Strategy of Digital Marketing Company That Serve SME in

Pandemic Era

Lim Sanny

, Kyla Zanabi Putra

, William Surya Widjaya

and Beni Widarman Yus Kelana

Business Management Program, Management Program, BINUS Business School Master Program,

Bina Nusantara University, Jakarta, 11480, Indonesia

Management Department, BINUS Business School Undergraduate Program, Bina Nusantara University,

Jakarta, 11480, Indonesia

Azman Hashim International School Business School, Universiti Teknologi Malaysia, Malaysia

Keywords: Business, Pandemic, Crisis, SM.

Abstract: The aim of this study is to analyze the conditions of an advertising business in the midst of a pandemic crisis.

The global pandemic have affected all sector in every country around the world, resulting a health, social, and

economic crisis that affects directly and indirectly to a business. In order to survive in the high uncertainty, a

company have to re-arrange their internal resources and re-identify the external conditions to formulate

strategies to maneuver. Some of the tools to help companies formulate strategies are PESTEL to analyze

external factors based on Political, Economy, Social, Technology, Environmental, and Legal sector mixed

with Internal analysis identifying Strength and Weakness of a company. This study use qualitative research

method to gather information by interviewing informants from SME and studying documents to confirm the

interview results. The result of the internal and external factors will be matched with TOWS matrix and STP

to find the best strategy alternatives to be used in the current pandemic. From the strategy alternative result,

it can be concluded what strategy an advertising company have to use to survive in the crisis.

1 INTRODUCTION

SME (Small and Medium Enterprises) is a type of

business that is mostly run by an individual or a group

instead of an organization or corporation. SMEs also

plays a massive part in supporting a country’s

economy, for example in Indonesia, according to BPS

(Indonesia’s Central Bureau of Statistics), as of 2018

the amount of SMEs has reached 64,2 million which

is 99,9% of businesses in Indonesia. And within the

64 million SMEs that exists in Indonesia, only 8

million or 13% of these SMEs are present on the

digital platform. According to Arliman, (2017), Small

and Medium Enterprises (SME) have strategic role to

strengthen national economy, therefore government

should pay attention to the strategies and policies

developed to empowering SME. One of the strategy

to empowering SME using digital marketing.

In modern business, Digital Marketing is so

important that it should be a key part of the approach

(Guttmann, 2019). The use of Digital Marketing

immensely transformed how businesses and

organizations communicate with their audiences

(Dave and Fiona, 2019). In conclusion, these

statements should be considered by Indonesian

organizations or companies to switch and massively

use information and technology to communicate and

promote digitally to reach more people or consumer.

Digital Marketing growth in Indonesia is

improving and all this have an impact on showing the

potential growth in Indonesia and shows promising

potential target market, mainly in product and service

marketing. The number of mobile service users make

it easier, looking at the numbers, with more than 50%

of the population able to connect to internet and

digital world, and 328 million SIM Card registered, it

is the best thing to do for marketing to going digital

through internet or in this case, using SMS

Marketing. A form of a mobile marketing that lets

your business appeal to users on mobile devices is

what an SMS Advertising is, and like other digital

marketing channels, the use of SMS marketing is to

reach potential customer and to keep the customers in

the loop (Antaranews, 2020). As big as potential of

reach on other digital marketing channel such as

social media and email marketing, the potential reach

for SMS marketing in Indonesia is big because the

Sanny, L., Putra, K., Widjaya, W. and Kelana, B.

Strategy of Digital Marketing Company That Serve SME in Pandemic Era.

DOI: 10.5220/0011243700003376

In Proceedings of the 2nd International Conference on Recent Innovations (ICRI 2021), pages 215-220

ISBN: 978-989-758-602-6

215

number of SIM card that already been registered,

means that the target audience increases.

As on average, within 3 minutes 95% of people

read text messages, the use of SMS Advertising is

massive to get customers information about what a

business offers to them (Moriarty and Sandra, 2014).

With these stats, it is recommended for business to

use the form of digital marketing, but however, some

company are capable to do this on their own, these are

usually technology-based company who have the

resource and tools to do it. Nevertheless, with the

tools and technology they have, they usually struggle

with the lack of knowledge of how to communicate it

properly in an efficient way possible. Thus, with this

opportunity comes a company that specially provide

the service to bridge the Business and the people they

are trying to reach. These companies are Advertising

company.

Advertising company or agency is a business that

provides service of planning, creating, and managing

all aspects of a client’s advertising, including

managing a client’s digital marketing plan (Ndubisi

and Nataraajan, 2016). An advertising company will

use campaign or communicate with the targets their

client wants to reach by SMS and or Email. To use

the SMS Method, a certain condition needs to be met

to effectively advertise or market a brand or a

product. This usually means they can only reach a

certain area where a user of a chosen Mobile service

provider is crowding a location. People like tourists,

an outsider of the area, or people visiting a certain

attraction or event are mostly the targets.

Although it is one of the digital marketing

channels, the treatment of SMS marketing is different

than another channel. Rather than using usual digital

marketing agency, SMS marketing usually done by

SMS blast company since target audience focuses on

mobile phone users and more varies. One of the ways

for targeting in SMS marketing done by SMS blast

company is Geolocation targeting. Unlike traditional

SMS marketing that just target certain numbers of

customer or mobile phone users, geolocation

targeting uses mobile device built-in GPS the target

customer with the accuracy to show where they are

located (Peppard, 2016). So that customers can get

promotion or advertisement near a location where a

merchant or a store or a business is near them, which

makes the targeting even more narrow.

2 LITERATURE REVIEW

This research was conducted with the support of

previous research using similar method with this

research. The journal written by (Nicula and Spanu,

2020) used PESTEL analysis as a tool to identify the

external factors surrounding honey farm in

Hunedoara country to help the authors to formulate

the best strategy for sustainable bee farming. Similar

to the journal, this research use PESTEL analysis to

identify the external factors where company operates

and help to formulate strategies. The main difference

is this research use TOWS analysis to identify the

internal factors to formulate strategy and the

conditions which in this research company is

operating in the midst of a pandemic crisis. In the

journal written by (Rahul et al., 2019), the author of

the journal used STP as a tool to analyze how

effective a marketing strategy implementation of

Batik Diajeng Solo to improve to improve its

competitiveness. The difference between the journal

and this research is that this research used STP

analysis to identify the market Segment, Target, and

business Positioning of company and generate

strategy with the support of other analysis tools.

3 METHODOLOGY

Techniques and instrument of data gathering is a

primary step and the most important factor in doing a

research because with the collected data researcher

might get a result after processing the data. Based on

the above, it can be concluded that data collecting is

a technique that the researcher can use to get the

necessary data from the informant with the use of

time. Data collecting done by the researcher is needed

in a scientific research because this is related to how

the researcher gather data, where the data is gathered

from, and what tool is used in collecting the data.

Determining informant in this research is done by

purpose sampling technique that is a technique of

choosing data source with a certain consideration

according to a certain purpose. This consideration

could be: Someone in the company who know most

of the company strategically, or an informant such as

higher-ups of an organization or business so that the

researcher has easier access of the most credible and

in-depth information. The choosing of the informant

is based on subject that have the access to the data,

possess the knowledge of the problem at hand, and

willing to share the data. In this research, the criteria

of the informant are managers above with length of

work time of at least five years.

The form should be completed and signed by one

author on behalf of all the other authors. This research

is conducted with qualitative descriptive method,

which displays qualitative data of the objects based

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on visible facts. To analyse the collected qualitative

data, author lean on phenomenon’s connected to the

existing theories. Premier data collected with the

interview method is the main source of data analysis

to answer the problem statement of this thesis. The

secondary data that will support this research are

documents such as news, and legal or laws made by

the government.

3.1 Data Reduction

To reduce the gathered data, interview results and

documents analysis will be summarized and capture

important points to be displayed.

3.2 Data Presentation

Reduced data will be presented as a narrative,

graphic, and matrixes in order to simplify the

displayed data so it will be easier to comprehend.

3.3 Conclusion

The last step is to make a conclusion of all the

analyzed data into a formulation of strategy fit for the

conditions of the company.

4 RESULTS AND DISCUSSION

4.1 Result

Company determine its customer segmentation from

the SME. The purpose of this segmentation is to

encourage and support the 98% of Micro businesses

to upgrade its scale of business to small or medium.

Based on segmentation above, the segmentation

criteria can be identified as below:

• Geographic segmentation: For a company

providing service in digital platforms, company

can operate from one place to serve its clients

in faraway location. Nevertheless, with its

current resources and clients it wants to serve

which is SME businesses, company will focus

in Indonesian market as its segmentation.

• Demographic segmentation: It is a company

that operates in B2B to provide digital service

without specific client’s demographic

characteristics. In this context company serve

all kind of demographic characteristics based

on the needs of its clients.

• Psychographic Segmentation: It is focusing to

improve the business level of micro to at least

small or medium. In this matter company

psychographic segmentation is low to medium

social class clients.

• Behavioural Segmentation: The focus of this

company is to introduce its services to micro

and small businesses that is not familiar with

digital advertising. Its behavioral

segmentation based on the interview is the

businesses that only focusing on production

and sales and not really familiar with

marketing and advertising.

The target market is to reach is the institutions and

associations which the micro, small, and medium

businesses are part of. Small businesses that have a

certain similar characteristic in their business usually

join to make one big institution or association to

connect with each other. Company is trying to

position itself as the one stop solution for advertising

needs in the market which offers simplicity and

effectivity in its service process.

Based on internal and external analysis, so the

tows matrix as conclude in figure 1 below.

Figure 1: TOWS matrix.

Below are the strategies:

• Increase database by using Telkomsel’s By.U

customer database and upcoming digital

SIMCard user. Based on the identified factors,

company can make use of its partnership with

the cellular operator to increase its database

range through the new product of Telkom

targeted for younger customer, By.U. This

new product of Telkom might trigger XL and

Indosat to try to launch similar product to

compete with Telkomsel, thus providing more

user database. Enhancing the partnership will

give access to the new database. (Product

Development).

• Introducing the simple all in one app to the

new digital for SME. When operating

conventionally through physical store, SME

Strategy of Digital Marketing Company That Serve SME in Pandemic Era

217

might be unfamiliar with digital processes.

After entering the digital platform, SME is re-

starting its business in a new market and

environment. In this stage, newly digitized

SME will find a way to promote their product

through digital platform. This is an

opportunity to introduce their all in one

application which offer simplicity to the new

market segment. (Market Penetration).

• Develop product to more platform such as PC

and Social media. (S1, S3, O3). With

advertising industry experienced management

team, it can easily identify the needs of its

clients from the potential targets. The

increasing number of digitalized SME and

digital activity traffic from the end customer

means more clients and targets with different

needs and interests. In this opportunity, it

should develop it’s all in one application and

add new line of service or increase the quality

of existing service in order to maximize its

performance. (Product Development).

4.1.1 Weakness-Opportunity (WO) Strategy

In WO Strategy, company have to take advantage of

the available opportunity to turn weakness to

advantageous situation. Below are the strategies:

• Promote and maximize non-SMS digital

advertisement to the new client and cellular

user. Text based SMS advertising feels boring

to certain customer and even some chose to

block the SMS. In this situation it need to

reach the customer with other media that is

more attractive to the new potential targets.

(Related diversification).

• Maximizing profit and service quality through

focusing on one strong product. It is not easy

to manage 13 line of products. To build strong

bond which result in loyalty, it must bring a

high quality service and contents for the

advertisement. Focusing on the best product

fit for the new market and target customer will

increase the service quality and revenue. (Best

value focus strategy).

• Bundle the product and lower the price for

higher number in Bulk SMS Blast order. In

order to attract the new digital platform for

SME, company must have a competitive price

with good quality service compared to its

competitors. To offer more competitive price,

it can bundle its services that might attract

more clients in the new digitalized SME. It can

also offer lower price in higher quantity order

(Best value cost leadership).

4.1.2 Strength-Threat (ST) Strategy

In ST strategy, company have to take advantage of

strength to overcome threats. Below are ST strategies:

• Take advantage of the broad database to reach

more target when some use advertising

blocker. When a company have limited

number of customer database, sending SMS

advertisement or any other digital

advertisement might fail to reach the desired

target. This can be caused by not having

enough user database to be send to, and some

users choose to block the advertisement. With

the broad database currently have,, the failure

of message being delivered can be avoided by

reaching more user. (Product development).

• Develop value added service for the struggling

business. No matter how a business market its

product or services, it will be in vain if the

client or customers do not have enough

resources to purchase the product, or if the

condition reduce the value of the service for its

given price. In these conditions, company can

adjust its price or giving more value to a

service will change the perception of the

customer of the price given for its value. (Best-

value cost leadership).

• Work with cellular operator and Government

to socialize health protocol. One of the factors

why PSBB regulation enforced to the public is

not performing well is the rules and protocols

are not communicated well to the public. In

this matter company can work with the

government or health institution with special

package or bundle to offer to spread correct

information about rules and protocols to the

public. It can take advantage from the cellular

operator database to spread the information.

This might even open new opportunity to

partner with government and other institution.

(Market Development).

4.1.3 Weakness-Threat (WT) Strategy

In WT strategy company have to minimize the

possible damage caused by threat and its weaknesses.

• Eliminate product that did not bring much

profit while hindering operation with difficult

process. Some products or services developed

by a business can be unprofitable in the

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operation process. Some other are giving the

business difficult time maintaining its quality

while the revenue is not worth the investment

in time and resources. For this situation

company can focus on the most profitable

product and eliminate the unprofitable service

to maintain quality and revenue. This process

can also reduce the number of division or

assets if the product or service depends on

certain division or asset. (Best value cost

leadership)

• Develop existing product to find the loopholes

for avoiding advertisement blocker. It can

develop existing product to find loopholes and

avoid its advertising being blocked by the user

with competitive price.

After identifying the TWS Matrix, below are the

result of the alternative strategy available:

• Market Development;

• Market Penetration;

• Product Development;

• Related Diversification;

• Best Value focus strategy;

• Best value cost leadership

Based on the analysis of the internal and external

factors, and Segmenting, Targeting and Positioning

plan of company, author have selected the most fitting

strategy for this condition based on the appearance

frequency in the analysis process:

• Product Development

• Best value cost leadership

Table 1: Alternative Strategy.

Alternative

Strate

Strategy Appearance

Product

Development

Develop

existing service

and take

advantage of the

new user

database to

attract current

SME.

Best value cost

leadership

Provide value

added service or

bundling service

to attract SME

and businesses

affected by

COVID-19

The strategies that author will suggest company to

implement are Product development which is to

develop existing service and take advantage of the

new user database to attract current SME and other

clients and Best value cost leadership strategy will

Provide value added service or bundling service

package to attract SME and businesses affected by

COVID-19 that have low buying power.

5 CONCLUSION

Based on the result of data analysis using PESTEL,

TOWS Matrix, and STP analysis in this research,

author have formulated Product development and

Best value cost leadership strategy. The product

development strategy is chosen because the

opportunity emerging from new database and SME in

digital platform is a chance for company to improve

its service in order to deliver the best experience for

the SME which will result in customer loyalty. The

best value cost leadership strategy is fitting for the

current situation when the businesses spending for

advertising and marketing is decreasing due to the

damaged revenue because of the COVID-19.

Company must provide a service that is worth the

investment in the affected businesses budget in order

to compete with its competitor. .

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