People Innovation Excellence

Online Marketing Channel in Selling Franchise Business in Indonesia (Part 2)

Oleh Hendry Hartono, S.E., M.M. dan Erwin Halim, SPt., M.M.

3. METHODOLOGY:

A survey was conducted in Jakarta on December 2013 with 82 respondents of franchise exhibition visitors (prospective franchisee) and 27 franchise exhibitors (franchisors). By using t-test and qualitative comparison, will be compared the answer from franchisors and franchisees.

4. RESULTS:

This paper databased on a survey in Jakarta on December 2013 with 82 respondents of franchise exhibition visitors (prospective franchisee) and 27 franchise exhibitors (franchisors). There around 2,000 visitors on this 3 days exhibition but mostly there did not want to answers the questionnaires. Half of this exhibition was followed by some franchisors and the others exhibitors sold products non-business opportunity.

86% of respondents from the franchisors use information systems for most activities. 92% of these respondents have websites and 96% of them update the websites.

untitledTable 1. shows the franchise sectors by demand in Indonesia. Most of the respondents are looking for F&B business sectors (including: dine in restaurants, fast food restaurant, retail food & beverages (booth), ice cream and yogurt, and bakery) (69,5%), followed by education (9.76%) and childcare (8.54%)

untitledFigure 2 shows the information gathered by prospective franchisee that internet as source of information give 29% portion, followed by Exhibition (27%) and Printed Advertizing (24%).

untitledThe franchise information channel proposed by franchisors or the exhibitors are different compare to the prospective franchisees side, whereas Exhibition (31%), followed by referral (22%), Internet as source of information give 20% portion, and Printed Advertizing (18%). In this case, actually franchisor can give more attention on their website or other online marketing. (Figure 3.). Since Indonesia franchisors mostly are SMEs, so the cost for Internet or online marketing is relatively cheaper than do an exhibition.

untitled

Figure 4. Shows that the channel of franchise information on internet are: search engine 47%, followed by social Media (21%) and online portal (20%). It means the collaboration of franchisor website using Search Engines, SEO and portal to refer the website will make the website as a power tools online marketing. The using of social media (facebook, tweeter, etc) will also give fifth part of channel of franchise information on internet.

untitledFrom franchisors side, there are different of priority. Social networking/ social media gives 37%, followed by Search Engines (29%), portal online (16%) and SEO only 10 %. These different priorities will give different outcome as well.

Figure 1 and 2 show that the franchisors have inappropriate both for the channel of marketing and communication channel in online marketing.

Next, Table 2 shows the mean of franchise information needed by the prospective franchisees from 82 respondents on Likert Scale of 1 to 7 followed by the mean of franchise information supplied by the franchisors. In the above Likert Scale example Strongly agree has a value of 7, Agree, 6, Agree somewhat 5, Undecided 4, Disagree somewhat 3, Disagree 2 and Strongly disagree 1. The content of information relate to the financial information (franchise fee, royalty fee, investment, advertisement fee, profit, payback period and money back guarantee), legal (contract duration), company profile (years company was established and years of company was franchised), franchisors obligations (employee support, training duration and site selection) and franchisee right and obligation (open same business after contract, own supplier, change supplies, self operator, run other business and use own building)

untitledThe t-test of prospective franchisee data group and franchisors data group is 0.958. It means that both two-group data are mostly homogeny. Or in other words, information proposed by the franchisors or needed by the prospective franchisee are remain the same.

The data on the table 2 shows that prospective franchisee less need of information compare to the willingness of franchisors to propose information such as financial information (franchise fee, royalty fee, investment, profit, payback period), legal and company profile (years company was established and years of company was franchised), legal (contract duration). On the other hand, prospective franchisees are more interest relate to the information of their rights open same business after contract, own supplier, change supplies, site selection support and money back guarantee.

5. CONCLUSIONS

As conclusions, mostly Indonesia prospective franchisee seeks for the Food & Beverages business sector. It means, the demand is very big (69% of respondents), so it also a signal for foods and beverages franchisors to follow a franchise exhibition and give attention to the online information content.

Second, franchisors have inappropriate marketing channel priority. They have to give more attention on online marketing than exhibition or printed advertising. Not only easy to update the information, but also less cost by using online marketing.

Third, for franchisors that have already used online marketing, they have to make digital advertisement on search engine and on online portal beside social media.

Last but not the least; Franchisors should give attention to the online information of franchise: the system quality, information quality and service quality (DeLon Model – DeLon et al, 2003)

Further research will be related to the franchise information systems proposed by franchisor, which is already confirmed by the prospective franchisees as comprehensive model.


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