Countries take reward of globalization from foreign directly investment and the increment of consign-import activities. Republic of indonesia is in its incredible growth today and it has great opportunity to keep growing rapidly by expanding the market of its SMEs (Small and Medium Enterprises) into global market, the business entities which play major role in Republic of indonesia economy are mostly SMEs. Unfortunately, the export of SMEs is yet low due to some issues, lack of global marketing skill and export procedure information are some of the issues and information technology can exist solved by piggyback marketing. There are two terms in piggybacking: passenger and carrier, piggyback scheme provides mutual benefits to both carrier and rider. Briefly, carrier will become new product line and rider can get learning opportunity to be independent and global exporter in the time to come. This conceptual newspaper was strengthened by single case study of PT Yori Masa Company which is based in Indonesia.

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PIGGYBACK STRATEGY

A SOLUTION TO BOOST INTERNATIONALIZATION OF Small AND

MEDIUM ENTERPRISES IN Indonesia

Abstract

Donny Susilo

Main of Business Administration, Asia University, Taichung, Taiwan

Countries take reward of globalization from foreign straight investment and the increase of export-

import activities. Indonesia is in its incredible growth today and it has great opportunity to keep

growing rapidly by expanding the marketplace of its SMEs (Pocket-size and Medium Enterprises) into global

market place, the business entities which play major office in Indonesia economy are mostly SMEs.

Unfortunately, the consign of SMEs is still low due to some bug, lack of global marketing skill

and export procedure information are some of the problems and it can be southolved by piggyback

marketing. There are two terms in piggybacking: passenger and carrier, piggyback scheme provides

mutual benefits to both carrier and rider. Briefly, carrier will get new product line and rider can get

learning opportunity to be independent and global exporter in the future. This conceptual newspaper westwardas

strengthened past single example study of PT Yori Masa Company which is based in Indonesia.

Keywords: Piggyback, Carrier, Rider, Small and Medium Enterprises (SMEs), Indonesia

JEL Nomenclature: M16

1.1 INTRODUCTION

Globalization isouthward still debatable every bit the impact on country economy can beast dissimilar based on the

unique characteristics of tlid country. And thenme people argue to obtain benefits from globalization while

the others merits that it will simply ham their country. 1 particular reason why country wants to open

for globalization is as well the advantage from foreign straight investment and the increment of export-

import activities. The degree of openness in about countries has increased, perhaps it due westsick pb to the

incrementally increase export-import activities. Indonesia is one of the globe economies that cannot

avoid globalization. It has insisted on the government to do marketplace-oriented reform that can maintain

high and sustainable rates of exports necessary for strong economic growth. Globalization can requite

positive impacts on economic growth of Indonesia, it can make opportunity for Indonesia'south company

to practice export and earn more than foreign exchange reserves. Association of southeast asian nations, ACTA and other economical

communities has been reply to get the member ready for tighter competition in the global market,

there are some reason why internationalization is important to practice by Indonesia business enterprises

which are: (ane) Indonesia demand foreign exchange to pay their import in case of commodity shortage,

(ii) foreign commutation can assistance Indonesia to increase its gross domestic product, (3) foreign exchange

can maintain Republic of indonesia currency value against other foreign currency in earth market and the terminal, (iv)

Information technology tin maintain common human relationship between Indonesia and other countries in global economy

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On the other manus, Indonesia is in its incredible growth today. It is recognized as one of emerging

market with stable economic growth. Already the 16th largest economy in the world, Indonesia idue south

potential to exist the seventh biggest past 2030. (Oberman et al, 2012:xiii) Indonesia economy grew at 5,18

percent in 2rd quarter (Indonesia Investment.com, 2016). In guild to keep powerin1000 its growth, it is

wise to increase export and earn from other emerging markets. In Indonesia, export activities are fully

supported past government through the establishment of National Export Development Institution,

domestic manufacture can obtain any information related to export in that location.

The contribution of SMEs to employment and Gdp is very magnificent. SMEs contribute to

employment more than 94 percentage of national employment. 118 million of 125 million employees idue north

Indonesia now are from Modest and Medium Enterprise sector. Small and Medium Due eastnterprise sector

also contributes to 57 pct or Gross Domestic Product (Gross domestic product), said past member of National

Industry and Economic Committee, Irfan (2016) Notwithstanding, inorth going to international market,

SMEs in Indonesia also faces thenme barriers such as competition, lonm duration of export certificate

process, product quality, export barrier from country destinations, depression capability in high production,

delay in transportation, communication barrier, government agencies that presumeast become barrier,

lack of international marketplace cognition, bulwark of entering international market, export administrative

procedures, inefficient product price, unofficial fee in export documents processing, incapable to

supply product in time, lack of knowledge in transaction method, limitation of destination country,

fourth dimension limitation in cargo, and delay of shipping (Siringoringo et al, 2009).

Unfortunately, Small and Medium Enterprises (SMEs) which dominate the contribution to Gross

Domestic Product (GDP) in Indonesia do non still have loftier capacity to get into global market. When

it comes to export, Small and Medium Enterprises in Indonesia contribute only a pocket-size part of

Indonesia export. Based on data form DJPEN, the export value of the country during the yr 2014

reached at U.s. $ 179 billion, The states $ 145.nine billion came from non-oil sector and in that location, SMEs contribute

simply xvi percent of all total value of not-oil exports, or about U.s.a. $ 23 billion. Tosolar day, Republic of indonesia's

SMEs solve the trouble of global marketing past utilizing third party, the bulk of those who exercise

export, they practise non export straight, only indirectly through intermediaries such as traders, exporting

companies, or trading houses (Tambunan, 2011). Still, the solution has many weaknesses.

Firstly, it will not let Indonesian SMEs to be matureast and independent, and then they will have to spend on

committee cost forever and the SMEs has no take chances to get learning about global market place. Secondly,

it is rare to find the third party who is experienced in all kind of production line, so they need to analyze

the potential market and it does not accept a short time. Based on those factors, a new innovative export

strategy chosen piggyback strategy has been offered especially to small and medium enterprise which

is notwithstanding depression chapters in reaching the global market, piggyback strategy is kind of distribution aqueduct

which is newly introduced merely very popular in other countries. It can bring company to toll efficiency

and independence and finally export market-oriented visitor.

Small and Medium Enterprises have been important and prioritized issue for Indonesia Getvernment

especially due to its domination in Indonesia economy structure just until now, the research about

internationalization of it is withal lacking. This newspaper is to help Republic of indonesia SMEs to develop and finally

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become a great driver for economic development and and so it can be learned by other countries within

Association of southeast asian nations and fifty-fifty Africa countries past introducing a new international market entry strategy for

Indonesia SMEs, inorth more than particular the purposes this research are (1) to introduce the concept and

literature review about piggyback strategy, (2) to gain a better understanding of piggybacking as a

method of international market entry, (3) to provide information on the term and agreement and

provide knowledge of how the cooperation can be made and (4) to provide information about the best

practice of piggybacking in other developed countries. While the benefits of this research are (1) it

tin can help Indonesia SMEs to reach cost efficiency and independence, (2) it can help Indonesia SMEs

to be eastxport market-oriented company, (3) it can enrich literature review about piggybacking and

developed by further study in larger scope such as SMEs in Asean countries and (4) piggyback can

empower SMEs wherever they are to create more than employment and lead Indonesian to better income

equality.

2.ane

LITERATURE REVIEW

2.ane.ane

Piggyback Definition

Piggyback isouth one of indirectly export do. In piggybacking exporting, one manufacturer uses its

overseas distribution to sell another company'southward production along with its ain (Terpstra & Saranthy,

2000). Piggybacking is considered as an early form of strategic alliance where firms join together

voluntarily, usually with no equity ties, to attain some objectives together that they cannot reach

efficiently by themselves (Terpstra & Yu, 1990). At that place are two terms in piggybackinthou procedure;

carrier and rider. It idue south described by Terpstra and Yu (1990); the carrier is usually a big firm with

highly reputed international business organization and experience, and the carrier should take widespread

production and distribution facilities in several countries. In full general, the carrier performs the

marketing and distribution strategy while rider is the supplier of the basic products. According to

Jeannet and Hennessey (1995), the rider is piggybacking its products onorth the southwardhoulders of the

established company.

When a new product line is needed by firm to satisfy their client, they have alternative to acquire

the necessary products outside by piggybacking. This choice can be bonny for large companies to exist

a carrier because they obtain the new product faster. Information technology is also a low cost solution to become product

because carrier does not take to invest in H&D, production facilities or market testing for the new

product. (Hollendsen, 1998). Piggybacking is one alternative route for the rider using an export

company to carry its product to foreign market, established export and distribution facilities and

shared expenses is offered by piggyback (Terpstra & Sarathy, 2000). When the rider'due south productsouth are

distributed past another producer, some important benefits canorth be obtained by the passenger equally compared

with using a regular distribution (Terpstra & Yu, 1990). This strategy tin be assist to export all kind of

products include textile, industrial and electrical machinery and equipment, chemical, consumer soft

goods and books (Albaum et al, 1994).

2.1.2

Small and Medium Enterprises in Indonesia

According to Pocket-sized and Medium Enterprise Indonesia Act no 20 in 2008, the classification of micro,

small and medium enterprises are as follow:

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Table 1: Classification of Enterprises in Indonesia

>50 1000000 – 500 million

>300 million – ii.five billion

>500 million – 10 billion

>2.5 billion – 50 billion

Source: MSME Act No 20, 2008

SMEs contribute substantially on the Indonesian economy and Association of southeast asian nations. Until now, virtually 96 % of

businesses in Association of southeast asian nations are classified as Micro, Small, and Medium Enterprises (SMEs) with

contributions to the gross domestic product (GDP) of about 30% to 57%; and information technology absorbs a workforce

of around 50% upward to 95%. While in Indonesia, SMEs deemed for 99.98% unit of measurement attempt with

contribution to GDP national average of 57% of national Gdp; and it absorbs almost 94% of all

domestic workers. Within this framework, the role of SMEs isouthward essential as a key commuter for creation

jobs and economic growth, both at the regional and national level. (Ashariyadi, 2016)

Ane of the advantages of Indonesia SMEs is immovability when information technology faced crisis situation. In Indonesia,

SMEs had proven able to survive in global economic crisis and be a lifesaver for Republic of indonesia economy

in the 1997 financial crunch and 2008 global economic crisis. It was caused past the flexibility of SMEs

the adjustment to production procedure, they were able to thrive with their own capital, and did not rely

on foreign debt. SMEs are also oftentimes linked the alleviation of the economical and social problems, such

as loftier poverty charge per unit, high unemployment, inequality of income distribution, as well as uneven

evolution.

The eastxistences of SMEs are expected to contribute positively and pregnantly to efforts of tackling

those probleuropean monetary system. The success of SMEs try has the greatest number and quite dominant in the

economy, it will greatly affect the achievement in order to compete in EquallyEAN Economic

Community. Moreover, SMEs with strong foundation does not only ensure the success of economic

integration, but also social welfare for the entire Indonesia people.

2.i.3

Process of Piggybacking

According to Cateora (1996), the decision process for potential piggyback distribution determines if

some pointes has been fulfilled: (1) The production is complementary to the product line and contributes

to it, (ii) The production matches the sales and distribution concatenation, (3) There is enough marking-up to cover

efforts, (4) The product will exist accepted by the market and be sold in acceptable volume.

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Effigy 1. Concatenation of Distribution for Piggyback

Source: Albaum et al, 1994

As illustrated in the model above created by Albaum et al (1994), four culling ways are offered to

handle the distribution of the production when using piggyback operations. The amount of steps and

middle easily used in the distribution chain are different in these four alternatives. Terms of auction,

promotional arrangements, and market coverage are some important points that must exist discussed to

protect the carrier and rider when deciding about the piggybacking system (Terpstra & Sarathy,

2000).

Term of sale

The carrier can brand compensation in form of commission and information technology can both acts as an amanuensis or

alternatively buys the product every bit an contained benefactor (Terpstra & Saranthy, 2000). Since the

carrier may need to help customers with back up and feedback operations, the carrier will insist that

the rider's products are somewhat similar to their own products in piggybacking, (Hollensen, 1998).

Cateora (1996) refers to that the largest volume of piggyback business is handled on an ownership

buy-resale arrangement. The large portion of the piggyback arrangements is undertaken when a

firm wants to expand its product line or keep its distributional chains active over low seasons.

Promotional arrangement

Branding policies are variable in piggybacking. The pick of branding is mainly on how important

the brand name is to the product and how well established it is (Terpstra & Sarathy, 2000).

Differences may occur concerning which company name the product should be sold under. Some use

individual labels or manufacturers name while some are using the name of the best-known corporation

(Albaum et al, 1994).

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Market coverage

Piggybacking is mainly used for products that are non-competitive but related, and complementary

and allied (Hollesen, 1998). The carrier firm may already take good coverage in many countries of a

region that is attractive to the rider (Terpstra & Yu, 1990). In terms of land coverage,

piggybacking offering one market or access to a global market place (Terpstra & Sarathy, 2000). A

piggybacking system for one state is ordinarily utilized when a large target marketplace is perceived.

In other caseastward the rider wants to cover all foreign market past piggybacking withursday a multinational

enterprise (Terpstra & Yu, 1990).

Manufacturers that have good market coverage in the dwelling house state may await for similar operations

in foreign market or region of interests. This is called reciprocal piggybacking (Terpstra & Yu, 1990).

The piggybacking arroyo may likewise be applied to product coverage. The carrier may handle just one

or all of the rider'southward products; withal the carrier has a large office of the decision making (ibid).

Initiator of the piggybacking arrangement can be the government, when a government trade

promotion historic periodncy initiates a" foster house" for inexperienced exporters. It can also be encouraged by

the private sector, when an industry group encourages members, which are successful in international

business organization, to seek opportunities for smaller and newer firms (De Burca et al, 2004).

2.one.4

Benefits with Piggyback

Rider benefit

Piggybacking provides an easy, low risgrand manner for the rider company to brainstorm export–marketing

operations. It is especially well suited for companies that are small, or that practice not want to invest

extensively in foreign market (Albaum et al, 1994). The just criteria necessary for piggybacking

operation is to produce a quality product, and to find a firm willing to carry it. Therefore it is a choice

for companies with a limited exporting activities, limited resources and lack of international market place

noesis (Terpstra & Yu, 1990).

In piggybacking, the rider firm utilizes the market channels of the carrier firm instead of developing

own channel. Bold that the rider is in early stage of internationalizing, it is not viable to own

product facilities in a host country. Therefore the rider relies on piggybacking to take advantage of

the carrier'due south knowledge of the host country or the carrier's distribution system in the host country

(Terpstra & Yu, 1990). When committing to a partnership, the international firm tin can go well-needed

local know-how from the local partner (Gronroos, 1990). When discussing market knowledge,

indirect entry is the least risky of the internationalization strategy (Ibid). When piggybacking, the

rider can advisedly observe how the carrier handles the transactions and acquire from the carrier'southward

feel. Eventually the rider is able to showtime own export transaction (Hollensen, 1998).

Piggybacking is a dynamic proassessment for the rider, used as a transitional strategy where firms can build

on their international marketing expertise. The rider can switch to another mode to serve foreign

markets when nerveless enough international marketing expertise (Terpstra & Yu, 1990).

The rider, if choosing the correct parent can gain advantages of sophisticated promotion tools and

association with a well-established brand reputation. This tin result in increased sales (Terpstra &

Sarathy, 2000). Since the carrier firm may have good marketing coverage in many countries of a

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region, the rider can reach bonny markets without needing to face high entry barrier (Terpstra &

Yu, 1990). This yardives the rider the ability to test strange market place with low cost (Ibid). And then SMEs in

Indonesia are supposed to be riders to for the follattributable benefits: (one) Piggyback export can give

opportunity to SMEs as passenger to learn how to do straight export from the carrier'southward experience that

visitor finally larn capacity to do direct export, (2) The carrier is one company that has human beingy

branches and overseas distributor channels to ensure that SMEs tin increase their sales to maximize

the apply of capaurban center. By capacity optimization, SMEs can become new financial resource to develop their

company globally, (3) SMEs tin utilize the make reputation of the carrier to easily find buyer in

global market, (4) SMEs can take advantage from carrier's res ource in testing market and

determining target market for their product which is complementary to each other, (5) SMEs tin become

information of how they tin make innovation of their product that can fulfill the demand of each country

people in global marketplace today, (6) The rider is part of carrier company, piggybacking is good

approach to attract global buyer because they avoid from using export agent, they will exercise their best to

avoid actress price or committee charged past export agent.

Carrier benefit

For the carrier, piggybacking option isouth one of the all-time ways to obtain a new product quickly. It

requires minimum investment and the products are received due westith maximum speed (Terpstra & Yu,

1990). It also allows the carrier to allocate resource to other purpose and projects (ibid). When a

company has a gap in its product line or excess chapters in its export operations, the necessary

products tin exist acquired outside westwardith piggybacking. This alternative is bonny considering the firm

can get admission to products quickly since someone already has it (Hollosen, 1998). The cost are also

kept low because the carrier has no demand to invest in H&D, product facilities and market testing

(Terpstra & Sarathy, 2000). Also when the carrier business firm seeks for complimentary products to their own

product line, or when the carrier is in demand of quick introduction of a new product to compete with

new competitors, piggybacking can be the best choice (Terpstra amd Yu, 1990).

Since the rider provides a product already successful on domestic chiliadarket, the probability for the

product to succeed on the strange market is too loftier. The carrier becomesouth access to a fully developed

product that has been commercially and technologically examinationed in the dwelling house market (Terpstra amd Yu,

1990). If the piggybacking partnership arrangements work out well, information technology is possible that the carrier

consider further commitment with the rider through a joint-venture human relationship (Terpstra amd Yu,

2000). According to Albaum et al (1994), the piggyback rider is also risky from losing the control of

their products marketing away, merely with skillful understanding and clear terms before the cooperation

begun, it tin still be avoided.

Relationship between the passenger and the carrier

The relationship between the rider and the carrier in piggybacking can be analyzed by defining

piggyback as ane of indirect export process and global marketplace entry strategy through cooperation. A

relationship-based entry tin can be the option if a considerable degree of cooperation is necessary in

society to accomplish success. This is because resource commitment is unremarkably minor in internationalism,

and both parties have a mutual stake in the outcome (De Burca et al, 2004). Partnerships are formed

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for a variety of different reasons; 1 of them is the entering of new international markets and is

particularly useful when entering a foreign market place for the first time (Hollensen, 1998). The

partnership should be undertaken if advisable controls are in identify to due southecure the expansion with

relatively small investments (Czinkota & Ronkaimen, 2004).

According to Albaum et al (1995) a partnership has two sides, the technical and the emotional side.

The technical side addresses to the machinery and contribution of each parties and the emotional side

is considered to exist feeling of collective try. Through the relationship business risk tin can be

minimized because management skills and experience from the local partner allows for an easier

adaptation to dangers of unfamiliar environments (ibid). According to Terpstra and Yu (1990), the

passenger volition need to rely on the carrier to sell its products and the carrier volition need to rely on the rider to

provide new production. This chiliadutual dependence strengthens the partnership relationship. Hollensen

(1998) states that the passenger and carrier, when entering a partnership normally sign a contrhuman activity for a

couple of years to provide for continuity in the commitment.

When piggybacking, firms join together voluntarily to reach objectives together that they cannot

reach efficiently by themselves. The relationship between the passenger and the carrier is close, but it is

not formal like merger or joint venture (Terpstra & Yu, 1990). The agreements are more flexible than

traditional agreements with export management companies or spider web-Pomerene clan (Terpstra &

Sarathy, 2000). Piggyback arrangements are important considering they canorthward offer an efficient economic

cooperation with benefits for both rider and carrier. But since piggybacking arrangements usually

accept a limited lifecycle. It can transform to be more serious cooperation if the parties get do good and

continuous profit. The parties can also agree to carve up equally atmospheric condition or company objective modify.

(Terpstra & Yu,1990). When evaluating the piggyback arrangement, the carrier might detect potential

advantages; the rider may be a good conquering candidate of articulation venture officener to build a stronger

human relationship with (Terpstra & Yu, 2000).

Suggested Application for Indonesian SMEs

In order to empower these SMEs, it is necessary to apply piggyback marketing strategy. The concept

is quite simple to apply, information technology can make Indonesia SMEs become mature and contained to do their

export in the time to come. Then piggyback garketing, aside of helping becomevernment to teach SMEs, it also

increase the competitiveness of SMEs through both global and domestic partnership in global marketplace

competition. In order to discover good partner for Indonesian SME, it can exist large companies with

complementary products that accept thouarketed their adept with loftier reputation to the destinations of

Indonesia exports by SMEs. Some export markets available today are ASEAN members (22 %),

Nippon (12,3%), Cathay (10,ix), America (10,8%) and others (Indonesia Eximbank, 2010). It is better if

the carriers are big companies prevarication in Indonesia so that becomevernment can hands protect and supervise the

relationship. In order to maximize profit, information technology is good to find partner which are located in the export

destination countries, they are more familiar with the market and they accept already had fit strategy to

win in the competition.

Net which now already becomes popular to get foreign buyer should also bdue east utilized to find

partner for piggybacking. Net has been easy to access and affordable for SMEs in Republic of indonesia. This

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also demand interfere for regime to facilitate large industries both domestic and strange one to meet

Indonesian SMEs. In this new paradigm, not only customers but also large industries with

complementary products are at present beneficial for SMEs. Big manufacture will need the rider'due south product

because the competitive advantage to provide i door solution and quality balls for global

customer, global buyer will like to gake business with supplier who tin provide all they need

completely for the post-obit reasons: (1) The buyer tin propose to go discount if they make a big

society consist of various complimentary products, (two) The buyer exerciseesn't demand to find anymore seller

as they will benefit from time and cost efficiency, (iii) The buyer tin get quality assurance from 1

carrier, there is no risk to get unqualified product from diversification.

3.ane

RESEARCH FRAMEWORK

3.1.1

Research Arroyo

Qualitative research is often used in relation with case studies where the aim is to obtain a better

agreement of the stated inquiry problem through gaining thorough information about the subject

(Yin, 2003). Since the purpose of this study is to gain a improve understandinm of what are the

internationalization motivations for Indonesian SMEs, what are determinants when deciding entry

modes, how these determinants influence the entry mode choice and the interaction between

motivations and entry way choice, qualitative approach, compared with quantitative approach, is a

more suitable research method to discover out the answers to these research questions.

three.1.two

Enquiry Design

Primary data is necessary for this study and these primary data is mainly collected by interview with

the direction of an Indonesian SME. In addition, some secondary data from investigated

companies and old research works would as well exist used for this research. In order to do this research,

writer will also apply single example study one thousandethod. Single case blueprint or unmarried-bailiwick design is a

blueprint that relies on comparison of treatment effects onorth a single discipline or grouping of single subjects.

Single-discipline design is thought to exist a straight result of Southkinner's research. This design is sensitive to

private differences. Information technology oft involves using large number of participants idue north a study, even so –

individuals in the written report serve equally their own control and therefore the design is chosen single-subject.

Single-subject blueprint has a number of requirements such continuous assessment, baseline cess

and variability in the data. Unmarried-discipline designs are quite popular considering they are very flexible and

highlight individual differences in response to treatment/intervention. Single subject research design

is most often used in applied fields of psychology and education.

three.one.3

Sample Choice

For our study, the purpose is to gain a deeper understanding atour the piggybacking process as a

method of internationalization for industrial firms. For this reason author chose a manufacturing

Indonesian firm. Author are conducting a single-case written report, which implies the sample selection to be

of i company. Within the manufacturing business writer chose PT Yori Masa Company as author

had some personal contacts within the company. Author knew that PT Yori Masa Company was

engaged in export operations.

3.1.four

Data Analysis

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Data assay canorthward exist defined "every bit consisting of three concurrent flows of activity: data reduction, information

display, and conclusion drawing/verification". The data reduction of the analysis helps the researcher

to brand the data sharp, sorted, focused, discarded and organized to be able to describe and verify

conclusions. In this phase the researcher can practice a within case analysis, where he compares the

findings with existing theories (Yin, 2003). Subsequently completion of within case analysis the conclusions

of the research are drawn. Each research question is re-posed and answered, based on the findings of

our study. In our instance writer analyzed the data to encounter patterns how these fitted with contemporary

research stated in our conceptual frame of references. Author did pick out what was relevant for our

inquiry questions.

4.1

EMPIRICAL Study

four.ane.1

General Overview of Visitor

PT. Yori Masa Company is one of rapidly growing modest company which sells wooden flooring, deck

with international quality both domestically and globally, This visitor has experienced consigning

their products to some big countries such every bit China, Australia, Poland, Malaysia and other big

countries in Europe. High quality in production proassessment standard had past this company has resulted in

college price compared to other competitor inorth exercisemestic market, therefore this visitor focused on

global market very much. PT. Yori Masa Company headquarter is located at Setia Budi no. 48 Talise,

E Palu. The owner named Ricky Tjandra begun his operation in Pasuruan since March, 24 2010.

This company has specific operation in wooden construction material trading. At very first fourth dimension, the

wood textile was concentrated to jati only tomean solar day this company no longer uses jati because it is rare to

find and they choose merbau as the substitute. My internship was done at Halmahera no. 30,

Pasuruan, one of the branches of PT. Yori Masa Company.

four.i.2

Data of Employees

The table below will explain in detail about the data of education level and gender of all workers in

PT. Yori Masa Company Pasuruan.

Tabular array 2: Data of Employees

Classification of position

Source: Primary Information (2012)

This company then in order to eliminate their barrier to straight export, this visitor has to add one

more than intermediary so that they can have chiliadore parties who will assistance them to get orders. That new

intermediary must besides bring other advantages to help PT. Yori Masa Visitor in line with its need

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Impact Cistron: ane.3599(GIF),

0.679(IIFS)

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to exist direct exporter. One of the best practices helpful for this company is piggyback export. The

reason why this company applied piggyback export because there are benefits thouatch to company

demand:

1.

Piggyback consign can give opportunity to PT. Yori Masa Visitor as rider to learn how to do

straight export from the carrier's experience that company finally learn chapters to do directly consign.

two.

The carrier is one company that has many branches and overseas distributor channels to ensure that

PT. Yori Masa Company tin increment their sales to maximize the use of capacity. By capacity

optimization, PT. Yori Masa Company tin get new fiscal resource to develop their visitor

globally.

3.

PT. Yori Masa Company can employ the make reputation of the carrier to easily notice buyer in

global market.

4.

PT. Yori Masa Company can take advantage fro1000 carrier's resource in testing market and

determining target marketplace for their product which is complementary to each other.

5.

PT. Yori Masa Company can get information of how they can make innovation of their product

that can fulfill the demand of each country people in global market today.

The chain of distribution used will be one step distribution. Information technology is the easiest style to execute

piggybacking due southince PT. Yori Masa Visitor as passenger does non have to influence carrier to buy their

production, they practise non sell to the carrier merely sell through the carrier and it means that whatsoever company that

will be its partner does non have to be worried about the market demand of product of PT. Yori Masa

Visitor. The carrier will be very attracted with this thouind of cooperation because it is riskless and

they tin enrich their product line to increase their competitive reward among their competitors.

The carrier of this piggyback consign is Traditec. It isouth a worldwide orientated import and export

visitor in roofing materials. They stock over 2.5 million reclaimed clay and physical roof tiles in

various colors, dimensions and types from Belgium, Holland/The Netherlands, France, Due southhurting, Italy,

Federal republic of germany, Smashing Brittan, Denmark, Sweden and Norway. With their own stock and partner network of

salve and reclamation yards in Europe, Us and Australia They take a reclaimed solution for

about every covering enquiry.

They work with several factories which are able to replicate every roof tile imaginable. They also

offer a wide range of roofing accessories form tile clips, roofing screws, underlay, pb, bird

protectors, southnow due southtops, ventilation tiles etc. Their entire product is proven by the highest quality

requirements to match building regulations and grandaintain the characteristics of historic and new

buildings. They service all enquiries with the best possible attending from 1 tile or special fitting to

thousands.

The reason why Traditec is suggested as the carrier of PT. Yori Masa Visitor:

□

Traditec has already had many branches all over the world to find heir-apparent by their own marketing

strategy. It means that the carrier firm may already take skilful coverage in many countries.

□

Make reputation of Traditec is already good in global market place. It is like shooting fish in a barrel to go global customer in

global market place for them, PT. Yori Masa Company tin can learn from Traditec experience of how to build

brand reputation and distribution networks in global market place for its training of being direct

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exporter.

□

Traditec has product tlid is complementary to the product of PT. Yori Masa Company, in club to

consummate their product line, they will like to corporate with PT. Yori Masa Company. Therefore any

commission that must be paid to Traditec volition non exist more expensive than the cost of united statesing export

broker.

□

Traditec help PT. Yori Masa Company to get data about the demand of many more countries

or region for flooring material and which country is the best target market for PT. Yori Masa

Company.

four.1.iii

Piece of work Understanding

Traditec is a partner because what PT. Yori Masa Company produces volition add the production line of

Traditec, Traditec has but roof tile while consumer who want to build a house absolutely volition need

more additional materials such as wooden flooring fabric, door etc. Traditec needs to secure their

customer from other supplier because other competitors tin can influence customer to switch from

Traditec to their shop past offering disbelieve for mass various purchase in whatever edifice materials. That

is strong reason why Traditec volition need PT. Yori Masa Company to complete their product line.

Traditec will need to come to factory in Pasuruan to check the quality of their new production line,

absolutely they wsick tell everything virtually how PT. Yori Masa Company can yardake innovation based

on the need of global market today, how Traditec does its global marketing try and what countries

ordinarily will need their product.

Traditec will accept commission about 10$ /M³ in a sales for their distributor utilizations. If they exercise non

get lodge, they volition not get any commission. Obviously that it is less risky for PT. Yori Masa

Company. Considering their product will be gratuitous to each other, their human relationship can exist

stronger after contract and PT. Yori Masa Company is a good acquisition partner of joint venture

partner to build a stronger relationship with.

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STUDIES

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The distributors of Traditec

The Netherlands

+ 31 (0)164 75 14 00

world wide web.dakkeramiek.nl

info@traditec.com

Italiana

Italiana@traditec.co1000

Belgie

+ 31 (0)164 75 fourteen 00

www.dakkeramiek.nl

belgie@traditec.com

Nippon

Japan@traditec.com

Luxemburg

+ 31 (0)164 75 14 00

Luxemburg@traditec.com

Australia

Autralia@traditec.cok

Salṭanat ʻUmān

Oman@traditec.com

Austria

Austria@traditec.com

Canada

Canada@traditec.com

Al Mamlakah al Arabiyah

as Suudiyah

Saudi-Arabië@traditec.com

Danmark

Phone: 36 96 42 75

Danmark@traditec.com

Sverige

Phone: 08 559 26 303

Sverige@traditec.com

France

French republic@traditec.com

United-Kingdom

Phone: 33 0001 0192

Uk@traditec.com

Deutschland

www.traditec.de

Deutschland@traditec.com

U.s.a. of America

Telephone: 518 620 1446

Usa@traditec.com

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five Conclusion

Piggyback is very good marketing strategy for Indonesia SMEs to apply. It can aid them to increment

their export past utilizing the distribution channel and promotion ability of bigger company. It is wise

to find global partner in the countries that have been Indonesia strategic partners in economic

communities. This strategic relationship will work considering it offers mutual benefits for both carrier

and passenger, carrier has to provide new product to complete their shop and satisfy their customers, while

rider can become more powerful managed distribution channel and lesson from its carrier which cooperate

as partner and not amanuensis. By this concept, anyone can be a partner as long as the product is supporting

to each other, moreover information technology can be applied to big company with the same product but different segment

every bit experienced by PT Yori Masa Company.

At that place are some reasons why carrier is argued to be able to satisfy their customer better with

piggybacking, the reasons are (1) The buyer can suggest to get discount if they make a big order

consist of various complimentary products, (2) The buyer exerciseesn't need to discover anymore seller as they

volition existnefit frothou time and cost efficiency, (3) The heir-apparent can become quality assurance from one carrier,

there is no risk to get unqualified product from diversification. Piggyback is easily implemented and

bring many benefits to stakeholders.

6.

RECOMMENDATION

In that location are some points to practice by Authorities in Indonesia to succeed the implementation of

piggybacking. SMEs are weak of law protection and understanding although it is important for

piggybacking process. SMEs must be protected by police in their proassessment of piggybacking, patent right

must be affordable and for SMEs to prevent irresponsible action of carrier from stealing the

innovation concept of SMEs product since they become their customer satisfied, in this instance carrier may

finish its partnership with rider suddenly. Authorities need to provide facilitate for SMEs to have

law protection through written agreement that must be requirement before piggybacking. This will

need government effort to socialize SMEs with law information.

Government must too provide mediation between SMEs and large companies from both domestic and

global MNC as SMEs has few networks of big companies though information technology is required to find partner that are

big, highly reputed and has potent distribution channel for piggybacking. Bated of that, one essential

matter to consider by authorities is the plan to aid SMEs standardize their products and comply

with international standard. This is rather difficult simply with the help of carrier for the technology and

knowledge transfer, authorities can contribute to give loan for operation machinery funding and

training of production staffs, the capability of SMEs to comply with international standard will be

very of import to the success of export by piggyback marketing.

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ResearchGate has not been able to resolve any citations for this publication.

  • Tulus Tambunan Tulus Tambunan

The main aim of this paper is to discuss recent development of micro, small and medium enterprises (MSMEs) and their current problems in Indonesia, based on assay of secondary data on their performance focusing on their contribution to gross domestic product (Gross domestic product) and productivity, and their constraints. It shows that their GDP share is larger than that of large enterprises (LEs). But it is mainly considering their number is huge, while their productivity is low. Their master constraints are mainly high toll of raw materials, marketing difficulties, and lack of uppercase.

THE objective of this research is to place and analyze the problems faced past exporters in conducting product consign. Unit analysis is limited to Pocket-sized and Medium Enterprises (SMEs) considering that they lack resources compared to large enterprises. Since the trouble is subjective in perception, questionnaire is used as the research instrument. Questionnaire was distributed to companies and was filled by their staff who is responsible to handle exporting activities. Data collected was and then analyzed by using statistics tool, in order to verify the factors which influence the export problems significantly. The effect of the survey shows that the factors which influence SMEís export performances in Indonesia are competition, long duration of consign document procedure, product quality, export barrier from country destinations, low adequacy in high production, delay in transportation, communication barrier, government agencies that presume become barrier, lack of international market knowledge, barrier of entering international market, export administrative procedures, inefficient production cost, unofficial fee in export documents processing, incapable to supply product in time, lack of knowledge in transaction method, limitation of destination country, time limitation in cargo, and filibuster of aircraft. As tin can be seen, the cause of some of export barriers is because of human cognition too as government authorities and agencies. The nigh important factors considered to overcome the barriers is to equip SMEís management with preparation and information

  • Christian Grönroos Christian Grönroos

Discusses some key challenges for service firms planning to become abroad and presents five different types of internationalization strategies for services, none of which are mutually exclusive. These are: straight export of services in terms of repairs and maintenance that are most appropriate to industrial markets; systems consign that is a joint export effort by two or several firms whose solutions complement each other; direct entry manner which means that the service house establishes a service-producing organization of its own on the strange market place; indirect entry which is used when the service firm wants to avert establishing a local operation that is totally or partly owned by itself (common modes are through licensing agreements and franchising); and electronic marketing which does non demark a business firm to a particular location.

Listing of Contributors. one. Supporting the Consign Activities of Small and Medium Enterprise (SME) B. Levy, et al. 2. Technical, Marketing and Fiscal Support for Indonesia'due south Small and Medium Industrial Exporters A. Drupe, B. Levy. 3. The Support System for Small and Medium Exporters in Japan Chiliad. Itoh, S. Urata. four. Korean SMEs and Their Back up Mechanisms Linsu Kim, J.B. Nugent. 5. Colombia'south Small and Medium Exporters and Their Back up Arrangement A. Berry, J.F. Escandon. 6. Comparative Analysis of SME Support Systems B. Levy, et al. 7. Implications for Theory, Policy and Future Enquiry J.B. Nugent, et al. References. Alphabetize.

In spite of important global inroads and successes scored by international marketing, the field stagnates in the optics of academics, practitioners, and policymakers and is harshly attacked past activists. The people defending international marketing usually bespeak to vague theoretical and long-term goals, whereas opponents serve up facile polemics, which acquire sympathies from the uninformed public. The authors postulate that the field of international marketing has already and can continue to brand major contributions to the improvement of society. They offer 7 theses in support of a lively debate for the sake of a renaissance of the field: (1) remember the roots and purpose of the field, (ii) resist the temptations of overspecialization, (3) piece of work with a new image and new methods, (4) look to the world, (5) maintain the dialogue with all possible constituents, (6) work also with those who place or show, and (7) profess expertise.

  • Vern Terpstra

http://deepblue.lib.umich.edu/bitstream/2027.42/36200/2/b1412000.0001.001.pdf http://deepblue.lib.umich.edu/bitstream/2027.42/36200/1/b1412000.0001.001.txt

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  • June Thursday

th June, 2018 Folio No: fourteen Web: www.irjms.in E-mail: irjms2015@gmail.com, irjms.in@gmail.com

International Marketing and Export Management

  • G Albaum
  • J Strandskov
  • D Duerr
  • L Dowl

Albaum, G.,Strandskov, J., Duerr, D., and Dowl, 50. (1994). International Marketing and Export Management 2nd ed. Workingham: Addison -Wesley Publishing Company.

ASEAN Community: SMEs in ASEAN Community Era. Publication of ASEAN Agreement Committee and Ministry of Foreign Diplomacy

  • Ashariyadi

Ashariyadi. (2016). ASEAN Community: SMEs in ASEAN Customs Era. Publication of Asean Agreement Committee and Ministry of Foreign Affairs, Indonesia

International Marketing 9th ed

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Cateora, P.R. (1996). International Marketing 9th ed. Boston: Irwin.