IV.

The Marketing Plan

IV.1.

Economics

Indonesia is a big market for pesticide products. The use of pesticide has increased with the
expansion of modern farming in the country to increase productivity. The types of pesticide
include insecticides, fungicides, rodenticide, herbicides, acaricides and bactericides.
There are currently local and multinational companies that competing in Indonesias
pesticide market. Multinational companies as member Crop Life Indonesia such as
Syngenta, Bayer Agrosciences, DuPont Agriculture Product, Nufarm Indonesia, BASF, FMC,
and Dow Agro Science. Around 40 of the local companies are members of the Association
of National Pesticide Community (HMPN). The member of Crop Life dominate the market
with a market share of 60 percent with HMPN members having a 25% share, and 15% from
companies outside of HMPN and Crop Life members.
In 2012-2013, the value of pesticide business in Indonesia was estimated to reach up to IDR
6 trillion (USD 500 million). Pesticide sale have increased 6 percent per year by value over
the past five years, and trend to increase in line the agriculture practice in Indonesia.
Base on data from Ministry of Agriculture, there are 2,672 brands pesticide found in
Indonesia. The main brands are insecticides with 887 items, followed by herbicide 672 items
and fungicide 405 items. The largest consumer of pesticide in the country approximating for
41% of the total domestic consumption, followed by oil palm plantation approximating for
27% and horticulture plants for 32%.
Herbicide have the largest share of pesticide market accounting 42,5%, followed by
insecticide according for 37,5, fungicide 18% and other type for 2%. Herbicide consumers
are mainly for the plantation sector and consumers of fungicide are mainly for food crop
sector.
PT Nusa Mandiri Utama (NMU) as new player in pesticide industry in the country. Recently
NMU is focusing on plantation sector such as palm oil, rubber, and sugarcane. NMU need
growing as the oil palm sector has grown tremendously over the years, the oil palm sector
will be NMU top target.
In 2015 NMU will introduce to the retail market in horticulture and food crop segment
because its biggest market in pesticide about 60% from total market. However by
maintaining the plantation sector, NMU estimating got 20% revenue from retail market.

IV. 2. Products
Currently NMU have seven brands registered at Agriculture Ministry such as herbicide and
insecticide type. The active ingredient of herbicide are gliphosate, paraquat, triklopir,
diuron, metil metsulfuron, and 2,4-D amine and carbofuran for insecticide.
Target market of these products are plantation segment. Herbicide consumers are mainly
for the plantation sector. Gliphosate and paraquat are biggest market in plantation.
Unfortunately, most of pesticide companies already have a gliphosate and paraquat, also
2,4-D amine, metal metsulfuron. These products are has been generic product.
The second target NMU business is completely the product portfolio by registering products
to introduced retail market in 2015. The products will select and should have a large market
share, has a good margin, and in accordance with market needs. In another side NMU will
1

develop a competitive advantage not just a product. NMU should be able to change the
battlefield than just the war in terms of products and turn into human capital and services.
IV. 3. Features and Benefits
All NMUs product already has registered in Agriculture Ministry. They have high quality
products, excellent source of active ingredient, good packaging material performance, good
processing formulation, and products variety according to plantation needed.
Meanwhile NMUs product was quality guaranteed and passed quality tested at laboratory
and field trial. Customer will felling convention to buy and effective in application. In the
field, NMU staff will guide how to the application and handling products.
All brand NMUs product also was register in Intellectual Property Rights, its make benefit to
customers that NMU product is legal pesticide and trusted. NMU just not pesticide company,
but is a partner in agricultural sustainability.
IV. 4. Customers
Basically there are two major segments of customer, namely distributors (dealer) and
plantation companies (corporate). Distributor choiced by NMU depends on the demographic
factor, size of coverage the service, and segmentation the customer and/or products.
Plantation companies can buy directly to NMU through direct purchase or a tender
mechanism. Several government companies such as PTPN and private companies that
have a large plantation area usually perform with tenders in procurement pesticide products.
IV.5. Competition
The pesticide industry is highly fragmented and very competitive between multinational
company with national companies and between national companies. Currently,
approximately more than 100 companies as owner registration product in the Ministry of
Agriculture. Multinational company was leading in marketing and promotion activities
because they have advantages by patent product and marketing cost. They product was
setting in premium price with excellent service and distribution. In the other side, national
companies no more advantage in the product and marketing cost. This situation makes the
price war between the national companies.
As national company NMU will head to head competition with multinational companies,
which have modern production facility, patent products, skilled human resources, massive
marketing campaign, etc.

Table 1: Competitive Analysis

Analyze each major competitor.
Scale : 1 = critical; 5 = not very important

Limited
portfolio
product
High price

Good
performanc
e
Premium

Competito
rB
(Dhama
Guna
Wibawa)
2

Quality

High quality

Selection

Service

Reliability

Stability

Expertise

Company
reputation

Segmented
market
Simple
organization
Limited
distribution
channel
Sustainable
supply
Herbicide
plantation
supply
Developing
company
reputation

Limited
customer
No alternative
choices
Limited
coverage
Store un
availability

Location

Appearanc
e

Sales
method

Credit
Policy

Advertising

Factory and
warehouse
one place
Good
performanc
e
Direct and
undirect end
user buying
Flexible
credit to
client and
agent
NA

Image

NA

Factor

NM
U

Products

Price

Strength

Weakness

Competito
rA
(Nufam
Indonesia)

Competito
rC
(Agricon)

Importance
to
customer

Very
important

Very
important
Very
important
Very
important
Very
important
Very
important

Slow
penetration
NA

Very
important
Very
important

Limited
information
about
company
Limited
representativ
e
High cost

Very
important

Very
important

Very
important

Limited sales
method

Very
important

Still no form
standard form
credit
Lack
promotion
activities
Lack of brand
and company
image

Very
important
1

Very
important

Very
important

NMU as a new player in the production and marketing of pesticides can harness its power to
grab market opportunities from existing companies and strengthen weaknesses to face the
challenges of the future.

NMU have strength on product appearance and quality, its can be used to build the image
that NMU product not a cheap product or poor quality.
Besides the weaknesses of the current condition can be improved, especially in terms of
service, availability, company reputation, and promotional activities in order to compete with
a rival company that has a good reputation.

IV. 6. Niche Market

Based on the mapping of strengths and weaknesses as in the table above, in the shortly
NMU focus on marketing particularly on oil palm, rubber and sugar cane plantation in small
to medium buyer. Currently NMU should build its reputation as a pesticide company has a
good product and excellent service. In the long run NMU should development to plantation
companies which has large areas with big buyer.
IV. 7.

Marketing Strategy

IV. 7. 1. Promotion:
NMU will promote the products using above the line (ATL) and below the line (BTL) strategy.
ATL strategy such as advertising, media online, and social media. BTL strategy such as
sponsorship, sales promotions, public relations, personal selling and direct marketing.
Common practice in pesticide promotion is doing the trial or product demonstration plot to
shown the product effectiveness and avoid the objections from prospective customers.
Other promotion activities are product brochure and information, website and product
catalogue, and product knowledge. NMU may use a combination of advertising, personal
selling, sales promotion, public relations, and direct marketing tools to communicate with
current and prospective customers.
IV. 6. 2. Advertising
To disseminate information and getting attention about company and products that
advertising is very common practice. However, for products with highly segmented as well
as pesticide products on television advertising less significant effect. The use of radio
advertising may still be considered, especially for retailers market. Other advertising media
such as newspapers, magazines and banners will be applying.
IV. 6. 3. Promotional Budget
NMUs marketing budget consist of two items are product development and market
development. Product development budget is using to new product registration and/or label
expansion, research and development activities, and demo plot trial. Market development
budget is using for promotion activities, advertising, exhibitions, marketing tools material,
and sales incentives.
Sales incentives budget for retailer about 15% from revenue (USD 4,8 million) are using for
agent and retailer reward, bonuses, and other incentives. Whereas corporate incentive
about 2% from revenue (USD 2,4 million).
IV. 6. 4. Pricing
NMU products have premium quality with price setting policy prices by 5% below the market
leader products. The determination of this price in order to attract market leader customer
4

and to avoid a price war with below segment products. They are still got the good quality
product with price competitive.
IV. 6. 4. Location
NMU has representatives in every province across the Indonesian province. Each province
will be handling by a Territory Manager (TM) and coordinated by Regional Sales Manager
(RSM) and RSM as sub ordinate National Sales Manager (SNM). TM as NMU
representative in the territory.
IV. 6. 5. Distribution Channels
NMU using distributors (dealer) and plantation companies (corporation) as distribution
channel. The distributors are the direct buyer from NMU, which distributed to major retailers
(R1), medium retailer (R2) and/or kiosk (R3) then product will delivered to the end user as
free market. Distributor as the first channel in the retailer market, and also can selling
product through the plantation if they appointed as exclusive distributor.
IV. 6. 6. Sales Forecast
NMU Sales forecast for 2014-2016 per segment are as below:
Segments
Corporate
Retailer
Total

2014 (USD)
25.258.629 100
%
25.258.629

2015 (USD)
102.964.793 79%

2016 (USD)
120.736.169 79%

27.200.000
130.164.793

32.640.000 21%
153.376.169

21%

As seen in the table above, approximate 79% from NMU sales revenue will come from the
plantation segment (corporate) and 21% from the retailer segment.