The Application of Consumer’s Knowledge

| CONSUMER BEHAVIOR PAPER| The Application of Consumer’s Knowledge and Involvement Concept in â€Å"Adu Segar Larutan Penyegar† Case Study from Brand Cap Kaki Tiga Perspective | September 2012| MMBM Batch 25 Team #2 Dickson Mulia 0152121007 Genoveva Iswati0152121016 Arfianti Puspitarini0152121035 Maulana 01521210xx EXECUTIVE SUMMARY Larutan Penyegar Cap Kaki Tiga, currently being manufactured by PT Kinocare, is facing a fierce competition against Larutan Penyegar Cap Badak since Wen Ken Drugs decision in February 2011 to withdraw the license from PT Sinde Budi Sentosa and granted it to PT Kinocare.In the market, the new Larutan Penyegar Cap Kaki Tiga is perceived as a replica product of its predecessor and they are struggling to gain consumer brand awareness and eventually become consumer’s choice. In this case study, we recommend Larutan Penyegar Cap Kaki Tiga to get out of the tight corner by implementing a breakthrough innovation in order to gain consumer inte rest and remove consumer’s visual imagery of Badak logo that has been anchored in consumer’s memory since 1937 I. BACKGROUND 1937 – The Product EraAbout 75 years ago, in 1937 four Singaporean Chinese families decided to go into business together to market a secret traditional medical recipe which becomes known as Three Legs Cooling Water. In Hokkien, ‘3 legs' (pronounced as Sa Ka) is a popular proverb meaning to flatter someone. But in the world of traditional medicine in Singapore and Malaysia, the ‘3 legs' means a simple effective way to prevent or heal fever and headache caused by ‘healthiness' in the body The logo features two legs on solid ground and one additional leg to provide additional support and expedite the healing process.The symmetrical legs represent equality for all and humbleness on others' views and suggestions. And finally, the circle marks the cohesiveness of the staff and customers centered on the triple legs 1978 – Introduction into Indonesia Market About 30 years ago, in 1978 Wen Ken Drug Co. Ltd Singapore granted the license of Three Legs (known locally as ‘Cap Kaki Tiga’) to PT Sinde Budi Sentosa as licensed manufacturer with headquarter located in Jakarta. 2011 – Transfer of License Wen Ken Drug Co. Ltd Singapore withdrew the license of Cap Kaki Tiga from PT Sinde Budi Sentosa and transfered it to Kino Group.February 2012 – The Competition Kino Group was prohibited from using Cap Kaki Tiga brand together with Cap Badak painting on the product. PT Sinde Budi Sentosa has won their claim over the usage of Cap Badak painting on their products and Kino Group may use Cap Kaki Tiga brand. This is the beginning of the competition on cooling water between Cap Kaki Tiga and Cap Badak. Following is the comparison of the product : Larutan Penyegar Cap Badak (Sinde) and Larutan Penyegar Cap Kaki Tiga (Kino). About Kino Group Kino Corporation started as a small distribution c ompany named Duta Lestari Sentratama back in 1991.Another big step was taken in 1999, Kinocare Era Kosmetindo,  manufacturer of a wide range of personal care products for all genders and ages was established. 2003 saw Kinocare Era Kosmentindo enlarged its businesses further into homecare division by providing a wide range of homecare products under the brand Sleek. Expanding  into Asian region, in 2002 Kino opened its branch office in Malaysia; Kino Care (M) Sdn. Bhd. , and in 2003 in the Philippine; Kino Consumer Philippines Inc. and also established distributorships with some other big distributor companies in Singapore, Brunei, Vietnam and Myanmar. Kino Group consists of the following: . PT KinoCare Era Kosmetindo : Personal care and Home care products (Kino Sweat, Ovale, Eskulin, B;B Kids Shampoo, Ellips, Sleek, Cap Kaki Tiga) 2. PT KinoSentra Industrindo: confectionary products such as candies, snacks and chocolates (Kino Candy) 3. PT KinoAid Indonesia : Pharmacy and Bevera ges (Resik V, Absolute, Panthers) 4. PT Duta Lestari Sentratama : Distribution After almost two decades, Kino Corporation Group   products are now available in big distributors, hypermarkets, supermarkets, mini-markets, thousands of cosmetic stores as well as   million of small traditional outlets throughout   the Indonesian archipelago.Kino’s product quality has met international standard qualification, proved by the increasing demands from the markets all over the world. II. BASIC CONCEPT AND THEORY The scope of analysis of â€Å"Adu Segar Larutan Penyegar Cap Badak vs. Kaki Tiga† case is focused on Consumer’s Product Knowledge and Involvement concept. Consumers have different levels of product knowledge, which they can use to interpret new information and make purchase choices. Levels of knowledge are formed when people acquire separate meaning concepts (accretion process) and combine them into larger, more abstract categories of knowledge (tuning).The levels of product knowledge are classified based on below spectrum: More Abstract| | | Less Abstract| Product Class| Product Form| Brand| Model/Features| â€Å"Larutan Penyegar†| Ready-To- Drink| Cap Kaki Tiga| Original(Bottled , 200ml ; 500ml)Fruity taste(Canned, 330ml, available in 7 variants)| Because consumers are likely to make separate purchase decisions at each level of knowledge, marketers need to understand how consumers organize their product knowledge in terms of these different levels.Thus, based on this concept, the basic questions that might arise are â€Å"What are the levels of product knowledge for â€Å"Larutan Penyegar†? and â€Å"Which are the dominant factors that influencing consumer’s purchase decision? † The knowledge of consumers is organized into means-end chain concept. In this concept, consumers can have three types of product knowledge: * knowledge about the attributes or characteristics of products, * the positive consequenc es or benefits of using products, * the values the product helps consumers satisfy or achieve Products as Bundles of AttributesThe simplest line to describe â€Å"Products as Bundles of Attributes† is that it is the physical characteristic of the product itself. From a cognitive processing perspective, we might wonder if consumers really have knowledge in memory about all of these attributes and whether consumers actually activate and use this knowledge when deciding which products and brands to buy. To evaluate whether consumer awareness of product attributes of â€Å"Larutan Penyegar† , we might get the figure by asking â€Å"Do you know the basic ingredients being used in this product? or â€Å"Would you compare the ingredients of each brand? † Products as Bundles of Benefits Marketers also recognize that consumers often think about products and brands in terms of their consequences rather than their attributes. Consumers can have knowledge about two types o f product consequences: functional and psychosocial. Functional consequences are tangible outcomes of using a product that consumers experience rather directly while psychological consequences of product use are internal, personal outcomes, such as how the product makes you feel. Products as Value SatisfiersConsumers also have knowledge about the personal, symbolic values that products and brands help them satisfy or achieve. Values often involve the emotional affect associated with such goals and needs (the strong feelings and emotions that accompany success). In contrast means–end chain links consumers’ knowledge about product attributes with their knowledge about consequences and values. In other words, consumers see most product attributes as a means to some end. The end could be a consequence (a benefit or a risk) or a more abstract value. A common representation of a means—end chain has four levels:Brand| Attributes| Functional Consequences| Psychosocial C onsequences| Value| Larutan Penyegar Cap Kaki Tiga| Mixture of medicinal ingredients | Help relieve sore throat | I feel better / healthy| -| Based on above figure, the means – end chain of Larutan Penyegar Cap Kaki Tiga ends at the level of psychosocial consequences. III. CONSUMER ANALYSIS Having all the questions behind the basic concept, we must get the answer in order to understand the levels of consumer product knowledge, the means-end chain of â€Å"Larutan Penyegar Cap Kaki Tiga† and whether consumers aware of the competition of â€Å"Cap Badak† vs. Cap Kaki Tiga† and if the subjected case influences the purchasing behavior. Therefore, a small research was conducted with the following design: Methods: Quantitative, Face to Face interview Geographic location : Jakarta, Bogor Sample criteria : Consumer of â€Å"Larutan Penyegar† with the following constraints: * 18+ years old * Purchase decision maker for Larutan Penyegar RTD * Purchase Larutan Penyegar RTD in last 6 months Sample size : 21 samples Research findings: 1. Cap Kaki Tiga name dominates the Top of Mind awareness by 90%, left Cap Badak with only 10% TOM. | Cap Kaki Tiga| Cap Badak|Top of Mind Awareness| 90%| 10%| Q: Thinking about â€Å"Larutan Penyegar† brands, what brand name do you think first of all? 2. 90% of respondents recall their last purchase of Larutan Penyegar brand is Cap Kaki Tiga   | Cap Kaki Tiga| Cap Badak| Last Purchase| 90%| 10%| Q: What was the brand(s) have you bought in past 6 months? 3. Interestingly, from 90% respondent who mentioned that their last purchase was Cap Kaki Tiga, only 19% who can distinguish the new packaging of Larutan Penyegar Cap Kaki Tiga and chose it, while 62% of the respondent most likely recall visual imagery of Badak and chose Cap Badak brand.The rest 19% didn’t remember which bottle that they bought. | Cap Kaki Tiga| Cap Badak| Don't Remember| Visual Imagery| 19%| 62%| 19%| Q: Now I would like to k now how familiar you are with the †Larutan Penyegar† product. 1 set bottles of Larutan Penyegar Cap Kaki Tiga vs. Cap Badak, and point which bottle they bought the last time 4. 90% of the respondent does not aware about the competition about the product   | Not Aware| Aware| Awareness about the case| 90%| 10%| Q: Do you know that currently there are two different products? 5.After the respondents are told about the brief description whether the â€Å"old† Cap Kaki Tiga is currently produced by different manufacturer (PT Kinocare), and the manufacturer of â€Å"old† Cap Kaki Tiga is now producing Cap Badak, only 10% of respondent who prefer Cap Kaki Tiga, 52% prefer Cap Badak and 38% would choose any products that is available in the store. | Cap Kaki Tiga| Cap Badak| Anything| Brand Preference| 10%| 52%| 38%| Q : After you have the knowledge that currently there are 2 brands, which product(s) that you would choose?To summarize, based on the research above , the insights are: 1. Most of the respondents (90%) do not aware about the competition of Larutan Penyegar products from the two brands (â€Å"Cap Badak† vs. â€Å"Cap Kaki Tiga†). 2. Inconsistency happened on brand name and product recollection. The high respondent mind share on â€Å"Cap Kaki Tiga† name (90%) is not translated into product election (19%) due to people historical memory about the product is anchored in the strong visual image of the â€Å"Badak† packaging. 3.An interesting fact appears when respondents are told about the difference of the brands, ironically most of them (52% vs 10%) prefer to choose â€Å"Cap Badak† instead of â€Å"Cap Kaki Tiga†. However, there is still an opportunity for â€Å"Cap Kaki Tiga† to win the 38% respondent who would choose any brands. Then, based on insights above, we can identify few problems of Cap Kaki Tiga current products, which are: 1. â€Å"Badak† logo imagery is very str ong in consumer’s mind. To win over â€Å"Badak† image is quite impossible eventhough consumers have strong awareness on â€Å"Cap Kaki Tiga† name.If both products have to be in head-to head competition, such in display, most likely consumers will always choose â€Å"Cap Badak†. 2. From interviews, we got few comments about â€Å"Cap Kaki Tiga† logo which is not quite familiar and don’t look interesting at all. Some of them think that logo of â€Å"Cap Kaki Tiga† makes the product looks like a fake. Some even thought the logo looks associated with poisonous mosquito-killer insecticide product logo. IV. RECOMMENDATION â€Å"RECOVERY/SOLVING† AND KEY LEARNINGOur group proposes several recommendations for â€Å"Cap Kaki Tiga† brand to be considered: 1. Launch new format of â€Å"Cap Kaki Tiga† with totally fresh new whole concepts (packaging design, formats and marketing communications). a. Changes of packaging desig n should emphasize on the â€Å"Cap Kaki Tiga† name, as its strong point, and minimize the proportion of â€Å"Cap Kaki Tiga† logo, as its weakness point. b. Changes of bottle format with new shapes. We analyzed that with same bottle format as â€Å"Cap Badak†, it won’t be beneficial for â€Å"Cap Kaki Tiga†.The reason for that is the consumer will always associate the bottle format with â€Å"Badak† painting in it and they would most likely prefer it and assume the â€Å"Cap Kaki Tiga† current same format as a fake. c. To support the changes in design and bottle format, we have to give strong marketing communications emphasizing on historical â€Å"journey† of original â€Å"Cap Kaki Tiga† brand product. This approach has the ultimate goal to underline the originality of the brand with â€Å"Cap Kaki Tiga† as the holder of official license from Wen Ken Drugs since the very beginning and create consumer confidence that the product is not a fake. . In order to increase consumer involvement, we recommend Cap Kaki Tiga to tap into younger segment through its flavored variant product line by communicating â€Å"Larutan penyegar† as daily beverage. Through this strategy, it is expected to create a new image and perception that a consumer does not have to wait until he feels sore throat to consume â€Å"Larutan Penyegar†. To support this strategy, Cap Kaki Tiga might conduct a marketing event that promote consumer’s involvement in the usage of the product, for example : conducting 10K Running Competition for charity, sponsorship in sports competition (e. IBL) as the official beverage, sponsorship in school annual music festival, and so on. 3. Strengthen distribution channel is also key strategy â€Å"Cap Kaki Tiga† have to explore to win the competition. To target indifferent consumers, availability of the product is a must. Kino should have expertise on this area, sinc e other Kino’s products are already strong in distributions. 4. Have further research (ZMET Study) in order to get further insights on: d. The brand and logo association, how â€Å"Cap Kaki Tiga† brand and logo can affect the consumer purchase decision. e.To understand the key reason for purchase and also the influential touch point so we are able to develop effective marketing campaign on the new concept launch Key learnings from our study on â€Å"Cap Kaki Tiga† brand, stated as following: 1. Top of mind awareness of brand is not necessarily translated into consumer’s decision to purchase (share of market) for the case of â€Å"Larutan Penyegar† competition. Therefore, an effective marketing strategy is needed to drive consumer purchase furthermore. 2. High brands awareness means nothing if the consumers don’t aware about the product itself.A product must have a uniqueness to be able to distinguish itself from the crowd and chosen by the c onsumers. 3. â€Å"Cap Kaki Tiga† has to try to go out from ‘Red Ocean’ competition with â€Å"Cap Badak†. The more they are trying to compete head-to head with similar concept as â€Å"Cap Badak†, the less opportunity for Cap Kaki Tiga to win â€Å"Larutan Penyegar† competition. 4. It worth to have a shot on going to the market with fresh new whole concepts, because â€Å"Cap Kaki Tiga† has opportunity to be the ‘offense’ side, rather than â€Å"Cap Badak† as defense’ side. Offense as to grab the indifferent market as mentioned before on the short-term basis, and to grab the current market share from â€Å"Cap Badak† on longer term period. V. REFERENCE 1. Peter, J. Paul & Jerry C. Olson, â€Å"Consumer Behavior and Marketing Strategy†, 9th edition, McGraw-Hill International Edition, 2010. 2. http://www. wenken. com 3. http://harrysanusi. blogspot. com/ 4. capkakitiga. com 5. Suryadi, Dede, â₠¬Å"Adu Segar Larutan Penyegar†, SWA Magazine Edition 22, October 2011.

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A risk is the chance of a negative event occurring. Internal controls are policies and procedures set in place to reduce the occurrence of an associated risk. Risks are never entirely eliminated; however, internal controls help reduce the occurrence and balance the risk. This brief will discuss the risks of Kudler Fine Food’s current Accounting Information System (AIS). In addition, the internal controls designed to mitigate the risks. Furthermore, this brief evaluates the internal controls for the AIS. Last, this brief addresses other controls, outside of the AIS that Kudler’s may need. Identify Risks According to Hunton, Bryant, and Bagranoff (2004), â€Å"business enterprises face a variety of risks, including business, audit, security, and continuity risks. † Business risk means the company may not achieve its goals and objectives. A review of Kudler’s strategic plan will help determine the business risk. The adoption of the new Just-In-Time (JIT) inventory system would be an IT timing risk. An IT timing risk is an example of an internal business risk that Kudler would face. An audit risk is the likelihood that Kudler’s external auditor would make a mistake in his or her opinion of the financial statements. Audit risks are broken down further into inherent, control, and detection risks. Every business has inherent risk because doing business is risky in itself. Control risks are the likelihood the internal controls the company has in place would not prevent a material error. Detection risks are the likelihood the audit procedure would not detect material errors. Security risks involve data access and integrity. The AIS converts raw data into useful information. To ensure the data integrity, Kudler will need to control the risks associated with collecting and processing the data. By implementing the JIT inventory system and point of sale system, data is processed as soon as something purchased from the stores. This mitigates human error under the old system. Continuity risks are associated with the AIS’ availability, backup, and recovery. Kudler’s will need to implement stronger firewalls and larger servers. This will ensure when Kudler’s does business online, customers will be able to access the website at any given time. Any down time of the website would be potential loss of business. Internal Controls Management must design and implement the internal controls. However, this is just two steps of the control process. Management must evaluate the controls for effectiveness. Kudler’s size would not necessitate an internal auditor; however, an external auditor would be beneficial in testing the effectiveness of the controls. In addition, Kudler’s would need to document policies and procedures to establish an audit trail. According to Bagranoff, Simkin, and Strand, (2008, p. 50-251), these documents should include: 1. â€Å"A chart of accounts (with the purpose of each general ledger account)† 2. â€Å"A complete description of source documents individuals must use to record accounting transactions† 3. â€Å"A comprehensive description of the authority and responsibility assigned to each individual† Controls Outside the AIS Kudler faces other external threats as well. T hese threats can be reduced by securing the AIS with firewalls, anti-virus, anti-spam, and other anti-spyware software. This will deter any potential hacker from accessing confidential information. Whereas, the software will not completely eliminate the risks involved with doing business over the Internet or remotely from each store, the risks will be greatly reduced. Conclusion Risk assessment and internal controls are vital to Kudler’s continued success. Kudler will need to monitor the effectiveness of the internal controls once the new JIT inventory system is in place. In addition, management will need to assess the risks associated with expanding business. However, these risks are balanced out by the expected increase in business transactions to ensure Kudler’s lasting success.

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