ajema b5. application of pricing strategy for new … application of pricing strategy for new...

An Application of Pricing Strategy for New Product: Zona of Flexibility Approach Saad Murdy

Faculty of Agriculture , University of Jambi Panduaji Panditatwa

Department of Agribusines, Bogor Agricultural University

Monang Simbolon Department of Agribusines, Bogor Agricultural University Corresponding author: [email protected] [submitted August 2014, Accepted October 2014] Abstract. One of marketing strategies which is applied by some companies is the pricing strategy. The price of a product is often determined by cost-approach and competitor-approach. However, a new product does not have comparative price in existing market. LPPM PKBT is a company which produces soft candy in aluminium-foil package and KWT Turi is a company which produces guava juice, branded as Jus Jambu Merah, in bottle and cup package. Until nowadays, LPPM PKBT and KWT Turi are not considering all the cost during production when calculate breakeven price. One of methods when setting the price strategy is employing zone of flexibility. This study aims is to analyze the pricing of JJM and ‘Fruit Talk’ soft candy by calculating all the cost in production, analyzing the range of price accepted by consumers and analyzing the zone of flexibility. The first instrument is ‘full costing’ method to know breakeven price as identification of OP (min) in firm side. The second instrument is price-sensitivity analysis as identification of CP (max) to know the zone of flexibility. This will discover the range of optimum price from the producer and consumer side. The ranges which are resulted from this study show that two companies may apply the prices of products between OP (min) and CP (max). Keywords: marketing strategy, zone of flexibility, willingness to pay.

JEL Codes: Q1, M20

Introduction

Background Subsector of horticulture contributes 1.5% to Indonesian GDP. Those contributions are relatively high compared to paddies; which is considered by government for more than 50 years; that contribute 2.5% to Indonesian GDP (Badan Pusat Statistik, 2012). Fruits are important commodity which production is increasing all the year. With high production, the consumption of fruits in Indonesia is expected to be over the standard. In reality, fruits consumption in Indonesia is still under the expected standard. Based on BPS data, fruits consumption of Indonesia in 2012 is only 39 kilograms per capita per year. Food Agriculture Organization (FAO) estimate ideal fruits consumption on 75 kilograms per capita per year. ASEAN Journal of Economics, Management and Accounting 2 (1&2): 64-81 (2014) ISSN 2338-9710

ASEAN Journal of Economics, Management and Accounting

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The consumption of fruit could be increased through processed fruit products. Guava, pineapple and papaya are tropical fruits which are mostly found in Indonesia, particularly West Java. Bogor is one of cities in West Java that produce high amount of those fruits. Fruit juice and soft candy are products which can be used to increase the fruit consumption. LPPM PKBT produces soft candy made of papaya and pineapple branded as ‘fruit talk papaya soft candy’ and ‘fruit talk pineapple soft candy’. KWT Turi produces fruit juice made of guava branded as ‘jus jambu merah’ (JJM). Those firms have to make policy which brings effectiveness and efficiency in work, such as breakeven price. Calculation of the breakeven price affects on pricing.

Formulation of the problem Horticultural products have characteristics: bulky, voluminous and perishable. Guava, pineapple and papaya have one of the characteristic, perishable. To avoid it, those fruits should be processed into fruit juice or soft candy. Fruit processing is also to put value added on it. KWT Turi and LPPM PKBT are producing fruit juice and soft candy. Until nowadays, those firms consider not all the production cost; particularly depreciation cost of buildings, vehicles, machinery and equipment; in calculating breakeven price. Depreciation cost affects on value of firm’s fixed assets. If depreciation cost is not calculated, firm should spend more budgets on it, not as production cost. Pricing strategy and knowing the zone of flexibility are the way to determine the breakeven price. By this way, firm can determine competitive price for the right market share. One of the methods to determine the breakeven price is ‘full costing’. Determination of the breakeven price should cover the both sides: consumers and producers. Range between minimum price from producers side and maximum price from consumers side is called as zone of flexibility. Minimum price set by firm, OP (min), is the lowest price of selling. Maximum price paid by consumers, CP (max), is the highest price of selling (MEP).

Objectives of the study This study aims to: 1. analyze breakeven price determination of JJM and Fruit Talk soft candy production by calculating all the production costs, 2. analyze the range of price accepted by consumers of JJM and Fruit Talk soft candy, 3. analyze the zone of flexibility of JJM and Fruit Talk soft candy. Theoretical and empirical framework of the study

The concept of cost and Price The concept of cost according to Nicholson (2002) is divided into three: opportunities costs, accounting costs and economic costs. Lipsey et al (1991) suggested that the total cost (TC) is the total cost to produce a given level of output. Total costs are divided into two parts, the Total Fixed Costs (TFC) and total variable costs (TVC). Breakeven price includes all costs in obtaining or getting a product (Garrison and Noreen, 2000). Breakeven price for manufacturing companies includes direct

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materials, direct labour and factory overhead costs. Cost price calculation should be done carefully and correctly. Errors in the calculation of breakeven price will lead the company's losses. Methods of determining the breakeven price are the way to take into account the cost elements in the breakeven price. There are three methods in estimating the cost elements in the breakeven price, the method of full costing, variable costing, and activity based costing. Pricing theory and Strategy The minimum price of products which profits is called OP (Min) and the maximum price to be paid by consumers is called CP (Max). CP (max) is the highest or maximum price of product (MEP). CP (max) shows the function of expected value which shows the perception of quality, price and the price of competitors. If CP (max) greater than OP (min), there will be flexibility to manufacturers in offering discounts. Consumers have the opportunity to pay a higher rate when they really want the product. The most important duty of the marketer is to determine the zone of flexibility where the consumer has the bargaining power. The negotiation allows for flexibility and a win-win situation. According to Kotler (2001), the price is the amount of money charged for a product or service. Price is the amount of value that is exchanged by consumers to utilize, to have or to use the products or services. Price is the only element in the marketing mix that generates sales revenue. The steps in determining the selling price is setting the goals, determining the demand, estimating the costs, analyzing the competitor’s prices and bids, selecting the pricing method, and evaluating the final price. Price sensitivity analysis was first introduced by Van Westendorp in the early 1970s. The assumption used in this study is that consumers always associate the price with the quality of the product. This analysis is used to see the price of the consumer. Assessing the consumer prices can be done by categorizing into very cheap price, cheap price, high price, and the price is very expensive (Blamires, 1998, in Sinaga, 2006). Previous studies The study in pricing strategy and zone of flexibility for processed fruit production has never been done in IPB. Related research in agribusiness development has differences; such as location and objects; but used the same analysis instruments. Related studies are summarized on Attachment 1. Mostly the study uses conventional analysis. Operational framework

KWT Turi produces guava fruit juice branded as ‘Jus Jambu Merah’ (JJM). LPPM PKBT produces soft candy made of papaya and pineapple branded as ‘Fruit Talk’ soft candy. To determine the breakeven price, both firms sum only the production cost, and then divide it by the quantity of product. This method does not represent all the cost paid by both firms, particularly depreciation cost. Because depreciation cost affects on value of firm’s fixed assets, it should be included in the calculation of breakeven price.


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This study is divided into two, from the firm side and consumer side. Study in firm side is to analyze the method used by KWT Turi and LPPM PKBT in determining the breakeven price. The goal is that KWT Turi and LPPM PKBT can determine the new breakeven price with the right method, full costing method. In consumer side, this study is to analyze the range of price accepted by consumers of JJM and Fruit Talk soft candy through price sensitivity analysis. Based on both studies, OP (min) and CP (max) of JJM and Fruit Talk soft candy can be concluded. Chart of operational framework is shown as Attachment 2. Research methods Scope and Research sites In this study, the fruit juice is defined as liquid that is clear and somewhat clear, not fermented and is obtained from the pressing of fruit that has been ripped and is still fresh (Codeq Alimentarius in Rohmah, 1999). Pineapple soft candy is dried fruit made of pineapple juice. Papaya soft candy is dried fruit made of papaya juice and pineapple juice. Soft candy is relatively soft textured candies if chewed. This research was run in two places: LPPM PKBT located in Tajur, Kota Bogor, West Java and KWT Turi located in Sukaresmi, District of Tanah Sareal, Kota Bogor, West Java. Methods of data collection Sampling in this research is using the purposive sampling method. Respondents are consumers of JJM and Fruit Talk soft candy. Consumers of JJM are staffs of Dinas Cipta Karya dan Tata Ruang Kota Bogor and employees of AHASS Bogor, grouped as Respondent 1. The staffs are selected because as a new product, JJM is sold to Government offices in Bogor City. The respondents of Fruit Talk soft candy are people who buy it in Botani Square, grouped as Respondent 2. Methods of data processing Analysis instruments used in this research are full costing method to identify OP (min) and price sensitivity analysis to identify CP (max). The goal is to know the zone of flexibility. Data are processed with software, Microsoft Office Excel 2007. Price sensitivity analysis Consumers put given prices into limited range: very cheap, cheap, expensive and very expensive. Based on cumulative percentages, the representing curves were made. Curves which represent group of not cheap price and group of not expensive price were also made. Those groups are formulated as bellow. cumulative percentage of not cheap group = 100% - cumulative percentage of cheap cumulative percentage of not expensive group = 100% - cumulative percentage of expensive Those curves will be intercepted each other as shown below. 1. Intercept of very cheap curve and not cheap curve is represented on X-axis (price) as price of marginal cheapness (PMC).

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2. Intercept of very expensive curve and not expensive curve is represented on X-axis (price) as price of marginal expensiveness (PME). 3. Intercept of cheap curve and expensive curve made indifferent of pricing point (IPP). In this point, consumers cannot distinguish between cheap and expensive. 4. Intercept of very cheap curve and very expensive curve made optimum pricing point (OPP). Area between PMC and PME is known as range of acceptable price (RAP). Price in this range is accepted by consumers. Area between OPP and IPP is an ideal range for the breakeven price. Zone of flexibility Area between OP (min) and CP (max) is zone of flexibility. There are three relations between OP (min) and CP (max) as shown below. 1. If CP (max) < OP (min), there will be no sales because the price is perceived too expensive. 2. If CP (max) = OP (min), there are probability of sales, but less flexibility. 3. If CP (max) > OP (min), there will be sales, flexibility, and probability to offer discounts. Description of company

LPPM PKBT and KWT Turi

LPPM PKBT was founded in April 2008 under supervision of PKBT IPB. At the beginning, PKBT sells only seeds of tropical fruit. Then, The Ministry of Research and Technology of Republic of Indonesia instructed PKBT to process the excess of fresh fruit into soft candy, fruit juice, dodol (Indonesian traditional lunkhead) or pickled fruit. LPPM PKBT holds certificates such as SIUP (No. S17/196/PK/Disperindagkop), P-IRT (No.614327102120) and LP POM MUI (No.0111). KWT Turi is a home industry which was founded in 2003. The purpose is to process the excess of fresh fruit, particularly guava. Hj Mariam, the founder, conducted house wives lived in The District of Tanah Sareal to produce fruit juice. The equipment was granted by agribusiness agency. Recently, Taufik Junaedi succeeded Hj Mariam as a director. KWT Turi holds certificate of P-IRT (No.2133271010664).

Results and Discussion Result of price sensitivity analysis for JJM is tabulated as ‘price sensitivity metres’ (Attachment 3, 4, 5 and 6). Based on the data, curves were formed to know PMC, PME, IPP and OPP. This survey was done to 20 respondents: actual and potential. Actual consumers of JJM are respondent who bought JMM. PMC values of actual consumers are IDR 1,580.00 per cup and IDR 4,086.00 per bottle. PME values of actual consumers are IDR 2,409.00 per cup and IDR 4,923.00 per bottle. RAP of JJM for actual consumers are IDR 1,580.00 – 2,409.00 per cup and IDR 4,086.00 – 4,923.00 per bottle. If the price is below the RAP, consumers will doubt the quality of the product. If the price is above the RAP, consumers perceived the products too expensive.


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Based on price sensitivity analysis, IPP values of actual consumers are IDR 1,900.00 per cup and IDR 4,464.00 per bottle. OPP values of actual consumers are IDR 1,950.00 per cup and IDR 4,550.00 per bottle. Ideal price for actual consumers are IDR 1,925.00 per cup and IDR 4,500.00 per bottle. Curves of price sensitivity for actual consumers are shown as Attachment 7. Potential consumers of JJM Potential consumers are respondent of judgement sampling. Respondent’s incomes are classified as low, intermediate and high. PMC values of potential consumers are IDR 1,595.00 per cup and IDR 4,008.00 per bottle. PME values of potential consumers are IDR 2,416.00 per cup and IDR 4,914.00 per bottle. RAP of JJM for potential consumers are IDR 1,595.00 – 2,416.00 per cup and IDR 4,008.00 – 4,914.00 per bottle. If the price is below the RAP, consumers will doubt the quality of the product. If the price is above the RAP, consumers perceived the products too expensive. Based on price sensitivity analysis, IPP values of potential consumers are IDR 2,083.00 per cup and IDR 4,428.00 per bottle. OPP values of potential consumers are IDR 1,800 – 1,900.00 per cup and IDR 4,095.00 per bottle. Ideal price for potential consumers are IDR 1,966.00 per cup and IDR 4,261.00 per bottle. Curves of price sensitivity for potential consumers are shown as Attachment 8. Identification of CP (max) in KWT Turi and Zone of flexibility for actual

consumers Based on price sensitivity analysis, maximum prices for actual consumers are IDR 2,409.00 per cup and IDR 4,923.00 per bottle. Maximum price for potential consumers are IDR 2,416.00 per cup and IDR 4,914.00 per bottle. Zones of flexibility for actual consumers are IDR 1,500.00 – 2,409.00 per cup and IDR 3,800.00 – 4,923.00 per bottle. Based on price sensitivity analysis, ideal prices are in the zone of flexibility so that the bargaining between producer and consumers is in win-win position. KWT Turi profits 35 % for JJM in cup package and 22 % for JJM in bottle package. Consumers paid below the CP (max). Charts of the zone of flexibility are shown below as Image 1 and 2. Figure 1 Zone of flexibility for JJM in cup package (actual consumers)

Zone of flexibility for potential consumers Zones of flexibility for potential consumers are IDR 1,500.00 – 2,416.00 per cup and IDR 3,800.00 – 4,914.00 per bottle. Based on price sensitivity analysis,

flexibility

cheap expensive IDR 2,409.00

OP (min) CP (max) price (IDR)

KWT Turi actual consumers

IDR 1,500.00

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ideal prices are in the zone of flexibility so that the bargaining between producer and consumers is in win-win position. KWT Turi profits 38 % for JJM in cup package and 14 % for JJM in bottle package. Consumers paid below the CP (max). Charts of the zone of flexibility are shown below as Image 3 and 4. Figure 2 Zone of flexibility for JJM in bottle package (actual consumers)

Figure 3 Zone of flexibility for JJM in cup package (potential consumers)

Figure 4 Zone of flexibility for JJM in bottle package (potential consumers)

Analysis of R/C ratio for JJM R/C ratios of JJM are 1.51 for cup package and 1.20 for bottle package. This means that every output of IDR 1.00 profits IDR 1.51 for cup package and IDR 1.20 for bottle package. The values of R/C ratio are more than one; the production is profitable and efficient.

zone of flexibility



KWT Turi potential consumers

IDR 3,800.00

zone of flexibility



KWT Turi potential consumers

IDR 1,500.00

zone of



KWT Turi actual consumers

IDR 3,800.00


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Value of OP (min) for JJM is acounted IDR 8,100.00 per package of 50 grams. Price sensitivity analysis in LPPM PKBT Result of price sensitivity analysis for Fruit Talk soft candy is tabulated as ‘price sensitivity metres’ (Attachment 9 and 10). Based on the data, curves were formed to know PMC, PME, IPP and OPP. This survey was done to 20 respondents who were potential consumers chosen through judgement sampling. Respondent’s incomes are classified as low, intermediate and high. PMC values are IDR 7,875.00 per package for papaya soft candy and IDR 8,300.00 per package for pineapple soft candy. PME values are IDR 12,416.00 per package for papaya soft candy and IDR 11,000.00 per package for pineapple soft candy. RAP of Fruit Talk soft candy are IDR 7,875.00 – 12,416.00 per package for papaya soft candy and IDR 8,300.00 – 11,000.00 per package for pineapple soft candy. If the price is below the RAP, consumers will doubt the quality of the product. If the price is above the RAP, consumers perceived the products too expensive. IPP values are IDR 9,333.00 per package for papaya soft candy and IDR 9,426.00 per package for pineapple soft candy. OPP values are IDR 8,500 per package for papaya soft candy and IDR 8,500.00–9,500.00 per package for pineapple soft candy. Ideal price for Fruit Talk soft candy is IDR 8,500.00 per package. Curves of price sensitivity for Fruit Talk soft candy are shown as Attachment 11.

Identification of CP (max) and Zone of flexibility for Fruit Talk soft candy Maximum prices of Fruit Talk soft candy are IDR 12,416.00 per package for papaya soft candy and IDR 11,000.00 per package for pineapple soft candy. Zones of flexibility for Fruit Talk soft candy are IDR 8,100.00 – 12,416.00 per package for papaya soft candy and IDR 8,100.00 – 11,000.00 per package for pineapple soft candy. Based on price sensitivity analysis, ideal prices are in the zone of flexibility so that the bargaining between producer and consumers is in win-win position. Charts of the zone of flexibility are shown below as Image 5 and 6. Figure 5 Zone of flexibility for papaya soft candy

Analysis of R/C ratio for Fruit Talk soft candy

zone of flexibility



LPPM PKBT potential consumers

IDR 8,100.00

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R/C ratio of Fruit Talk soft candy is 1.38. This means that every output of IDR 1.00 profits IDR 1.38. The value of R/C ratio is more than one; the production is profitable and efficient. Figure 6 Zone of flexibility for pineapple soft candy

Conclusion and Ssuggestion

Conclusion This study results some conclusions as follows. 1. Breakeven prices of JJM which were calculated through full costing method are higher than breakeven prices of JJM which were set by KWT Turi. 2. The range of acceptable price between minimum price accepted by producer (OP-min) and maximum price paid by consumer (CP-max) is found IDR 1,500.00 – 2,916.00 per cup and IDR 3,800.00 – 4,914.00 per bottle. Ideal prices of JJM are IDR 1,966.00 per cup and IDR 4,216.00 per bottle. 3. Breakeven price of Fruit Talk soft candy which was calculated through full costing method is higher than breakeven price of Fruit Talk soft candy which was set by LPPM PKBT. 4. The range of OP (min) and CP (max) of Fruit Talk soft candy are IDR 8,100.00 – 12,416.00 per package for papaya soft candy and IDR 8,100.00 – 11,000.00 per package for pineapple soft candy. Ideal price of Fruit Talk soft candy is IDR 8,500.00 per package. Suggestio Based on this study, there are some suggestions as shown below. 1. The full costing method can be used to determine the breakeven price, so that identification of all production costs will be precise. 2. KWT Turi needs to increase the sales quantity of JJM in cup package by market expansion because the R/C ratio > 1. 3. LPPM PKBT needs to increase the sales quantity of the soft candy because the R/C ratio is 1.38. 4. Further studies need to analyze the elasticity of demand to know the decrease of demand due to the increase of price. References [BPS] Badan Pusat Statistik. 2009. Produksi Buah-buahan di Indonesia. Jakarta. http: //www.bps.go.id.

zone of flexibility



LPPM PKBT potential consumers

IDR 8,100.00


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Cartwright R. 2002. Mastering Marketing Management. Palgrave. New York. Garrisson RH, Noreen EW. 2000. Managerial Accounting. International Edition. Graw-Hill. Boston Burridge. Horngren CT, G Foster. 1994. Akuntansi Biaya Suatu Pendekatan Manajerial. Jilid I. Edisi keenam. Penerbit Erlangga. Jakarta. Hammer LH, MF Usry, A Matzs. 1994. Cost Accounting. South Western Publishing Co. Cincinnati Ohio. Haposan E. 2006. Analisis Penetapan Harga Pokok Produksi Pepaya (Carica papaya) Dengan Metode Activity Based Costing Pada PT. Cipta Daya Agri Jaya Di Bogor, Jawa Barat [skripsi]. Program sarjana Ekstensi Manajemen Agribisnis. Fakultas Pertanian. Institut Pertanian Bogor. Bogor. Ivana E. 2004. Analisis Penentuan Harga Pokok Produksi Karkas dengan Menggunakan Metode Full Costing, Variable Fosting, dan Activity Based Costing (Studi Kasus Rumah Potong Ayam (RPA) Asia Frika, Bogor, Jawa Barat) [skripsi]. Departemen Ilmu-ilmu Sosial Ekonomi Pertanian. Fakultas Pertanian. Institut Pertanian Bogor. Bogor. Kotler P. 2001. Manajemen Pemasaran Analisis, Perencanaan, Implementasi, dan Pengendalian. Jilid II. Edisi Bahasa Indonesia. Penerbit Erlangga. Jakarta. Lipsey RG, DD. Purvis, PO Steiner, PN Courant. 1991. Pengantar Mikroekonomi. Jilid I. Edisi Kesembilan. Binarupa Aksara. Jakarta. Nicholson W. 2002. Mikroekonomi Intermediate. Edisi kedelapan. Penerbit Erlangga. Jakarata. Samsurrijal K. 2009. Sesitivitas Harga dan Faktor yang Mempengaruhi Loyalitas Pembelian Jus Belimbing Picco Kasus PT. Tonsu Wahana Tirta, Kota Depok, Jawa Barat [skripsi]. Program Sarjana Ekstensi Manajemen Agribisnis. Fakultas Pertanian. Institut Pertanian Bogor. Bogor Sari, Yulia. 2009. Strategi Pemasaran Produk Jus Jambu Merah “JJM” Kelompok Wanita Tani Turi, Kelurahan Sukaresmi, Kecamatan tanah Sareal, Kota Bogor [skripsi]. Departemen Agribisnis. Fakultas Ekonomi dan Manajemen. Institut Pertanian Bogor. Bogor. Sinaga F. 2006. Analisis Sensitivitas Harga dan Faktor-faktor yang mempengaruhi Penilaian Konsumen Terhadap Harga Ayam Panggang dan Steak Di Restoran MP Bogor [skripsi]. Program Ekstensi Manajemen Agribisnis. Fakultas Pertanian. Institut Pertanian Bogor. Sundari A. 2006. Analisis Harga Komoditas Pisang, Pepaya dan Nenas di Indonesia [skripsi]. Program sarjana Ekstensi Manajemen Agribisnis. Fakultas Pertanian. Institut Pertanian Bogor. Bogor. Tari AT. 2007. Produk Keripik Nanas Sebagai Alternatif Produk Olahan Sari Buah Nanas (Ananas Comasus L.Merr) Di Daerah Palangka Raya [Skripsi]. Departemen Ilmu dan Teknologi Pangan. Fakultas Teknologi Pertanian. Institut Pertanian Bogor. Bogor. Yulianti H. 2007. Penetapan Harga Pokok dan Zona Fleksibilitas Harga Meises Cokelat, Kasus PT G di Bandung, Jawa Barat [skripsi]. Program sarjana Ekstensi Manajemen Agribisnis. Fakultas Pertanian. Institut Pertanian Bogor. Bogor.

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Attachment 1 List of previous studies

No. Name Year Title

1. Ivana E. 2004 Analisis Penentuan Harga Pokok Produksi Karkas dengan Menggunakan Metode Full Costing, Variable Fosting, dan Activity Based Costing (Studi Kasus Rumah Potong Ayam (RPA) Asia Afrika, Bogor, Jawa Barat) 2. A. Sundari 2006 Analisis Harga Komoditas Pisang, Pepaya dan Nanas di Indonesia

3. F. Sinaga 2006 Analisis Sensitivitas Harga dan Faktor-faktor yang mempengaruhi Penilaian Konsumen Terhadap Harga Ayam Panggang dan Steak di Restoran MP Bogor

4. E. Haposan 2006 Analisis Penetapan Harga Pokok Produksi Pepaya (Carica papaya) dengan Metode Activity Based Costing pada PT. Cipta Daya Agri Jaya di Bogor, Jawa Barat 5. Yulianti H. 2007 Penetapan Harga Pokok dan Zona Fleksibilitas Harga Meises Cokelat, Kasus PT G di Bandung, Jawa Barat 6. A.T. Tari 2007 Produk Keripik Nanas Sebagai Alternatif Produk Olahan Buah Nanas (Ananas Comosus L.Merr)

7. Pitri Yulian Sari 2008 Strategi Pemasaran Produk Jus Jambu Merah “JJM” Kelompok Wanita Tani Turi Kelurahan Sukaresmi, Kecamatan Tanah Sareal, Kota Bogor

8. Kholid Samsurrijal 2009 Sesitivitas Harga dan Faktor yang Mempengaruhi Loyalitas Pembelian Jus Belimbing Picco Kasus PT. Tonsu Wahana Tirta, Kota Depok, Jawa Barat


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Attachment 2 Chart of operational framework

KWT Turi and LPPM PKBT

• Miscalculation of breakeven price • Change of breakeven price

identification of OP (min) KWT Turi dan LPPM PKBT

determining the breakeven price of JJM and Fruit Talk soft candy

Correct determination of breakeven price of JJM and Fruit Talk soft candy

determination of minimum price of JJM and Fruit Talk soft candy

OP (Min)

zone of flexibilityrecommendations on breakeven policy

identification of CP (max) customers

Price sensitivity analysis: 1. Indiferent Pricing Point (IPP) 2. Optimum Pricing Product (OPP) 3. Range Of Acceptible (RAP) 4. Price Of Marginal Cheapness (PMC) 5. Price Of Marginal Expensive (PME)

maximum price of JJM and Fruit Talk soft candy

CP (Max)

full costing method methods set by KWT Turi and LPPM PKBT

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Attachment 3 Price sensitivity metres table of JJM in cup package for actual consumers Price (IDR)

Very cheap Cheap Expensive Very expensive Not cheap Not expensive

∑ (person) % %

cumulative ∑

(person) % % cumulative

∑ (person) % %

cumulative ∑


% cumulative

% Cumulative

1.500 16 80 100 9 45 100 0 0 0 0 0 0 0 100 1.600 2 10 20 0 0 55 0 0 0 0 0 0 45 100 1.700 0 0 10 0 0 55 1 5 5 1 5 5 45 95 1.800 0 0 10 2 10 45 0 0 5 0 0 5 55 95 1.900 0 0 10 0 0 45 0 0 5 0 0 5 55 95 2.000 2 10 10 6 30 45 10 50 55 2 10 15 55 45 2.100 0 0 0 0 0 15 1 5 60 1 5 20 85 40 2.200 0 0 0 0 0 15 0 0 60 0 0 20 85 40 2.300 0 0 0 1 5 15 0 0 60 1 5 25 85 40 2.400 0 0 0 0 0 10 1 5 65 0 0 25 90 35 2.500 0 0 0 2 10 10 7 35 100 15 75 100 90 0

Attachment 4 Price sensitivity metres table of JJM in bottle package for actual consumers

Price (IDR)


∑ (person) % %

cumulative ∑


∑ (person) % %

cumulative ∑


% cumulative

% cumulative

4.000 19 95 100 4 20 100 0 0 0 0 0 0 0 100 4.100 0 0 5 1 5 80 2 10 10 0 0 0 20 90 4.200 0 0 5 2 10 75 0 0 10 0 0 0 25 90 4.300 0 0 5 4 20 65 0 0 10 0 0 0 35 90 4.400 0 0 5 0 0 45 0 0 10 0 0 0 55 90 4.500 1 5 5 5 25 45 11 55 65 0 0 0 55 35 4.600 0 0 0 0 0 20 0 0 65 1 5 5 80 35 4.700 0 0 0 0 0 20 0 0 65 0 0 5 80 35 4.800 0 0 0 0 0 20 0 0 65 0 0 5 80 35 4.900 0 0 0 0 0 20 0 0 65 0 0 5 80 35 5.000 0 0 0 4 20 20 7 35 100 19 95 100 80 0


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Attachment 5 Price sensitivity metres table of JJM in cup package for potential consumers Price (IDR)


∑ (person) % %

cumulative ∑


∑ (person) % %

cumulative ∑


% cumulative

% cumulative

1.500 19 95 100 2 10 100 0 0 0 0 0 0 0 100 1.600 0 0 5 0 0 90 0 0 0 0 0 0 10 100 1.700 0 0 5 3 15 90 0 0 0 0 0 0 10 100 1.800 0 0 5 3 15 75 1 5 5 1 5 5 25 95 1.900 0 0 5 1 5 60 0 0 5 0 0 5 40 95 2.000 1 5 5 6 30 55 5 25 30 1 5 10 35 70 2.100 0 0 0 0 0 25 0 0 30 0 0 10 75 70 2.200 0 0 0 1 5 25 0 0 30 0 0 10 75 70 2.300 0 0 0 1 5 20 7 35 65 0 0 10 80 35 2.400 0 0 0 0 0 15 1 5 70 0 0 10 85 30 2.500 0 0 0 3 15 15 6 30 100 18 90 100 85 0

Attachment 6 Price sensitivity metres table of JJM in bottle package for potential consumers

Price (IDR)


∑ (person) % %

cumulative ∑


∑ (person) % %

cumulative ∑


% cumulative

% cumulative

4.000 20 100 100 4 20 100 2 10 10 1 5 5 0 90 4.100 0 0 0 5 25 80 0 0 10 0 0 5 20 90 4.200 0 0 0 5 25 55 2 10 20 0 0 5 45 80 4.300 0 0 0 0 0 30 0 0 20 0 0 5 70 80 4.400 0 0 0 0 0 30 0 0 20 0 0 5 70 80 4.500 0 0 0 6 30 30 7 35 55 1 5 10 70 45 4.600 0 0 0 0 0 0 1 5 60 0 0 10 100 40 4.700 0 0 0 0 0 0 1 5 65 0 0 10 100 35 4.800 0 0 0 0 0 0 3 15 80 0 0 10 100 20 4.900 0 0 0 0 0 0 1 5 85 0 0 10 100 15 5.000 0 0 0 0 0 0 3 15 100 18 90 100 100 0

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Attachment 7 Price sensitivity curves of JJM for actual consumers

Image 1 Price sensitivity curve of JJM in cup package for actual consumers

PMC PME IPP OPP

RAP

PMC IPP OPP PME

RAP

Not cheap Very expensive Expensive Very cheap Cheap Not expensive


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Attachment 8 Price sensitivity curves of JJM for potential consumers Image 3 Price sensitivity curve of JJM in cup package for potential consumers

PM OP IPP PM

PMC OPP IPP PME

RAP

RAP



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price

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Image 4 Price sensitivity curve of JJM in bottle package for potential consumers Attachment 9 Price sensitivity metres table of Fruit Talk papaya soft candy for potential consumers

Price (IDR)


∑ (person) % %

cumulative ∑


∑ (person) % %

cumulative ∑


% cumulative

% cumulative

7.500 9 90 100 0 0 100 0 0 0 0 0 0 0 100 8.000 1 10 10 3 30 100 0 0 0 0 0 0 0 100 8.500 0 0 0 4 40 70 1 10 10 0 0 0 30 90 9.000 0 0 0 3 30 30 0 0 10 1 10 10 70 90 9.500 0 0 0 0 0 0 0 0 10 0 0 10 100 90

10.000 0 0 0 0 0 0 0 0 10 0 0 10 100 90 10.500 0 0 0 0 0 0 0 0 10 0 0 10 100 90 11.000 0 0 0 0 0 0 1 10 20 1 10 20 100 80 11.500 0 0 0 0 0 0 1 10 30 1 10 30 100 70 12.000 0 0 0 0 0 0 1 10 40 1 10 40 100 60 12.500 0 0 0 0 0 0 6 60 100 6 60 100 100 0

Attachment 10. Price sensitivity metres table of Fruit Talk pineapple soft candy for potential consumers Price (IDR)


∑ (person) % %

cumulative ∑


∑ (person) % %

cumulative ∑


% cumulative

% cumulative

7.500 7 70 100 0 0 100 0 0 0 0 0 0 0 100 8.000 3 30 30 2 20 100 0 0 0 0 0 0 0 100 8.500 0 0 0 2 20 80 1 10 10 0 0 0 20 90 9.000 0 0 0 6 60 60 0 0 10 0 0 0 40 90 9.500 0 0 0 0 0 0 0 0 10 0 0 0 100 90

10.000 0 0 0 0 0 0 4 40 50 1 10 10 100 50 10.500 0 0 0 0 0 0 0 0 50 0 0 10 100 50 11.000 0 0 0 0 0 0 2 20 70 1 10 20 100 30 11.500 0 0 0 0 0 0 2 20 90 1 10 30 100 10 12.000 0 0 0 0 0 0 0 0 90 0 0 30 100 10 12.500 0 0 0 0 0 0 1 10 100 7 70 100 100 0


81

Image 5 Price sensitivity curve of Fruit Talk papaya soft candy for potential consumers

Image 6 Price sensitivity curve of Fruit Talk pineapple soft candy for potential consumers

PMC OPP

IPP

PME

PMC OPP IPP PME

RAP

RAP



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ajema b5. application of pricing strategy for new … application of pricing strategy for new...

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