Small businesses are the backbone of the Indonesian economy. Supporting them is very crucial to have a sustainable growth development of the country. To compete in a global market requires them to have brand equity to drive volume growth and to allow the company to have more control over its own destiny.

In today environment, Internet is an effective media to support the brick and mortar business. Businesses find higher efficiency starting from building brand equity all the way to improving performances by increasing sales growth and volume through Internet.

This project will study the suitable application of EC (Internet) to Indonesian small businesses, specifically home industries. As a pilot project, it is decided to focus the study on cake home industry, Apple's Pastries. The company specializes in delivering cake as a gift. Cake as a gift is a suitable product category for on line transaction, as one does not need to touch/taste, as long as the design is attractive. Ordering on line offers the convenience and catalogue display at low capital investment.

Based on consumer survey, most people buy cakes for special occasion. Buying cakes for birthday is the most common reason to buy (89%). 91.5% of the respondents buy the product directly in the shop, while 5.4% would place order through phone. However, when asked whether they would like to buy on line, about 61 % were interested. Thus, there are a high percentage of people that would like to buy on line.

The on line transaction is intended to support the physical channel by building brand equity, increase penetration through new channel and build customer relation.

It is recommended that for small businesses to do on line transaction by finding a solid alliance with existing community and transaction sites with strong brand equity and wide consumer base. Thus, the partnership will leverage the click and brick muscle. Partnership policy should be based on early on targeting, pay for performance and limited exclusivity.

In addition, the company should adopt a portfolio strategy where the web site and price can be customized to different target market (local and abroad). The price for local market should be lower than abroad market since they are charged in different currency. The language used should also be customized according to the targeted market.

Last but not least, ensuring a sustainable on line transaction requires the site not only to acquire the customers but also to convert and retain. Thus, the right marketing campaign involving both on and off line activities are important to support the overall business objective in leveraging Internet path.



Reseach Location: Apple Pastries

Supervisor: Ir. Rudianto Prabowo, MSIS.

Accepted on 22 June 2002



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