Designing Online Marketing for SME (Organic Food Case Study)

10 Pages Posted: 9 May 2016  

Hasrini Sari

Institut Teknologi Bandung - Industrial Engineering Management

Aditya Parama Setiaboedi

Institut Teknologi Bandung - b Industrial Engineering Management

Date Written: April 30, 2016

Abstract

Organic food consumption in the world tends to grow each year along with the increasing public awareness on health. This positive trend also happens in Indonesia. Nevertheless, many producers of organic food in Indonesia face problems in market their products. Most of them are SMEs so they have limited financial resources for conducting marketing activities. Therefore, they need kinds of marketing program that can be run at a low cost but reach a wide range of audience. Online marketing meets these requirements. Nowadays, the role of online commerce in increasing organizations’ profit is growing each year. Organizations spending on online marketing is also increasing as media buyers adjust to online world while other media advertisement spending keep falling or remain constant each year. Nevertheless, the online marketing effort should be designed in a way that will deliver value to both the organization and its customers. Several SMEs in Indonesia have adopted online marketing program but they do not enjoy its maximum benefit. Even worst, they just ignore or stop their online marketing activities. One form of online marketing is a website creation program. This study is intended to investigate the characteristics of online marketing activities and website that will enhance the customers’ intention to buy. Several steps are taken. First step, we identify characteristics of online buyers in general in Indonesia. Then, based on their similarities and differences, we group them into several segments. Second step, we identify potential segment suitable to be targeted by organic food producers. At the end, we identify the online marketing activities and the technical characteristics of website that match with the profile of the selected segment.

Total 686 valid data are collected out of 688 data gathered using an online questionnaire. The questionnaire’s URL is being spread through several online social media. Factor analysis is used to analyze the data and the result shows there are six factors that influence online purchase intention, namely ease-of-use, website integrity, customer communication, word-of-mouth, transaction security, and perceived usefulness. Then, cross tabulation and cluster analysis is conducted to obtain segments and their profiles. This study shows that potential online shoppers could be grouped into three segments based on behavioral variables (online buying frequency and spending, and payment method) and psychographic variables. For the organic products, the potential target is professional-shopaholic group, the segment with buyers who have high frequency on online shopping and relatively large number of online financial transaction. These characteristics are then translated into technical characteristics of organic food online marketing activities and website in order to increase visitors’ intention to buy. At the end, this paper is also describes the implementation of the study result by analyzing an existing processed organic food producer.

Keywords: intention to buy, online marketing, online shoppers, organic products, website

Suggested Citation

Sari, Hasrini and Setiaboedi, Aditya Parama, Designing Online Marketing for SME (Organic Food Case Study) (April 30, 2016). OIDA International Journal of Sustainable Development, Vol. 09, No. 04, pp. 53-62, 2016. Available at SSRN: https://ssrn.com/abstract=2776954

Hasrini Sari (Contact Author)

Institut Teknologi Bandung - Industrial Engineering Management ( email )

Labtek V Building, Ground Floor
Jl.Ganesa No.10
Bandung, 40132
Indonesia

Aditya Parama Setiaboedi

Institut Teknologi Bandung - b Industrial Engineering Management ( email )

Labtek V Building, Ground Floor
Jl.Ganesa No.10
Bandung, 40132
Indonesia

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