Jakarta –
Every time there is an Indomaret, usually there is also an Alfamart nearby, why huh? Whereas Indomaret and Alfamart both sell the same goods, ranging from daily necessities from food, drinks, to other household goods.
This of course often makes a lot of people wonder. Why are the two minimarket outlets always close together? Did they deliberately set up their outlets close to their business rivals?
It turns out that there are indeed several reasons why these two minimarket outlets are always in close proximity. Launching from CNBC Indonesia, there are at least 5 important reasons why the Indomaret location is always close to Alfamart.
5 reasons Indomaret & Alfamart outlets are always close together:
1. Attract a Wider Market
The main reason behind this ‘phenomenon’ is a marketing strategy. The two outlets certainly aim to gain a wider market and attract as many consumers as possible. So, they will choose a location with the concept of industrial location theory, namely Hotelling Theory.
Hotelling theory is a theory that explains two similarities in types of economic activity that are close to each other with the aim of controlling the market as wide as possible. The theory will focus on site selection. The profit presentation is definitely 50:50 which will then be left to consumer tastes.
2. Carrying Different Advantages
In the eyes of consumers, Indomaret and Alfamart may look like siblings who have many similarities. However, both admit that they have their respective advantages. There are those who carry advantages in terms of lower prices, wider store capacity, more friendly service or a comfortable atmosphere.
3. Build Consumer Perception
When consumers come to one of the minimarkets, the employees will be tasked with building positive perceptions for customers to come back to their outlets. As previously discussed, each Indomaret or Alfamart outlet will show its own advantages to captivate customers.
4. Save on Research Budget
The reason Indomaret and Alfamart are always close together is none other than to save the research budget. If one of the outlets is built in a certain location, it can be ascertained that the market potential is good and has passed the business feasibility test. This is indeed one of the formulas for building new outlets among franchise businesses or minimarket retail.
5. Use of the Five Forces Strategy
The two minimarkets, Indomaret and Alfamart, use a five forces strategy or porter’s five forces approach, which is a method to analyze and identify the forces that shape business patterns. Among others are:
– Competitive Rivalry, a business environment that has a very high level of competition between companies and competitors. When there is competition, the company will create new innovations so that their products are not less competitive than business opponents.
– Power of Buyer, the ability of consumers to bargain for cheaper product prices. So, consumers will weigh the prices of goods at Indomaret and Alfamart themselves and then decide for themselves where to buy.
– Power of Supplier, influenced by products produced from suppliers. The fewer suppliers of a product, the higher the company’s dependence on these suppliers to supply goods to them.
– Threat of New Entry, it will be difficult for new entrants to enter the market or industry. Because the strength of the company is influenced by barriers such as entry fees, regulations, economic conditions and patents. This will affect who is more powerful and more powerful in that location.
– Threat of Substitute Product, the power that comes from substitute products or goods from the goods to be sold in the company. This substitute product can be referred to as a substitute product that has a similar function to the company’s product.
Those are 5 reasons why Indomaret and Alfamart are always close together.
(fdl / fdl)
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