8 P's: Analysis of this Major Strategy

This research will focus on the 8P’s. There are Price, Product, Place, Promotion, People, Process, Physical Evidence, and Packaging. The results of the observation are:

1. Price: the pricing strategy used is cost-plus pricing, so the selling price is depending on the price of the raw material. The percentage of mark-up is varies.

This the most effective way of pricing strategy as the price of rubber latex in the market that never stable. The price might reach around Rp20.000/kg at maximum and minimum at Rp4.000/kg and on average at between Rp11.000/kg to Rp12.000/kg. (Rubrik Ekonomi Bisnis 2013) There are much different in the maximum and minimum price. Since the price cannot be predicted, cost-plus pricing is consider to be flexible because the selling price might be varies due to the changing of raw material prices (expenses). This is a good method to ensure the company to always get profit despite the unstable price of raw materials (rubber latex)

The percentage of mark-up is different almost in every transaction. If the price of raw materials is low, the company might set the highest at around 85% of mark-up and sometimes lower it to 80%-75% when the customers are negotiating a discount (only applied in bulk-buying). If the price of raw materials is high, the company set the mark-up at 45%-50%. On average, the company will set 65% mark-up.

2. Product: the type of product is ‘producer goods’ because the output is produced for other business to use. The design varies by request of the customer and shaped using the newest technology to ensure the quality and the effectiveness of production. The packaging is simple, using transparent plastic bag.

The products itself were shaped based on customers’ request, so it should meet the customers’ wants. The quality control of each piece of the shaped rubber (products) were checked before the delivery time so the quality of the product is guaranteed to be very good because the company is having a high standard in quality control.

The packaging might be simple yet it’s suitable and effective enough for the business. Since its business-to-business company, the packaging doesn’t have to be attractive because nobody pays attention to the packaging as long as it’s able to protect the product inside safely. The plastic is transparent to make the employees identify the product easily and to make the customers able to observe the products without having to open the package.