CHAPTER I INTRODUCTION

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1 CHAPTER I INTRODUCTION 1.1 Research Background PT. Telekomunikasi Indonesia, Tbk. (TELKOM) is the biggest telecommunication, information, media and edutainment (TIME) provider in Indonesia. TELKOM organizational structure consists of Corporate Office Group, which consists of the Directorate of Human Capital & General Affairs Division, Directorate of Finance, Information Technology Directorate, Directorate of Compliance & Risk Management, Strategic Investment Unit and Corporate Planning, Department of Internal Auditors, Corporate Affairs and Corporate Communications Department. Meanwhile, the Business Operations Group consists of the Directorate of Consumer and Wholesale Enterprises Directorate and the Directorate of Network & Solution. From those 9 directorates in Telkom, Directorate Consumer is the one which has direct contact to the customers. Directorate Consumer focuses on the management services for the retail market segment and management. One of the divisions who do the management services for the retail market segment is Promotion Unit. As the unit which responsible for the retail management, The Promotion Unit in TELKOM is focusing on Joint Promo with other companies to support their marketing program. During 2009 and 2010, The Promotion Unit has made deal with three companies to do joint promo; the three companies are KFC, Panasonic, and MarkPlus. The three companies are selected through negotiation between Promotion unit (officer promotion and campaign management, treasurer, AVP Promotion, VP Marketing & Customer Care) and the selected companies. One of the joint promo done by TELKOM is cooperation with KFC. To get closer to Telkom products, particularly Speedy and Flexi, with the youth, PT. Telekomunikasi Indonesia Tbk. (TELKOM) has made a joint promo with PT. Fastfood Indonesia Tbk (KFC). The joint promo covers provision of Hotspot Speedy access at 116 outlets of KFC and organizing Off Air events together. The joint promo agreement has been signed by both parties represented by Consumer Director TELKOM, I Nyoman G Wiryanata, and Fabian Gelael, COO PT. Fastfood Indonesia Tbk (KFC), in 1

Jakarta, Thursday, May 14, 2009. The joint promo agreement was signed as the continuation of the cooperation that has been done before, which was considered to have positive impact for the two.

positioning value, differentiation and branding. In running marketing process of Flexi or Speedy, TELKOM has prioritized positioning, differentiation and branding.

2 Jakarta, Thursday, May 14, The joint promo agreement was signed as the continuation of the cooperation that has been done before, which was considered to have positive impact for the two. According to Consumer Director Telkom, I Nyoman G Wiryanata, selection of KFC has been made based on the similarities between TELKOM and KFC in which their market target is the youth and develops positioning value, differentiation and branding. In running marketing process of Flexi or Speedy, TELKOM has prioritized positioning, differentiation and branding. KFC can represent youngsters activities where they usually gather together with their friends. This joint promo is supportive and profitable for each party. Figure 1.1 Fabian Gelael (left) and I Nyoman G Wiryanata (right) at the Joint Promo Agreement on May 14, Problem Statement and Objectives Based on the agreement, the project was started in May 2009 by installing Internet TELKOM Hotspot at KFC s store Indonesia. This is the first cooperation between TELKOM and KFC and it was called Kerjasama Tahap I. The cooperation is targeted the youth market aged years old and focused on building Speedy brand, with special mission to build brand preference toward Speedy among the target market. The result from the first cooperation was far from what was expected from TELKOM which there were installment in KFC store much less than 116 stores which is only 35 stores in Indonesia. The previous page will be a list of KFC stores that have been installed Speedy inside in Indonesia. 2

3 Table 1.1 KFC stores with Speedy installed inside in Indonesia No KFC Stores City 1 KFC Mulyosari Surabaya 2 KFC Sudirman Pekanbaru 3 KFC Cemara Asri Medan 4 KFC Metro City Pekanbaru 5 KFC Cakung Jakarta 6 KFC Plaza Mulya Samarinda 7 Rest Area km 19 Bekasi 8 Lambang Sari Bekasi 9 Bogor Indah Plaza Bogor 10 Ambon Baru Ambon 11 Depok Ramayana Jakarta 12 Pontianak Pontianak 13 Benton Tangerang 14 Bogor Trade Mall Bogor 15 Ahmad Yani Surabaya 16 Yogya Dept. Store Sukabumi 17 Martadinata Sukabumi 18 Taman Lily Suheri Medan 19 Mega Mall Batam 20 Gunawarman Jakarta 21 Rawa Barat Jakarta 22 Hayam Wuruk Jakarta 23 Daan Mogot Jakarta 24 Walikota Medan 25 Panakukang Mas Ujung Pandang 26 UGM Jogja 27 Gatot Subroto Bali 28 Sanur Bali 29 Bandara Cengkareng Jakarta 3

4 Table 1.1 KFC stores with Speedy installed inside in Indonesia (cont.) 30 Balikpapan Plaza Balikpapan 31 Kawi Atas Malang 32 Buaran Plaza Jakarta 33 Lia Palembang Palembang 34 Pajajaran Bogor 35 Raya Darmo Surabaya The problem occurred vary from technical problem and lack of management in the field. The communication program was unsuccessful in building brand preference toward Speedy because it was not suitable with KFC customers. Both parties evaluated what went wrong and agreed to put more commitment for making it more successful. They declared the second term of joint work, called Kerjasama Tahap II, started in September Telkom does not want to fail again this time. Knowing that the marketing communication program was unsuitable, they decided to one that fits the youth segment. KFC youth customer s knowledge and behavior (preference and perception) is crucial information for Telkom managers in order to propose an effective marketing communication program. Accordingly, the research problem is: What is the knowledge and behavior of youth customers in KFC about/toward Speedy brand? 1.3 Research Question In order to solve the problem and to achieve the research objectives, the researcher defined the research questions as listed below: 1. How is the customer brand awareness toward Speedy? This question will define how the respondents brand awareness toward Speedy. The data is derived from questionnaire result. 2. What is customer preference toward Speedy? The relationship between brand and customers is important to know since the stronger the relationship; the more customers will be attached to the brand. The 4

5 question, which the data is collected by questionnaire, is intended to see the respondents preference toward Speedy. 3. What is the analysis of customer perception toward Speedy? The question is intended to know what customer perception is toward Speedy. Customer perception toward Speedy s performance is important thing as the review of customers point of view that could be a feedback for Speedy. 1.4 Research Scope and Limitation 1. The research scope is to identify and analyze the brand awareness of the youth in Bandung who is the customers of KFC. It is to see whether Speedy has reached the youth as their new target market in the terms of brand preference. 2. The research has limitation to the youth respondents aged years live in Bandung who also the customer s of KFC. 1.5 Research Method Research methodology provides the framework to collect and analyze data. The appropriate research designs will help the researcher to relate the research problem appropriately. The researcher is using exploratory and descriptive research. The exploratory research is gathering data from internet and books which is focusing on literature review about brand, brand equity, brand awareness, brand choice, brand perception, and brand identity. Descriptive research is used in the research to gather data from the field in the form of questionnaire. The research is done by distributing questionnaire to the youth respondents to get response toward the question given to be able to analyze brand awareness of Speedy. The questions are presented in 7 parts, they are Brand awareness: Brand recall, Brand recognition, Brand exposure, Internet provider brand choice, Brand Perception, and Important attributes needed from an internet provider. The sampling used in the research is convenience sampling. Convenience sampling refers to the collection of information from members of population who are conveniently available to provide it. The population for this research is the youth in Bandung. Based on interview and information sought, the youth (aged years old) 5

6 are represented the KFC s target market. Based on the research limitation, the field work is limited in Bandung where KFC stores located. The places are Paris Van Java (PVJ), Bandung Trade Centre (BTC), Ciwalk, and Bandung Super Mall (BSM). After the questionnaire has been collected, the data is measured by Likert-scale. The processed data then is analyzed by descriptive statistics. Descriptive analysis in the research is done by obtaining all personal data (the respondents answers) then turned in into means, to get the final result and recommendation. 1.6 Writing Structure Below is the writing structure which covers the whole chapters for the research: Chapter I: Introduction First chapter describes the introduction of the research. It contains background of the research which is the cooperation Speedy made with KFC in order to get new target market, which is the youth. Problem statements show that the first cooperation did not run well however the cooperation is planned to be continued. Chapter II: Theoretical Foundation Second chapter describes the literature review that is used for the research. The literature reviews are about what brand is and the equity of the brand. The discussed equity of the brand is brand awareness. Besides brand awareness, theoretical foundation has purpose to convey to the reader what knowledge and ideas have been established on brand choice, brand perception, and brand identity. Chapter III: Methodology Third chapter describes the detailed step taken when conducting the research. The methodology includes methods of research, population and sample, data collection techniques, as well as processing techniques. The research is conducted by spreading questionnaire to the respondents in Bandung aged years old. 6

7 Chapter IV: Data Analysis Fourth chapter decipher the data and result of the research. In this chapter, the collected data are analyzed to be able to answer the research questions. Chapter V: Conclusions and Recommendation Fifth chapter contains the conclusions and recommendations that can be offered to Speedy in order to strengthen its penetration to the youth as their new target market in terms of brand preference. 7

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