CHAPTER 5

CONCLUSION AND RECOMMENDATION

5.1 Conclusion

From the finding showed that middle to upper class Indonesian are “made in” oriented.

There is a fact that Indonesian people who “always” and “often” look for country of

origin label had bigger percentage rather than people who “occasionally” and “never”

look for country of origin label. Indonesian really cares about manufacturer’s country of

origin their product and country of origin can be a consideration when Indonesian

determine buy or not buy the product. Present research also found that Indonesian people

tend to not believe “made in Indonesia” product, that was proved from the percentage of

Indonesian who “always” and “often” look for “Indonesian made” product have smallest

percentage rather than people who “occasionally” and “never” look for “Indonesian

made” product. Findings from comparison between “Indonesian” and “foreign” brand in

consumer durable category indicate that Indonesian tends to trust foreign brand names

product and also Indonesian has more believe in foreign brand product in term of

“technology”. The information show that there are significant differences between

“Indonesian” and “foreign” brand names in all products namely car, refrigerator, washing

machine, TV, camera, and watch. Indonesian people assume technology provided by

foreign brand for those products are higher than technology in their local brand,

especially in car product. Indonesian people also have opinion that their product had

lower quality and not reliable rather than foreign brand product. This statement was

proven by looking at the mean comparison between “Indonesian” and “foreign” brand in

“quality” attribute. The main weaknesses for Indonesian brand was in “status and

esteem”, showed in this study that most differences were in “status and esteem”

attributes. From the data, this study concludes that Indonesian people are prouder when

using foreign brand product rather than using Indonesian product in the consumer durable

category. In term of “value for money” Indonesian people assume those Indonesian

durable products are not value for money for them, This conclusion can be proven by

data that “value for money” attribute in consumer durable category were rated lower

rather than products with “foreign” brand names. The data also shows us that credibility

of country of origin foreign product is also rated higher that indicate Indonesian people

more believe foreign makes. Findings from the comparison between “Indonesian” and

“foreign” brand in consumer’s non durable category also indicate that Indonesian tends to

trust foreign brand names product and also Indonesian has more believe in foreign brand

product in term of “technology” even in low technology product. In “quality”, “status and

esteem” and credibility, “country of origin” attributes is almost the same with durable

products, Indonesian people rated lower in Indonesian product. The term “value for

money” has smallest mean differences among the other attributes. The correlation tables,

which are Table 4.5 and Table 4.6, also strengthen the conclusion in this study that there

is an effect of country of origin on foreign brand name in the Indonesian market. The

correlation tables show that there are strong correlation between country of origin

credibility with “technology”, “quality”, “status esteem” and “value for money” in

consumer durable product. Also, there are strong correlation between country of origin

credibility with “technology”, “quality”, and “status esteem” in consumer non durables.

From the data, this study can conclude that one of the reasons Indonesian people gave a

high rating for foreign brand names product in term of “technology”, “quality”, “status

esteem” and “value for money” is credibility of country of origin foreign brand. Similar

with the Indian people, for Indonesian people buying foreign products is not considered

as unpatriotic or non nationalistic. This statement, as shown in the factor analysis

calculation, indicates that Indonesian people have strong “nationalism”, supporting

product “made in Indonesia”, but Indonesian people assume there is a prestige buying

foreign makes.

5.2 Recommendation for Indonesian company and foreign company

Based on the conclusion, this study will also give the recommendation for foreign

companies who want to enter Indonesian market and also for Indonesian companies to

make an improvement in local market. From the conclusion of this study we can see that

Indonesian people really like products with foreign brand names because Indonesian

people believe foreign brand names products have a superior technology, superior

quality, better value for money rather than Indonesian brand name products, better

credibility of country of origin and the most important part is Indonesian people feel

prestigious using Indonesian product. This study suggests to foreign companies who want

to enter Indonesian market to position their product as high technology and good quality

product. Foreign companies have to use their own foreign brand products for both

categories durable and consumer durable products. There are several marketing strategies

that can be applied to foreign companies, such as franchising and joint venture. These

studies also indicate that price is not a significant attribute for Indonesian people

particularly in consumer durable product, so the pricing strategy for foreign companies

should apply market skimming pricing strategy rather than go with the market penetration

pricing strategy. Using original foreign brand names will be benefit for foreign brand

product associated with higher “status and esteem”. This would increase prestige the

product in Indonesian consumer’s mind since Indonesian people were rated higher in

“status and esteem” attributes. On the other hand, the Indonesian local players have to

improve their technology, quality, and also promotion and branding strategy. Developing

the brand name by using foreign language and using foreign people to become an

ambassador for the brand name proved to be quite an effective strategy. Indonesian

product such as Vinoti living, Lea Jeans, Equil, and Executive (SWA, 2003) which

develop their brands using such strategy proved to survive in the local market and can

even compete with foreign brands. Collaboration with foreign companies was also

considered as a good strategy as it can gain more credibility from the Indonesian

consumers, with the fact that Indonesian people prefer products which are associated with

foreign countries. Providing high technology manufacturing to make high quality

product and also increasing efficiency by cost reduction would result in higher quality

product with a more competitive price. This would also result in gaining more trust and

credibility from the local customers.

5.3 Future research recommendation

This research has limitation when adapted in Indonesian market especially in

comparing Indonesian brands and local brands parts. In general, respondent usually

cannot differentiate foreign brand product and Indonesian brand product, people tend to

think that Indonesian did not have brand in some product categories. In the future

research, product brand names should be more specific, future research can provide

example of Indonesian brands and local brands in the questionnaires. In the future

research the selection of product categories should be more selective, product categories

have to easily found as an Indonesian made product, so the respondent are easier when

comparing Indonesian product and foreign product.