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The AAPG/Datapages Combined Publications Database

Indonesian Petroleum Association

Abstract


24th Annual Convention Proceedings (Volume 2), 1995
Pages 523-529

Lubricating Oil Product Development and Marketing Strategies in the Hectic Era of Free Trade Competition

A. Sanusi Wiradimaja, Hanung Budya Y.

Abstract

As a member of APEC and also a member of AFTA and a cosigner of the Marrakesh Protocol, Indonesia has a commitment to enforce trade liberalization by 2020.

The implication of this, among other things, demands that Indonesian products including lubricants will have to compete with products of other countries both in the domestic and international markets.

For maximum benefit in winning the competition presented by this free trade era, Indonesia is required to get better prepared for the various dominating aspects, such as the technological mastery and marketing control strategy.

Indonesia's trade potential has a very bright prospect. It is one of the fastest growing markets in the Asia-Pacific region, as indicated by its 7% annual GDP growth for the last five years. In the meantime, realized lube sales made by PERTAMINA topped 356,000 KL in fiscal year 1994/95, and it is estimated that the sales will grow around 2.7–3.0% annually through the year 2000. This figure constitutes approximately 90% of the market potential of Indonesia.

PERTAMINA, under Presidential Decree 18/1988, was appointed a trust company for domestic lubricating oil (non-synthetic) trade and, therefore, must master the lubricant formulation technology and prepare the right marketing control strategy to maintain its position as the market leader at the commencement of a free domestic market.

This market leader position will be at risk with the commencement of a free domestic market. This implies that there will be competition with foreign competitors having the edge in brand image in international trade.

Product development strategy is performed through the quest for lubes formula, through joint development programs with additive manufacturers and the establishment of R & D facilities for lube oil.

The marketing control strategy is implemented under the market space concept, made available through the existence of the "information revolution", where the information network serves as an interface between the producer/seller and customer.

It is expected that by incorporating this concept and updating technical services and logistic network facilities owned by PERTAMINA, which are widespread throughout Indonesia, will yield an edge against competition in domestic marketing control.


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