Introducing a new product to Muslims
Format APA Volume of 5 pages (1375 words) Description 1. INTRODUCTUION 3. Literature Review Recommendations Conclusion 8. References 8.1 Appendices 16) Before purchasing, Do you look for any Halal sign/logo on the food packaging or in a restaurant? 18) What suggestion would you like to give in order to improve Turkish delight?
Assignment type : Literature / Movie review
Indonesia is the world’s fourth most populous country after China, India and USA, with over 235 million people. Besides, Indonesia is known to be the largest achipelagic nation in the world. Jakarta, which is both the capital city and business centre of Indonesia, has a very large purchasing power because of its high population and income distribution is fairly average in the city. As a result, most foreign products from all over the world are imported to Jakarta. In Jakarta, thousands of various imported brands and types of products are available, especially those that come from the food industry. With these regards, it is evident that the ability to export and import products serves as a bridge for a global consumer to get adequate access to various goods and services.
The advancement of international trading has enbaled people to get the opportunity to taste and buy food products from the international market, starting from Korea, Japan, China, Australia and the West. However, Turkish products are not much prevalent in Indonesia, except the famous grilled meat wrap called Kebab and Turkish date palm fruit called Hurma. The majority of Indonesian citizens are Muslims, in fact Indoensia ranks first as the country with the largest Muslim population in the world although it is not an Islamic country. According to Quora (2015), Indonesian Muslim and Middle Eastern’s have the same Quran, ritual and rules, such as praying (Salat) for five times a day, fasting during Ramadhan and not consuming haram food such as pork and any alchoholic beverages.
However, they are completely different in terms of culture. Thousands of islands in Indonesia are inhabited by different group of people with varying ethnicity, each having their own culture that encompasses all manner of aspects from language, architecture, fashion, and many other aspect of human life. Ramadhan is one of the Muslim festivals where people must fast for a month. They believe that by fasting, they can learn to restrain all lust, so that they can be more patient and achieve purity. During the Month of Ramadhan, they end their fast at dusk. They usually start their meal with some sweet food for a quick source of energy. On the other hand, sugar helps their blood glucose level to quickly return to normal. Therefore, Lokum, beside being healthy to consume, would be able to deliver the unique taste of Turkish traditional delights to consumers while still providing them the sugar that they need to replenish their energy.
1.1 Introduction of Turkish Delight
Lokum are small, cube shaped jelly, covered with toppings of different flavors.It is a famous Turkish delight that is made by using water, sugar and starch. This luxury food is known as rāḥat al-ḥulqūm ,which means “Throat Comfort” and has lots of health benefits . Fruits, nuts and icing sugar are some of the most popular toppings used to coat the Lokum. Some of the most popular fruit flavors are mint, rose, cinnamon, lemon and raisin. Whereas for the nut flavors are pistachio, hazelnut, and almond. The perfect way to endulge Lokum is with a nice cup of tea or coffee. This delight is usually made by pastry chefs and can be found in pastry shops, bakeries and cafes all over Turkey. The process of making Lokum is time consuming. Lokum requires a specific temperature, over 100 ̊C (degree Celsius), patience and skill to manufacture the best quality and taste.
1.2 Personal Experience
As an Indonesian, I have seen a lot of foreign food products being imported to Indonesia. Yet, ever since I was born, I have not seen many products of the Turkish origin, which I find odd. The reason as to why I find this odd is because Indonesia has such a huge Muslim population, which is an excellent market for Turkish products as they are suitable for Muslim consumers. I see this as a golden opportunity for me to bring Turkish products to Indonesia and I believe this product will sell well in the Indonesian market. Apart from being suitable for Muslim community’s consumption, Indonesian people love sweet delights. Hence, I would like to use this opportunity that has been missed.
2. Research Objectives and Research Questions
2.1 Research Objectives
The main purposes of this research is to gather enough information through qualitative methodologies, analyze the information and develop a strategic plan for entering the Indonesian market for the product called “Lokum.” The strategies plan consists of personal evaluation of potential Indonesian consumer behavior and entry strategy to successfully accepted by the Indonesian consumers especially for Muslims in Indonesia.
2.2 Research Questions
1. What is the most suitable strategy to successfully introduce the Turkish delights “Lokum” to Indonesian Muslim market?
2. What kind of model is appropriate to describe the consumer behavior of Indonesian Muslims?
3. Does the Muslim culture affect Indonesia’ consumer’s behavior?
3.1 Consumer behavior
Consumer behavior is the study that examines how consumers behave towards making a decision when selecting or buying goods and services to meet their needs and wants. Typically, consumer attitudes often change from time to time and contexts and thus, they become obstacles or benefits for investors. With these regards, it is crucial for marketers to understand consumer behavior such that they may know how consumers are likely to respond to new products (Solomon, 2008). Essentially, marketers use various models to analyze and understand consumer behavior.
Sociological Model
The concept of sociology is concerned with the structure of the society, social stratification, and culture among other social factors (Perner, 2010). Typically, busineses do not exist on vacums, rather, they require consumers or societies for them to thrive. With these regards, sociological models explain that the buying behavior of consumers may be influenced by certain groups or people around them such as family, friends among others (Huda, 2017). For example, as a member of the Muslim society in Indonesia, consumers must wear Muslim clothes and eat Halal food, and thus, they have to buy and consume goods that are applicable to the lifestyle set within the group.
Psychological Model
Psychological Model is a purchase behavior that is influenced by motivation and perception. A motive can push an individual to purchase goods or services for their inner needs and satisfaction. For example, when an individual feels hungry, their inner needs push them to buy food (biogenic needs). Conversely, psychogenic needs are needs such as, ambition, power, material, affection and information needs. Perception refers to something that pushes individual to purchase goods through the responses towards the five senses: sight, smell, touch, taste and hearing. (Murray, 1938).
The ABC Model
Consumer behavior is determined by several factors including attitudes, feelings, and beliefs. Consumer attitudes play a significant role in the success of a marketer. Thus, choosing to disregard or ignore consumer attitudes while developing a marketing strategy provides a limited opportunity for the success of the marketer. Conversely, perceptive marketers leverage their understanding of attitudes in forecasting the effects of consumer beliefs. In this case, such savvy marketers know exactly the distinction between attitudes, beliefs, and behaviors in establishing a successful marketing strategy. Solomon (2008) posits that attitudes in marketing is a consumer’s general evaluation of product or service formed over time. In this case, attitudes satisfies an individual’s motive and consequently influences the shopping and buying habits of a consumer. According to Perner (2010), consumer attitude refers to a composite of consumers’ beliefs, feelings, and behavioral intentions regarding marketing. A consumer can hold a negative or positive perception about a commodity or service. With these regards, behavioral intention is determined through the customer’s feeling with respect to the product.
Solomon (2008) indicates that the ABC model of attitudes comprises three elements which include cognition, affect, and behavior and all the three components accentuates the association between knowing, feeling, and doing. Based on this Solomon’s (2008) view, affect refers to the feeling of a consumer towards a product or service. With regards to the marketing framework the company will adapt, affect refers to the opinions and emotions the consumers have towards a product, while behavior refers to the response from cognition and affect.
Mainly, the hierarchy of effects from a particular decision depends on the three components collectively. In this case, the hierarchy of effects may be used to distinguish between a consumer’s level of motivation towards a specific product or service. For instance, the low-involvement, standard-learning, and experiential hierarchies form the main three of effects. Novack (2010) posits that in a standard-learning hierarchy, before a consumer purchases or consumes a product, he or she is expected to do extensive research and establish the beliefs about the commodity. Consequently, the consumer establishes his or her feelings about the product and lastly behavior comes into interplay. On most occasions, the cognition-affect-behavior is prevalent in most of the decisions consumers make.
On the other hand, the low-involvement hierarchy comprises a cognition-behavior-affect of actions. In this hierarchy, the consumer makes decisions based on what consumers know as opposed to what they feel. According to Novack (2010), in low-involvement hierarchy, a consumer establishes his or her feelings after the purchase. Undoubtedly, this kind of limited knowledge does not substantiate adequate information for life changing purchases of some commodities such as cars or a new home.
Additionally, experiential hierarchy of effects is determined by the affect-behavior-cognition order. In this case, a consumer makes a decision based on feelings towards a particular product or service (Solomon, 2008). Consequently, the cognition comes into effect. Additionally, in the experiential hierarchy, emotional contagion plays a critical role in influencing the consumer’s behavior. According to Oskamp & Schultz (2005), in an emotional contagion situation, a consumer’s emotion is influenced by the emotion contained in an advertisement.
The increased complexity of companies’ operations and traditional based approaches for managing organizations have become weak and do not hold water anymore (Dean, 2010). Consequently, managers have sought to use different ways of accessing more accurate and up-to-date information and among them is the ABC approach as one of the prominent alternatives. Dean (2010) defines the ABC model as a theory of explaining consumer behavior and it is divided into three components which include Affect, Behavior, and Cognition. Affect refers to the feeling which someone has towards an object. Behavior is a consumer response resulting from their affect and cognition towards the product. Besides, Cognition refers to an individual’s trust and knowledge regarding a product. Dr. Perner (2010) explained that consumer beliefs, feelings and behavioral intentions towards products and services are significant considerations which influence a consumer’s attitude towards a product. This information is illustrated with the following framework:
From this model, it is a person who is interested with a delicious cake in a pastry shop (Affect), they will buy it (Behavior), and after devouring it, they will make remarks about the type, color, shape and taste of the cake and store it in their mind (Cognition).
However, the sequence of the components of this model may change irregularly, depending on the nature and the way of thinking of the consumer. For instance, following the C-B-A approach, before Christmas, every family may begin to prepare various foods and Christmas trees to welcome their celebrations (Cognition). Afterward, preparations and bringing of Christmas items will begin (Behavior), and finally they can share happiness during Christmas day (Affect). Thus, the sequence of these events influences them to re-purchase the required things for the next Christmas celebrations. Another example is C-A-B, which is known as the high involvement hierarchy.
Going by the literature of this model, Dean (2010) stated that consumers will do a deep reseach of an object, whereby through such research, they will establish a feeling of certainty towards an object. In this situation, consumers build a feeling within themselves towards that object. Thus, by giving in to their feeling towards the object, then, the consumers’ decision to buy a product is complete. To give an example of this, a person with a flu will look for a flu medicine that they think will help cure their sickness (Cognition), after they found the medicine, they will feel confident that this medicine is suitable (Affect), then finally they will purchase it (Behavior) (Dean, 2010). Initially, the ABC model was developed to respond to manufacturing needs within manufacturing firms but in the current robust and competitive business world, the model has gained a lot of acceptance in different fields.
However, the application of ABC model has not proved to be the best method despite its many advantages. For instance, the complexity and subjectivity of the method when approximating the time spent by employees in completing a certain activity makes the method time consuming and too subjective (Dean, 2010).
3.2 Halal Labeling toward Indonesian Muslim
The word “Halal” is derived from Arabic language, which means permissible or permitted under the Islamic law. In other words, it is considered as a food that is holy and allowed by God. The opposite of Halal is Haram, which means unlawful or prohibited. According to Huda (2017), the terms Halal and Haram are very universal and, they are applicable in all aspects of life. With regards to food, Halal means pure, clean, healthy, nutritious and pleasing to the taste (Huda, 2017). Huda says that Muslims are ordered not to eat certain foods because of their health, hygiene and obedience to God. With these regards, despite the same cooking equipment are used in cooking a non-halal food, such food may be declared as Halal if its preparation, processing, and storage follows proper cleaning procedures as stipulated in Islamic laws.
According to a Qur’an (the Muslim scripture), the prayer of Muslims who consume Haram (Non-Halal) food will be rejected by Allah. Foods containing ingredients such as animal gelatin, enzymes and emulsifiers are Haram food because they contain chemicals which its origin is unknown (Islamic Council of Victoria, 2016). For example, gelatin which is used to thicken puddings, gummy candies, and marshmallows among others contain the contents made from the byproducts of leather and meat industry, especially bones, and these are not permitted by the Islamic law.
Typically, any Muslim is expected to know the foods which the Islamic law considers as halal and haram. Meanwhile, meat and poultry food industries such as cows, goats, sheep, turkeys, chicken and duck are considered Halal meat, except pork and anything from pork. With regards to the slaughtering of animals, also known as “Qurbani”, the raw materials derived from animals, especially goats and cows should be done by a Muslim who knows the proper way of doing it according to Islamic rules. Otherwise, Muslims will consider this product not Halal. Hence, Muslims must follow a set of dietary laws which are outlined in the Qur’an (Islamic Council of Victoria, 2016).
The Department of Halal Certification (2017) affirms that in the global consumer base in 112 countries comprises about 1.9 billion Muslims who constitute the largest size of Halal market worth of trillions of US dollars. Besides, the Department of Halal Certification (2017) have declared that the Muslim population in the world is booming, especially in the Southeast Asia and Middle East markets with more than 400 million Muslim consumers. Halal certification is considered as a reward after the raw materials and the manufacturing processes of food have qualified through the observation process in accordance with the Islamic dietary requirements in order to obtain Halal certificate (Islamic Council of Victoria, 2016).
According to Paul, Modi & Patel (2016), the Theory of Reasoned Action plays a critical role in influencing an individual’s intentions to engage in the consumption of a particular product in a specific place and time. As Brennan et al. (2016) indicate, theory of planned behavior explains all actions over which people have the ability to control implement their self-control with regards to consumption. In this case, in consistent with the theory of planned behavior, Soesilowati (2010) has shown that the Halal certification is the only means of improving consumer behavior in Muslim countries. Additinally, Al-Nahdi and Islam (2011) affirm that the control of perceived behavior is the main way of boosting Malaysian Muslims to support Halal restaurants. With these regards, most entrepreneurs in Malaysia seek Halal certification for the purpose of attracting more Muslim consumers into their businesses as well as other health conscious individuals who show concern as to whether the food preparation take place as directed by the Sharia principles. In their study, Omar, Mat, Imhemed and Ali (2012) conducted a study to establish the direct effects of Halal products on actual purchase by using international Muslim students from different Malaysian universities and established that confidence is the most important factor in the actual purchase of Halal products. Additionally, Abdul, Ismail, Mustapha and Kusuma (2013) says that Indonesian entrepreneurs perceive Halal certification as the best means of increasing their consumers’ trust, confidence, and satisfaction. Moreover, this study affirms that Halal certification boosts marketing strategies and finally increases market competitiveness. Similarly, Abdul, Ismail, and Mustapha (2013) hold the same view that Halal certification assists companies to build confidence and attract new customers to buy their products. Additionally, Abdul et al. (2009) hold similar views that Halal logo plays a critical role in convincing customers on the Halalness of the consumed foods. In a study by Abdul et al. (2009), establishes that the presence of a Halal logo on products convinces customers to believe that the product is Halal despite its legal status.
With these regards, non-Muslim entrepreneurs are encouraged to seek Halal certification in their provisions for various reasons. For instance, Halal certification allows consumers to make informed decisions without any doubt about the legality of the products they select. Additionally, the presence of Halal logo on products in Muslim countries is an indication that businessmen value Muslims and they take care of their interests (Razalli et al 2012). Besides, Halal logos are better marketing strategies for increasing the market share since Halal foods are preferred by both Muslims and non-Muslims (Aziz, 2010). Evidently, the literature herein demonstrates that consumers are willing to buy Halal products when they have the assurance that the products are Halal certified. In a study by Verbeke et al. (2013) on Belgium markets, the researchers indicates that Muslim consumers buy meat at premium from Islamic butchers where they are assured of Halal certification than buying the same meet from supermarkets where they are not assured of the Halal status. Thus, this behavior shows the significance of seeking Halal certification to build customers’ confidence in buying Halal products.
3.2.1 Trends in Indonesian Muslim Consumer Behavior
Halal food ingredients and products and syariah system have attracted significant attention among members of the Islamic Conference Organization. Soesilowati (2010) reported that by 2010, the global demand for Halal products had reached 600 million USD and it was believed to increase by more than 20% each year. The target market of Halal product is mainly the world’s islamic population, which has reached the 1600 million. Indonesia has ranked above India, Pakistan, Middle East, Malaysia and other countries to be the country with the World’s highest Islamic population.
According to Indonesian economic experts, several Islamic countries are required to import products that are Halal from non-muslim countries due to the limited amout of supplies in their country. For instance, muslim countries in the Middle East with limited number of livestock have to import their meat products from Australia as they produce meat in abundance (Soesilowati E. S., 2010). Thus, it is a huge and profitable business opportunity to sell Halal food in the domestic and International market. Furthermore, Indonesia has the chance to overtake the global market in Halal food trading. Hence, the Muslims in Indonesia have a high awareness regarding Halal and Haram food, especially in choosing food that still need to be processed before consumption. In fact, to date, Muslims put constant importance in Halal issue when buying food, meat, or picking a restaurant.
Besides that, the degree of religiosity of an individual directly correlates to the degree of their concern towards whether a food is halal or not. The more religious the individual is, the more will they be conscious regarding how halal a food is and is more likely to be highly picky in terms of the food they consume. Other than that, a part of Indonesian Muslim purchase food products that have the Halal label on food packaging and they also prefer to dine in restaurants which have Halal certificate from the Indonesian Ulama Council (Soesilowati E. S., 2010)
3.3 Relationship between Turkey and Indonesia
The Turkey-Indonesia relationship is a close but multifaceted association with broad areas of cooperation. Studies have ranked Indonesia as the third largest democratic country with the largest Muslim-majority who occupies strategic positions along the Pacific and Indian Ocean (Çolakoğlu & Güler, 2013). The Turkish-Indonesia may be traced back to the 12th century where the Turkish Islamic scholars who moved to these places played a critical role in spreading Islam and converting people into Islam. According to Çolakoğlu & Güler (2013), the Turkish–Indonesia relationship was strengthened when the Sultanate of Aceh called for help from the Ottoman Empire because of the increased pressure from the Portuguese. Besides, Turkey became the first country to recognize Indonesia in 1949 after it attained its independence from the Netherlands and, consequently, the relationship between the two countries was strengthened after the opening of the Turkish Embassy in Jakarta on 10th April 1957.
Since 2004, Turkey and Indonesia decided to strengthen their ties by elevating their relationship to a strategic level in 2011. In their agreement, the 11th president, H.E Abdullah Gül visited Indonesia, met Indonesia’s 6th president and signed a binding joint declaration, “Turkey and Indonesia: Towards an Enhanced Partnership in a New World Setting”, thus, this declaration forms the strongest basis of the bilateral relationship that exists between the two economies to date. Besides, the visit to Indonesia by H.E President Recep Tayyip in 2015 is a demonstration of the bilateral ties between Indonesia and Turkey in which the two countries (Abdul, Ismail, Mustapha & Kusuma, 2013). During the 2015 visit, Turkish-Indonesia Business Forum meeting was held in which KADIN and DEIK signed a memorandum of understanding to strengthen investments, trade, and technology between the two economies. The cooperation between Turkey and Indonesia is multifaceted on several institutions and forums such as UN, D-8, MIKTA, G20, and OIC among others (Çolakoğlu & Güler, 2013). In fact, Indonesia is one of the founding members of ASEAN and in 2010, Indonesia acceded to ASEAN’s Treaty of Amity and Cooperation in Southeast Asia, and since then, the Turkish Embassy in Jakarta has got significant accreditation to ASEAN since 2010 (Çolakoğlu & Güler, 2013). From the recent economic statistics, Indonesia ranks as the largest economy in the Southern Asia and expected to be among the top ten flourishing economy by 2030 because of several factors such as, the growing middle-class consumers, long-term economic potential, and the dynamic 258 million population. Thus, the bilateral ties between the two countries need further expansion.
In any economy, people-to-people links form a critical basis for a close and friendly association. With this view, about two thousand four hundred Indonesians are registered as Turkish residents and around four hundred Turkish citizens reside in Indonesia. Furthermore, by 2017, five hundred and seventy-three Indonesians have studied in Turkish universities Under Turkiye Scholarships.
3.4 Penetrating the Indonesian Market
3.3.1 Importance of Strategic Management
The definition of strategic management implies that this topic focuses on integrating all systems to achieve the success of an organization, the process of integrating the management, marketing, accounting, operations, research and development, and computer information systems. Pearce & Robinson (2009) posit that there are 3 stages in strategic management process and they include Formulation, Implementation and Evaluation stages.
With the current robust and unpredictable business environments, international entities need to formulate very competitive approaches such that they can compete with the generic enterprises for them to remain relevant in the market (Pearce & Robinson, 2009). In this regard, formulation requires an entity to develop a clear vision and mission to act as a blueprint for an organization during the provision of goods and services to the consumers. In this approach, an organization needs to identify its internal strengths and weaknesses, establish long-term objectives, generate alternative strategies and focus on specific strategies (Wood & Robertson, 2000). The issues of strategy formulating determine the type of business structure a business should venture, which business to abandon, how to allocate economic resources, how to expand operations, how to enter international markets, whether to merge or form a joint venture and how to avoid hostile takeovers.
Strategy implementing (action stage). In this stage, a firm need establish annual objectives, formulate policies, motivate employees and allocate resources as planned to commence the plan. This action stage is often considered to be the most challenging stage in strategic management, because it requires sacrifice, commitment and personal discipline (Fred, 2017). With this view, companies may not develop if the implementation stage is not well applied. This stage requires an entity to develop a supportive strategy to enhance the firm’s personnel deliver and work towards attaining an organization’s objectives (Fred, 2017). Furthermore, the firm needs to create a strong and an effective organizational structure for redirecting marketing efforts, prepare budget estimates and information systems which may be necessary for linking employees’ compensation to organizational performance.
Strategy Evaluation. In this level, the managers needs to identify any factors which may not be function according to the stipulated timelines and budgets and fix the problem before entering the completion stage. Fred (2017) suggests that all strategies are supposed to be modified because both the internal and external factors are constantly changing from one context and time to another. There are 3 fundamental strategy evaluation activities. To begin with, there is a need to review external and internal factors that are needed for the current strategies. Additionally, measuring the performance within organization is also critical. The last is by taking actions to correct them because tomorrow’s success does not depend on today’s success and thus, strategy evaluation is needed (Fred, 2017). Essentially, the choice of an entry strategy has over-reaching consequences and thus, an organization needs to select the best framework which fits its objectives, goals, and the available resources. In this study, the researcher intends to franchise the Lokum as the best selected framework which is based on Pan and Teece’s (2010) entry framework which emphasizes on Root’s (1998) strategy which says that external and internal explanatory variables influence the choice of entry mode strategy. According Root’s (1998), franchising requires organizations to provide branding, expertise, concepts, and, mainly, facets are required to in overseas markets for the franchisee (Teece, 2010). In this case, the management of the Lokum will be directed by the requirements of the Islamic laws in Indonesia. Thus, since the choice of a suitable entry mode has over-reaching consequences on the organization’s performance and survival of the firm, it is crucial for an entity to have an extensive framework that is based on sound theories. For small business entities, they lack sufficient resources and skills to venture into the international markets and compete effectively. Thus, such firms should select frameworks which concentrate on the organization’s efforts to foreign partners which offer higher sales potential (Root, 1998). In this research, the researcher will evaluate the easiness of the Indonesian market to protect the patency of a product in by complementing Root’s (1998) framework with the variables from Wood and Robertson and Teece (2010).
3.3.2 Entry Mode Strategies
According to Teece (2010), entry mode strategies refer to a comprehensive plan which sets goals, objectives, and policies to guide an organization over a given future period. Furthermore, Wood & Robertson (2000) define entry mode strategy as a scheme on the methods or strategies on how to deliver a product or service to a new target market. As Teece (2010) indicates, the literature concept of entry strategies into the international markets was concerned with the choice between exports and FDI (Foreign Direct Investment). Besides, the entry mode scheme is made by an individual or a business entrerprise that is trying to introduce a new product. Concerning the importation or exportation of goods and services from one country to another, market entry strategy means the formation and management of a business contract between the countries concerned. With these regards, an entry strategy requires proper decision making on choice of the target market, objectives, goals, choice of entry modes, penetration approaches into the international markets, and the control system for monitoring performance in the target market. Thus, every business enterprise must choose an entry strategy which is best for its products and best fitted to their brand so that their product will be widely accepted and appeal to the new target market.
3.3.2.1 Legal Strategy
In this theory, there are several different types of entry modes such as: partnership, joint venture, franchising and Sole Proprietorship (Badruldin et al., 2011)
I. Partnership is the business association between two or more individuals who have agreed to share the profit and liabilities of the business they start together.
II. Joint venture refers to the condition where two or more companies agree to work together in a project for a specific amount of time. Usually, the agreement between both parties is terminated after the goals of the project has been achieved or when the work have been completed.
III. Franchising is a type of business where the franchiser lets the franchisee to open a new branch of the franchiser’s business in such a way that the franchiser still manages the system and process of the business including the business’ name.
IV. Sole Proprietorship refers to a business that is managed and run by a single individual without anyone else’s assistance. In this way, the profits and liabilities of the business is entirely obligated to one man only.
3.3.2.2 Growth Strategy
3.4 Country of Origin Effect Theory
Essentially, the label “made in” is available on many products but it may not be the case because some companies use this “made in” label as a way of marketing their products. The Country of Origin Effect Theory (COE), which is also known as “made-in” image, refers to a psychological effect in which a person’s view and behavior towards a product is affected by the country or origin of the product. The country of origin (COE) label can affect someone’s decision in choosing whether or not to buy a product depending on the consumer’s stereotype towards the country which the product has originated from. In the case of fashion, usually, people purchase branded goods which originates from European countries and could probably be reluctant to purchase products with Chinese brands (The Economist Group, 2013). In this theory, there are several factors that can affect a consumer’s behavior.
First, it depends on the individual who is judging the product. For example, person A may think that Japan has very advanced technologies and thus the cars with Japanese origin must be of a good quality. Conversely, individual B may have a different opinion that Japanese cars have weak engines and that German has better technology and more powerful engines, hence individual B finds German cars to be better and he or she is not very fond of Japanese cars (Czinkota, 2013). The second factor is the country origin of the company’s brand’s and the place where the product is manufactured. By taking Apple’s Iphone as an example, the brand Apple originated from the United States of America and their products were manufactured there but now their products are manufactured in China instead.
Third, the development of the industry may affect a consumer’s behavior. For instance, during the past decades few people went to South Korea for plastic surgery, but as the plastic surgery industry in Korea has become popular, many people travel to South Korea to get their plastic surgery done. The last factor is demographic factors. Consumers tend to discriminate against foreign products depending on their demographic factors. As an example, the elders and less educated people may avoid products originating from foreign countries and prefer to purchase and use or consume the products they know (Czinkota, 2013).
4. Research Methodology
4.1 Introduction
Data collection is an important procedure in research process and is done after the researcher has designed a research plan according to the research question. Primary and Secondary studies are the research methodologies used to gather data. This research is done to collect information regarding the strategies on importing and introducing a new food product to the Indonesian market, finding out the behavior of Indonesian Muslim consumers, and the effects halal food has on the Indonesian Muslim. Also, this section will discuss the procedures which will be used throughout this research, including the location where the data gathering will be done and the ways used to gather the information.
4.1.1 Primary Research
Primary research is a research study that is done by the researcher and data presentation is obtained directly from the source. Primary research is also called as real data or new data which is up to date (Bryman & Bell, 2010). By using this method, a researcher collects all data or information by himself and not using the data obtained from anyone else’s research. This research methodology can be done through several means, which includes surveys, questionnaires, interviews, focus groups, or observation. In this thesis paper, the author uses two research methodologies, which are survey and focus group to answer the questions that are related to this research. First, the author uses a survey method because it can collect data from many people and it is time efficient. In the survey, the volunteer have been asked to scan a WeChat barcode that will direct them to a page where they can fill in the survey form online. Additionally, free samples for the Turkish delight will also be given to the participants. With these regards, the author can directly infer from the collected data how much of an influence the Halal quality of a product is, and the extent of the effect on consumer consumption based on the country origin (Turkey) to the Indonesian consumers. Afterward, the author will conduct a focus group study to obtain qualitative data by visiting two Indonesian restaurants that are situated in Shanghai: Bali Bistro and Bumbu Restaurant. In this method, 7 Indonesian citizens will be interviewed and asked to sample the Turkish delight, voice their opinions on the taste of the product and suggest how much of an effect does Halal quality and the Muslim country origin of a product bring to the Indonesian Muslim consumers.
4.1.2 Secondary Research
Secondary research refers to the collection of data that was obtained or acquired by researches from various available sources (Bryman & Bell, 2010). This data may be obtained from numerous sources such as journal data, reports, books or websites that were assembled by other scholars. This research methodology helps the reader to understand better the behavior of Muslim consumers in Indonesia, the extent and the level of effects halal certification a product can bring to the Indonesian Muslim consumers, analyze and find the right strategy to introduce a new product and the importance of country of origin theory to costumers. The data that have been collected from this research will be determined, gathered, compared and analyzed using statistical methods and tools such as Stata.
Research Findings
This section will explain the results of research finding done by the author. Primary and secondary researches used will give the results for assessing the research. Discussion results from the focus group and survey answers from people who will taste the Turkish delight will be part of Primary research to obtain quantitative and qualitative data whereas, data gathered from books, journals, websites and other articles will be part of secondary research. Some theories will also be used and matched to primary and secondary research in order to obtain the right research results.
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8.1.1 Example of the survey used.
1) Age
◦ 12-18
◦ 19-25
◦ 26-30
◦ 31-40
◦ 40+
2) Gender
◦ Male
◦ Female
3) Nationality
_______________
4) If you are from Indonesia, which city are you from?
◦Jakarta
◦Bandung
◦Surabaya
◦Medan
◦Bali
◦Pontianak
◦Others_____
5) Income/month?
◦Less than Rp 5,000,000 (< ¥2,500) ◦Rp 6,000,000 – Rp 10,000,000 (¥3,000 – ¥5,000) ◦Rp 11,000,000 – Rp 15,000,000 (¥5,500 – ¥7,500) ◦Rp 16,000,000 – Rp 20,000,000 (¥8,000 – ¥10,000) ◦More than Rp 20,000,000 (> ¥10,000)
6) Do you know any kind of Turkish food that exist in Indonesia?
◦Iskender Kebap (grilled meat wrap)
◦Hurma (date palm fruit)
◦Lokum (Turkish Delight)
◦Donduram Ice Cream
◦Baklava (sweet desert pastry)
◦Others_____
7) Have you ever heard about Lokum or Turkish Delight?
◦Yes
◦No
8) How do you feel when you eat this food?
◦Satisfied
◦Dissatisfied
9) What do you think of the sweetness level? (Rating from 1-5, 1 being not sweet and 5 being very sweet)
1 2 3 4 5
10) Do you know that the relationship between Indonesia and Turkey is very close?
◦Yes
◦No
11) What behavior do you relate to this food? (Can choose more than one anwer)
◦Serve with tea or coffee
◦Breakfast
◦Reading a novel
◦Smoke Shisha
◦Watching a movie
◦Family Reunion
◦Others_____
12) Does it affect you to know that Lokum (Turkish Delight) is a traditional Turkish Muslim food?
◦Yes
◦No
13) When is the right moment would you like to eat or share this food? (Can choose more than one answer)
◦Ramadhan / Break the fast
◦Eid Al-Fitr and Eid Al-Adha
◦Christmas and New Year
◦Family Events
◦Wedding party
◦Others_____
14) Is eating this food more or less “high class” than eating a candies or chocolate or nougats such as Fitbar or Bengbeng?
◦More high class
◦Less high class
15) In terms of food, what do you know about Halal? (Can choose more than 1 answer)
◦No pork or anything from pork
◦Pure, clean, healthy and nutritious
◦Qurbani slaughter must be done by Muslim people in proper way
◦Preparation, processing, and storage follows proper cleaning procedures
◦Others_____
◦Yes
◦No
17) How much money are you willing to pay for one box of Turkish Delight? (1 box = 16 pieces)
◦Rp 70,000 – Rp 80,000 (¥35 – ¥40)
◦Rp 81,000 – Rp 90,000 (¥40.5 – ¥45)
◦Rp 91,000 – Rp 100,000 (¥45.5 – ¥50)
◦Rp 101,000 – Rp 110,000 (¥50.5 – ¥55)
◦Rp 111,000 – Rp 120,000 (¥55.5 – ¥60)
◦Variety of Flavor
◦Level of sweetness
◦Textures
◦Packaging Box
◦Halal logo
◦Others______
19) Will you recommend this product to other people?
◦Yes
◦No
8.1.2 Example of the questions used in focus group
1. Do you know Turkish Delight?
2. What do you think about the Turskish Delight?
3. Have you ever used or eat a product from Turkey? If yes, what was it?
4. How do you feel when you eat this?
5. Do you know if Turkish Delight is a traditional Turskish food? Does it affect you to know?
6. Do you think this food can become one of luxury food for Muslim people in Indonesia?
7. Is eating this food make you feel lazy or feel energetic to other candies or nougats?
8. Can Halal food affect Indonesian Muslim’s attractiveness to buy?
9. Would you prefer to purchase a product with a “Halal” sign/logo?
10. Do you think this food is suitable to eat during Muslim national holidays, such as Ramadhan, Eid Al-Fitr and Eid Al-Adha?
