Volume 3 Number 7 July 2024 E-ISSN: 2963-2900 | P-ISSN: 2964-9048 https://jmi.rivierapublishing.id/index.php/rp
Design of
Cashew Marketing Strategy Through Evaluation of Export Potential to Enter the
Global Market (Case Study of Mrs. Tini's MSMEs in Ciputat)
Thiersyanda Revikhansyah
Fakultas Ekonomi Dan Bisnis, Universitas
Padjadjaran, Jatinangor
Email: [email protected]
ABSTRACT
This study aims to identify
market expansion opportunities and address the administrative barriers MSMEs Kacang Mete Bu Tini face in exporting fresh or dried
shelled cashew nuts with HS Code 080132 to Malaysia and Thailand. MSMEs Kacang Mete Bu Tini encounter significant administrative
obstacles due to the lack of essential export documents such as quality
certificates, certificates of origin, etc. These obstacles slow the market
expansion and reduce the product's competitiveness in international markets.
The research conducted through Revealed Comparative Advantage (RCA) analysis
shows that Indonesian cashew nuts have significant comparative advantages in
the Malaysian and Thai markets, with RCA values reaching 3.318911 in Malaysia
and 2.556656 in Thailand. An RCA value greater than one indicates a comparative
advantage in both markets. Regarding competitive advantage, Malaysia holds a
"Rising Star" position with an annual export market share growth of
0.281030 percent and a cashew market growth of 0.180204 percent per year. In
contrast, Thailand is in a "Retreat" position with an annual export
market share growth of -0.509915 percent and a cashew market growth of
-0.009638 percent per year, indicating a decline in demand and less
satisfactory export performance. The conclusion is that Malaysia is a more
suitable export destination for Cashew Nut Bu Tini MSMEs, given the higher RCA
value and more favorable market position. MSMEs Kacang Cashew Bu Tini needs to promptly complete the
necessary administrative documents to enhance product competitiveness and
expand export markets.
Keywords: Export, Cashew Nuts, Revealed Comparative
Advantage, Export Product Dynamic, Malaysia, Thailand, Administrative Barriers.
Various
agreements between countries have been formed to facilitate cross-border trade
and investment (Li et al., 2018). One of the early
examples is the General Agreement on Tariffs and Trade, commonly known
as GATT, which is the predecessor of the World Trade Organization (WTO)
to regulate global trade since January 1, 1995, signaling that the era of free
trade has begun (Makuch, 2014). The marketing of
domestic products and the context of free trade has expanded opportunities for
traders to market to the international market (Tao, 2024).
Globalization
has changed the face of international trade, making it more inclusive and
connected (Zahoor et al., 2023). With the
establishment of the GATT, which later became the WTO, countries are committed
to reducing barriers to trade and investment (Sagio, 2024). Globalization
allows products and services to cross national borders more easily,
strengthening economic ties and accelerating growth (РУДА
& КРАУС, 2024). This creates
opportunities for traders to expand the market through international trade (Galimova et al.,
2023).
International trade is an economic phenomenon triggered by each country's
uneven resources and needs (Reinert, 2024). The diversity of
natural and human resources and the production of goods and services that vary
between countries create a solid basis for economic exchange through export and
import activities (Susanto et al.,
2024). These
factors encourage each country to participate in international trade to meet
growing domestic needs and exploit their peculiarities in a particular
production (Sousa et al., 2020). Thus, international
trade not only serves as a channel for meeting needs but also as a tool to
improve the economic welfare of each party involved, and this process is
expected to generate mutually beneficial benefits for all countries involved in
such trade (Salvatore, 2020).
In the
global trade arena, traders will be involved as exporters or importers who have
a key role in linking the diversity of needs and resources owned by countries (Singh et al., 2024). By taking advantage
of differences in production costs and prices between countries, they
effectively meet international market demand (Tien & Ngoc,
2019).
Exporters and importers proactively adapt their strategies to meet changing
demand and competitive markets (Keskin et al., 2021). Recent studies have
shown that this trade activity expands access to goods and services and becomes
a key driver for innovation and economic expansion, providing consumers with
more choices and for producers with access to new markets.
Globalization
and free trade have accelerated economic exchanges between countries, with the
WTO at the core of this system, reducing barriers and strengthening economic
linkages (Suksom, 2024). The uniqueness of
each country's resources and its evolving needs form the basis of international
trade (Anand et al., 2021). This allows
countries to trade based on their production specializations. Exports and
imports are becoming important tools in improving the well-being of the global
economy, with traders playing a crucial role in meeting the needs of dynamic
markets, leading to innovation, and opening up new opportunities for producers
and wider choices for consumers.
According
to data from the Indonesian Ministry of Trade in Table 1.1, the value of
Indonesia's exports shows a significant positive trend in total exports
fromfrom 2018 to 2022. Overall, Indonesia's exports have experienced an
increase trend of 12.85% over the past five years. Despite the decline in oil
and gas exports, which showed a decrease of -2.51%, the non-oil and gas sector
has shown strong growth, with an increase of 14.09%.
In the
last five-year period, the progress seen in the value of Indonesia's exports
has been greatly influenced by the performance of the non-oil and gas sector.
In contrast to the oil and gas sector, which shows slower development, the
development of non-oil and gas processed exports is the main factorfactor
contributing to the country's foreign exchange. The report released by the
Central Statistics Agency (BPS) and subsequently analyzed by the Ministry of
Trade shows that of the various categories of non-oil and gas exports that
contribute to international trade, Indonesia's food industry has become the
dominant pillar in terms of export foreign exchange receipts, especially
measured by consistent achievements over the past three years. This fact underscores
the food industry's importance infood industry's importance in Indonesia's
export economy and emphasizes the need for trade strategies that further
strengthen the sector. One of the non-oil and gas sectors contributing to
export value is the primary sector of Indonesia's excellence, which is the
export activities of the food and beverage industry, a primary need.
The food
and beverage sector has become one of Indonesia's contributors to the value of
non-oil and gas exports. As one of the world's leading cashew nut producers,
Indonesia takes advantage of the ideal climatic and soil conditions for
producing this commodity, which is popular in the domestic market and great
demand in the international market. There is a demand for cashews in
international trade, categorized as Coconut, Brazil Nuts and Cashews (HS
Code 0801). International demand for fresh or dried cashews, peeled (HS
Code 080132), as a derivative of this category, is growing.
The need
for cashews in Indonesia shows a significant domestic consumption and export
trend. Cashew production in Indonesia has fluctuated, but in 2018, it was
recorded at 136,402 tons. Around 71,644 tons were exported, valued at 38.3
million US dollars. This shows that cashew nut production in Indonesia can meet
domestic needs and provide a significant surplus for the export market.
Cashews, in particular, have recorded increased demand due to their
versatility, from direct consumption as a snack to use in the culinary
industry. Indonesia's comparative advantage in cashew nut production has
enabled the country to export in large volumes and earn significant foreign
exchange from the trade of this commodity. Indonesia has shown the ability to
significantly meet the domestic needs of cashews to export. In 2018,
Indonesia's cashew nut production reached around 95,000 tons annually, with
almost 50% of the production being exported. This shows that domestic needs
have been met and production is in surplus.
Through
various programs, the Indonesian government has improved the production and
quality of cashews, such as through the superior cashew nut development program,
which aims to improve quality and productivity so that it can compete with
other largest cashew nut-producing countries in the world. In addition,
innovations in packing and packaging have also been carried out to meet
international standards and increase the competitiveness of Indonesian cashew
nut products in the global market. With the quality improving, Indonesian
cashews have managed to penetrate the export market to various countries,
showing that domestic needs are more than enough to be met. The government's
efforts to improve the quality standards of cashews for export, including
certification and compliance with international standards, have helped maintain
and improve the reputation of this product in the global market. Trade
promotion initiatives, participation in international food exhibitions, and
free trade agreements have also expanded the reach of Indonesia's cashew export
market.
According to data from the International Trade Center
(ITC), the importing country of fresh or dried cashews peeled from Indonesia
over the past 5 years is Malaysia, with the highest number of export values,
followed by Thailand. The value of imports carried out by Malaysia reaches 23%
annually, and Thailand reaches 22.8% annually, equivalent to the value of the
whole world, which continues to grow. Based on this data, market opportunities
in Malaysia & Thailand are very open for the export of shelled cashews.
This striking comparison confirms that Malaysia and Thailand offer significant
market opportunities, with high demand for Indonesian cashews, reflected in the
actual export value far exceeding the estimated export potential from the
previous year. This clearly indicates the untapped opportunities for Indonesian
MSMEs to pursue and fill the space in these markets with quality cashew nut
products.
Data from Vtops.com states that cashews are very popular in Malaysia due
to several main factors. First, increasing health awareness among consumers has
led to a preference for nutritious snacks such as cashews, which are rich in
healthy fats, fiber, vitamins, and minerals. Second, the diverse use of cashews
in Malaysian culinary culture, ranging from traditional dishes, dim sum, and
cakes, has also contributed to the widespread appeal of cashews.
In addition to the interest of the people of export
destination countries with cashews, Indonesia, Malaysia, and Thailand have
bilateral trade cooperation between countries that make it easier for the three countries, as members of ASEAN, to participate in the ASEAN Free
Trade Area (AFTA) is one of the agreements that provides ease of conducting
international trade for the three countries to create an environment that
allows products from member countries move more freely, support regional
economic growth and increase international competitiveness. The AFTA agreement
has the ASEAN Trade in Goods Agreement (ATIGA), which aims to increase
free trade between member countries by reducing tariffs and other trade
barriers. ATIGA facilitates bilateral trade cooperation between the two
countries by creating a more conducive environment for cross-border trade and
investment. In addition to ATIGA, the three countries have bilateral agreements
to strengthen trade and economic ties. This cooperation covers various sectors
and reflects the close economic ties between Indonesia, Malaysia and Thailand.
This agreement facilitates the exchange of goods, services, and investments and
creates new opportunities for businesses and MSMEs to enter new markets and
take advantage of a wider distribution network, namely the Regional
Comprehensive Economic Partnership (RCEP).
The Regional Comprehensive Economic Partnership (RCEP), as the world's largest free trade agreement, involves 15
countries covering 30% of global GDP. This agreement provides new opportunities
for Indonesia to market its products, such as cashews, to a wider market,
including countries in the Asia Pacific. By leveraging more flexible rules of
origin and a commitment to open up more sectors, RCEP can assist Indonesia,
Malaysia, and Thailand in increasing exports and imports between the two
countries. Through RCEP, Indonesian MSMEs, particularly, have a golden
opportunity to integrate into regional and global supply chains, encourage
innovation, and increase business scale. This will allow MSMEs to participate
in intra-ASEAN trade and more broadly in the Asia-Pacific region. RCEP also
promises to simplify trade procedures that will provide direct benefits for
MSMEs in navigating the complexities of exports and imports.
Within the framework of this cooperation, there are opportunities for the
two countries to collaborate in increasing cashew nut production capacity,
product research and development, and joint marketing to increase products'
added value and competitiveness in the international market. With this
cooperation framework, Indonesia can take advantage of the opportunities to
increase exports of its products, including cashews, which have strong demand
in Malaysia. This initiative increases trade volume and supports both
countries' economic growth by opening greater market access for entrepreneurs
and MSMEs.
Bu Tini Cashew MSMEs, specializing in producing fresh cashews
with HS Code 080132, stands on the verge of a significant opportunity to
enter the export market. Given the wealth of raw cashew production in
Indonesia, this opportunity can bring MSMEs like Mrs. Tini to the international
stage based on Figure 1.3, which shows the sale of fresh or dried cashew
products peeled by Mrs. Tini's MSMEs in the last four years with the choice of
destinations to Malaysia or Thailand as a promising initial target market. However,
the transition from local to international markets requires fulfilling a series
of strict administrative requirements, including quality certification, food
safety standards, and bilateral trade regulations.
To equip Bu Tini Cashew MSMEs with the necessary tools to
operate effectively in the export ecosystem, this study aims to outline and
simplify the administrative processes needed. This includes the preparation of
export documents, an understanding of ASEAN trade regulations through ATIGA
RCEP, and competitive pricing strategies. In addition, the study will provide
an in-depth analysis of the challenges faced, such as logistics requirements,
and identify strategies that can take advantage of the advantages offered by
regional trade agreements. The main goal is to assist Bu Tini Cashew MSMEs not
only in expanding the market but also in selecting the most appropriate
countries to expand the market to ensure sustainable growth and long-term
success in the international arena.
Based on
the background that has been described earlier, the researcher has the
following problem formulation:
1. What strategy can Mrs. Tini MSMEs use to expand the
market through the export of cashew nut products?
2. How can Mrs. Tini's MSMEs overcome administrative and
regulatory barriers for the export of cashew nut products?
Based on
the formulation of the problem that has been formulated, the objectives of this
research are as follows:
1. Formulating strategies that can be carried out by Mrs.
Tini MSMEs to expand the market through the possibility of exporting cashew nut
products to potential countries
2. Providing solutions to Bu Tini's MSMEs over
administrative and regulatory obstacles for the export of cashew nut products
1. For Academics
It is
hoped that the results of this study can help future researchers as a reference
for the design of a strategy for expanding cashew exports to potential
countries in ASEAN. In addition, this research can provide broad insights and contributions
to the understanding of administrative requirements and export regulations, as
well as success factors in conducting international trade.
2. For Practitioners
This
research is expected to be a convenience for Bu Tini Cashew MSMEs in preparing
export administrative requirements, understanding export regulations, and
providing advice on strategy design for expanding to the international market.
In this final project, the researcher designs a scheme of research
stages or a research framework that maps the step by step of the research
process from the initial phase to finding the purpose of the research,
referring to the conclusions and main findings of this research.
Figure 3. 1 Research Stage Scheme
3.2
Place and Time of Research
This
research was carried out in the micro, small, and medium enterprises (MSMEs)
unit of Mrs. Tini, which is located on Jl. Cipunegara No. 101, Cipayung, Ciputat District, South Tangerang City,
Banten 15411. The design of the strategy and final project will be
carried out for three months, namely, February 2024 to May 2024.
The object
in this study is Marketing Strategy for Cashew Peanut Export of Mrs. Tini
MSMEs, while the subject in this study is Mrs. Tini MSMEs as micro, small, and
medium business units that will start exporting.
It is
known that the sales volume of cashew nut products (in Kg) from 2020 to 2023 Bu
Tini Cashew MSMEs have experienced a significant increase in sold stock and turnover.
In this period, the stock sold increased from 2944 kg to 6736 kg, while the
turnover increased from IDR 441,600,000 to IDR 1,010,400,000. The largest
increases occurred between 2021 and 2022, as well as from 2022 to 2023, with an
increase of more than 40% in both periods. Overall, there was a gradual
increase of 9.48% from 2020 to 2021, then jumped to 43.19% from 2021 to 2022
and increased again by 45.96% from 2022 to 2023. This shows positive and
significant growth in MSME sales and revenue.
From
national sales and export capacity of cashew nuts, MSMEs from 2020 to 2023 show
fluctuations in production capacity, national sales, and export capacity.
Production capacity decreased from 8,258 Kg in 2020 to 6,980 Kg in 2021, down
by 15.47%, but increased to 8,470 Kg in 2022 with an increase of 21.36% and
reached 10,667 Kg in 2023 with an increase of 25.97%. National sales continue
to increase every year, from 2,944 Kg in 2020 to 3,223 Kg in 2021, experiencing
an increase of 9.46%, then soaring to 4,615 Kg in 2022 with an increase of
43.21%, and reaching 6,736 Kg in 2023 with an increase of 45.97%. Meanwhile,
export capacity decreased from 5,314 Kg in 2020 to 3,757 Kg in 2021, a
significant decrease of 29.29%, but slightly increased to 3,855 Kg in 2022 with
an increase of 2.61% and 3,931 Kg in 2023 with an increase of 1.97%. A
significant decline in export capacity in 2021, followed by a small increase in
the following years, shows that domestic demand is increasing strongly, but Bu
Tini Cashew MSMEs continue to produce cashew nuts in large quantities, making
it possible to export cashew nut products.
In facing these various challenges, joining the Indonesian
Cashew Nuts Association (INACANAS) can provide many benefits. INACANAS can
provide many benefits for Bu Tini Cashew MSMEs, including support in the form
of comprehensive training on export procedures, document management, and
international regulations that must be complied with. INACANAS provides
up-to-date information on requirements and quality standards in various export
destination countries. In addition, INACANAS offers an extensive network with
other exporters and importers, allowing Bu Tini Cashew MSMEs to establish
strategic partnerships that can help in product marketing and distribution. The
logistics support provided by INACANAS facilitates the process of shipping
products abroad, including customs clearance and coordination with shipping
service providers. With the help of INACANAS, Bu Tini Cashew MSMEs can be
better prepared to face administrative and regulatory export requirements and
gain wider and targeted market access, increasing the chances of success in the
international market. On the other hand, exports provide full control over the
entire process and faster decisions, but high costs, greater risk, and
limitations in market access and logistical support can be significant challenges.
The decision between exporting alone or with INACANAS must consider the balance
between full control and comprehensive support to optimize the chances of
success in the global market.
A.
Cashew Export Value from Indonesia
It is known that the export
value of fresh or dried cashews, namely, shredded cashews (HS Code
080132), will be from Indonesia to Malaysia and Thailand from 2018 to 2022.
Every year, the value of exports is measured in USD. This data provides an
overview of the performance of Indonesia's trade with Malaysia in five years.
In 2018, Indonesia's exports to Malaysia
reached 4,154,000 USD, while Thailand reached 7,333,000 USD, with a difference
of 3,179,000 USD higher to Thailand. In 2019, exports to Malaysia fell to
3,007,000 USD, down by 27.6% from 2018, and to Thailand fell to 6,189,000 USD,
down by 15.6%, with a difference of 3,182,000 USD higher to Thailand. In 2020,
exports to Malaysia declined again to 2,864,000 USD, down by 4.8% from 2019,
and to Thailand to 3,517,000 USD, down by 43.2%, with a difference of 653,000 USD
higher to Thailand. In 2021, exports to Malaysia continued to decline to
2,542,000 USD, down by 11.2% from 2020, and to Thailand to 3,032,000 USD, down
by 13.8%, with a difference of 490,000 USD higher to Thailand. In 2022, exports
to Malaysia recovered significantly to 4,120,000 USD, an increase of 62.1% from
2021, and to Thailand increased to 4,028,000 USD, an increase of 32.9%, with a
difference of 92,000 USD higher than Malaysia. Overall, exports to both
countries showed significant fluctuations, with exports to Thailand likely to
be higher except in 2022, when exports to Malaysia were slightly higher.
B.
Total Cashew Exports by the World
Based on Table 4.4, the total score export of fresh or dried
cashew products, peeled HS Code 080132 by the world in five years, namely 2018 to
2022, shows that the value of exports in that period has fluctuated. In 2018,
the world's total exports reached 4,930,216,000 USD, with exports to Malaysia
amounting to 24,179,000 USD and Thailand amounting to 84,387,000 USD. In 2019,
total world exports declined to 4,663,033,000 USD, down by 5.4% from the
previous year, with exports to Malaysia falling to 21,619,000 USD and to
Thailand falling to 79,176,000 USD.
In 2020, total world exports continued to
decline to 4,293,725,000 USD, down by 7.9% from 2019, with exports to Malaysia
falling to 17,457,000 USD and to Thailand falling to 65,973,000 USD. In 2021,
there was an increase in total world exports to 4,715,705,000 USD, up by 9.8%
from 2020, with exports to Malaysia increasing to 25,080,000 USD while exports
to Thailand decreased slightly to 65,384,000 USD. In 2022, total world exports
declined again to 3,998,558,000 USD, down by 15.2% from 2021, with exports to
Malaysia falling to 22,168,000 USD but exports to Thailand increasing slightly
to 65,601,000 USD. These fluctuations reflect variability in global demand as
well as market dynamics in Malaysia and Thailand, with a general downward trend
in total world exports except in 2021, which experienced a temporary recovery.
C.
Total Exports of All Commodities by the World
Based on Table 4.5, the
total value of exports of all commodities by the world in the five-year period,
namely 2018 to 2022, has fluctuated. In 2018, the world's total exports reached
19,328,414,044,000 USD, with exports to Malaysia amounting to 217,664,499,000
USD and to Thailand amounting to 251,099,199,000 USD, 33,434,700,000 USD higher
to Thailand. In 2019, total world exports declined to 18,760,986,149,000 USD,
down 2.9% from 2018, with exports to Malaysia falling to 204,988,314,000 USD
and to Thailand falling to 240,139,196,000 USD, higher by 35,150,882,000 USD to
Thailand. In 2020, total world exports continued to decline to
17,511,577,681,000 USD, down 6.7% from 2019, with exports to Malaysia declining
to 189,559,672,000 USD and to Thailand falling to 208,615,061,000 USD, higher
than 19,055,389,000 USD to Thailand. In 2021, total world exports experienced a
significant recovery to 22,146,825,040,000 USD, up 26.5% from 2020, with
exports to Malaysia increasing to 238,321,107,000 USD and to Thailand increasing
to 269,102,030,000 USD, 30,780,923,000 USD higher to Thailand. In 2022, total
world exports continued to increase to 24,707,495,155,000 USD, up 11.6% from
2021, with exports to Malaysia increasing to 295,092,902,000 USD, and to
Thailand increasing to 306,260,910,000 USD, 11,168,008,000 USD higher to
Thailand. During this period, total world exports and exports to Malaysia and
Thailand showed a downward trend until 2020, followed by a significant recovery
in 2021 and a further increase in 2022, with exports to Thailand consistently
higher than Malaysia each year.
D. Total Exports of All
Commodities by Indonesia
Overall, based on Table 4.6, the total export
value of all commodities by Indonesia in the period 2018 to 2022 has fluctuated
in export value. In 2018,
Indonesia's total national exports reached 180,215,036,000 USD, with exports to
Malaysia amounting to 9,436,721,000 USD and to Thailand amounting to
6,818,949,000 USD. In 2019, total national exports decreased to 167,682,996,000
USD, down 7% from 2018, with exports to Malaysia falling to 8,801,815,000 USD
and to Thailand falling to 6,218,393,000 USD. In 2020, total national exports
continued to decline to 163,306,490,000 USD, down 2.6% from 2019, with exports
to Malaysia declining to 8,130,627,000 USD and to Thailand decreasing to
5,112,862,000 USD. In 2021, total national exports increased significantly to
231,587,887,000 USD, up 41.8% from 2020, with exports to Malaysia increasing to
11,967,891,000 USD and to Thailand increasing to 7,087,712,000 USD. In 2022,
total national exports continued to increase to 291,979,103,000 USD, up 26.1%
from 2021, with exports to Malaysia increasing to 15,452,430,000 USD and to
Thailand increasing to 8,169,361,000 USD. Overall, Indonesia's total exports
showed a downward trend through 2020, followed by a significant recovery in
2021 and a further increase in 2022. Exports to Malaysia and Thailand also
showed a similar pattern, with a greater increase in Malaysia than in Thailand
during the recovery period.
A. Revealed Comparative Advantage (RCA) Analysis
Based on
RCA analysis, the export performance of fresh or dried cashews from Indonesia
to Malaysia and Thailand during the 2018-2022 period shows a strong comparative
advantage. Reports from the Asian Development Bank (2022) emphasized
that market diversification and increased production efficiency are the keys to
increasing the competitiveness of fresh or dried cashew exports, peeled. The
data in Table 4.7 reveals that the RCA value for Indonesian cashews in Malaysia
reached 3.318911, and in Thailand, it was 2.556656. This shows that Indonesia
has a significant comparative advantage in cashew exports to the two countries.
The results obtained show that the RCA value
(Revealed Comparative Advantage) fresh or dried cashew products, peeled
with HS Code 080132 in Malaysia and Thailand during the period 2018 to
2022, it can be concluded that Indonesia has a significant comparative
advantage in cashew exports to the two countries. The average of Indonesia's
cashew exports to Indonesia's total exports to Malaysia is 0.000323, while the
average of world cashew exports to total world exports is 0.000098, resulting
in an RCA value of 3.318911 which means that the score shows that Indonesia's
cashew exports share to its total exports is more than three times the share of
cashew exports at the global level,� signifies a very strong comparative
advantage in Malaysia. On the other hand, the average of Indonesia's cashew
exports to Indonesia's total exports to Thailand is 0.000736, while the average
world cashew exports to total world exports is 0.000288, resulting in an RCA
value of 2.556556. Although lower than Malaysia, this score still shows a
strong comparative advantage in Thailand, with Indonesia's cashew export share
more than double the share of cashew exports at the global level. An RCA value
higher than 1 in both countries indicates that Indonesia has a comparative
advantage in this commodity, with a greater advantage in Malaysia compared to
Thailand. Research by Zahir & Sanawiri (2018) supports these
results, showing that Indonesian-peeled fresh or dried cashews have a
comparative advantage in the international market during 2011-2015.
B.
Export Product Dynamic (EPD) Analysis
The EPD analysis was used to analyze the
performance of Indonesia's cashew logs exports to Malaysia and Thailand from
the perspective of competitive advantages. Based on Table 4.8, the analysis is very
detailed for Export Product Dynamics fresh or dried cashew products,
peeled (HS Code 080132) in Malaysia and Thailand during the period 2018
to 2022, showing that there are significant differences in market dynamics in
the two countries.
In
Malaysia, the average export market growth is 28.103%, and the average cashew
market growth is 18.0204%, which puts Indonesia's cashews in the position of
"Rising Star. "This shows that the overall export market and
cashew market in Malaysia are growing well. Market"Rising
Star" indicates that the product is in the up-and-coming category and gaining
market share, reflecting strong growth potential and further expansion
opportunities in the Malaysian market. In contrast, in Thailand, the average
growth of the export market is -50.9915% and the average growth of the cashew
market is -0.9638%, putting this product in the position of "Retreat."
The growth of the export market of -50.9915% means that Indonesia's export
market to Thailand experienced a very significant decline during the period,
reflecting drastically declining market conditions and a decrease in overall
demand or competitiveness of Indonesian products in Thailand. The growth of the
cashew market of -0.9638% shows that the export market, specifically for
cashews, has also experienced a slight decline, although not as large as the decline
in the overall export market. Market"Retreat"
indicates that the product is losing market share and competitiveness,
reflecting the great challenges and the need for different strategies to
increase competitiveness and market share in Thailand. This difference
underscores the importance of a different strategic approach for each market to
maximize the export potential of Indonesian cashews.
The analysis shows that
Indonesian cashew logs have a bright outlook in Malaysia due to significant
growth in exports and market demand, while Thailand faces challenges with
declining demand and unsatisfactory export performance. With a deep
understanding of cashew export dynamics based on EPD analysis, Indonesia can
formulate more effective strategies to improve the competitiveness and export
performance of these products in Indonesia's international market in both
destination countries, while the growth value of the cashew market indicates
the overall market growth for cashew products in both countries. Strong
economic growth in Malaysia may have driven an increase in cashew demand, while
economic conditions in Thailand may not be as good as Malaysia's. Based on data
excerpts from UN Comtrade 2023, Competition
from other countries such as Vietnam and India, which are known as large
producers of cashews, also affected Indonesia's export performance in the Thai
market. Product quality and efficiency in production and distribution play an
important role in international competitiveness, and Indonesia may have an
advantage in terms of quality and lower production costs in Malaysia than in
Thailand (Zahir & Sanawiri, 2018).
In this study, based on the
results of the analysis of RCA and EPD countries that can be the destination of
Cashew MSMEs Bu Tini is Malaysia, then strategy placement can be carried out
with the STP method (Segmenting, Targeting, and Positioning) to achieve
the planned goals.
A. Segmenting
a) Demographic Segmentation: The main focus is on large importers and
distributors engaged in the import and distribution of food products, as they
have a large purchasing capacity and an extensive distribution network. This
Segmentation allows for more effective marketing and distribution strategies to
reach consumers, given that these companies process cashews into various
products such as snacks and ready-to-eat foods. Retailers and supermarkets,
including hypermarkets and retail stores, are also an important segment as they
sell cashews directly to end consumers in various package sizes located in
urban and suburban areas across Malaysia.
b) Geographical Segmentation, based on data from the Export Potential Map
provided by the International Trade Center (ITC), the
Selangor region, with access to Port Klang, one of the largest ports in
Malaysia, offers superior logistics infrastructure to support the export of
large quantities of cashews. In addition, Johor, which is home to Johor Port
and close to Singapore, has excellent access to international trade. Kuala
Lumpur, as the capital and major business center, has
an extensive distribution network and a large consumer market, making it an
ideal target for cashew exports. Data from the Export Potential Map
shows that these regions have high demand and great market potential for
Indonesian cashew nut products, so focusing on these regions will allow for a
more effective and optimal export strategy.
c) Psychographic Segmentation: Health-conscious consumers are the main
target because they are looking for healthy snacks that are free of additives
and rich in nutrients, are often active in physical activity and follow healthy
food trends. In addition, premium consumers who are looking for high-quality
and exclusive products are also important, as they are willing to pay more for
quality products and shop at premium stores. Finally, environmental consumers
who care about the sustainability and environmental impact of the products they
buy prefer products that are produced sustainably with eco-friendly packaging.
With a focus on health-conscious, premium, and environmentally conscious
consumers, cashew marketing and distribution strategies from Indonesia to Malaysia
can be tailored to reach the most relevant and potential consumer groups,
maximizing marketing effectiveness and increasing market penetration in
Malaysia.
d) Behavioral
Segmentation in Segmentation is perfect for consumers who are looking for
health and nutritional benefits from cashews, such as protein, fiber, and healthy fat content, as well as those who
prioritize quality and taste. In addition, consumers who focus on price and
value are looking for products at affordable prices but still with quality.
Brand loyalty also plays an important role, with loyal consumers who always buy
from a particular brand because they are satisfied with the quality and
experimental consumers who love to try new brands and products. The occasions
of use also vary, with daily consumption as a healthy snack or addition to
food, purchases for special occasions such as parties and family gatherings,
and business use by companies that buy in bulk to be processed or resold. By
understanding these consumer behaviors, cashew
marketing and distribution strategies from Indonesia to Malaysia can be
tailored to reach the most relevant and potential consumer groups.
B. Targeting
To target fresh or dried cashew exports,
peeled (HS Code 080312) from Indonesia to Malaysia can be focused on the
household consumer segment in large cities with high purchasing power and
awareness of healthy food, modern retailers such as AEON, Tesco, and Giant
looking for high-quality products, specialist stores that focus on organic
products and premium foods, and the food industry that uses cashews as a raw
material.
C. Positioning
Fresh or dried cashews, peeled from
Indonesia, are premium products of superior quality that offer the best size,
taste, and purity. Highlight its health benefits, such as being high in protein
and rich in nutrients, as well as being preservative-free, to appeal to
health-conscious consumers. Affirm that these products have been certified
halal, which is very important for Muslim consumers in Malaysia.
In an effort to carry out
export activities, Bu Tini Cashew MSMEs must meet several requirements. The
following are details of the requirements that must be met by Bu Tini Cashew
MSMEs in planning exports to Malaysia:
A.
Identification of the Packaging Quality of Bu Tini Cashew Peanut MSME Products
Based on the packaging that
has been used by Bu Tini Cashew MSMEs, as shown in Figure 4.2, several
identifications can be made to improve and meet export requirements.
Figure 4. 1. Packaging of Cashew Nut MSME products Bu Tini
Source : Bu Tini Cashew MSMEs
Here are some
identifications and improvements that can be made by Bu Tini Cashew MSMEs based
on the standards from the site Malaysian Ministry of Health for Fresh or
Dried Cashew Nut products, Peeled (HS Code 080132) :
1.
Packaging Materials
The packaging
material used by Cashew Peanut MSMEs is plastic with a thickness of 0,250 mm
but has not met the export requirements to use polypropylene (PP) or
polyethylene (PET) plastic packaging with ISO 9001:2015 certification, which
guarantees quality and in accordance with operational procedures.
2.
Labeling
The label on the
packaging of Bu Tini Cashew MSMEs only includes the product name and production
address, while according to the packaging standards, the label on the product
must include important information such as the product name, ingredient list, weight
or contents, expiration date, manufacturer's name and address, and allergen
information. All of this information must be available in English or Bahasa
Malaysia.
3.
Hygienic Standards
To ensure that
product packaging meets high hygiene standards, it is necessary to select
materials that have been tested and approved for contact with food. Packaging
tests such as leak and strength tests should be performed to ensure the
packaging can protect the product from damage and contamination. Strict hygiene
practices should be implemented during the packaging process, including the use
of gloves, masks, and workers' regular handwashing. The use of vacuum sealing
techniques and strong seals is necessary to keep the packaging tightly sealed,
preventing the entry of air and contaminants. In addition, the management of
storage and transportation conditions, including temperature and humidity
control, is essential to maintain product quality. These guidelines refer to
standards set by regulatory bodies such as FDA and EFSA, as well as ISO
standards related to quality management in packaging production.
4.
Halal Certification
Halal certification for
cashew nut products is an important step to ensure that the product meets the
halal standards that have been set by the competent authorities. This
certification process involves a thorough examination of the entire production
chain, from the source of raw materials to the processing and packaging
process. Cashews that have received halal certification guarantee that there
are no ingredients or processes that are contrary to Islamic Sharia principles.
Institutions such as the Halal Product Assurance Agency (BPJPH) and LPPOM MUI
in Indonesia are responsible for conducting audits and inspections to ensure
compliance with halal standards. This process involves not only document
verification but also field inspections and laboratory testing if required.
After the product is declared halal, the company will get a halal certificate
that is usually valid for two years and must be renewed before the expiration
date. The official halal label is then placed on the product packaging, giving
Muslim consumers confidence that the product is safe
and in accordance with Islamic teachings. With halal certification, cashews can
be accessed by a wider market, including countries with a majority Muslim
population, thereby increasing export opportunities and product competitiveness
in the global market.
Conclusion In this
study are as follows: The strategy that can be carried out by Mrs. Tini's
MSMEs to expand the export market of cashew nut products is through the Revealed Comparative Advantage (RCA) analysis, which shows that Indonesia's
cashew export share to its total exports is more than three times the share of
cashew nut exports at the global level with an RCA score of 3.318911. This
score indicates a very strong comparative advantage in Malaysia compared to
Thailand, which has an RCA score of 2.556556. An RCA score higher than 1 in
both countries shows that Indonesia has a higher comparative advantage than
Malaysia. The market position of fresh or dried cashew commodities peeled with
HS code 080132 based on Export Product Dynamic (EPD) analysis, has
opportunities in the Malaysian market with the 'rising star' market position
indicating that the product is in the rising category and gaining market share,
reflecting strong growth potential and opportunities for further expansion in
the Malaysian market. Bu Tini MSMEs can overcome administrative and
regulatory obstacles for the export of cashew nut products, namely by improving the quality of the
plastic packaging used, including packaging labels covering all important
information, namely the list of ingredients, net weight, expiration date,
allergen information, and halal product certification. For the fulfillment of administrative requirements, Cashew MSMEs Bu
Tini can meet several export requirements, namely business legality, which
includes business identification numbers, micro and small business licenses,
and taxpayer identification numbers (NPWP)
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