4. Recommend a potential distribution channel for Hellers to reach the upper middle class urban consumer in Indonesia
Distribution in Indonesia is fraught with difficulties. The geography is highly complex, with there being many islands and mountains and not the infrastructure to cater for the whole population. There are other challenges also for exporters. Corruption is a real problem and this makes dealing with customs and government officials difficult. There is also a lot of corruption in the business sector, which can be troublesome for foreign companies. This is particularly the case for New Zealand companies as corruption is not as rife as it is in Indonesia. This has a great impact on how business needs to be conducted and due to the complex nature of doing business in Indonesia, foreign companies need to pay particular attention.
The way most foreign companies deal with the said problems is by partnering with a local importer. A local importer then acts on behalf of the company, helping them to carry out their business as safely and securely as possible (Kotabe, 2014). A local importer also can help, in this case Hellers, to navigate the complex distribution system in Indonesia.
As Hellers would be targeting the upper middle class, they should focus their exports on major capital cities in the West part of the country – western Indonesia is significantly more developed than the eastern part (Delteil and Gan, 2011) – with the capital, Jakarta, being the main focus.
By targeting Jakarta and its 10 million inhabitants, Hellers could reach the country’s burgeoning upper middle class whom of many live in the capital that is the economic powerhouse of the country. As a gourmet product, Hellers should aim to distribute their product through up-market retailers such as Carrefour but also include Hero supermarkets, which dominate the supermarket sector. Upscale restaurants and bars should also form part of Hellers distribution strategy.
Delteil, B. and Gan, K. (2011). Emerging Market Entry Candidates—Indonesia. Accenture.
Kotabe, M. (2014). International Marketing. 4th ed. Milton, QLD: Wiley.
Hellers Halal 