Sandwich Strategy in Marketing | Oleh Penulis Marketing 4.0, 5.0, dan 6.0 - ANALISIS #65

Summary

In this video, Iwan Setiawan addresses the current economic challenges in Indonesia, highlighting a shrinking middle class, increased food spending, and declining manufacturing. He introduces the 'Sandwich Strategy' as a solution, urging businesses to cater to both the lower and upper markets. By offering essential, affordable products for the lower market and premium, brand-building products for the upper market, businesses can effectively 'sandwich' the shrinking middle market. This strategy balances volume-based sales with high-end offerings, ensuring survival during tough times and positioning for growth once the economy rebounds.

Takeaways

• 😀 The 'Sandwich Strategy' helps businesses navigate economic challenges by focusing on both lower and upper market segments.
• 😀 During economic contraction, the middle market tends to shrink, leading to market polarization where the lower and upper markets grow.
• 😀 Lower market consumers prioritize affordability, seeking basic and essential products, with a focus on volume-based sales.
• 😀 Upper market consumers are willing to pay more for premium products that offer high quality, differentiation, and unique experiences.
• 😀 Businesses should allocate 70% of their resources to the lower market during economic downturns and 30% to the upper market.
• 😀 The Sandwich Strategy ensures businesses don't solely focus on low prices, but also work to elevate their brand through premium offerings.
• 😀 As the economy recovers, businesses should gradually shift their focus to the upper market, increasing resource allocation for premium products.
• 😀 Trading down (moving to the lower market) occurs when middle-class consumers face weakened purchasing power and focus on essentials.
• 😀 Trading up (moving to the upper market) happens when middle-class consumers experience an increase in purchasing power and desire better products.
• 😀 The Sandwich Strategy balances high-volume, low-cost offerings for survival with premium products for long-term brand-building and profit.
• 😀 Small businesses, like restaurants, fashion brands, and barber shops, can implement the Sandwich Strategy by offering essential products and unique, signature offerings to build their brand.

Q & A

What is the main focus of the video presented by Iwan Setiawan?

The video focuses on the challenges faced by the Indonesian economy and introduces the 'sandwich strategy' as a solution for businesses to navigate these economic difficulties, particularly with regard to the shrinking middle class and market polarization.

What are the key economic indicators discussed in the video that reflect the challenges in Indonesia's economy?

The key indicators include a shrinking middle class, a significant portion of household spending going to food (over 40%), deflation for five consecutive months, and a contraction in the manufacturing sector.

What is the 'sandwich strategy' proposed by Iwan Setiawan?

The 'sandwich strategy' suggests that businesses should target both the lower and upper market segments, effectively 'sandwiching' the shrinking middle market. This involves offering affordable products to the lower market and premium, differentiated products to the upper market.

How does the concept of 'trading down' and 'trading up' impact the middle market?

The middle market is shrinking as consumers either 'trade down' to lower-priced products due to weakening purchasing power or 'trade up' to higher-quality, more expensive products. This results in a polarized market where the lower and upper segments grow, while the middle market diminishes.

What are the characteristics of products suited for the lower market segment in the 'sandwich strategy'?

Products for the lower market should be basic and affordable, with essential features only. They should be cost-efficient, using inexpensive materials and minimal packaging, while maintaining acceptable quality that meets customer expectations.

How should businesses approach the upper market according to the 'sandwich strategy'?

Businesses should offer differentiated, premium products that stand out from competitors. These products should feature unique qualities and an exclusive experience to justify higher prices. The focus should be on superior quality to build brand prestige.

Why does Iwan Setiawan emphasize the importance of focusing on both the lower and upper market segments during an economic downturn?

Iwan Setiawan suggests that focusing on both segments helps businesses maintain a broad market presence. Targeting the lower market ensures volume sales, while focusing on the upper market helps maintain brand prestige and prepares the business for economic recovery and growth.

How should resource allocation be managed in the sandwich strategy during an economic contraction?

During a contraction, businesses should allocate 70% of their resources to the lower market (for volume-driven, affordable products) and 30% to the upper market (for premium, differentiated products). This allocation ensures balanced focus on both segments during tough economic times.

What potential risk does a business face if it only focuses on the lower market during a period of economic contraction?

If a business focuses solely on the lower market, it risks being perceived as a 'cheap' or 'discount' brand. This could harm the brand’s reputation, making it harder to attract higher-end consumers once the economy recovers.

Can you provide examples of businesses implementing the sandwich strategy for different industries?

Examples include: For food and beverage, a business might offer basic products like iced tea (lower market) while also offering unique, premium drinks (upper market). In fashion, a business might sell essential clothing lines while creating limited-edition collaborations to build brand prestige. In the barber industry, a business might offer basic haircuts at affordable prices while also offering exclusive, high-end treatments.