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Extended Essay in Economics
Tacit Oligopoly of the Original Supermarkets of Bogor
Written By IB Diploma Candidate #: SessionWord Count:
Abstract
The grocery market of Bogor has been facing a significant change during the past several
years. Sudden emergence of new suppliers has more than doubled the number of existing
supermarkets. I took interest at the fact that despite of the sudden increase in the number of
suppliers, there never was a price decrease. This signifies that the market is experiencing Over
Supply.
I decided to investigate whether the strain caused by the over supply have changed a
particular part of the market structure of the supermarkets of Bogor. I took a keen interest at
whether the original supermarkets of Bogor form a tacit oligopoly to compete against new
competitors.
My first step was to investigate whether the supermarkets shows characteristics of an
oligopoly. Several factors are apparent; the number of firms in the market is small, their size is
relatively big, their products are slightly differentiated, and the entry barriers are high. To further
strengthen my claim concerning the barrier, I have studied a small portion of two legal documents
that concerns starting a supermarket business.
Afterwards, I have recorded product prices and performed statistical analysis to determine
whether the price range is narrow. I then compare the prices of the new supermarkets and all the
supermarkets of Bogor as a whole.
1
The result shows that indeed there is an oligopoly; yet it extends to reach the new
supermarkets. This means that the original supermarkets have not segregated themselves to attempt
gain business power (e.g. in pricing). New questions are formed based on the results. Among them
is whether the oligopoly intentional or has competition with other suppliers, e.g. the traditional
markets, caused the price range to be limited? These questions require further researches that are
likely to orientate to the Business Studies disciplines.
Word Count: 295
Table of Contents
Abstract 1
Table of Contents 2
Part 1: An Introduction to the Essay 3
Part 2: The Present Market Profile 5
Part 3: Review of Relevant Theories 7
Part 4: Hypothesis and Methodology of Research 10Part 5: Data Collection and Analysis 12
Part 6: Conclusion and Evaluation 17
Bibliography 18
2
Appendix 1____ 19
Appendix 2 20
Appendix 3 21
Acknowledgements 22
Part 1:
An Introduction to the Essay
Bogor is a minor city that is founded over two centuries ago, thus by now it is well known
by its surrounding cities and villages. The city was established as a center of trade for local
agricultural industries (Encarta).
As a citizen of the city ever since birth, I know well that the grocery market of the city is
massive. The vast and well known open air market of fresh produces called Pasar Bogor (or ‘the
Market of Bogor’), numerous minor grocers, five notable supermarkets, and the easily accessible
shopping centers in Jakarta have supplied the household demands of the 3,696,848 citizens residing
in Bogor (the figure was recorded at a 1997 census) (Encarta).
3
The market status, however, have taken a significant turn during the last 10 years.
Numerous new suppliers entered the market; among them are as much as five new supermarkets
(doubling the present number), two hypermarkets, and two new mini-market chains.
Among the very basic principles taught to economics students is the Market Equilibrium
law. It states that the demand and supply of a product is dependent of the price level. The
consumers prefer lower prices while the suppliers prefer higher prices. Where the two quantities
met, it is called the Equilibrium point. (Collier, 201) Diagram 1.0 shows this point of importance
as (q1, p1).
Diagram 1.0. The Micro Economic Model of the
Grocery Market
A sudden increase in supply that was not due to a price change signifies that there is a shift
in the Supply line. Diagram 1.0 portrays this scenario by having the line labeled ‘Supply 1’ shift to
become ‘Supply 2’. This shift will cause the equilibrium to increase in quantity but decrease in
price (Collier, 191).
However, there never was a significant price decrease in the grocery market of Bogor. The
supply line may shift, but the price is maintained at p1, and theoretically this must result in an Over
Supply. An Over Supply occurs when the quantity of supply exceeds the quantity of demand.
(Collier, 203)
4
Diagram 1.1. Illustration of the market experiencing Over Supply
The Over Supply strains the suppliers, since it means that some of their stock will remain
stagnant and inevitably experience depreciation –which in turn will result in business failure.
Despite, logically thinking, the side that was experiencing the biggest lost of consumers will be the
suppliers (supermarket, etc.) in Jakarta; inevitably the local suppliers of Bogor too will share part of
the strain. However, the pressure will not be as hard on the new competitors as it would be to the
original suppliers since all new competitors belong to a nationwide company (details are located in
part 2: the Present Market Profile).
There is the possibility that the demand line has shift along (or even preliminary) to the shift
of the supply line. However, through observation I have noticed that there never was an apparent
change in the factors that may trigger a shift of the demand line. Those factors are: price of
substitute products, price of complementary goods, general income and taste (preference), the
population, and advertisements (Glanville, 24).
The original supermarkets (from this point this term will be used to refer to the
supermarkets that have existed before the sudden emergence of new competitors) concerned me the
most. The Market of Bogor and other minor suppliers surely offered the least prize, thus they have
a separate market segment. My concern would be whether the business pressure is strong enough
for the original supermarkets to from a tacit oligopoly. Thus was formed the research question: Did
the original supermarkets of Bogor form a tacit oligopoly to compete against the new
competitors?
The next part of the essay will reveal the present market profile. Following it will be a
review of relevant theories, which serves as a base for the hypothesis. After discussing my methods
5
of research to verify my hypothesis, the data collected will be presented and analyzed. Thus, a
conclusion will be formed, along unanswered questions and possible sources of error.
6
Part 2:
The Present Market Profile
Here is a list of the present entities of the market:
Original Supermarkets: Ngesti Supermarket (3 outlets) Grand Supermarket Shangri-La Supermarket
New Supermarkets: Hero Supermarket Matahari Marketplace A&G Groceries ADA Supermarket Ramayana Supermarket
New Hypermarkets: Giant Hypermarket Hypermart Hypermarket.
New Mini-markets: Indomart Alfamart
Other competitors: The Market of Bogor Minor Grocers Suppliers (supermarket, etc.) of Jakarta
A ‘minor grocer’ is a reference towards traditional Indonesian grocery suppliers, known
locally as ‘waroengs’. It tends to be a small store, not often would you found one the size of a
typical bathroom. The goods it sells are usually minor needs, such as cigars, sweets, and hygiene
products. The appearance of the outlets tends to be ignored and they could be found dispersed
around the vicinity of the city.
However, the term ‘mini-markets’ refers towards literal small supermarkets. Its design and
facilities equal those of a supermarket and thus it presents its customers with every benefits of a
6
supermarket besides variety of product. The mini-markets belong to a nationwide chain and they
have an outlet in seemingly every residential area of the city.
Despite being under the same brand, the three outlets of Ngesti Supermarket belong to
different people. It originated as a Private Limited company, but now the three branches are run
separately by three children of the original founder.
Every new entity belongs to a company-chain or to a public limited company:
(Note: ‘Pt…Tbk’ is the Indonesian label for a Public Limited company)
Hero Supermarkets and Giant Hypermarket belong to PT. Hero Supermarket Tbk.
Matahari Market Place (a supermarket) and Hypermart (a hypermarket) belong to PT.
Matahari Putra Prima Tbk.
Ramayana Supermarket belongs to PT. Ramayana Lestari Sentosa Tbk.
AG Mart Groceries and ADA Supermarket belong to different companies but both own
more than one outlet situated in different cities of the country.
The mini-market chain Indomart belongs to PT. Indomarco Prismatama (a Limited
company that belongs to the Indofood group, whose owner once so far as become
Indonesia’s richest entrepreneur).
The Alfamart mini-market chain belongs to PT Sumber Alfaria Trijaya Bidang Usaha (a
Limited company) and is about to be integrated to PT Ramayana Lestari Sentosa Tbk that
owns the Ramayana Supermarket (see above).
7
Part 3:
Review of Relevant Theories
Ceteris Paribus
Ceteris Paribus is an assumption that every factor other than the one being discussed
remains constant (Glanville, 10). Every part of this essay is written on Ceteris Paribus.
Various Forms of Market Structure
To investigate whether the original supermarkets of Bogor have formed an oligopoly, first
the characteristic of that particular market structure and other alternatives must be pre-determined.
1). A Monopoly
This is a market where there is a single seller. It has absolute control over the prices of the
market due the unavailability of substitute products. Due to this fact, often times monopolies are
placed under strict control of the government. (Glanville, 120)
A monopolized market requires the highest forms of barrier of entry. This means that
people interested in entering the market ought to proceed through many difficult requirements
which often was impossible to attain. The highest barrier that one may encounter is governmental
laws, and indeed it was often intentionally employed to create monopolies. (Collier, 269)
A good example would be Indonesia’s PLN, its sole electricity supplier for the whole
nation. It was the only entity in the market for mass electricity and legal laws forbid any enterprise
to enter the market. In this particular case, the government owned the company. This grants them
maximum control over the market. The huge sales volume was directed towards the government’s
fund.
8
2). Assumptions of an Oligopoly
An oligopoly is a market situation where there are few sellers and each firm may be aware
of the activities of another. There are high barriers of entry –but these are lower than those of a
monopoly. The products they offered tend to be differentiated goods, this refers to goods that are
derived from an original form (e.g. shampoos may be differentiated to anti-hair-loss, scalp oil
controlling, etc). (Glanville, 140)
The few firms in the market collude together and act like a monopoly formed by many
entities. A formal collision is called a cartel, and the original supermarkets of Bogor do not belong
to a formal cartel. An unofficial collusion is referred to as a tacit oligopoly. (Glanville, 140)
The colluding firms will have an agreement about price range, advertising, market share,
and possibly corporate business strategies. Their semi-monopoly allows the firm sizes to be big.
(Glanville, 140)
3). Assumptions of a Monopolistic Market
A monopolistic market is when many firms compete in the same market, selling similar yet
differentiated goods or services. The barrier of entry is relatively low compared to the previous two
market structures discussed. (Glanville, 114)
Jeans and brand-less t-shirts are examples of products that are close substitutes of each other
but are differentiated. A consumer may switch his preference from one brand to another and will
not experience a significant change in utility. Note however, that when talking about such products,
there are several items on the market with very distinguished feature (special brand of clothing,
etc.) that belongs to niche markets. These products are not part of a monopolistic market.
The degree of price control (however weak) of a monopolistic market is attributed towards
this slight differentiation. If the product is entirely homogenous, no firm will have control over its
prices, turning it into a Perfect Competition Market. (Glanville, 114)
9
4). Assumptions of a Perfect Competition Market
A perfect competition market houses extreme amounts of producers, none of which
possessing a high rate of market share. The products are homogenous (exactly the same), and the
barrier of entry is near to non-existent.
No firm has any influence over the market’s price. The homogeneity of the product does not
allow selling above market price (since it will result in severe loss), and the fierce amount of
competition did not allow the firms to engage in a price war strategy (setting price lower), since the
market price is already set as close to the cost of production as it could be. If indeed the current
price is a degree above the average cost of producing the goods, then a firm may employ a price
war strategy and enjoyed supernormal profit for a period of time, but other competitors will follow
suit immediately.
Here is a table that summarizes the elements of the four market structures discussed previously:
Market Structure
Number of Firms
Typical Size of Firms
Product Homogeneity
Entry Barriers
Examples
Monopoly One (sole supplier)
Usually very large
No substitute Blockade or almost impossible
National companies
Oligopoly Few Relatively Big
Differentiated Significant Hygiene products
Monopolistic Many Relatively small
Differentiated but similar
Relatively easy
Garments
Perfect Competition
Very large
Small Almost identical or even identical
Barely any Garden produces
10
Part 4:
Hypothesis and Methodology of Research
My hypothesis is the original supermarkets of Bogor have formed a tacit
oligopoly that is separate from the new supermarkets to gain business power. As
discussed in the introduction and the market profile section of this essay, it is
unquestionable that the original supermarkets experience a degree of pressure from
the sudden establishment of new competitors. I believe that it is only logical for them
to attempt making the overall competition more endurable by forming a segregated
oligopoly. This way, they may attempt corporate business strategies, especially on the
matter of pricing.
To prove this hypothesis, I must attempt to correlate the supermarkets with
characteristics of an oligopoly. Those are:
Number of firms: few.Products are slightly differentiated (as in groceries).Size of firms: relatively big.High barrier of entrance.
Similar price range.
The first three characteristics are theoretical and apparent. There are a small number
of firms (compared to the monopolistic food and beverage business or the perfect
competition green grocers, for example). All supermarkets sell many identical
products (common brand and package size) and the nature of these products is in
general only slightly differentiated. The size of the firms too is relatively big, proven
to us by the existence of mini-markets which are smaller representatives of
supermarkets.
As of the barrier of entering the market, it is only logical that it is high. A
supermarket is visibly a large scale business –meaning that it requires a big amount of
capital to start. Furthermore, the products offered by a supermarket are numerous in
variety. For every single product they would have to prepare legal methodologies of
11
payment, storage, delivery, and shelf placement –this surely is a significant entry
barrier on its own. So, I believe it is endorsable to conclude that the barrier of entry to
the supermarket business is high.
The last missing information is their product prices. I will record the prices of
all supermarkets and perform statistical analysis to determine their price range. If the
prices posed by the original supermarkets are similar to each other, then it is proven
that they indeed do form a tacit oligopoly.
The next part of the research would be comparing the price of the original
supermarkets to the new supermarkets. Afterwards I shall perform identical
mathematical analysis as before. If indeed the two results (the first being the price
range of the original supermarkets alone and the second data being the price range of
all supermarkets) are different, then indeed we would know that the original
supermarkets of Bogor have formed an oligopoly that segregated them.
Diagram 4.0 shows the Market with the original supermarkets segregating themselves
and formed an entirely new team (oligopoly). This way, possibilities to compete better
will open to them, e.g. a corporate pricing strategy.
12
However, if their price range is similar, then we may conclude that all the
supermarkets as a whole is an oligopoly and so the original supermarkets have not
segregated themselves by making an oligopoly of their own.
Diagram 4.1 shows an oligopoly that includes both the original and the new
supermarkets.
13
Part 5:
Data Collection and Analysis
Before proceeding with the price analysis, I would like to strengthen my claim
concerning the high entry barrier. Here are parts of two legal documents that concern
opening a new supermarket business. Note that the documents are written in the
Indonesian language (Bahasa Indonesia), thus the translations present are my personal
attempt.
Here is a transcript from the ‘Perda tentang Pengelolaan Usaha Industri
Kabupaten Bogor [Regional Regulation Concerning the Managing of Industries in the
Bogor Region]’:
Surat Izin Usaha Perdagangan [Legal Permission of Retail Businesses], hereby referred to as SIUP, is a permission to commence retail business activities.
(Transcript from Web Terintegrasi Kabupaten Bogor)
Thus we know the SIUP is necessary to start the business. The conditions of attaining
a SIUP present a more apparent barrier. SIUPs are differentiated according to
business size. It is only logical that supermarkets are considered a large retail
business, therefore:
Business activities may posses a SIUP for large retail if the investment value is above Rp. 500 million excluding land and building costs.
(Transcript from PT. RCS Online Page)
14
To clarify the weight of this figure (Rp.500 million) to international readers of this
essay, note that the GDP/Capitappp of Indonesia was merelyUS$3,900 (at 2006,
according to the CIA World Fact Book). If converted to US dollars, Rp.500 million
will become US$52,800.50 (based on today’s rate –today: 18th of August 2007). This
means that an average person will need to accumulate all of his earnings for much
more than a decade to enter the industry, having in mind that the number is merely the
absolute minimum capital and it excludes land and building fees.
Thus, we may formulate that indeed there is a very high barrier towards
entering this industry.
The next step would be to record the prices of the sample products in all the
supermarkets. To provide a subjective data, the quality and quantity of the sample
products should be a controlled variable; thus I have decided that the sample products
to be investigated should be branded goods of the same package size. To further make
the investigation more reliable, I will record all prices during the same day as to
prevent price fluctuations.
The two statistical analysis methods necessary to analyze this data are the
mean (average) and the standard deviation (how much is the standard rate of the
prices’ deviation from the mean).
To calculate the mean of a
series of data, the formula would be:
where:
= the mean of the series of data
n = the number of terms.
xi = the value of the term i.
(Urban, 463)
The standard deviation is calculated by:
where:
σ = Greek symbol ‘sigma’ (in lower
case) which represents standard
deviation.
n = the number of terms
xi = the value of the term i.
= the mean of the series of data
(Urban, 485)
15
Here is the result of the calculations. For the detailed list of prices, please refer to Appendix 1.
ProductMean of Original
Supermarkets
Mean of New Supermarkets
Mean (Overall)
SD of Original Supermarkets
SD of New Supermarkets
SD (Overall)
Frisian Flag Milk Full Cream 1000gr
Rp46,600.00 Rp44,940.00 Rp45,770.00 4.42% 1.58% 3.70%
Ovale Skin Tonic 200ml Rp9,940.00 Rp10,370.00 Rp10,155.00 8.41% 13.32% 10.83%
Sariwangi Bagged Tea 150mg
Rp6,400.00 Rp5,868.00 Rp6,134.00 9.38% 5.98% 8.83%
Blue Band Margarine 250 mg
Rp4,375.00 Rp4,425.00 Rp4,400.00 4.28% 5.88% 4.90%
Pepsi Cola 500mg Rp4,460.00 Rp4,520.00 Rp4,490.00 11.19% 4.98% 8.16%
SoKlin Lantai Floor Cleaner 800 mg
Rp4,850.00 Rp5,161.00 Rp5,005.50 3.18% 6.61% 5.96%
Oreo Biscuits150g Rp4,310.00 Rp4,453.00 Rp4,381.50 3.00% 10.81% 7.77%
Lifebuoy Body Wash 300ml
Rp10,680.00 Rp10,485.00 Rp10,582.50 2.60% 10.17% 7.01%
The original supermarkets showed a similar price range. The biggest deviation
is merely 11.19%, meaning the average difference in price was only 11.19% of the
mean price.
However, the new supermarkets’ average prices did not differ greatly with the
prices of the original supermarkets. There is no repetitive trend on which one side
always poses a higher/lower price than the other. This means that the oligopoly that
the original supermarkets have made extends to all of the supermarket industry.
If the original supermarkets have created a separate oligopoly to compete with
the new competitors, evidence of them segregating themselves would be visible. Their
prices will have a trend that is close to each other yet different from the new
supermarkets. However, in the chart above, we could see that for some products, the
15
prices were generally cheaper in the original supermarkets yet for some others it was
cheaper in the new supermarkets. Furthermore, the overall standard deviation shows
that both sides’ prices did not differ significantly.
The question now will be, ‘why have not the original supermarkets made a
new oligopoly?’ One factor to question would be whether the profit margin for
grocery products will allow further price deduction. Further investigations of this
possibility however must derive from the disciplines of economics and orientate to
areas of business studies and this essay will not further develop this idea for that
reason.
Another notable factor is that by not posing a corporate pricing strategy, the
original supermarkets are ready to engage in a non-price competition with the new
suppliers. What made them prefer doing so? To complete the analysis, that question
must be answered.
After investigating economics textbooks, I discovered that there exists a form
of oligopoly named Non-collusive Oligopoly. A market is labeled so when the firms
met all characteristics of an oligopoly but they compete among themselves in ways
that did not involve price. In its place, the firms may compete in branding,
advertising, free offers, and promoting quality and price. (Glanville, 140)
The original supermarkets of Bogor have a beneficial factor that readied them
for a non-price competition; it is the fact that they are original. During the years
before the new supermarkets entered the market, surely the original supermarkets
have built a strong customer base.
It is known that all original supermarkets except for Shangri-La Supermarket
are Sole Proprietorships –meaning they are owned by one person. The owners
managed the shop as a whole and not separate it into departments. Often would they
be seen directly involved in the shop floor. This signifies that direct customer
approach is something that occurs very often, this is a favorable factor in building a
customer base.
However, the threat for them would be that their customer loyalty surely is
limited towards the older population. Young ones who, before the emergence of the
new supermarkets, have not integrate shopping as part of their routine surely did not
have such loyalty. When the demography shifts, the main advantage of the original
supermarkets may be eliminated.
15
Nevertheless, if we decide to disregard the non-price competitive power of the
original supermarkets, a new argument might arouse. Have the supermarkets of Bogor
turn into a monopolistic market? Where no firm has a high degree of price control and
so everyone is selling at their absolute minimum profit. The answer to this will
certainly be negative.
It is true that the number of the entities has increased, but I believe that it is
not big enough to deform the market structure to become a monopolistic market. An
empirical evidence is that the prices posed by the original supermarkets and the new
supermarkets differ –and the difference is not of a common percentage. Look at
Appendix 3 for details. This fact does not only signifies that the firms were not selling
at the absolute minimum price, but it also shows that the supermarkets each have a
degree of control over their price. The comfort and practicality of supermarket
shopping gave this power to the supermarkets; they have the power to set higher
prices. This means that they are not a monopolistic market yet.
Another possibility as of why there is no corporate pricing strategy is, if
referred to the concept of ‘the Prisoner’s Dilemma (PD)’ it will be visible that it is
favorable that all supermarkets set their prices high. The PD, if applied to the present
case, will resemble the market as:
New Supermarkets
(NS) Low Price
High Price
Original Supermarkets
(OS)
Low Price
Medium revenue for both
Low revenue for NS, very high revenue for OS
High Price
low revenue for OS, very high revenue for NS
High revenue for both
If one side of suppliers poses high prices and the other side poses lower prices,
customers will prefer the less expensive side –this will result in great revenues for
15
them and low revenues for the entities with higher prices. Thus the best scheme for all
suppliers is for everyone to set high prices –and the grocery market of Bogor has the
power to do so; since as discussed before, as a whole they are an oligopoly.
15
Part 6:
Conclusion and Evaluation
This main aim of this essay is answer the question “Did the original
supermarkets of Bogor form a tacit oligopoly to compete against the new
competitors?” It is proven through the collected data that there is an oligopoly
between the original supermarkets, but this oligopoly extends to include the new
supermarkets as well.
I hypothesized that the original supermarkets have formed a separate oligopoly
in which they may employ corporate pricing and other business strategies. It is now
proven wrong. This also implies that the original supermarkets are willing to engage a
non-price competition.
However, this investigation process is limited. To maintain subjectivity, I have
decided that branded goods would be the only appropriate sample products; these
products allow quantity and quality to be controlled. If non-branded goods are taken
into account, the fluctuation of price might be greater. Those goods’ values are
subjective and the supermarket’s brand image will definitely alter its value in the eyes
of the consumer. This gives the supermarkets a higher degree of price control.
Furthermore, the price recording is held only once. There might be a trend of price
change that depends on the time of the year or the day of the week and which I might
have failed to apprehend. Apart form the price recording process, there are other
limitations as well. Despite there is a figure for GDP/Capita, income disparity is not
integrated into it.
Lastly, there are several new questions that emerge from these results. Is the
oligopoly intentional or was it a necessity to compete with other suppliers, e.g. the
hypermarkets? Or was there a corporate pricing strategy (a separate oligopoly) once
but the new supermarkets has adapted their prices unto it? Despite these questions
derives from the purpose of this essay, they could be taken into consideration during
future researches.
20
Bibliography
1). "Bogor." Microsoft® Student 2006 [CD]. Redmond, WA: Microsoft Corporation, 2005.
2). Collier, Barry. Introducing Economics. 2nd ed. Queensland: Jacaranda Press,1992.
3). Glanville, Alan. Economics from a Global Perspective. Oxford: Glanville Books, 2003.
4). “Indonesia.” The CIA World Fact Book. 16 Aug 2007 Central Intelligence Agency. 18 Aug 2007. <https://www.cia.gov/library/publications/the-world-factbook/geos/id.html>
5). “KETENTUAN STANDAR PEMBERIAN SURAT IJIN USAHA PERDAGANGAN (SIUP)” 2002. PT.RCS Online Page. PT. Roda Cipta Semesta. 18 Aug 2007. < www.rcs.co.id/kepmendprin_289_2001.htm>.
6). “Perda tentang PENGELOLAAN USAHA INDUSTRI DAN PERDA.” 2002.Web Terintegrasi Kabupaten Bogor. Bupati Bogor. 18 Aug 2007. <http://gerbang.jabar.go.id/kabbogor/index.php?index=15&idartikel=1>.
7). Urban, Paul, et al. Mathematics for the International Student: Mathematics HL (Core). Adelaide: Haese & Harris Publications, 2004.
21
Appendix 1
ProductProduct Prices Posed by the Original Supermarkets Analysis
Ngesti 1st Branch
Ngesti 2nd Branch
Ngesti 3rd Branch
Grand Supermarket
Shangri-la Supermarket
Mean Standard Deviation
Frisian Flag Milk Full Cream 1000gr
Rp44,700.00 Rp44,300.00 Rp47,400.00 Rp47,400.00 Rp49,200.00 Rp46,600.00 4.42%
Ovale Skin Tonic 200ml Rp10,800.00 Rp9,600.00 Rp8,900.00 Rp9,600.00 Rp10,800.00 Rp9,940.00 8.41%
Sariwangi Bagged Tea 150mg Rp6,900.00 Rp6,700.00 Rp5,800.00 Rp5,700.00 Rp6,900.00 Rp6,400.00 9.38%
Blue Band Margarine 250mg Rp4,625.00 Rp4,200.00 Rp4,200.00 Rp4,500.00 Rp4,350.00 Rp4,375.00 4.28%
Pepsi Cola 500mg Rp5,250.00 Rp4,350.00 Rp460.00 Rp4,000.00 Rp4,100.00 Rp4,460.00 11.19%
SoKlin Lantai Floor Cleaner 800 mg
Rp4,850.00 Rp4,700.00 Rp4,750.00 Rp4,850.00 Rp5,100.00 Rp4,850.00 3.18%
Oreo Biscuit 150g Rp4,350.00 Rp4,300.00 Rp4,150.00 Rp4,250.00 Rp4,500.00 Rp4,310.00 3.00%
Lifebuoy Body Wash 300ml Rp10,900.00 Rp10,700.00 Rp10,200.00 Rp10,800.00 Rp10,800.00 Rp10,680.00 2.60%
22
Appendix 2
ProductProduct Prices Posed by the New Supermarkets Analysis
AG MartHero Supermarket
ADA Supermarket
Matahari Market Place
Ramayana Supermarket
Mean Standard Deviation
Frisian Flag Milk Full Cream 1000gr
Rp45,600.00 Rp45,600.00 Rp43,900.00 Rp44,700.00 Rp44,900.00Rp44,940.00 1.58%
Ovale Skin Tonic 200ml Rp8,500.00 Rp11,150.00 Rp9,450.00 Rp11,950.00 Rp10,800.00
Rp10,370.00 13.32%
Sariwangi Bagged Tea 150mg Rp5,500.00 Rp6,275.00 Rp6,000.00 Rp6,065.00 Rp5,500.00
Rp5,868.00 5.98%
Blue Band Margarine 250mg Rp4,100.00 Rp4,675.00 Rp4,675.00 Rp4,225.00 Rp4,450.00
Rp4,425.00 5.88%Pepsi Cola 500mg Rp4,500.00 Rp4,150.00 Rp4,600.00 Rp4,750.00 Rp4,600.00 Rp4,520.00 4.98%SoKlin Lantai Floor Cleaner 800 mg
Rp5,400.00 Rp5,415.00 Rp4,775.00 Rp5,415.00 Rp4,800.00Rp5,161.00 6.61%
Oreo Biscuit 150g Rp3,850.00 Rp4,290.00 Rp4,300.00 Rp5,125.00 Rp4,700.00 Rp4,453.00 10.81%Lifebuoy Body Wash 300ml Rp9,700.00 Rp11,925.00 Rp10,300.00 Rp11,175.00 Rp9,325.00
Rp10,485.00 10.17%
Appendix 323
Product Prices (Comparison)
ProductProduct Prices Posed by the Original Supermarkets Product Prices Posed by the New Supermarkets
Ngesti 1st Branch
Ngesti 2nd Branch
Ngesti 3rd Branch
Grand Supermarket
Shangri-la Supermarket AG Mart
Hero Supermarket
ADA Supermarket
Matahari Market Place
Ramayana Supermarket
Frisian Flag Milk Full Cream 1000gr
Rp44,700.00 Rp44,300.00 Rp47,400.00 Rp47,400.00 Rp49,200.00 Rp45,600.00 Rp45,600.00 Rp43,900.00 Rp44,700.00 Rp44,900.00
Ovale Skin Tonic 200ml Rp10,800.00 Rp9,600.00 Rp8,900.00 Rp9,600.00 Rp10,800.00 Rp8,500.00 Rp11,150.00 Rp9,450.00 Rp11,950.00 Rp10,800.00
Sariwangi Bagged Tea 150mg Rp6,900.00 Rp6,700.00 Rp5,800.00 Rp5,700.00 Rp6,900.00 Rp5,500.00 Rp6,275.00 Rp6,000.00 Rp6,065.00 Rp5,500.00
Blue Band Margarine 250mg Rp4,625.00 Rp4,200.00 Rp4,200.00 Rp4,500.00 Rp4,350.00 Rp4,100.00 Rp4,675.00 Rp4,675.00 Rp4,225.00 Rp4,450.00
Pepsi Cola 500mg Rp5,250.00 Rp4,350.00 Rp460.00 Rp4,000.00 Rp4,100.00 Rp4,500.00 Rp4,150.00 Rp4,600.00 Rp4,750.00 Rp4,600.00
SoKlin Lantai Floor Cleaner 800 mg
Rp4,850.00 Rp4,700.00 Rp4,750.00 Rp4,850.00 Rp5,100.00 Rp5,400.00 Rp5,415.00 Rp4,775.00 Rp5,415.00 Rp4,800.00
Oreo Biscuit 150g Rp4,350.00 Rp4,300.00 Rp4,150.00 Rp4,250.00 Rp4,500.00 Rp3,850.00 Rp4,290.00 Rp4,300.00 Rp5,125.00 Rp4,700.00Lifebuoy Body Wash 300ml Rp10,900.00 Rp10,700.00 Rp10,200.00 Rp10,800.00 Rp10,800.00 Rp9,700.00 Rp11,925.00 Rp10,300.00 Rp11,175.00 Rp9,325.00
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Acknowledgements
I would like to credit:
Santo Gultom, as my Extended Essay supervisor, Economics teacher, and IB Coordinator (2007-2008).
Kale Hanson, as my IB Coordinator (2006-2007).
I also acknowledge the supermarkets that were subject to my research:
Ngesti Supermarket Ngesti Supermarket 2nd Branch Ngesti Supermarket 3rd Branch Grand Supermarket Shangri-La Supermarket Hero Supermarket Matahari Marketplace A&G Groceries ADA Supermarket Ramayana Supermarket
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