2009 Indonesian economic outlook

A good thing working in marketing research company is that you have a lot  of the data to see how the overall manufacturer is  doing.

In 2008, most (if not all) product category is increasing in value compare to 2007, this is mostly driven by pricing increase. However in terms of volume, it is totally different story, some of the product category is actually showing a negative growth (or stagnant). Even in milk category which usually quite resilient in time of crisis, is shrinking in some segments.

Looking at the above and also the financial crisis in US and Europe which start to impacting  the financial business in Indonesia, I  a bit pessimistic about 2009 outlook.  Few companies (mostly export oriented) already start to lay off their employee, which also mean that it will reduce the product affordability.

But I also not very pessimistic about it, because there are few things that  may increase the income of the consumers income in 2009.

1. Fuel price is down, which also means that the price increase for most product category is stop at current level at least. This will somewhat give consumer room to breath as their transport cost now is somewhat reduced. This also give manufacturer a chance to give discounted price to consumers.
2. There is Pemilu event in the very near future where all the contestant will pouring money like crazy (where they got the money is still a mystery to me). They usually pay anyone who can joint their campaign (Tips : you can join to more than one campaign to get more money) just to sit and hear the candidate, clapping their hand or just yelling slogans like a parrot.

Although they got additional income, I am sure that the consumer will be more reasonable in spending their money.  They will be more aware the combination of  size, price and quality, trying  to get the best bang of their buck (or rupiah for that matter).

So what manufacturer should do in time of crisis. From my personal opinion :

• Don’t stop the communication to the consumers, probably more emphasis on the affordability without sacrificing the quality image.
• Product discount or bundled product to make it cheaper.
• Introducing more affordable (smaller) pack size
• And last but not least, “contact me” to track what is the consumer have in mind..

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