indonesia was 7.1%. The unstable labor

markets and poor compensation for workers have been cited for reducing the competitiveness

and attractiveness of Indonesia as a country to invest in. The workforce then consists of 111.5

million people, broken up into three categories; services, agriculture, and industry (The World

Factbook, 2009).

Major Industries and GDP

The GDP in Indonesia is facing a period of exponential growth. In 2009, GDP was $539

billion, in 2010, it was $707 billion, and the estimated GDP for 2011 is $823 billion. The annual

growth rate was 4.5% in 2009, 6.1% in 2010, and is estimated to be 6.2% in 2011. Inflation is

rising with 2009 inflation recorded at 2.8%, 7% in 2010, and is expected to be 7.3% in 2011

(Report for Selected Countries and Subjects, 2011).

Indonesia GDP Consists of:

Natural resources: Oil and gas, bauxite, tin, copper, silver, gold, and coal. Agricultural products: Timber, rice, coffee, palm oil, and rubber. Manufactured goods: Furniture, paper products, footwear, garments, electronic goods,

and automobiles (“Indonesia”, 2011).

Tourism

In 2007, Indonesia saw 4.9 million international tourist arrivals. Of the 4.9 million, 2

million came to visit the Bali Island alone. The ten most popular tourist destinations in Indonesia

include Bali, West Java, Central Java, East Java, North Sumatra, Lampung, South Sulawesi,

South Sumatra, Banten, and West Sumatra. Jakarta, the nation’s capital, and the Island of Bali

are two major shopping destinations. Bandung also is a popular shopping destination,

particularly for fashion products among Malaysians and Singaporeans. (“Most Visited”, n.d.)

Particularly in Bali, food is an important factor in the tourism industry. Bali not only

offers traditional Indonesian dishes to draw tourists in, but a variety of international foods as

well. Mexican, Italian, Japanese, and Continental cuisines are available. Even McDonalds and

KFC, and other American style restraints can be found in Bali.

Indonesia hosts several Western Hotels including: two Marriott hotels and two Ritz-

Carlton hotels in Jakarta, a Marriot in Surabaya, and Marriot Courtyard, Holiday Inn Resorts,

and a Hard Rock Hotel in Bali. Those that offer free breakfast have a buffet selection that

includes traditional, English (tea and decadent pastries), Asian, Western, and other international

cuisines. They have restaurants in the hotel that serve full breakfasts to order, an extensive

breakfast buffet, or a la carte menu that features Balinese and international (Western included)

dishes. The Hard Rock Hotel even serves their famous burgers as part of their Western cuisine.

Infrastructure

Indonesia’s infrastructure is made up of navigable waterways, roads and highways,

railways, pipelines, and air transport. Indonesia’s thousands of islands make their water

transport very important, and common. A lot of times Indonesians will move items among

islands on merchant marine vessels. Sea transport is extremely important for their economic

growth for domestic and foreign trade.

Indonesians road transport system has a total length of 473,759 km as of 2008. There is a

railway system that has four unconnected networks on Java (most populated island), and

Sumatra. These railway systems are used mostly for moving commodities in bulk, and long

distance passenger traffic. Air transport also plays a critical role for connecting the thousands of

islands for trade and transportation. Unfortunately, the air transport system is not very safe in

Indonesia, and is actually one of the least safe in the world.

Indonesia has 21,579 km of navigable waterways, and

about half of these waterways are found on the island of

Kalimantan, and the other half is divided among Sumatra, and

Papua. The waterways in Indonesia are very well developed, and each major island has at least

one significant port city.

Foreign Investment

In 2009, Indonesia received roughly $4.8 billion in foreign direct investment (FDI) -

down from $9.3 billion in 2008. This is a relatively small figure, in comparison with China,

Japan, India, and other countries that see FDI of up $70 billion per year. Indonesia has a strong

credit history and is in good faith with each of the major rating agencies.

Import and Export

Indonesia’s imports totaled 127.1 billion in 2010 that

is a 29.58% increase from last year.

Imports include:

Machinery and equipment Chemicals Fuels A variety of foods

Imported goods are required to go through import duties mentioned in the Indonesian

Customs Tariff. Food regulations are based on national standards, sanitary inspections,

registration of processed foods by the National Agency of Drug and Food Control, and food

labeling. Tariff rates on food imported items are no higher than 5% with few exceptions, and

required registration of the items can take up to six months. Import duty calculation is based on

CIF which is the landing cost in any Indonesian port including freight and insurance. An income

tax of 2.5% is issued on CIF value imports. Value added tax (VAT) is issued on a majority of

goods including imports at a rate of 10%.

Import document requirements include the following:

Import declaration Performance invoice

Commercial invoice Certificate of origin Bill of Landing Insurance certificate Packing list

Indonesia’s current agreements regionally and worldwide are:

AFTA (ASEAN Free Trade Agreement) APEC (Asia-Pacific Economic Cooperation) WTO (World Trade Organization)

Exports totaled 158.2 billion in 2010 which is a 24.39% increase from 2009. The US food

and agricultural exports to Indonesia is steadily on the upward and is the 8th most prevalent

export market for US agriculture products. VAT is 10%.

The highest export commodities shipped out of Indonesia include:

Oil and gas Electrical appliances Plywood Textiles Rubber

Electrical Requirements

Indonesia has an electrical requirement of 110/220 V. This means that international

voltage varies throughout the country, from 100 to 160 V, and 200 to 260 V. The appliances

coming from the United States are typically 120 V range. The two options available for using

appliances such as a waffle iron in Indonesia are:

International Voltage Adapter- If the voltage in the country is the same as the appliance is manufactured for, but the outlet it different then an international voltage adapter will come in handy. The adapter allows the user to plug in a device that is customized for a certain type of outlet.

International Voltage Converter- These converters are designed to change the voltage from a certain amount to another. These typically cost from $10 to $20 US dollars.

Daily Life and Lifestyles

The dynamics of Indonesian families are comprised of immediate and extended family

members. Frequently occurring natural disasters cause the loss of family members and homes to

be common leading to more extended families. At a young age children learn how to help

around the home, looking after the elders and helping with any chores that might be asked of

them. It is important for the children to lighten the load on the older family members, and the

family in general because Indonesians commonly have such large families living under one roof.

Religion and its Impact

Religious diversity in Indonesia is a result of religious freedom in the country. However,

the majority of the population is Muslim. Other religions include: Protestants, Catholics,

Hindus, Buddhists, and Confucianism. Monotheism prevails as the dominant ideology for most

Indonesian religions. Religion exerts a strong influence on kinds of foods eaten and advertised

in Indonesia.

Diet and Nutrition

Indonesian food is influenced by Chinese, Indian, and Western cultures – making it a

diverse mixture. Chinese and Indian cultures have had a strong impact on the spices used and

both the serving and presentation methods of foods. The west has contributed influence to the

structure and types of meals served in Indonesia; however, most dishes are tailored to better suit

the preferences of Indonesians’.

A typical meal in Indonesia will consist of steamed rice along

with two sides of fish, beef, chicken, or vegetables (sometimes in

soup) all of which are served together. A common side dish is sambal

(picture to right), which is a spicy condiment made from fresh chilies,

dried shrimp paste, lime juice, sugar, and salt.

For breakfast, Indonesians might have a simple plate of fresh fruit. This plate might

include ripe papaya, rose apple, and watermelon. Porridge of vegetables, fried rice, fried banana,

and chicken soup are also common breakfast dishes. During lunch and dinner Indonesians have

rice as their main dish, and enjoy potatoes, shrimp and vegetable salads. Lastly, common

desserts include fresh fruits such as coconuts, mangos, bananas prepared in a variety of dishes

but with a sweet flavor.

SWOT Analysis

Strengths Brand name Strong presence in U.S. markets Financial stability Simple to prepare

Weaknesses Non-diverse product offerings

Opportunities Tourism Penetration of Indonesian market First mover advantage

Threats Culture and religion Climate Geography Shipping issues and risk Tango Waffles

(New Carbon Company, 2010)

Strengths

Brand name

Carbon Golden Malted Pancake & Waffle Mix offers a premier brand and the finest since

1937. Golden Malted Mix offers premier quality products with a brand name people know and

trust across the states as well as where it is distributed in foreign states. A patented blending

process and recipes offer consistency in its products.

Strong presence in U.S. markets

The Golden Malted brand products such as the waffle iron and mixes are sold in Puerto

Rick and 16 foreign countries along with all 50 states. Since 1937, New Carbon Company, Inc

has experienced profitable success and long term distributor relationships that will be relied on to

make impacts in Indonesia. Their strong presence can be contributed by the company’s

dedication to its customers regularly.

Financial stability

Since 2002, President/CEO Rick L. McKeel has help New Carbon Company, Inc

increase sales from $12million to $34 million annually. Since the increase in sales, New Carbon

Company, Inc has grown from 31 employees in 2004 to 76 in 2010. This company was not

affected by the Recession; in fact the last two years have been the company’s best years.

Simplicity

The company’s products are simple and quick to make. Pancake mixes consist of only

four readily available mixed ingredients and to be cooked in the waffle iron which runs

approximately four minutes.

Weaknesses

Non-diverse product offering

The New Carbon Golden Malted product line consists of pancake, waffle, and vanilla cone

mixes. There are recipes that utilize the pancakes and waffles in ways that can be seen as a lunch

or dinner food; but, they are still pancakes and waffles.  The majority of consumers are going to

see those as breakfast foods. Also, New Carbon lists, on the website, recipes for cakes, cookies,

and muffins. Those two - muffins anyways - are breakfast foods. So in short, the weakness is the

narrow variety of products offered by Carbon’s Golden Malted.

Opportunity

Tourism

Indonesia is a location that receives a lot of tourism due to its tropical climate and

geographic setting. The islands, water sports, and weather attract people from all over the world.

Many of the tourists come from locations that are likely to be accepting of Belgian style waffles.

Tourist destinations – hotels, restaurants, shopping, amusement parks, etc. – will be the primary

targets for this marketing strategy.

Penetration of Indonesian markets

It is crucial to successfully penetrate the Indonesian market and introduce this kind of

product to the native people first because it could have a monopolistic effect. If New Carbon can

devise a strategy that might include new recipes to accommodate more to the Indonesians taste

for food, then New Carbon could dominate the waffle and pancake market in Indonesia.

Although penetrating this market will not be easy, it is possible and could prove to be very

profitable for New Carbon in the long run.

First-mover advantage

New Carbon has an opportunity to be the first company to introduce Belgian style waffles

to Indonesia. The Indonesian natives do not eat pancakes or Belgian style waffles. As the first

entrant New Carbon can build relationships with distributors and gain a control of resources that

followers may not be able to match.

Threats

Culture and religion

American style breakfast foods are not incorporated in their culture. Indonesians do not

prefer sweet tastes for breakfast; and, they do not eat much bread or bread-like products.

Instead, Indonesians tend to favor rice as their substitute.

Customs of the Muslim religion will make it difficult for Indonesians to accept Western

ideology; which, in turn, will make it more challenging to get Indonesians to accept the idea of

eating American style waffles for breakfast.

Climate

Indonesia maintains a constant tropical climate that includes high levels of humidity.

This puts long term storage of our product at risk; unless, it is properly stored at cool temperature

away from humidity. While most restaurants and hotels New Carbon will target will have

adequate storing environments, in some of the more impoverished urban areas, the storing of our

product may not be in cool place - potentially causing the product to spoil. Consumption of

spoiled Golden Malted products can have serious negative implications for the New Carbon

brand name.

Geography

Indonesia consists of many islands.  With the breakup of the geography, many

subcultures exist.  A uniform campaign would not be practical because of the cultural differences

within the country.  It is not possible to just consider one Indonesian market but instead must

consider the many submarkets within Indonesia.  

Shipping issues and risk

New Carbon will be shipping their product by boat to the various harbors all over

Indonesia. Security and inspections at Indonesian ports will not be as stringent as in the United

States – leaving their product at greater risk. Ports are managed by 4 different Indonesian Port

Corporations that are numbered I – IV. Each has jurisdiction over various regions of the country,

with I representing the far west, and IV the far east. New Carbon will need to be aware of the

different levels of security and safety at these ports, and be knowledgeable to whether certain

jurisdictions handle specific issues differently. New Carbon needs to be prepared in the case that

their product comes up missing at these ports, or gets damage during the un-loading process.

Tango Waffles

Tango Waffles makes breakfast biscuits and that are the most similar product to waffles

eaten in Indonesia. Tango Waffles could be viewed as New Carbons direct competition in the

Indonesian markets. Tango Waffles is being produced in Indonesia and can be found commonly

throughout country. It is possibly that word “waffle” will be strongly associated with the biscuits

and not the Golden Malted products – making the New Carbon product seem more taboo.

Realizations and actions to counter this problem will be important when marketing in different

languages.

Marketing Plan

Target Market

New Carbon’s efforts in Indonesia will be in the food service sector; more specifically,

hotels. Hotels attract consumers that are in Indonesia for both business and pleasure.

International tourism accounts for a significant portion of imported food demand, in Indonesia.

Tourist Industry

New Carbon will target the tourism industry as international tourism is a major driver of

demand for food imports in Indonesia. Key areas will be those that attract high volumes of

tourist activity: our primary and secondary target markets are Bali and Jakarta, respectively.

Nearly 25-30% of all tourist arrivals to Indonesia fly directly to Bali and an equal amount of

tourists venture to Bali after coming to Indonesia by a port on a different island.

Hotels

Hotels and high-end western restaurants make up 60% of imports destined for food

services; and, hotels use about twice as much imported food as restaurants. At top class hotels,

roughly 15% of the food used is imported.

The premier target market is the 4 and 5 star hotel sector – accounting for a

disproportionate amount of the imported food; and, an estimated 25% of the starred hotels are 4

or 5 stars. Three star hotels would be a prime target for market penetration – along with or

following the 4 and 5 star establishments.

Bali accounts for almost 20% of the starred hotel rooms in Indonesia (not only 4 and 5).

In 2010, there were 170 starred hotels in Bali which consisted of 21,133 rooms and 32,892 beds.

Those hotels saw 19,699 customers per day and 15,501 were foreign – 78% and, the average

daily room occupancy rate for starred hotels in Bali was 60 in 2010.

Jakarta has statistics that are similar to that of Bali; 160 starred hotels with 27,685 rooms

and 38,485 bed. Those establishments saw 22,376 customers per day – more than Bali – but,

only 6,644 were foreign – 30%. The statistics indicate that Bali attracts more foreign patrons;

but, New Carbon will still look to penetrate the market in Jakarta.

Shopping Malls

Indonesia’s major cities, including Jakarta and Bali, have experienced a booming growth

of new shopping malls. Plaza Indonesia, located in central Jakarta, features the Grand Hyatt and

Jakarta’s most fashionable shopping. It is at the top end of the market and attracts the wealthiest

and most affluent shoppers. Centers like Plaza Indonesia continue to be the focus of new

construction throughout Indonesia. Tourists flock to upscale shopping centers and make them

prime targets for the distribution of New Carbon products.

Product Strategy

Product Positioning Strategy

Carbon’s Golden Malted will position their Original Carbon Malted Pancake and Waffle

Mix product as a premium breakfast food to be served in restaurants and hotels. Our mix will be

associated with consistent quality.

Product Competitive Advantage

Our product has a competitive advantage because of the waffle irons that will be

supplied. As long as the consumer purchases a set amount of waffle mix cases then the waffle

iron will be loaned out at no additional cost. Maintenance and repairs will also be supplied free

of charge for the irons. This will set us above competitors because of the cost saving benefits to

the users of the irons.

Packaging

The labels of our product will have to be changed to meet the following requirements in

Indonesia. All food packaged for sale must be labeled using:

The Indonesian language. Roman text. Arabic numerals Writing that is firmly affixed and clear so as to be easily understood by the community

The minimum requirements for the information on the packaging label include:

The name of the product. Net weight or net volume - using metric units. Name and address of the manufacturer or importer. Registration number. Composition or a list of ingredients. Date of expiry. Production date or production code.

Promotional Strategy

The message we want our promotional campaign to convey is that we sell a premium

breakfast food that is superior to our competitors. Our objective is to have our potential clients

realize that there is a demand for our product in the Indonesian restraint, hotel, and tourism

industry. An advantage of this strategy is that we will be the first company to sell this kind of

premium breakfast food in Indonesia giving us a first-mover advantage. We hope to capitalize

on the fact we are the first entrant to this market and gain control of resources, building long

term business relationships with our distributors that our competition or follows will not be able

to match.

We will be focusing our promotional efforts towards major hotels across Indonesia, but

more specifically in Bali and Jakarta. Bali has more westerners and tourism, and Jakarta is

where most of the economic activity takes place in Indonesia. Bali’s hotels are a good choice

because the westerners and tourists are more likely to already be custom to eating this type of

breakfast meal. Jakarta’s hotels are occupied more by people coming in town for business, but

Jakarta is a popular tourist destination as well.

Bali has an exceptionally high average hotel occupancy rate of 58.86% recorded for

2010. Jakarta is the capital city of Indonesia, and is located in northwestern Java. The average

occupancy rate for central Java is 41.01% recorded in 2010. Indonesia has roughly 1000 hotels

given stared ratings, and of those 1000 about 22% of them are 4 or 5 star hotels. Our target for

our promotional campaign will be the 4 or 5 starred hotels.

Trade Shows

The best way for us to introduce our product and gain clientele will be through

showcasing our product at trade shows. This will create awareness of our product in Indonesia,

and hopefully allow us to penetrate this market successfully. We have selected two trade shows

in Indonesia that we believe are the most appropriate for showcasing our product.

The most important trade show for us to showcase our product will be at the FHT Bali –

Food, Hotel & Tourism Bali which is held at the International Convention Center in Bali. This

trade show is held every two years. This next trade show will be held from March 1 st through

March 3rd of 2012. This is an international exhibition for equipment, food, beverages, and

services to support Indonesia’s tourism and hospitability industries.

Bali International Convention CenterKawasan BTDCNusa DuaBali, 80363Indonesia

Phone: +62 361 771906Fax: +62 361 772047Web: http://www.baliconvention.com/Email: bicc@baliconvention.com/Date: March 01 – 03, 2012

We believe it would also prove beneficial to attend the PROPAK Indonesia trade show

that is held at the Jakarta International Expo (JIExpo). Last year this tradeshow had a record

attendance, which means this should maximize our exposure to potential clients (Record

Attendance, 14 December 2010). This trade show involves international food processing and

packaging machinery, as well as a materials exhibition. This trade show take place once a year.

The next trade show date has yet to be announced, but is expected to be in December of 2012.

Jakarta is where most of Indonesia’s economic activity takes place. This is why we also think

it’s very important we attend this trade show as well. We want to present in trade shows that best

suit our product, and take place in cities that are our target market.

Jakarta International ExpoGedung Pusat Niaga Lt.1 Arena PRJ KemoyoranJakarta, 10620Indonesia

Phone: +62 (21) 266 45 000/131Fax: +62 (21) 657 000 10Web: http://www.jiexpo.co.id/Email: marketing@jiexpo.co.id/Date: TBA

Distribution Strategy (Macro)

Port of Origin / Destination

New Carbon will utilize the services of Maersk, in order to export to Indonesia. The

container shipments will leave Apm Terminal-Berth 88 in New Jersey via the Maerskline

container vessels. The Warnow, a Maersk feeder vessel will assume responsibility of the

shipments in Malaysia at Palebuhan Tanjung Pelepas Terminal.

Cargo will be landed at Tanjung Priok (Jakarta’s port) and then warehoused and shipped

to their destinations. The port also has developed container ports which handle cargo effectively.

Tanjung Priok handles the majority of imports to Indonesia and offers the best methods of

further distributing New Carbon’s flour mixes.

Documentation Required

Maersk supplies New Carbon with shipping instructions – listed are the mandatory items needed:

B/l No. (Bill of Lading for Ocean Transport or Multimodal Transport) Insurance of Duplicate Bill of Lading Bill Type Auto NVOCC or Non-Auto NVOCC Port of Loading Place of delivery Shipment details:

o type of packages o description of goodso container and seal numbero gross weight and measurements.

Distribution Strategy (Micro)

The supply chain in Indonesian is “archaic tangle of restrictive arrangements employing

sub-wholesalers, wholesalers and distributions in between the manufacturer and importer and

retail outlet and restaurant. The chain is difficult to understand and expensive to use: large

distributors not only transport goods, assume risk, get involved in promotions and negotiate retail

margins charging up to 30% of the retail price.”

Channel of Distribution

Due to the complexities of the Indonesian supply chain, New Carbon will need the

assistance and local knowledge and leverage of an Indonesian distribution company. PT Sukanda

Djaya will be that company. They are the largest distribution company in Indonesia – a division

of PT Diamond Cold Storage. PT Sukanda Djaya has 17 major distribution hubs that feature both

cold and dry storage; and, one is located in Jakarta. They will receive the Carbon shipments and

deliver them direct to clients (Indonesia Central Bureau of Statistics, 2009). Contact information

is listed below:

PT Sukanda Djaya

JL Pasir Putih Raya kay, 1Ancol TimurJakarta, 14430Indonesia

Phone: + 62 21 640 5678Fax: +62 21 640 2861Web: www.sukandadjaya.com

Pricing Strategy

New Carbon sells to distributors at different levels. New Carbon sells to its distributors at

a case price of $40 USD and the case weighs 30 pounds. The distributor will then have a

suggested case price to his or her client between $120 and $140 USD per case which is a gross

profit margin of approximately 40%-60% per case. The distributors’ customers’ gross profit

margin is approximately 400%-600% per waffle. New Carbon also has a minimum pricing

structure: that includes 300 cases, 20 irons and two Better Butter dispensers. The Original Mix is

priced at $33 USD per case and each of these cases entitles the buyer 224 waffles in total. The

just add water mix is sold at $37 USD per case and yields 222 waffles (NEWCO International,

n.d.). Selling at a price that is worthy to the final customer will be important to gain and keep

many customers to New Carbon. Factoring in premiums and give-a-ways to enrich relationships

with customers will be important.

The distributor has to add shipping and insurance charges because the price quoted by

New Carbon’s is based on FOB. New Carbon pays for the transportation of the goods to the port

of shipment and the loading costs. The buyer pays for the transport cost, insurance, unloading,

and the transportation from the arrival port to the final destination.

The minimum weight of a shipment will equal 300 cases X 30 pounds per case = 9000

pounds. A specific tariff is a given amount per unit of weight and gauges other measurements

such as quantity: Rp 6,000. per kilogram under the matrix system. 9000 pounds = 4080

kilograms. 4080 kilo grams X 6,000 Rp = 24,480,000 Rp’s. 24,480,000 rupiahs = $2715.47

USD.

NO. 1045 describes waffles and wafers that are imported into Indonesia. There is a 10%

value added tax to waffles and wafers. BEA MASUK/ % import duty (Embassy of, 2010).

Participating in a trade shows generate leads quickly, effectively get businesses in front

of potential customers, and is an opportunity to create a good first impression. A budget between

$5,000 - $10,000 should be set aside to cover a booth and other expenses such as display aids,

traveling, promotion, and personnel expenses. A floor plan at the Food, Hotel, & Tourism Event

in Bali will cost $299, $354, and $364 per square meter for options 1, 2, and 3 respectively

(Pamerindo Indonesia, n.d.). There are no current rates for space listed for the PROPAK trade

show. Option 3 will be the preferred choice providing great first impressions, allowing for the

best presentation of New Carbons Golden Malted Waffles. This is the only option with enough to

allow seating for clients to sample the products.

Works Cited

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2. Learning Bahasa Indonesia, the National Language of Indonesia. (n.d.) Living In Indonesia, Site for Expatriates-Jakarta Indonesia. Retrieved from http://www.expat.or.id/info/bahasa.html

3. The World Factbook 2009. Washington, DC: Central Intelligence Agency, 2009. https://www.cia.gov/library/publications/the-world-factbook/index.html

4. Report for Selected Countries and Subjects. (April 2011) In IMF – International Monetary Fund Home Page. Retrieved from http://www.imf.org/external/pubs/ft/weo/2011/01/weodata/weorept.aspx?pr.x=26&pr.y=11&sy=2010&ey=2010&scsm=1&ssd=1&sort=country&ds=.&br=1&c=536&s=NGDPD%2CNGDPDPC%2CPPPGDP%2CPPPPC&grp=0&a=

5. Indonesia. (2011, March 6). U.S. Department of State. Retrieved from http://www.state.gov/r/pa/ei/bgn/2748.htm

6. Most Visited Countries – Top Ranking Countries – World Tourism Rankings. (n.d). Travel Guides – Online Tourist Information – Photos4Travel. Retrieved from http://www.photos4travel.com/travel-resources-tools/most-visited-top-ranking-countries#2007

7. Economy Watch. (2010). [Graph illustration the import partners of Indonesia, 2008]. Indonesia Trade, Exports and Imports. Retrieved from http://www.economywatch.com/world_economy/indonesia/export-import.html

8. Indonesia Trade, Exports and Imports. (2010, March 15). Economy Watch. Retrieved from http://www.economywatch.com/world_economy/indonesia/export-import.html

9. Embassy of the Republic of Indonesia Singapore. (2007). Indonesian Import Tariff [Data file]. Retrieved from http://www.kbrisingapura.com/docs/Buku_Tarif_2007.pdf

10. http://www.indonesianmission-eu.org/website/page203796760200309194251713.asp11. INSTATE Pty. Ltd, Rural Industries Research and Development Corporation. (1995).

Supermarket & retailing infrastructure development in Indonesia: implications for Australian agri-food exports: a report for RIRDC. Available from http://books.google.com/books/about/Supermarket_retailing_infrastructure_dev.html?id=OVVEAAAAYAAJ

11. Badan Pusat Statistik Republik Indonesia (Statistics Indonesia of the Republic Indonesia). (2009). Room Occupancy Rate Non Classified Hotel by Province, Indonesia 2004-2010 [Data table]. Retrieved from http://dds.bps.go.id/eng/aboutus.php?tabel=1&id_subyek=16

12. United States Department of Agriculture Foreign Service. (2003). Indonesian Exporter Guide 2003 (Global Agriculture Information Network Report #ID 3024). Jakarta ATO.

13. United States Department of Agriculture Foreign Service. (2003). Indonesia HRI Food Service Sector Report 2003 (Global Agriculture Information Network Report #ID 3022). Jakarta ATO.

14. FHT Bali – Food, Hotel & Tourism Bali 2012 (2011, November 28). Trade Shows Directory: Exhibitions, Conferences & Trade Shows World Wide. Retrieved from http://www.eventseye.com/fairs/f-fht-bali-food-hotel-tourism-bali-4947-1.html

15. ProPak Indonesia 2011 (2011, November 28). Trade Shows Directory: Exhibitions, Conferences & Trade Shows World Wide. Retrieved from http://www.eventseye.com/fairs/f-propak-indonesia-2221-1.html

16. Pamerindo Indonesia. (n.d.). Cost of Participation. Welcome to Food, Hotel & Tourism Bali. Retrieved from http://www.fhtbali.com/

17. Trade Resources, Import Export Services. (2011). International Trade in Indonesia: Resources for your trade in Indonesia. International Trade Services, Distributors and Reports on GlobalTrade.net. Retrieved from http://www.globaltrade.net/international-trade-import-exports/m/c/Indonesia.html

18. NEWCO International: Exclusive Worldwide Distributors of New Carbons Golden Malted Pancake & Waffle Mix. (n.d.). Newco International, LLC. Investment Opportunity/International Distribution [Handout]. Retrieved from class.

19. Carbon Company. (n.d.). Golden Malted. Golden Malted. Retrieved from http://www.goldenmalted.com/