Microsoft Word - 914-Article Text-4401-1-15-20220611 rev Available online at: http://journals.researchsynergypress.com/index.php/ijmesh International Journal of Management, Entrepreneurship, Social Science and Humanities (IJMESH) ISSN 2580-0981 (Online) Volume 5 Number 1 (2022): 161-181 Corresponding author sastipretita@gmail.com; moh.toha@sbm-itb.ac.id DOI: https://doi.org/10.31098/ijmesh.v5i1.914 Research Synergy Foundation Marketing Mix Strategy Formulation of Ready Meal Business using Hierarchical Clustering (Case Study of Kokikit) Sasti Pretita1, Mohamad Toha2 1, 2 Institut Teknologi Bandung, Indonesia Abstract Kokikit is a food and beverage startup company providing non-frozen ready meal, such as instant rice and instant side dish which is ready to serve within minutes. Although the market growth of ready meal in Indonesia is positive, the revenue of Kokikit keeps decreasing. Marketing is one of the ways to dominate the market share, yet Kokikit has not fully utilised its potential to market the products, which impacted the sales due to its ineffectiveness. The research aims to determine the new segment, target customers and positioning (STP) for Kokikit based on cluster generated from the consumer analysis, and to propose marketing strategies based on new marketing mix according to the cluster’s preferences. The data collection used qualitative method through one- on-one interview with 5 potential consumers to determine attributes, and quantitative method through questionnaire attended by 149 potential consumers within Jabodetabek area, which further analysed using hierarchical clustering. The conclusion of the hierarchical clustering is using Importance-Performance analysis as a comparison between the importance of attributes and its performance in the company. The new target consumers are the ones that prefer hygiene, good taste, variety of menu; price discounts; distribution place using GoFood, GrabFood, supermarkets, or minimarkets; and promotions through YouTube, endorsement and social ads. Therefore, the proposed marketing strategies are maintenance of taste and hygiene, add more variety of menu, conduct more price discounts, opening GoFood and GrabFood, partnering with supermarket and minimarket, conduct regular promotions focusing on YouTube with endorsement and social ads to attract more customers. Keywords: ready meal; segmentation; targeting; positioning; marketing mix; hierarchical clustering This is an open access article under the CC-BY-NC license. INTRODUCTION Kokikit is a food and beverage startup company in Indonesia established in 2021, providing non- frozen ready meal, such as instant rice and instant side dish which is ready to serve within minutes, only by letting the product in boiling water, or heating it in the microwave. There are seven menu offered to customers, which are Nasi Bebek Betutu ala Bulan Sutena, Nasi Minang Daging Rendang ala Iwa K, Nasi Daun Jeruk Lidah Cabe Ijo ala Tantri Box, Nasi Pandan Ayam Suir Pedas ala Fenita Arie, Nasi Biryani Kambing Ungkep ala Arie Untung, Nasi Kuning Empal Suir Pedas ala Thalita Latief, Nasi Keraton Daging Balado ala Asri Welas, Nasi Liwet Rendang Paru ala Indra Bekti, and Nasi Kecombrang Cakalang Woku ala Komeng, with its single side dishes products offered as Instant Side Dish. The price of the products vary between Rp 23.000 – Rp 90.000 in Indonesian Rupiah. Kokikit prioritizes food safety through strict hygiene and sanitation protocols that meet International Hazard Analysis & Critical Control Point (HACCP) standards and supervised by the National Agency of Drug and Food Control (BPOM). International Journal of Management, Entrepreneurship, Social Science and Humanities (IJMESH), Vol. 5 (1), 161-181 Marketing Mix Strategy Formulation for Ready Meal Business using Hierarchical Clustering (Case Study: Kokikit) Sasti Pretita, Mohamad Toha 162 The consumption of ready meals was found to be higher if the person responsible for food preparation had a paid job according to a study by Verlegh & Candel (1999). Time pressure was found to have a strong and positive connection with ready-meal consumption, as stated in the previous research by Puteri, Damayanti, Jameelah & Giovani, (2022) that pre-cooked meals become even more popular since the COVID-19 pandemic caused by some people found that preparing meals at home is a burden due to their busy work schedules, especially those with low cooking skills. Young people' lives are generally hectic, and they are more accustomed to fast meals and ready-to eat food (Wu, 2007). Older adults may be more accustomed to preparing their own meals and may be unfamiliar with ready-to-eat meals and other convenience foods (van der Horst, Brunner, and Siegrist, 2010). This was validated in a study of 65-year-old seniors who do not think highly of ready meals and do not see the need to consume them (Saba et al., 2008). Therefore, Kokikit target customers aged 21-45 years old in Jakarta, Bogor, Depok, Tangerang and Bekasi (Jabodetabek) that prefers practical, fast and easy way to serve the food also those with smartphones, and familiar with social media, and online marketplaces. A research by Chattipmongkol & Jangphanish (2016) revealed that consumer’s buying decision of frozen ready meal is highly influenced by the marketing mix factors, primarily product factor. However, more specific research by Syukur, Bungkil & Jongsureyapart (2020) indicated that product and place factors affect customer’s purchasing decision of packaged halal food in Thailand, while price and promotion are less influential. Still, marketing mix factors are considered important in influencing customers’ purchase decision which affecting the sales. Although prior research stated that sales of ready meal products keeps growing in many developing countries, including in Indonesia (Regmi & Gehlhar, 2005), Kokikit performance keeps decreasing in revenues. Activations and programs are conducted without proper planning and profiling of the target consumers, therefore, most of it impacted in low sales. The business issue mentioned above is focusing on the marketing scope in which the research will discuss (1) the suitable target segment for Kokikit, and (2) the new marketing mix strategies according to the preferences of the new target segment. By conducting the research using hierarchical clustering analysis, it will benefit the marketers to formulate marketing strategies according to customer behaviors rather than merely demographic characteristics. Furthermore, the Importance-Performance analysis conducted in this research may serve as an example of a tool to evaluate the company’s current performance with the important attributes to ensure customer’s satisfaction. It is quite difficult to compare this to previous research, yet the market is expected to grow more in the future as it matures. At this point, the findings of this study are intended to be the basic data for a future market that is more diverse, while also providing a strategic marketing direction for dealing with the existing market. LITERATURE REVIEW Ready Meal Ready meals is ready-to-eat products that still requires some cooking or re-heating before serving (Verlegh & Candel, 1999). It should be separated from ready-to-eat take away foods since take away foods do not require any cooking or heating (Geerooms et al., 2007; Verlegh & Candel, 1999). Kim International Journal of Management, Entrepreneurship, Social Science and Humanities (IJMESH), Vol. 5 (1), 161-181 Marketing Mix Strategy Formulation for Ready Meal Business using Hierarchical Clustering (Case Study: Kokikit) Sasti Pretita, Mohamad Toha 163 & Kim (2013) elaborated the classification of ready meal according to previous study by Costa et al. (2001) as follows: (1) Ready-to-eat: Foods that does not require any cooking process and can be served immediately. (2) Ready to heat: Foods that require pre-heating process before serving. (3) Ready to end cook: Foods that require additional cooking process in before serving. (4) Ready to cook: Foods that require minimal preparation for pre-cooking process and completed with additional ingredients. In Indonesia before the pandemic COVID-19 hit globally, ready meal products are considered practical and easy to distribute, therefore become the alternative solution to food supply of disaster management (Fanny, 2021). Marketing Mix (4Ps) One of the major marketing concepts is marketing mix, a collection of marketing techniques that a company uses to generate tactics based on the desired response in its target market market (Kotler & Armstrong, 2012). Everything a company can do to affect demand for its product is included in the marketing mix, which consists of four elements, known as 4P; Product, Price, Place, and Promotion. By assessing the four elements, the marketing strategy will be integrated and consistent in delivering values to customers. The promotion mix breaks down into Integrated Marketing Communication consists of Advertising, Sales Promotion, Direct Marketing, Public Relations, and Personal Selling (Kotler & Armstrong, 2012). To market a product, one or more IMC tools are utilized simultaneously. If a firm is advertising a product, for example, it must guarantee that the advertisement is complemented with a news article about the product. Previous study by Sainiyom (2007) proved that marketing mix highly affects consumers purchase decision of frozen ready meals in Thailand. Result of the research indicates that consumers prioritizes hygiene as product factor, clear label pricing as price factor, convenience as place factor and ads placement across various media platform as promotion factor (Sainiyom, 2007). The influence of each marketing mix factors towards frozen ready meal is explained further by Chattipmongkol & Jangphanish (2016), that the pre-purchase decision was impacted by reasonable quantity pricing, numerous distribution channels, and the overall aspect of promotion, such as relevant advertising and publicity in various media. The overall product factor becomes the primary consideration for customers in purchasing the product., including the reputation of the brand, to distinct itself from alternatives. The customers’ awareness regarding the needs of ready meal increased through promotions, as well as the total price factor. Finally, the post-purchase judgment was impacted by reasonable costs for good quality. Another study regarding marketing mix implementation of ready meal business, particularly frozen nuggets, is conducted by Marsuki et al. (2019). The marketing mix strategy formulation is based on the current company’s competitive advantages, potential customer preferences and competitor performance. Result of the study is that the product mix is developed based on The Five Level International Journal of Management, Entrepreneurship, Social Science and Humanities (IJMESH), Vol. 5 (1), 161-181 Marketing Mix Strategy Formulation for Ready Meal Business using Hierarchical Clustering (Case Study: Kokikit) Sasti Pretita, Mohamad Toha 164 framework; pricing based on the cost, benefit and competitors’ price; place mix, as distribution strategy, is formulated by using indirect distribution method to offline retailers; and promotion is suggested to primarily use online media services (website, online ads, and social media), as well as below-the-line advertising (Marsuki, Syah, Indradewa & Pusaka, 2019) Hierarchical Clustering Analysis for Segmentation, Targeting and Positioning and Other Marketing Applications This research used Analytical Hierarchy Process (AHP) method to measure the preferences with mathematical structure, primarily used decision hierarchy and Pair-Wise Comparison Analysis. As elaborated by Goodwin & Wright (2004), the decision hierarchy consists of description of the decision's overall objective appears at the top of the tree. At the next level, these traits may be broken down even more, as indicated. This approach of breaking down variables can be repeated as needed until all of the important criteria for making a decision have been defined. Finally, under each of the lowest-level attributes, the possible alternatives are added to the hierarchy. Wind & Saaty (1980) revealed that the framework is useful for three significant marketing applications: (1) to determine the target market/product/distribution, (2) to develop and assess new product concepts, and (3) to formulate a marketing mix. Previous study by Kim & Kim (2013) succesfully segmented customers according to purchasing behaviors towards ready meal, called as home replacement meal (HMR), that resulting in two different clusters. The two clusters generated show different demographic characteristics and reveal four important attributes of purchasing ready meal: food quality, design, convenience and accessibility (Kim & Kim, 2013). By using clustering analysis, marketers can precisely deliver values that are suitable for the targeted customers. METHODOLOGY The research is examined the customer’s preferences towards ready meal products. First, quantitative methodology was conducted through exploratory interview with five potential customers around Jabodetabek, Indonesia to obtain variables as preferences of each marketing mix elements. Second, quantitative method through close-ended questionnaire to compare importance between variables that are arranged using hierarchical clustering analysis. The requirements for the quantitative respondents are those who located in Jabodetabek and consume ready meal products at least once. Since the population is determined as infinite, probability sampling method is used with normal distribution formula to obtain the amount of minimum respondents. It is assumed that the population proportion is 0.5, with confidence level of 95% (z score = 1.96), and a margin of error of 10%, resulting in 96 respondents as minimum requirements for the survey. The data was analyzed using Analytical Hierarchy Process (AHP) to examine each individual’s importance rating by comparing between variables obtained from the variables. The decision hierarchy is developed which consists of description of the decision's overall objective appears at the top of the tree, and the sub variables in the bottom. Next step is to formulate the questionnaires with the previous elaborated variables, and the result is presented in importance scale ratio International Journal of Management, Entrepreneurship, Social Science and Humanities (IJMESH), Vol. 5 (1), 161-181 Marketing Mix Strategy Formulation for Ready Meal Business using Hierarchical Clustering (Case Study: Kokikit) Sasti Pretita, Mohamad Toha 165 between 1 to 5 in the survey, and scale ratio between 1/3 to 3 as the real weight criteria. The price willing to pay assessment is an exception, since it was presented as an open-ended short answer in the questionnaire. Each criterion ratio represents the weight of importance between compared two variables, known as to analyze the data using Pair-Wise Comparison (Goodwin & Wright, 2004). Below is the scale ratio between criterion: Table 1. Scale Ratio for Pair-Wise Comparison Importance Weight Remarks 1/3 Values for Inverse 1/2 Values for Inverse 1 Equal 2 Strong Importance 3 Very Strong Importance Pair-Wise Comparison matrix is required assess how well the alternatives perform on the multiple variations and to establish their relative relevance. The result then is processed using hierarchical clustering with K-Means cluster to find hierarchical relationship between attributes. The weight of importance rating then is compared to performance rating of Kokikit to determine the overall weight of each cluster. Because the respondents for this research are potential customers, the performance rating is based on previous company’s internal customers assessment. From the method, sales opportunity of each clusters is obtained by calculating the result the percentage of targeted Serviceable Obtainable Market (SOM) which Kokikit has determined by 5% to be achieved in 10 years. The sales opportunity is to determine new segment that has most potential for Kokikit, and become a basis for formulating proposed marketing mix strategies. Figure 1. Importance-Performance Grid Chart (Martilla, 1977) A. Concentrate Here B. Keep Up The Good Work B. Low Priority D. Possible Overkill Fair Performance Excellent Performance Extremely Important Slightly Important International Journal of Management, Entrepreneurship, Social Science and Humanities (IJMESH), Vol. 5 (1), 161-181 Marketing Mix Strategy Formulation for Ready Meal Business using Hierarchical Clustering (Case Study: Kokikit) Sasti Pretita, Mohamad Toha 166 Finally, the conclusion consists of determining the new segmentation, targeting and positioning for Kokikit based on the clustering analysis result, and Importance-Performance analysis to formulate the suitable marketing mix strategies. The chosen strategy is the attributes that indicate as “Concentrate Here” to be added and improved, while the attributes that indicate as “Keep Up The Good Work” will be included as a strategy that needs to be maintained. Moreover, previous research and study regarding marketing strategies will be used to support the marketing mix strategy formulation. FINDINGS AND DISCUSSION Qualitative methodology is conducted through interview to respondents based on Kokikit’s initial target segment. The interview aimed to obtain variables which will be used for questionnaires. The variables found from the interview are arranged hierarchically to be analyzed using AHP. There are six major criteria with its variables and sub variables that represents the marketing mix elements. Customer’s Buying Criteria and Customer Food Type Preferences refer to Product-Price Mix, Customer Place Preferences and Customer Place Criteria, Customer Media Promotion Type and Customer Promotion Media Type Preferences. Below is the depiction of hierarchical variables: Figure 2. Hierarchical Variables International Journal of Management, Entrepreneurship, Social Science and Humanities (IJMESH), Vol. 5 (1), 161-181 Marketing Mix Strategy Formulation for Ready Meal Business using Hierarchical Clustering (Case Study: Kokikit) Sasti Pretita, Mohamad Toha 167 The questionnaire was successfully filled out by 149 respondents across demographic characteristics in Jabodetabek. Each respondent compares between two variables giving ratio based on personal judgment. In this matrix, known as Pairwise Comparison, the criteria in the row and the criteria in the column are being compared, with an example of Pairwise Comparison calculation of Customer’s Buying Criteria from one respondent as follows: Table 2. Example of Pairwise Matrix from a Respondent Good Taste Affordable Price Serving Method Variety of Menu Packaging Hygiene Good Taste 1 3 0,3 3 3 0,3 Affordable Price 0,3 1 0,5 0,5 1,0 0,3 Serving Method 3 2 1,0 2,0 1,0 0,3 Variety of Menu 0,3 2 0,5 1,0 1,0 0,3 Packaging 0,3 1 1,0 1,0 1,0 0,5 Hygiene 3 3 3,0 3,0 2,0 1,0 TOTAL 8 12 6,3 10,5 9 2,8 The normalized score of each column value is then calculated by dividing it by the column total. There is CHECK column to ensure that each sum of column is one, except the sum of the total columns; it should be the amount of variables being compared in one matrix. Below is an example of normalized weight calculation of Customer’s Buying Criteria from one respondent as follows: International Journal of Management, Entrepreneurship, Social Science and Humanities (IJMESH), Vol. 5 (1), 161-181 Marketing Mix Strategy Formulation for Ready Meal Business using Hierarchical Clustering (Case Study: Kokikit) Sasti Pretita, Mohamad Toha 168 Table 3. Example of Normalization Matrix from a Respondent Good Taste Affordable Price Serving Method Variety of Menu Packaging Hygiene Total Weight Average Weight Good Taste 0,13 0,25 0,05 0,29 0,33 0,12 1,16 0,19 Affordable Price 0,04 0,08 0,08 0,05 0,11 0,12 0,48 0,08 Serving Method 0,38 0,17 0,16 0,19 0,11 0,12 1,12 0,19 Variety of Menu 0,04 0,17 0,08 0,10 0,11 0,12 0,61 0,10 Packaging 0,04 0,08 0,16 0,10 0,11 0,18 0,67 0,11 Hygiene 0,38 0,25 0,47 0,29 0,22 0,35 1,96 0,33 CHECK 1,000 1,000 1,000 1,000 1,000 1,000 6,000 1,000 The average weight shows how the data is sorted based on the level of importance of the preferences of each consumer. For example, according to the matrix above, the data shows that this respondent perceives Hygiene (0,33) is the most important criteria when buying ready meal products. Good Taste and Serving Method is equal based on the same average weight for both attributes. Packaging (0,11) is more important than Variety of Menu (0,10) and Affordable Price (0,08). For the sub criteria, the measurement process is similar to the parent attribute. The difference is that each of sub criteria attribute’s average weight is multiply by the average weight of the parent attribute. To ensure that the analysis is correct, the total sum of final average weight should be equal with the parent attribute’ weight. Finally, the weight should remain one when the sum of sub criteria’s final average weight add to the other criteria’s weight. After processing the survey data with AHP method individually, the collective average weight data set is processed using hierarchical cluster represented in dendogram below: International Journal of Management, Entrepreneurship, Social Science and Humanities (IJMESH), Vol. 5 (1), 161-181 Marketing Mix Strategy Formulation for Ready Meal Business using Hierarchical Clustering (Case Study: Kokikit) Sasti Pretita, Mohamad Toha 169 Figure 3. Hierarchical Clusters of Result Survey in Dendogram From the dendogram, it can be seen that the intersection line crosses four clusters to create possible clustering. The K-Means Clustering is then used to organize comparable attributes into groups by comparing the attributes and divides them into clusters based on their similarity. The table below shows the numbers of each clusters after analyzing the data using The K-Means Clustering: International Journal of Management, Entrepreneurship, Social Science and Humanities (IJMESH), Vol. 5 (1), 161-181 Marketing Mix Strategy Formulation for Ready Meal Business using Hierarchical Clustering (Case Study: Kokikit) Sasti Pretita, Mohamad Toha 170 Table 4. Number of Cases in Each Cluster The analysis of K-Means Clustering that generates four clusters, each cluster shares different degree of variable importance level. It can be seen that Cluster 2 and 4 have greater numbers than the Cluster 1 and 3, in which that there are quite wide distance between clusters. The percentage of opportunity is generated based on respondents of each clusters; Cluster 1 generates 3 respondents (2,01%), Cluster 2 generates 72 respondents (48,33%), Cluster 3 generates 5 respondents (3,36%) and Cluster 4 generates 69 respondents (46,31%). The performance rating is obtained from Kokikit’s internal customer survey data to review the company’s current marketing mix elements. If the rating is given zero, it means that the company has not yet made actions regarding the attributes. The results of K-Means Clustering The result of the analysis is depicted in the table as follows: Description Amount % Cluster 1 3 2,01% 2 72 48,33% 3 5 3,36% 4 69 46,31% Valid 149 Missing 5 International Journal of Management, Entrepreneurship, Social Science and Humanities (IJMESH), Vol. 5 (1), 161-181 Marketing Mix Strategy Formulation for Ready Meal Business using Hierarchical Clustering (Case Study: Kokikit) Sasti Pretita, Mohamad Toha 171 Table 5. Clustering Analysis International Journal of Management, Entrepreneurship, Social Science and Humanities (IJMESH), Vol. 5 (1), 161-181 Marketing Mix Strategy Formulation for Ready Meal Business using Hierarchical Clustering (Case Study: Kokikit) Sasti Pretita, Mohamad Toha 172 To obtain success opportunity is by multiplying average weight with opportunity. The next step is to determine the sales opportunity by multiplying by the amount of potential market from SOM, and the result is multiplied by the success opportunity. From the table, Cluster 4 generates Rp 3.720.544.585, the highest sales which depicts the highest potential among others. The second highest sales opportunity is Cluster 2 by Rp Rp 1.488.273.920, followed by Cluster 3 by Rp Rp 571.818.370 and Cluster 1 by Rp 474.023.647 respectively. CONCLUSION A. New Segmenting, Targeting & Positioning (STP) The basis for formulating new STP is refers to the analysis of Hierarchical Clustering. Instead of segmenting the consumers demographically, this research proposed new Segmentation based on the cluster of customer’s preferences, which are the four clusters generated from the results. The new target segment is Cluster 4 highlighted in the Table 6. Cluster 4 obtained 69 respondents, with average weight of 9,63 and sales opportunity by Rp 3.720.544.585, being the cluster that generates the highest sales opportunity among other clusters. Table 6. Summary of Cluster Segmentation Cluster Number of Respondents % of Respondents Total Importance- Performance Average Weight Max Sales Opportunity (by 10 years) Cluster 1 3 2,01% 9,71 Rp 474.023.647 Cluster 2 72 48,33% 9,56 Rp 1.488.273.920 Cluster 3 5 3,36% 9,45 Rp 571.818.370 Cluster 4 69 46,31% 9,63 Rp 3.720.544.585 The new positioning refers to the importance rating of Cluster 4. Attributes that are considered important for consumers become the new value proposition of Kokikit that includes in the positioning. In this case, the new positioning for Kokikit is, “Kokikit offers delicious and hygienic ready meal products in affordable price, with a range of menu variants, available to purchase in various online platforms and offline retail.” B. Importance-Performance Analysis The basis of formulating new strategies is Importance-Performance analysis of Cluster 4. The analysis shows each attribute indicator for improvement, maintenance or simply being the least concern for the company to create strategies. Below is the table of Importance-Performance analysis result: International Journal of Management, Entrepreneurship, Social Science and Humanities (IJMESH), Vol. 5 (1), 161-181 Marketing Mix Strategy Formulation for Ready Meal Business using Hierarchical Clustering (Case Study: Kokikit) Sasti Pretita, Mohamad Toha 173 Table 7. Product-Price Mix Importance-Performance Analysis Result of Cluster 4 No Product-Price Mix: Customer Buying Criteria Attributes Importance Performance Remarks 1 Good Taste 0,2 3,78 Keep Up The Good Work 2 Affordable Price 0,14 3,61 Concentrate Here 3 Serving Method: Practical 0,05 3,91 Possible Overkill 4 Serving Method: Fast 0,03 3,15 Low Priority 5 Serving Method: Easy 0,04 3,36 Low Priority 6 Variety of Menu 0,14 3,82 Keep Up The Good Work 7 Packaging: Attractive Design 0,03 3,82 Possible Overkill 8 Packaging: Functional Features 0,05 3,65 Low Priority 9 Packaging: Durability 0,06 3,78 Possible Overkill 10 Hygiene 0,25 4,20 Keep Up The Good Work Average Weight 0,10 3,71 N/A Product Mix: Food Types Preferences No Attributes Importance Performance Remarks 1 Instant Carbo: Rice 0,07 2,10 Possible Overkill 2 Instant Carbo: Noodles 0,08 0,00 Low Priority 3 Instant Carbo: Porridge 0,05 0,00 Low Priority 4 Instant Side Dish: Beef 0,13 2,81 Keep Up The Good Work 5 Instant Side Dish: Chicken 0,11 0,92 Possible Overkill 6 Instant Side Dish: Fish 0,09 0,46 Low Priority 7 Vegetables 0,23 0,00 Concentrate Here 8 Instant Soup 0,24 0,00 Concentrate Here Average Weight 0,125 0,79 N/A According to the results of Product-Price Mix of Cluster 4 shown in the table above, the attributes that have achieved customers value based on the performance of the company is Good Taste, Variety of Menu, Hygiene, Instant Side Dish: Beef—indicated as Keep Up The Good Work. There are attributes that Kokikit has performed well, yet the consumers do not perceived as important. The Possible Overkill attributes are Serving Method: Practical, Packaging: Attractive Design, Packaging: Durability, Instant Carbohydrates: Rice, and Instant Side Dish: Chicken. Improvements are required for attributes that are indicated as Concentrate Here, which are Affordable Price, Vegetables, and Instant Soup. International Journal of Management, Entrepreneurship, Social Science and Humanities (IJMESH), Vol. 5 (1), 161-181 Marketing Mix Strategy Formulation for Ready Meal Business using Hierarchical Clustering (Case Study: Kokikit) Sasti Pretita, Mohamad Toha 174 Table 8. Place Mix and Promotion Mix Importance-Performance Analysis Result of Cluster 4 Place Mix: Distribution Place Preferences No Attributes Importance Performance Remarks 1 Online Marketplace: Tokopedia 0,13 2,20 Possible Overkill 2 Online Marketplace: Shopee 0,12 1,62 Possible Overkill 3 Online Marketplace: Bukalapak 0,06 0,10 Low Priority 4 Delivery App: GoFood 0,19 0,10 Concentrate Here 5 Delivery App: GrabFood 0,18 0,10 Concentrate Here 6 Offline Retail: Supermarket 0,17 0,00 Concentrate Here 7 Offline Retail:Minimarket 0,15 0,00 Concentrate Here Average Weight 0,14 0,59 N/A Place Mix: Distribution Place Mix Criteria No Attributes Importance Performance Remarks 1 Comfortability 0,28 3,53 Keep Up The Good Work 2 Familiarity 0,26 0,67 Concentrate Here 3 User Friendly Interface 0,23 0,42 Low Priority 4 Product Availability 0,24 3,65 Possible Overkill Average Weight 0,25 2,07 N/A Promotions Mix: Media Promotion Platform Preferences No Attributes Importance Performance Remarks 1 Instagram 0,31 3,36 Keep Up The Good Work 2 YouTube 0,21 0,42 Concentrate Here 3 Twitter 0,15 0,42 Low Priority 4 TikTok 0,18 2,52 Possible Overkill 5 Public Billboard 0,14 0,00 Low Priority Average Weight 0,20 1,34 N/A Promotions Mix: Digital Content Media Preferences No Attributes Importance Performance Remarks 1 Official Brand Profile: Feed 0,12 1,05 Possible Overkill 2 Official Brand Profile: Story 0,12 0,42 Low Priority 3 Official Brand Profile: Reels 0,13 1,05 Possible Overkill 4 Social Media Ads 0,28 0,42 Concentrate Here 5 Endorsement 0,35 1,26 Keep Up The Good Work Average Weight 0,20 0,84 N/A International Journal of Management, Entrepreneurship, Social Science and Humanities (IJMESH), Vol. 5 (1), 161-181 Marketing Mix Strategy Formulation for Ready Meal Business using Hierarchical Clustering (Case Study: Kokikit) Sasti Pretita, Mohamad Toha 175 For the Place Mix and Promotion Mix results, attributes that are indicated as Keep Up The Good Work, are Comfortability, Instagram and Endorsements. Possible Overkill are Online Marketplace: Tokopedia, Online Marketplace: Shopee, Product Availability, TikTok, Official Brand Profile: Feed and Reels. Attributes that is considered important but low in performance are Delivery App: GoFood and GrabFood, Offline Retail Store: Supermarket and Minimarket, Familiarity, YouTube, and Social Ads. The rest of attributes are indicated as Low Priority, as it describes low in attributes performance of Kokikit, and the consumers perceived it as low attributes importance. In conclusion, improvements should be conducted for Affordable Price, Vegetables, and Instant Soup, Delivery App: GoFood and GrabFood, Offline Retail Store: Supermarket and Minimarket, Familiarity, YouTube, and Social Ads. Attributes that are assessed as Keep Up The Good Work should be maintained to satisfy the consumers. C. Proposed Marketing Mix Strategy Product Mix Strategy The product mix recommendation refers to the attributes Customer’s Buying Criteria and Food Type Preferences. Attributes that include in the proposed solution of product mix are Hygiene, Good Taste, and Variety of Menu. The first attribute, Hygiene, is indicated as good in performance and high in importance, in which Kokikit must maintain its product hygiene. The operational process should be conducted in the highest level of safety, and regulated standards by related institutions. Good Taste attribute also needs to be maintained by Kokikit. Making the products from fresh and quality ingredients is one of the effort to maintain products’ taste. Kokikit should also ensure that the product matches with customers’ taste preferences by conducting customer survey regarding the product as reviews, especially after launching new product variants. The product that is considered excellent to customers’ tastebuds should be maintained, and the ones that is considered poor should be replaced or dismissed. Another attribute that is considered as high in importance and high in performance is Variety of Menu, which means Kokikit has already offered quite a range of product variants for customers. Since it is considered as high in importance, Kokikit should keep improving in the amount of products by adding more variety of menu. The variety of menu refers to the Customer’s Food Type Preferences. Kokikit can start developing menu that includes Vegetables, or developing Instant Soup products, such as Indonesian Meatball Soup (Bakso), Seblak, or traditional Beef Soup. When it comes to developing new variants, Kokikit should make Beef a priority as a protein. Beef is the most preferable Instant Side Dish category by the customers, therefore by incorporating such category in the new variants, it would increase the value proposition of the product. However, too many variants will increase the customers’ awareness and eventually pick the product that optimize their decisions the most (Amanah & Harahap, 2018). Therefore, further customer research is required to develop preferable variants within the category, and the variant that does not perform well should be replaced, or discontinued. International Journal of Management, Entrepreneurship, Social Science and Humanities (IJMESH), Vol. 5 (1), 161-181 Marketing Mix Strategy Formulation for Ready Meal Business using Hierarchical Clustering (Case Study: Kokikit) Sasti Pretita, Mohamad Toha 176 Price Mix Strategy Apparently, the cluster is quite sensitive to price. From the previous table, the price willing to pay for Cluster 4 is Rp 68.760. Amanah & Harahap (2018) mentioned that selling products online increases price sensitivity among customers that expensive price will reduce their interests to buy. Therefore, Kokikit should conduct promos relating to price reduction through seasonal discounts, or sale primarily focusing on the products that exceed customers’ price willing to pay. The promo can also help to boost sales temporarily, and create bigger hype of the products. It should be kept in mind that when new products are developed as new variants, the pricing strategy should be within the price willing to pay range in order to capture the target market. Place Mix Strategy Kokikit distributes their products mostly through online platforms, yet the target market prioritizes delivery app and offline retail more than online marketplaces. Comparing to the Kokikit’s performance which is considered as low performance, the place strategy should revolves around the chosen attributes. According to research by Rosenblum & Kilcourse (2013), a company that allows customers to engage through multiple distribution channels are more successful in achieving profits than those who do not. Kokikit should sell the Ready Meal products in delivery app, namely GoFood and GrabFood. The company can partner with both parties to be the official tenant partner in the app to gain customer’s trust better, and initiate various promotions strategy in the app for awareness and sales. Hastianingsih & Sari (2020) revealed that people have been using delivery apps, yet the frequency of use increases when the COVID-19 pandemic occurred, and mostly gain public interests in urban area. Time efficiency, lengthy distances, and reluctance to go out is the reason people use delivery apps as perceived as satisfying the lifestyles of its users (Nurbayti, 2019; Hastianingsih & Sari, 2020). By using the delivery service app, customers do not have to wait for days to get the products, therefore enhance the influence of purchasing the products. Offline retail stores’ degree of importance is high, while Kokikit has not yet sold the products in such distribution place. This proves the previous research that customers still prefer to purchase the products through offline retail due to their needs to touch the products (Rathee & Rajain, 2019). A study by Sayyida, Hartini, Gunawan & Husin (2021) found that the consumer behaviour shift to the information seeking behavior, known as webrooming, in which they will search for information regarding the products online before purchasing it in offline stores. Regardless of the pandemic and social isolation, people still prefer to go to offline store and experience the physical product directly. Additional research for customers preferences towards specific offline retail brands should be conducted before making decisions on which store Kokikit will sell the product according to customer’s comfortability and familiarity towards distribution place. International Journal of Management, Entrepreneurship, Social Science and Humanities (IJMESH), Vol. 5 (1), 161-181 Marketing Mix Strategy Formulation for Ready Meal Business using Hierarchical Clustering (Case Study: Kokikit) Sasti Pretita, Mohamad Toha 177 Promotion Mix Strategy Advertising The weight average of social ads since Kokikit focuses on online media, the advertising should be conducted in main three social media platforms chosen by the cluster of respondents, in which Instagram, YouTube and TikTok based in importance ratio. The ads content is created as hard- selling content directly to customers. Ahmed (2020) in his study showed that design elements are important for social media ads to convince the audience’s buying decision, which are the image, color and effects. Good design elements persuades the audience better to buy the products, convince them about products or service quality (Ahmed, 2020). Therefore, Kokikit must highly pay attention to its ads design. For the content, Mao (2015) explains that consumers are more likely to click on display ads on social media the ads content its relatable, informational and entertaining at the same time. The Ready Meal products is currently partnering with nine influencers, so that video collaboration of the influencers enjoying the products can be appealing to customers. Therefore, the content is a combination of variables; Endorsement and Social Media Ads. By combining the two factors, it can boost the ads. Sales Promotions The proposed solution about sales promotions refers to the price mix strategy, one of it is discount promo. The discount and its amount are appealing for potential customers who want to purchase items or services (Alford & Biswas, 2002; Corbett & De Groote, 2000; Ma et al., 2016) by increasing the perceived value of a product (Grewal, Krishnan, Baker, & Borin, 1998; Lattin & Bucklin, 1989; Gordon-Hecker et al., 2019). Consumers' decisions to consume a product are impacted by discounts, which are motivated by discount levels (Eisenbeiss et al., 2015). The first suggestion is to give discount during public holidays, or double dates such as 9.9 sale on September 9th, and so forth which usually occurs in marketplaces. This is to encourage new leads trying the products for the first time before eventually becoming loyal customers. Payday sale is also famous among buyers with the perspective that people receive their monthly income during the certain period which encourages more spending. However, since this is a food and beverage business significantly Ready Meal products, the promo events could take place in the middle of the month since people tend to purchase something more affordable as they are more sensitive to price during the period, such as cashback as OVO or Gopay cash in marketplaces. Cashback is money that is given back in a specific amount, both in cash and in the form of virtual money, and generally includes limits (Pinem, Efrizal & Saputra, 2020). Cashback includes as a marketing approach that is still effective in motivating purchase decision (Ballestar et al., 2016). Another promotions program is that buyers who purchase the products for the first time are given a discount voucher code for the next purchase. In this proposed strategy, the voucher must be redeemed within 30 days since it is claimed directly through Kokikit’s customer service. This is to encourage purchase retention, or even become a loyal customer after trying the products couple International Journal of Management, Entrepreneurship, Social Science and Humanities (IJMESH), Vol. 5 (1), 161-181 Marketing Mix Strategy Formulation for Ready Meal Business using Hierarchical Clustering (Case Study: Kokikit) Sasti Pretita, Mohamad Toha 178 times. A study from Stejskal & Matatkova (2012) stated that vouchers are a powerful and engaging approach for raising customer awareness. Other than price reductions strategy, sales promotions can be as multibuy promotions, such as BOGO, or Buy One Get One. BOGO is more preferred by the customers who must buy certain quantity of products compared to percentage deals (Gordon-Hecker et al., 2019). For example, if a customer buy one instant rice product, they will get one instant side dish product, or also eligible for one way to another. This is one of the ways to attract customers who buy more than one product, and at the same time to control the inventory stock pile. Digital Marketing For Kokikit, according to the survey result, the tactic should focus predominantly on Youtube. The content could be how to make the Ready Meal products, creative recipes sharing in a practical way, or reviews from Key Opinion Leaders (KOL) known as endorsement. There is a positive correlation between social advocacy and interactivity which shapes the information credibility through YouTube, especially when the influencers are found to be open and easy-going (Xiao, Wang, & Chan- Olmsted, 2018). There is a positive correlation between social advocacy and interactivity which shapes the information credibility through YouTube, especially when the influencers are found to be open and easy-going (Xiao, Wang, & Chan-Olmsted, 2018). By combining the two attributes, the promotion material could strengthen its communication value to the customers. To promote the Youtube videos better, Instagram can be utilised by sharing the YouTube link to the audience. Endorsements attribute should be maintained since it is considered as good in performance, and yet high in importance. Kokikit should alternatively put endorsements from influencers, mainly food vloggers and reviewers, at least once a month. Therefore, the performance of each endorsement can be measured and evaluated easier. Prior research has demonstrated that celebrity endorsers have a beneficial impact on customer perceptions about brands and purchase decision (Amos, Holmes, & Strutton, 2008; Silvera & Austad, 2004). Since Kokikit primarily sell the products in online marketplace, the customers are not able to have social experience in purchasing the product, thus increase the risk. Therefore, endorsers are needed to gain trust from customers through its advertising activities, supported by a study from Zhu et al. (2020) that trustworthy endorsers appeared as a key to persuade the audience and affect their purchase decision. LIMITATION & FURTHER RESEARCH The limitation of this research is that it only measures customer preferences in terms of the interests and current performance of the company. From the variables that generated, there are still many sub-variables that need to be measured in the context of preferences. For example, supermarket, as a sub-variable of offline retail, consists of many brands out there that should be explored to know customer preferences between brands. Research on the relationship between preferences and consumer actual behavior towards the preferences also needs to be carried out so that companies can find out the possible outcome of the marketing strategies that they would implement. 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