Marketing Model Design Using System Dynamic Approach

-The Abstract of My Undergraduate Final Project-

Recently, PT. Telekomunikasi Indonesia Tbk. as one of the state-owned enterprise has several telecomunication services facilities which are offered to the Indonesian people. Its business value is currently increasing. However Telkom FLEXI, as one of Telkom business units, is currently losing its competitive advantage especially in the West Java CDMA market. The competition of telecomunication services is getting more fierce, the number of telecomunication operators is growing rapidly, on the other hand the growth of FLEXI new customer especially in the urban area has shown constant trend, this condition must be anticipated instantly by the TELKOM FLEXI management.

Considering this condition, it is important for the TELKOM management especially TELKOM FLEXI management to choose the right marketing policies such that the targeted product selling performance can be achieved, although the external conditions keep changing. The arrangement of the optimal marketing policy requires the company ability to understand the dynamic behavior of the market. This market dynamic behaviour is caused by several elements which interact inside the currently formed market.

The system dynamics model has been developed to simulate market competitionin the West Java CDMA provider market. Three players are involved in the competition, i.e:FLEXI, FREN, and ESIA. Based on the market share attractiveness and community consumption rate, five sub-systems have been developed to representing the market competition. The subsystems are: tariff and price, market share, marketing expenses, sales, and demand potential.

Based on the analysis of the mathematical model, the policy which is most significant in market share development of a certain CDMA provider is the below the line marketing expenses. For the community consumption rate, marketing expenses agregate value is the most influencial variabel. From the simulation results, it is recognized that the basic policy model which represents current condition would not let FLEXI achieve the targeted marketing performance. From 15 policy scenarios designed, there are two scenarios produce the best results in fulfilling the stated FLEXI target.

Keyword: market competition, marketing policy, system dynamics, CDMA providers