PT Fosroc Indonesia, producer and marketer of construction chemical products has established a good market position in Indonesia, and is one of the leaders in the specialized constructions chemical product business. But, currently PT Fosroc Indonesia is serving mainly the corporate sector and give little attention to the retail market.

In response to the attractive growth potential of retail segment in the country's construction industry, the IPMI East Group is giving an assistance to PT Fosroc Indonesia for its strategic intention to explore the possibility of expanding its market to the retail segment. Such strategic move is not intended only for increasing sales by penetrating into the new market, but also a necessary choice for market risk management, cash flow improvement as well as other benefits. As the result, a feasibility study has been conducted on whether PT Fosroc Indonesia should go retail, or stay on its competences in the corporate sector.

The feasibility study is also supported by market research; in-depth interview of more than 70 (seventy) construction material retail stores around Greater Jakarta Area (Jabotabek). Group discussion with the managers of PT Fosroc Indonesia, its staff and professionals from the chemical construction business as well as potential competitor had covered important issues concerning the marketing mix, targeting, positioning and 4Ps (product, price, placement and promotion).

For the purpose of the study, 3 (three) construction chemical product types were considered, they are; Waterproofing, Concrete Admixtures (plasticizer) also known as Cement Additives and Tile Grout. These product types were chosen not only on the belief that the products are mostly demanded by the retail customers, but they are also already dressed accordingly to suite the retail market.

As the result of the feasibility study The IPMI Group provided PT Fosroc Indonesia with the analysis over retail market competitive situation, inward analysis on the company readiness and possible short term as well as medium term strategies in detailed form to enter the retail market segment, which relate to the marketing mix, targeting, positioning and 4Ps.

Critical and Key Success Factors to the initiative were also identified and analyzed, such as :

-The major critical role of Product Distribution Infrastructure ( Placement aspect of marketing 4Ps)

-The proposed strategic stages to take "below the line" promotions while strengthening the product existence, before taking extensive advertising.

-The preference to setup own SBU and empowerment of the existing applicators instead of using major distributors

Detailed information such as current competitive pricing situation in the market for each product category, data of 2084 retail stores around greater Jakarta Area to be further solicited, up to calculation over required salesmen for the proposed SBU are also provided in this report, in order to facilitate PT.Fosroc Indonesia with the initiative.



Research Location : PT FOSROC INDONESIA

Supervisor : Mudzaffar Daud, MBA

Accepted : 18 October 2005



This document contain confidential information until 18 October 2010 .