The main topic for this Extended Essay is to analyze the effectiveness of company’s market strategy. A marketing strategy can be defined as a process that helps a business to optimize the opportunities in order to complete business objectives, which mainly gain profits. It includes all basic and long-term field activities of marketing that deal with the analyzing of initial strategy, evaluation of the strategy, and making of a new strategy if the initial strategy is found to be ineffective or even might cause loss. (Homburg, Kuester and Krohmer 2009) To make sure the effectiveness of marketing strategy, its crucial to establish the right marketing mix which cover all the element needed in marketing a product. (Clark, et al. 2009)
XXX’s rubber manufacture is business-to-business type of company that can be categorized as small-medium enterprise. XXX’s processing rubber l that the company orders from the suppliers. The process will be shaping the rubber materials based on customize request from the customers. This type of company might exist because many of industries use rubber as the main content or just a small section of it, which the product can’t operate well without.
The example is water bottles, there is rubber on lid to prevent the water from dripping while the people is drinking. The rubber is only a small part of the whole bottle, so most of the company orders the rubber from other company because producing themselves will result in more expenses and ineffective. XXX Company didn’t have any permanent customers or customer under contract, so their income is varies each month and it has lots of competitors. Although the income varies, the company survives the economic crisis in 1998 and still standing for 15 years
‘The farmers of rubber plantations in West Kalimantan are worried about the selling price of rubber latex. Lately it has been decreasing from Rp9.500/kg to Rp8.500/kg yet the production cost is around Rp7.000/kg. L ast year, the price was even reaches Rp16.000/kg.” (Handoko 2013)
“As the impact of decreasing demand of rubber in international market, the selling price of rubber even reaches Rp5.000/kg. This is happening due to the economic problem in the Europe that influences the demand of rubber in international market.” (Dinas Kehutanan Provinsi Jawa Barat n.d.)
This issue drew my attention, lately, is the selling price of rubber as a raw material (rubber latex) has a significant decrease – almost half as normal price - in a short period of time. The price of rubber is supposed to increase like the other raw materials, such as oil (petroleum). The interesting part is that even the selling price of raw material decreases, but the selling price of products that uses rubber as their components/main content is increasing (e.g. wheel, tank’s tracks). It becomes a huge loss to the raw material provider and benefits to the manufacture.