Health Food Market in Indonesia   Term Paper ID:27527 Click to get this paper

Essay Subject: Reviews the economic development & prospects of Indonesia; proposes the introduction of a new line of health food products into the Indonesian market.... More...

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Paper Abstract: Reviews the economic development & prospects of Indonesia; proposes the introduction of a new line of health food products into the Indonesian market. Paper Introduction: Country Market Statistical Analysis Indonesia is a nation formed in 1949. The region was formerly under the control of the Netherlands. Indonesia is composed of the islands of Java and Madura, Sumatra, Borneo, Sulawesi (Celebes), Bangka Belitung, the Riau Archipelago, the Moluccas, and the Nusa Tenggara Islands (including Bali and Timor). In 1963 Indonesia also assumed sovereignty over Irian Jaya, formerly Netherlands New Guinea. In 1976, East Timor joined Indonesia as the 27th province. Indonesia today has a well-diversified economy. Every sector of the Indonesian economy plays an important role. The country has a strong agricultural potential, and thus agriculture has historically been the dominant activity, both in terms of employment and output. The mining sector has also made important contributions as the nation Text of the Paper: The entire text of the paper is shown below. However, the text is somewhat scrambled. We want to give you as much information as we possibly can about our papers and essays, but we cannot give them away for free. In the text below you will find that while disordered, many of the phrases are essentially intact. From this text you will be able to get a solid sense of the writing style, the concepts addressed, and the sources used in the research paper. Consumers have shown that they are willing to spendmoney for the benefit of health no matter what the price difference, andthis is especially true of the more expensive U.S. As late as 1988, oil revenues accounted for 8 percent of theincome of the nation, but this has now been surpassed by the industrialsector, whose share of GDP rose by 9.6 percent over the decade to 22.9percent in 1993. In 1976, East Timor joinedIndonesia as the 27th province. Importedproducts come first from the United States, followed by Australia, Japan,and Taiwan. By far thehighest level of development has been achieved on Java and Bali, which arethe two most densely populated islands in the country. 1st Quarter 1996. Among theseproducts are vitamins, minerals, enzymes, ginseng, royal jelly, plant andherbal extracts, and so on. products on nearly every front.Marketing should be geared to the high population centers of Bali and Java,where economics also have meant a less healthy diet than in traditionalcenters. The mining sector has also made important contributions as thenation has a vast range of mineral resources. In 1994, the per capita GDP for Indonesiaexceeded $875, triple that of Bangladesh and more than double that ofIndia. Indonesia needs growth to stimulatedevelopment and to absorb the more than two million new workers enteringthe labor force each year. The reformers have been market-oriented and have cut away atrestrictions within the economy, restrictions which created inefficienciesthe country could no longer afford to sustain in a world of falling oilprices while at the same time opening the domestic economy as much aspossible to outside forces. However, the economy continued toprosper throughout the decade in spite of this, with the GDP growing at anannual average rate of 8 percent. Industry and tourism-based services, however, predominate inthe two. Attractive packaging design and labelingare also important (Indonesia, 1997, 4-5).Distribution Market access is determined by various factors. Every sector of the Indonesian economy plays an important role.The country has a strong agricultural potential, and thus agriculture hashistorically been the dominant activity, both in terms of employment andoutput. The structure of the economy had changed greatly from 1983to 1993. Imports continue to grow at 1 percentannually. import market in the firstyear and could reach 1 percent by the third year.Summary/Recommendations The market for health food products in Indonesia is a growth marketwhich gives special advantage to U.S. Indonesia. Washington, D.C.: U.S.Department of Commerce. Further progress is needed to eliminate remaining barriers toforeign and domestic trade and to replace the current outdated commercialcode and establish clear and transparent auditing and accounting standards(Indonesia: An economic success story, 1995, 14). Multi-level marketing isanother approach and fits with the cultural norms in Indonesia wherepersonal relationships are very important. products in general have the highest price, followedby those from Japan. Education is a key element in promotion to inform consumers about thebenefits of health products as a daily supplement. The current deficit droppedform $4.4 billion in 1991 to $3.2 billion in 1994 because of strong exportperformance. Indonesia: Country profile: 1995-1996 (1995). These regions have continued torecord real economic growth rates averaging 7.6 percent per year in Javaand 8.6 percent per year in Bali since 1987-1992, and the pattern of thisgrowth has tended to be well balanced, with all sectors experiencing someexpansion. Indonesia: An economic success story. In the early 198 s, however, there was aprecipitous drop in growth which pointed to limits in the industrializationstrategy, and a new generation of reformers advocated a more limited rolefor the government (Frederick and Worden, 1992, 143-144).Economic Statistics and Activity Indonesia today is an economic success story. Continuity of supply is important, and consumers will turn toanother brand if the supply of favored products is not maintained.Promotion is effected through television, newspapers, and magazines as wellas other mass media in Indonesia. products are held in highesteem. Jakarta: Price Waterhouse. Products deemed to have the highest potential in the health foodsegment in Indonesia are those that would contribute to degenerativeprevention, or those that would reduce diseases such as cardiovasculardiseases, cancer, hypertension, and osteoporosis. There areno import restrictions on health food products, but imported food productsare to be registered with the Department of Health, which has an importantrole in controlling the distribution and quality of imported products(Market Research Reports, 1997, 1-2). The service sector over the same period rose by 2.1percent, while both the agricultural and mining sectors were on the decline(Passow, 1995, I4). Passow, S. dollars from $148.2 million in 1994 to$174. Frederick, W.H. The EconomistIntelligence Unit, London. They have taken the country through the adjustmentprogram they have been promoting to heavily indebted countries for over adecade. (1995, December). and R.L. Indonesia has received considerable assistance in its growth from theIMF and the World Bank. Life expectancy had increased from 41 years in 1965 to 63 in 1994,and infant mortality and illiteracy rates had dropped. 5 years of achievement. Indonesia recently celebrated its fiftieth anniversary ofindependence. Receiving sucha certificate takes between 3 and 6 months. It was one of theworld's poorest countries in 1967 when Suharto came to power when a percapita gross domestic product of $7 per person prevailed, then half thatof India and Bangladesh. (1997). Imported goods ingeneral have an advantage because Indonesians believe that importedproducts are of superior quality when compared to domestic products. While there has been substantial growth in manufacturedexports over the last several years, Indonesia remains a major exporter ofraw, unprocessed commodities, which means that the economy is vulnerable toany major slowdown in the industrialized world (Doing Business inIndonesia, 1989, 1 ).The Target Market Economic development has been uneven through the different provincesof Indonesia, and extensive regional imbalances have arisen primarily fromvariations in the resource endowments of the different areas. The New Order was committed to a stable economic environmentencouraged by responsible fiscal and monetary policy. The industrial sector hasexpanded rapidly and has been given a particular emphasis by the governmentas a way of diversifying the economy and improving the ability of thecountry to compete in terms of trade. Promotion is affected by several factors. Indonesia: Country report. Outside these two regions, development has proceeded more slowlyand has often been concentrated in areas endowed with a suitableenvironment for the cultivation of cash crops or with mineral resources.The pace has been especially slow in the eastern provinces, which for themost part have relatively small populations and are far from the centers ofpolitical and economic influence and power: The government has long been aware of the need to promote a more equitable geographical distribution of development, and to take active measures to eradicate the remaining pockets of poverty. The governmentused a restrictive monetary policy and a conservative fiscal stance toconfine inflation to the 5 to 1 percent range. Market Research Reports. BusinessAmerica, 14-15. Indonesia: A country study.Washington, D.C.: Library of Congress. Curiosity is afactor with reference to new products and particular health benefits.Quality is also important, which is why U.S. Country Market Statistical Analysis Indonesia is a nation formed in 1949. Indonesia is composed of the islands ofJava and Madura, Sumatra, Borneo, Sulawesi (Celebes), Bangka Belitung, theRiau Archipelago, the Moluccas, and the Nusa Tenggara Islands (includingBali and Timor). Import tariffs stand at between 1 and 25 percent. (1995, August). The change in dietary content has contributed to an increasein deaths from certain diseases. References Doing business in Indonesia (1989). American products are highly regarded in Indonesia. The totalmarket has been growing in U.S. These would includeOmega-3, wheat germ, squalene. Indonesia today has a well-diversifiedeconomy. The EconomistIntelligence Unit, London. Concerns overforeign economic dominance, the limited national industrial base, and theneed for pribumi (indigenous) economic development mandated increasedgovernment regulation during the 197 s. After the downfall of Sukarno, the New Order regime under Suhartogained financial assistance from the International Monetary Fund for avariety of emergency stabilization measures to put the economy back oncourse. million in 1996. Worden (1992). They also possesssome of the most fertile agricultural soils and have historically enjoyedthe best infrastructural facilities. Diet andaesthetic products are also popular and include those whose consumptionaffects physical appearance, such as metabolism increasers, fiber diet, andfat burners. Thereputation of the United States means that promotions should emphasize theconnection with the new product and its country of origin. Direct marketing is one method used. Other important types are those designed for the maintenanceof vitality and stamina (royal jelly, ginseng, bee pollen) and those thatassist in the maintenance of a healthy lifestyle (anti-oxidant formulas,multivitamins and minerals, trace mineral tablets) (Indonesia, 1997, 3-4).Pricing Price is normally not a determining factor in the success or failureof a product in Indonesia. A new product with proper promotion and market placement could achievea good market penetration early if sufficient curiosity can be aroused.The product should achieve 3 percent of the U.S. Food consumption patterns in Indonesia have shifted from traditionalto fast food, and there are class differences in the types of food consumedso that those in the upper and middle classes consume food that is high inenergy and fats, low in fiber and low in micronutrients such as vitaminsand minerals. Cancer has increased and is associatedwith diets high in fat, and this is a disease of rising affluence inIndonesia as people get more money and change the types of foods they eat(Indonesia, 1997, 2-3). The five-year plan tries to meet this challengeby relying on the private sector to contribute heavily to future growth inthe economy. There has been a globalreorientation back to natural products, and this trend is also taking placein Indonesia. The region was formerly underthe control of the Netherlands. U.S. In 1963 Indonesia also assumed sovereignty over IrianJaya, formerly Netherlands New Guinea. products (Indonesia,1997, 5).Promotion In Indonesia, brand image is not as important as country of origin,and products from the United States have an advantage. All imported foodproducts have to be registered with the Indonesian Ministry of Health andmust receive a Certificate of Health prior to importation. In Indonesia, the 1995 total market for healthfood products was $158.2 million, and the market consists of over 9 percent imports, with some locally sourced or manufactured items. Many products are also soldthrough retail outlets in drug stores, supermarkets, and pharmacies(Indonesia, 1997, 8).Financial Statements and Budgets The United States today imports 492 food supplement products for a42. Regional subsidies have been an important feature of the government's recurrent spending through the New Order period, while regional development has been a major priority of its capital spending (Indonesia 1995-96, 1996, 21).The target market initially will be in Java and Bali, the most populatedand most economically advanced regions of the country.Product The product line is health foods, which covers a range of edibleproducts, either in solid or liquid form, which do not require aprescription and are not to be used for medical treatment. 2 percent share of the market. InstitutionalInvestor, I4-I7. bone powder, and lecithin. Real GDP growth hasaveraged 6.7 percent per year over the last five years. The people tend to associate cheaper price withpoorer quality. There are several commonly used distribution practices for health foodproducts. If this paper is not what you are looking for, you can search again: Search for: or Click here to request an essay written just for you.