Paradox Marketing Implementation for Business Sustainability in Indonesian Telecommunication Company
The study provides the analysis of paradox marketing strategy implementation for business sustainability for Indonesian telecommunication company using the Telkom as a center of investigation. The research objectives have been achieved and research questions answered using both the primary and secondary research. The secondary data are collected using a comprehensive literature review from various scholarly research articles. Moreover, comprehensive literature review is carried out by collecting data from various research articles from EBSCOhost database, Science Direct, Emerald Publication, university libraries, and online academic libraries. The quantitative research is used as a method of data collection using the survey strategy. Comparative analysis carried out between qualitative and quantitative research reveals that quantitative research is more appropriate to complete the thesis because it saves time and is cost effective.
The data collected through primary and secondary research have been used to achieve the research objectives and answer the research questions. The results of the primary data reveal that Telkom has used the paradox marketing to achieve sustainable market advantages in Indonesia. Application of the paradox marketing technique has made the Telkom to increase number of cellular subscribers in Indonesia in the last few years, which has made Telkom to increase sales and revenues within few years after the application of the model. Despite the benefits that Telkom achieves from paradox marketing model, the government needs to use different strategies to attract large communication companies from other countries to invest in Indonesia telecommunication industry. The strategy will make the telecommunication services to be more accessible to large number of Indonesian population.
Introduction
Businesses globally have recognized increased necessities to develop skills, aptitudes, and knowledge to compete effectively in the competitive market environments. Emergence of globalization, open world economy, and expansion of internet access have increased interconnections and interdependence of businesses, which consequently lead to competitions among businesses. Moreover, dynamic and complexity of the marketing environments make companies to formulate the best strategy to manage the marketing of business organizations.
A fundamental goal of marketing strategy is to increase sales and revenues in order to achieve sustainable marketing advantages. Marketing strategy includes all short- term and long-term marketing activities dealing with analysis of strategic situation to assist in formulating and selection of market objectives in order to achieve a company’s strategic goals. A paradox marketing is one of the marketing strategies that organizations employ to achieve competitive market advantages. Similar to other telecommunication companies that develop different market strategies to attract customer, Telkom (Telekomunikasi Indonesia Company) also develops market strategy to attract different categories of customers, and many stakeholders have appraised Telkom based on its excellent marketing strategy, vision and implementation that that the company has adopted. In 2013, the Telkom won the Telecommunication BUMN Marketing Award out of the 32 telecommunication companies that participated in the competition, which was recognized nationally and internationally. The company has been able to win the award based on the paradox marketing strategy that the company has adopted.
The paradox marketing is one of the marketing strategies that can deliver extraordinary results, which combine elements that are mutually contradictory and exclusive to one another in order to formulate marketing strategy. Formulation of marketing strategy to achieve strategic marketing advantages involves analysis of 4 Ps (Price, People, Place, and Promotion) that forms the basis of marketing promotion. The 4Ps marketing mix model is an effective method to stimulate an organizational marketing strategic positions.
A marketing paradox is a marketing technique that utilizes element of 4Ps (Piece, Product, Place and Promotion) where the two poles create unique combination to determine market paradox. Although, this is unusual approach in a product marketing, however, the strategy can create amazing results. The implementation of marketing paradox can assist organizations to make product and services already private to entire public. The strategy is to make limited products accessible to the public, and affordable to consumer . The Telkom has adopted the paradox marketing using the low cost strategy to make its services accessible and affordable to customers. Using the low costs strategy, the Telkom has been to sell its product to enjoy high profits. (Yahya, 2013). The paper develops research aims and objectives to enhance a greater understanding of the analysis of paradox marketing and its implementation for business sustainability Indonesian telecommunication company..A case of Telkom.
Research Aims and Objectives
The research aims and objectives are presented below:
To investigate the implementation of paradox marketing to achieve business sustainability by Indonesian telecommunication company.
To explore the concept of a paradox marketing and its application to Indonesia telecommunication industry.
To investigate factors that make Telkom implementing paradox marketing within the telecommunication industry.
Research Questions
What are the impact of paradox marketing on consumer experience?
To what extent the paradox marketing has assisted the Indonesia telecommunication industry to achieve sustainable market advantages?
How does the paradox marketing assists Telkom to achieve sustainable marketing advantages?
Investigating the research question is very important because it enhances a greater understanding of the paradox marketing and how Telkom has been able to achieve competitive market advantages with the paradox marketing model. Since the liberalization of Indonesia telecommunication sector more than 10 years ago, the country has been transformed into one of the toughest market in Asia. The telecommunication sector has been saturated with low prices that make telecommunication companies to record low profits. The low profits occur because prices are more expensive and many consumers are unable to afford the expensive packaging offered by companies. To overcome the problems, Telkom develops the paradox marketing and utilizes the company assets to harness more values for the organization.
Over the years, the Telkom has derived success from the international calls by forming a partnership with Telkomsel, which is a cellular subsidiary. In essence, the study attempts to answer the research questions because of the benefits that telecommunication industry derives from the paradox market model. Although, some studies have investigated the concept of paradox marketing in a business environment (Triyantoro, 2013, Aidan, 2008), however, there is still a paucity of literatures investigating the impact of paradox marketing on the Indonesia telecommunication industry. Garrity, (2012) points out that large number of management literatures have investigated the paradox concepts, however, literatures on paradox marketing is still limited. The marketing areas that attract more attention include customer service, media and technology adoption. However, researchers still focuses limited attention on paradox marketing. The study answers the research questions to fill the gap that has been created with the scanty of literatures.
Research Organization
Chapter 1 discusses the background of the entire project that discusses different concepts to be investigated. The chapter also develops the research questions, research aims and objectives. Moreover, the chapter discusses the reasons that make the study investigating the research aims and objectives.
Chapter 2 explores the past studies related to the paradox marketing and its impact on the telecommunication industry. The chapter explores the concepts paradox and paradox marketing. Moreover, the chapter discusses the overview of Indonesian telecommunication industry and the major factors that make the Telkom implementing the paradox marketing. The study also discusses the impact of paradox marketing on Telkom market sustainability advantages.
Chapter 3 designs the method of data collection, which compares quantitative and qualitative research. The research selects the quantitative research as a method of data collection and analysis based on its benefits that outweigh the qualitative research. The quantitative research is more cost effective and saves research time than the time to complete the qualitative research. The chapter also designs the survey instrument used to collect data.
The chapter 4 provides the strategy that the study employs in analyzing quantitative data. The research uses the descriptive statistics to summary the raw data in a manageable form, and the findings are presented in tables, graphs and words. The findings have been able to answer the research questions and achieve the research objectives.
Chapter 5 is the final chapter that provides the overall summary of the dissertation and recommendations, which provides the leeway for a future research.
The dissertation reviews the previous literatures to enhance a greater understanding on the theoretical framework relating to paradox marketing. Investigating different models relating to the paradox marketing is very critical to understand its applications in the contemporary telecommunication business environment.
LITERATURE REVIEW
This chapter reviews the literatures that enhance a greater understanding of the concepts paradox marketing and its applications on the Indonesia telecommunication industry. The chapter also investigates factors that make Telkom utilizing paradox marketing strategy in the telecommunication industry.
Overview of Concept of Paradox Marketing
Different theoretical frameworks have been developed to enhance a greater understanding regarding marketing implementations. While marketing theories have been developed from the traditional 4Ps theory — Price, Place, Promotion and Product, however, new Ps -Process, Physical Evidence and People have also been used in the application of marketing framework. Yahya, (2013) identifies factors that enhance consumer behaviors and the factors include cultural background, family, social class, and situation. All these components play important roles impeding and inducing purchasing decisions. Moreover, five components of marketing theoretical approach that include Personality, Knowledge, Attitude, Motivation, and Demography can influence consumer decisions. The psychological process includes learning process, international of information, change in attitude and behavior. Moreover, the psychological, environmental, and social cultural preference are also the concepts that have direct impact on the marketing application and consumer behaviors.
Mark, John, & Jane, (2007) define marketing as “an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.” (p 653).
For more than a century, the concept of marketing has contributed to the element of dichotomy. The authors argue that paradox creates tension within the marketing environment. However, the application of marketing is to integrate paradoxical theoretical approach in the marketing thinking, and the tension in marketing can be resolved by redefining the marketing concept.
The concept paradox comes from Greek word “paradoxon” and Latin word “paradoxum.” The prefix “para” is contradiction, while the prefix “doxa” is popular opinion or belief. Yahya, (2013) reveals the logic behind increase in productivity because the concept paradox leads to sustainable business of win-to-win market structure. In the contemporary business environment, increasing number of businesses are integrating the paradox concept in their business model by translating the old traditional business model to modern innovative business. For example, the Bank Central of Asia has become one of the biggest banks in Asia because the bank invests in ATM (Automatic Teller Machine).The paradox model connotes contradictory and interrelated elements that strengthen and compete one another. In other words, the concept paradox refers to a “situation where two apparently contradictory tensions appear to be simultaneously credible and where resolution is pursued in a non-exclusionary way. Examples of such tensions in marketing are globalization/localization and transaction marketing/relationship marketing.” (O’Driscoll, 2008 p 96-97).
Lewis, (2000) argues that concept paradox assists organizations to respond to the competitive business environment. Since organizations, managers and individuals are embroiled in tensions, and inherent in paradoxical conflicts, there is a need to develop a response to changes of marketplace to achieve a smooth, planned, and linear marketing strategy to encourage organizational development. (Lewis,2000).
Brown (2006) contributes to the argument by pointing out that paradox is valuable lens that assist in studying theory and practice of marketing. In essence, marketing practices are get done by organizations and effective marketing planning assists in coping with inherent tension, equivocation, and ambiguity. Typically, paradox provides theoretical framework to resolve ambiguity. Lewis (2000) argues that paradoxical tension arises because of the interrelated and opposing elements, and managing paradox entails practice to accommodate and accept tension. If an organization aims to embrace paradox concept, there is a need to understand the marketing organization. (Sundaramurthy and Lewis, 2003).
Despite the general argument presented about the paradox model, some marketers and academicians fail to create balance when applying the paradox model to marketing sustainability. According to Yahya, (2013), marketers should consider a company brand, and consumer’s needs. Moreover, a marketer must be sensitive about consumers’ desire and anxiety. Paradox marketing comes in within the marketing practice because the model teaches organizations how to divide their market segments in an appropriate way. The model also assists organizations customizing their products, offers higher price to certain segment and cheaper price to other segments.(Kotler & Kartajaya,2010).
Yahya, (2013) points out that the application of paradox marketing requires a comprehensive study of internal and external environments that an organization intends to operates. Moreover, there is a need to analysis competitive environment where firms operates and consumer behaviors. Slotegraaf & Dickson, (2004) contribute to the argument by pointing out that the central element of marketing planning is based on firms’ resources. In other words, firms’ resources are the critical elements that can assist organizations to achieve competitive market advantages. Thus, incorporating strategic planning in marketing plan is the source of the organizational agility. (Chaffey, Mayer,, Johnston, & Ellis-Chadwick, 2000). The main goal of strategic planning is to project the market opportunities, which requires the understanding of environments as well as recognizing the value of available resources. Essentially, marketing planning enhances firms’ positive marketing performances. Powel (1992) argues that firms are more effective when they deploy their strengths to study emerging market trends.
Slotegraaf, & Dickson (2004) believe that organizations are likely to increase performances if they integrate paradox marketing in their strategic planning. Despite the benefits to be derived from the paradox marketing, there is still need to devise a strategy to manage paradox marketing planning. A strategy to manage the paradox marketing is to carry out effective planning with reference to both internal and external environments. However, Triyantoro (2013) describes the concept marketing paradox as the marketing strategy that combines elements of mutually contradictory or exclusive to one another in order to formulate marketing decision . Yahya (2013) believes that element of 4Ps approach yield remarkable results. The paradox marketing identifies at least two poles, which creates a unique combination to determine strategic implementation of marketing. The four pillars of paradox marketing and their polarities are as follows:
Place: Public-Private
Product: Consumer-Enterprises
Price: Retail-Wholesale
Promotion: Personal — Social
The first pillar of marketing paradox is to make private product becoming public to make products and services accessible to large number of customers. The strategy is to make product and services accessible and affordable to different circles. (Yahya, 2013). The second pillar in the paradox marketing is to service individual customers such as corporate customers. The third pillar is the relationship between retail and wholesale customers. For example, when customers buy product in volume, they are able to enjoy cheaper price per unit instead of allowing customers to purchase product in small quantity and pay higher price per unit. The third strategy provides the revenue sharing between retailer and wholesalers. The fourth pillar of marketing paradox involves promotional strategy that targets the community. The overall goal is to attract large number of active customer engaging in social relations with the company. “The more leverages are employed, the more unusual the implementation of paradox marketing become. Thus, the harder it is for competitor to imitate.” (Yahya, 2013 p 64).
The foundation of paradox marketing consists of three elements: Targeting, Segmentation, and Positioning. The tactical portion of this model consists of supporting tactic and main tactic. The supporting tactic composes of three pillars: Price, Product and Promotion. On the other hand, the main tactic is place and last pillar, where each pillar is paradoxical in nature.
The model defines “paradox marketing as a marketing concept that comprises supporting tactic, main tactic, and strategic foundation that operate within the four paradoxical pillar: (4 Ps Price, Product, Place, and Promotion) that create sustainable marketing outcomes and delivers remarkable marketing results. ” (Yahya, 2013 p 64).
In paradox marketing, effective segmentation facilitates optimal function of pillars. However, market-based segmentation is preferred for the implementation of paradox marketing. In marketing world, types of marketing-based segmentation are: vertical horizontal and cluster. (Chong, 2003).
Targeting is the second element. The moving target is appropriate in the marketing world because of the turbulent business environment. However, firms should expand their products offering to enjoy the benefits of moving target. Positioning is the last element. The positioning assists organizations to determine their position relative to competitors, which offers the best strategy to determine the position of an organization. (Constantinides, 2002). In essence, mass customization is the best strategy to offer better value for customer. For example, organizations are required to offer best values and offer low prices for customer.
Yahya, (2013) identifies place as the main tactic of paradox marketing where producer and consumer meet. When targeting large consumer, accessibility of product and services is very critical. In paradox marketing, the best solution is to use the tactic buyer as seller. If done properly, organizations will be able to make its products and services accessible to consumer without hiring additional staff. Paradox marketing also focuses on standardized product meant for specific category of customer. On the other hand, specific products are not standardized and not meant for specific customer. By combining two categories of products, it will be possible to create product customization. The strategy is to serve the specific needs of medium-sized consumer as well as community member.
Price is another pillar of paradox marketing. Choosing the right price is very essential for marketing technique. The lower the price, the more attractive the product. In reality, the issue is not always the case because some group of high taste customers still prefer products commanding higher prices. Promotion is very critical when marketing products. In Indonesia, the conventional media that include newspaper, radio, and television still dominate the contemporary marketing environment. However, new media such as social networking is emerging. By combining both new and conventional media, organizations will be able to achieve high promotion impact with low budget.
On the other hand, Ghanadan (2012) argues that large number of companies put the bulk of their marketing resources on product promotions. While branding is very important in the marketing strategy, many organizations only focus on product promotion, and a successful marketing campaign is to build a paradox between product and brand promotion to assist organizations maximizing their revenues. In essence, brand and product promotion should go hand-in-hand, and if a company is able to achieve market advantages using product promotion, the success will only be in short-term. The paradox marketing is an effective strategy that organizations can employ to promote both product and brand.
Similar to paradox marketing that focuses on 4Ps, Kotler, & Armstrong.(2012) identify another system of marketing mix that consists of personal selling, advertising, sales promotion, public marketing, and public relations used by many companies to achieve marketing and advertising goals. Kotler, & Armstrong.(2012) highlight that marketing is important because it assists in providing information to the public with reference to the goods and services that a company produces. Typically, advertising is a powerful promotional strategy to build public awareness about product and services that a company produces. (Goi, 2005). Sales promotion is directed to consumer to enhance publicity of goods and services. Examples of sales promotion are coupons, samples, discounts, demonstrations and contests. However, trade promotion is directed to traders or retailers using the contests dealers and advertising discounts. (Kalyanam, & McIntyre, 2002). On the other hand, public reactions are used to promote a firm’s image. A company can also use events that include seminars, competitions, contests to reinforce an organizational image. Personal selling is a two-way communication that satisfies and explores the need of prospective buyers to benefit buyer and sellers favorably. Direct marketing is also part of the marketing mix that uses media to motivate consumer as well as getting consumer response without involving retail stores. (Kent, & Brown, 2006).
However, the interactive marketing is the fastest and latest strategy to communicate with customers quickly to assist organizations selling directly to consumers. Moreover, internet technology has assisted organizations to interact effectively to enhance competitive market advantages. The word of mouth is another marketing mix used to target potential consumer . (Kotler, 2003).
A word of mouth about a product can have extensive marketing effect especially when a well-known person passes the comment .(Kotler and Kartajaya, 2010) . Goi, (2009) contributes to the argument by discussing the 4 Ps of the paradox marketing. The author points out that marketing mix originates from the microeconomic theoretical perspective, and marketing mix is the tool to develop long-term strategies and short-term strategies for organizational efficiencies. In essence, marketing mix is very effective in the development of marketing practice and theory. (Moller, 2006).
The main benefit of marketing mix is to assist organizations to achieve competitive positions. The marketing mix also assists organizations to allocate available resources to achieve competitive advantages.
Triyantoro (2013) identifies education and promotion as part of the model of brand communication that provides information about consistency, brand reputation, and high quality. In essence, a brand should possess unique values that can make consumers having interest in buying a particular product, an increasing number of organizations are using the brand strategy to develop a marketing strategy. (Palmer, 2004).
Marketing professionals have developed different marketing model to assist organizations to achieve competitive market advantages. The model of marketing paradox utilizes the four pillar of marketing concept that utilizes 4Ps: Product, Price, Place and Promotion, and at least two poles of the paradox marketing to create a unique combination to achieve amazing results. (Patterson, . & Ward, 2000).
In the contemporary marketing environment, increasing number organizations are using sustainable marketing theory to design their marketing strategy in order to enhance competitive marketing advantages. The sustainable marketing model is the strategy of designing product and services.(Cherian, and Jacob 2012). In other words, sustainable marketing refers to a business decision to design product that are presumed to be environmental safe. (Kaur, 2014).
Despite the benefits that organizations can derive from 4Ps marketing mix, Wang, Wang and Yao, (2005) point out that there is still a degree of dissatisfaction with the application of 4Ps frameworks that leads to the development of 7Ps frameworks. Typically, there is a need to implement modification in 4Ps because all the frameworks of the marketing 4Ps mix are equally important leading to a deficiency in any in the 4Ps.( Wang, Wang and Yao, 2005). Popovic, (2006) criticizes the concept 4 Ps because they are production-oriented and not customer-oriented. Moreover, the 4Ps does not take consumer behavior into a consideration. There is also a high degree of dissatisfaction with 4Ps in consumer marketing, which leads to the application of 7Ps frameworks. Despite the criticisms centered on 4 Ps marketing framework, the paradox marketing model redesigns the 4 Ps framework and applies the model to the telecommunication sector in Indonesia. Telkom is the major telecommunication company in Indonesia that has used the paradox marketing theoretical framework to enjoy market superiority in Indonesia.
Overview of Indonesia Telecommunication Industry
A change in telecommunication law that allows competitions in the Indonesia telecommunication industry has resulted to the rapid growth of the industry. Moreover, advance in communication technology has accelerated the growth of the telecommunication industry. Since the government has deregulated the telecommunication sector, the Indonesian telecommunication sector has recorded an intense competition in the internet, multimedia and data communication. The diversification has also made the telecommunication business to gain momentum leading to an intense competition in term of customer service quality, network coverage and price. Increase in the use of mobile devices such as Smartphone, and access to internet features have also led to the growth of Indonesia telecommunication industry. The overall growth rates have resulted in constant innovation, and higher industry efficiency in the Indonesia telecommunication industry.
The Indonesian demographic is also one of the major factors that contributes to growth of telecommunication industry. Globally, Indonesia is the fourth largest population and the country has recorded a growth rate in the middle class. In the last few years, the Indonesian has recorded a stable economic growth leading to the high demand in the data and telecommunication services. (Annual Report, 2014). A report by Research and Market (2015) reveals that telecommunication industry in Indonesia has played a critical role in the development of Indonesian economy in the last few years. The industry has increased connectivity across the country, and stimulated the growth of other sectors such as finance, banking, hospitality, software and trade. The Indonesia telecommunication sector comprises of different segments, which include cellular servicers, fixed line services, internet and network infrastructure services. By 2013, the Indonesia has the third global largest cellular subscriber apart from China And India. Between 2008 and 2012, the wired line subscription grew by 5.7%, however, it declined by 19% in the 2013 fiscal year. The penetration rate of mobile cellular penetration rate grew by 30% between 2003 and 2011 increased by 100% in 2011 and 125.4% in 2014. However, the telecommunication industry recorded a lower subscriber growth in 2014 leading to decline in the voice average revenue.
On the other hand, wireless communication enjoys an immense growth in the last few years, and the major reason leading to the growth of wireless communication is due to an increase in the number of internet users between 2008 and 2012. Telkom is one of the internet providers, and by 2012, the Telkom could boast of 151 million mobile phone or landline subscribers. While the fixed telephone subscribers decline, subscribers for wireless telephone increase. (Annual Report, 2014).
A report presented by BMI Research (2015) revealed that the mobile subscription in Indonesia was over 322.9 Million at the end of 2014. However, Telkomsel was the first mobile operator in Indonesia offering 900 MHz spectrum in 2014. Despite that Telkomsel appears to be the first mobile operators in Indonesia, the Telkom is the largest Indonesia telecommunication company. Traditionally, “Telkom provides telecommunication services for both domestic and international connections through fixed landline telephony (landline), CDMA (Code Division Multiple Access) and GSM (Global System for Mobile Telecommunication). Telkom also offers interconnections services between different telecommunication operators.” (Yahya, 2013 p 110). Over the years, Telkom has invested in various technology to diversify its business portfolios.
The strength of Telkom lies in its number of customers patronizing the company. In 2012, the company can boast of over 147.5 Million customers. Moreover, Telkom enjoys both inorganic and organic growth . The organic growth comes from existing business expansion, while the inorganic growth comes from acquisitions, and Telkom continues to acquires different companies vital to their inorganic growth. The strength of Telkom also lies on being the state — owned company, which assists Telkom to accumulate vast financial resources used to dominate the telecommunication industry in Indonesia. Despite the financial resources that Tekom has accumulated over the years, Yahya (2013) believes that Telkom is still experience a sluggish growth based on the analysis of its financial report between 2007 and 2011. Moreover, Telkom stock performances is sluggish based on its declining stock price in the New York Stock Exchange. In 2010, the Telkom stock price was $35.76, however reduced to $29.51 in 2012. The decline in the Telkom share prices in the New York Stock Exchange and Indonesian Stock Exchange is attributed to the fierce competition that Telkom is facing in the Telecommunication industry.
The source of Telkom value is derived from mobile communication, wireless telephone connections, data communication and network and interconnection services. The marketing strategy that Telkom implements over the year makes the company to enjoy monopoly over the telephone segment. Currently, Telkom enjoys 78% of the telecommunication market share in 2015 in the fixed- broad market because of the rise in the middle class population. Presently, the Telkom records more that $600 Million from the Indonesia Digital Network in 2015. The business strategy of the Telkom is the application of the sustainable digital business, and Telkom develops the optical fiber-based network to assists in accessing 13.2 Million subscribers in the optical fiber network . (Annual Report, 2014).
In 2014, Telkom built 15,558 3G/4G BTS, and by the end of 2014, Telkom could boast of 85,420 BTSs where 45% were 3G/4GBTSs. The goal of BTS infrastructure is to provide the best digital experience for customers. Additionally, the Telkom has installed 170,000 Wi-Fi access points to enhance connectivity across Indonesia. The Telkom has also joined partnership with Telkomsel to develop fixed broadband services in order to support superior backbone network. At the end of 2014, the Telkom built 76,700-kilometer fiber-optic backbone Network. The Telkom has also continued building the backbone network to reach all parts of archipelago in Indonesia. Typically, “Telkom has built 54,800 m2 worth of data center to support the cloud computing services.” (Annual Report, 2014 p 2). The goal is to provide a comprehensive digital service to meet customer needs using various applications. Telkom has also built broadband infrastructures to achieve positive results such as achieving growth in revenue and future growth. The partnership that Telkom has with Telkomsel has assisted the growth of its revenue. Moreover, the Telkom has ” supported Telkomsel in developing its business by allocating the largest portion of its capital expenditure to strengthen its business to maintain an above industry average growth.” (Annual Report, 2014 p 2).
The Telkom has also been able to manage risks and strengthen its business model through the PT Telin (Telekomunikasi Indonesia International), which is one of the Telkom subsidiaries. Typically, Telkom operates in 4 countries that include Hong Kong, Malaysia, Saudi Arabia and Macau. The company also operates the MNO (Mobile Network Operator) and BPO ( Business Process Outsourcing ) in New Zealand and Australia. Telkom also has the telecommunications-related businesses in the United States and Taiwan. The development of broadband infrastructure has been one of the strategies that Telkom has employed in achieving growth rate in the industry. In 2014, Telkom recorded 32.5% increased in revenue compared to the 28.2% revenue growth recorded in 2013.
Yahya, (2013) supports the argument of the previous authors by pointing out that Indonesia is one largest population in the world with growth rate of the middle class. Indonesia provides the opportunity for Telkom to get access to the professionals specializing in the telecommunication sector. In 2012, the numbers of cellular telephone users in Indonesia reached 255 million that exceed the Indonesian population of 240 Million. The data presented by the IDS (International Data Corporation) revealed that the smart phones sales increased from 11% in 2011 to 13% in 2012. The population growth, and increase in the number of middle class have made the smart phones to be more affordable.
Moreover, Telecom operators have seized opportunities of the growing markets to increase access of internet and makes the internet to be affordable. The internet penetration reached 61.8 Million in 2012, which a quarter of Indonesian population. However, the big market has changed the consumer behavior because consumers are increasingly intelligent. Increase in consumer awareness and competitive market environment make Yahya, (2013) to implement paradox marketing to assist Telkom achieving competitive market advantages in the telecommunication industry.
Factors making Telkom Implementing Paradox Marketing in the Telecommunication Industry
Intense competition within the communication industry makes Telkom to develop paradox marketing to increase sales, and promote its services in the communities.(Annual Report, 2014 p 117). Typically, Telkom applies the paradox marketing concept to offer value and lower price to customers compared to prices that the competitors offer. The factors leading to the development of paradox marketing is to provide practical, contradictory, and paradoxical strategy to conquer the complex market. The company also uses the paradox marketing to obtain satisfactory and sustainable market results. Before Yahya, (2013) formulated paradox marketing, the Telkom’s growth rate was stagnant making the company to record a decline in share prices. The formulation of paradox marketing has made the Telkom to enjoy rapid growth rate. In Indonesia, the Cellular penetration is 105%, and Telkom controls 43%. Moreover, Telkom has a strong domination in fixed wireline sectors. The company domination in broadband sector has reached 61%, and Telkom uses the social promotion, wholesale-retail price, and enterprise-consumer products to obtain satisfactory results.
Essentially, Telkomsel is the backbone of the Telekom business success by contributing to more than 60% of the revenue earned in the last few years. Telkomsel is committed in developing the main broadband infrastructure for Telekom in order to improve service coverage and quality. Telkomsel has also committed in developing the state of art technology to enhance customer experience. The Telekom has supported Telnkomsel to allocate capital expenditure to strengthen the business in order to record industry average growth. In the last few years, the Telekom has responded to global market challenges by adopting sustainable competitive business and implement digital business. The digital business has made Telkom business to be sustainable and competitive. Investing in digital business is one of the strategies to remain competitive while improving the sustainable growth. In 2014, the Telkom main business program is to enhance the growth of organizational digital business. Telkom commitment is to use the CSR (Corporate Social Responsibility) to develop the sustainable business by creating harmonious and good relationships with the community that it operates. In Asia, Telkom has used the promotion technique to increase public awareness about the sustainable business that the company has implemented. Telkom has also used the cause related marketing where the company donates part of its income to the community to address the social problems. The corporate philanthropy is also used to donate to the needy, and Telkom uses the community volunteering to encourage employee to contribute to the CRS activities.
Yahya, (2013) identifies sustainability as the backbone of paradox marketing, and organizations should integrate value in their products to deliver sustainable business growth. For example, sustainable retail-wholesale business determines how businesses have been able to deliver value to consumer. Moreover, a sustainable business requires participation of consumer in social platform. The online campaign can be used to attract large percentages of consumers participating in social media to enhance effective sustainable business. The study discusses the method of data collection in the next chapter to reveal the method Telkom has used paradox marketing to achieve sustainable market advantages.
RESEARCH METHODOLOGY
Research methodology is the method of data collection to answer the research questions and research objectives. Qualitative research strategy is the major method of inquiry using tools such as interview, document analysis or case study to understand the research phenomenon. On the other hand, quantitative research uses the survey method to investigate a research inquiry. Evaluating the strength and weakness of both the qualitative and quantitative research is very critical to identify the appropriate research method to collect data for this study.
The quantitative research investigates research inquiry using the positivism by collecting and analyzing data with statistical technique. Moreover, quantitative research tests the hypothesis with statistical tool and displays research results using tables, charts and graphs. Contrarily, the qualitative research collects data using the in-depth interview, however, quantitative study uses the survey method as the instrument of data collection. Fundamental difference between qualitative and quantitative studies is the way both research techniques view the world. While the quantitative research views the world in a realistic and positivism approach, the qualitative research views the world in a subjective approach. This study prefers using the quantitative research over qualitative research because quantitative research can assist in validating and testing theories.
Moreover, the quantitative research can assist in arriving at research findings when data are sufficient in size. Moreover, quantitative study allows quantitative prediction, which assists in eliminating the confounding influence of the variables. The data collection using the quantitative research is relatively quick because it provides a precise, numerical and quantitative data. The data collected using the quantitative technique is relative quick because the researcher can use the statistical software to analyze data.
The research findings can have higher credibility because the findings is independent of researcher. The results from quantitative study can be used to study large population. Moreover, the quantitative study is more cost effective because its method of data collection is relatively quick and less time consuming. More importantly, the results generated by the quantitative research is free of bias and can produce research reliability and validity. Other strength of quantitative research is its ability to collect data from large population. The findings derived from quantitative study can deliver high statistical significant. Despite the benefits to be derived from using quantitative research technique, the research findings might be too abstract to be used for direct application of local situation. However, the research technique is appropriate to investigate the paradox marketing implementation on Indonesian telecommunication company despite the shortcomings identified in the quantitative study,
Data Collection Technique
The study uses the survey method to investigate the implementation and application of paradox marketing on Indonesian telecommunication company. The project uses 5-Likert scale survey instrument based on the following format:
” (1) Strongly Agree (2) Agree (3) Neutral (4) Disagree (5) Strongly Disagree.”
One of the benefits of using the Likert Scale questionnaire is its universal application because its design can be easily understood by respondents. The Likert Scale can be used to quantify responses using statistical analysis. The survey instrument is also an efficient and effective strategy of collecting data. Despite the benefits that can be derived from Likert scale instrument, an dishonest researcher can fake results using the data collection technique. Additionally, the scale may not deliver accurate measure of individual opinion. (McNabb, 2002).Despite the shortcoming identified in the Likert study, its benefits outweigh its shortcomings. The researcher sends 500 questionnaire using the email to the sample population and only 100 questionnaires are used to answer the research questions and research objectives. Before the questionnaires are distributed to the participants, the researcher seeks agreement from participants. Out of 500 survey questionnaires invitation, 346 sample population agree to participate in the survey, and the researcher allows participants 10 days to fill and return the questionnaires. Within the 10 days grace, 284 sample population return their questionnaires through emails. Out 284 questionnaires returned, 121 filled their questionnaires correctly. Since the study only need 100 valid filled questionnaires for the results, the researcher randomly selects 100 questionnaires out of the 121 returned. The Table 1 anf Fig 1 provide overall summary of data collected:
Table 1: Questionnaire
Data
Questionnaire Invitation
Questionnaire Distributed
Questionnaire Returned
Questionnaire filled correctly
Questionnaire not filled correctly
Questionnaire randomly selected
Subject Population
The subject population are the participants taking part in the survey, and the subject population consists official of different telecommunication companies, top officials of Telkom, and Telkomsel companies. The study also selects public officials working in the telecommunication arena. The sample population are also selected small, medium and large telecommunication companies in Indonesia. The demographic data of the subject population are 74 males and 26 females. The male sample population outnumbers female sample population because percentages of male personnel working in the telecommunication industry outnumber female personnel. The age ranges of the subject population are between 25 and 65 and drawn from diverse ethnic background. The paper provides the survey instrument in the next section
Survey Instrument
Consent Instrument
Thank you for participating in the survey. The survey will not take you more than 30 minutes of your time to complete. This study is to investigate the paradox marketing strategy implementation to achieve business sustainability in Indonesian telecommunication company. Your participation in the survey is voluntary and you are free to withdraw any time. You are assured that we will not display your name in the research findings and all the information collected will be highly confidential. The survey consists of different sections. The section 1 is designed to demographic data:
Section 1
Demographic Data
Pick your gender
Male
Female
What is your age?
Under 18
18-24
25-34
35-44
45-54
55-64
65 or Above
Pick your martial status
Single
Married
Living with partner
Seperated
Divorced
Widowed
Prefer not to answer
Pick your employment status
Employed full time
Vocational or Trade
Not employed
Retired
Student
Your education level.
Some high school
High school graduate
Trade or Vocational degree
Associate degree
Bachelor’s degree
Professional or Graduate degree
Section 2
Please choose you agree or disagree with the following statements .
Strongly Disagree
Disagree
Neutral
Agree
Strongly Agree
1
Traditional advertising technique such as TV, Newspaper and Radio serve as the major advertising method used by the Telecommunication company
2
Online marketing such as internet and social marketing as the major advertising method used by the Telecommunication company
3
Telecommunication company used both the traditional advertising and online marketing as the major advertising method used by the Telecommunication company
4
Telecommunication company such as Telkom use 4Ps — Price, Place, Promotion and Product as the promotion method.
5
Telkom Company promotes environment sustainability in the community in the pace that its operates
6
Paradox Marketing adopted by Telkom assists the company to achieve extra-ordinary high revenue results.
7
Paradox Marketing technique makes the Telkom product and services accessible to consumers at affordable prices.
8
Increase of profitability is the major reason that makes Telkom to implement paradox marketing model.
9
Application of the sustainable digital business such as the optical fiber-based network assists Telkom to gain 13.2 Million subscribers in the optical fiber network.
10
Telkom adopt paradox marketing to achieve sustainable marketing advantages through corporate social responsibility.
11
Telkom sustainable marketing paradox strategy is by using part of the profits to revive community enhance environmental sustainability.
12
Providing customer with sustainable product is an effective method to enhance their personal shopping relevant experience.
13
Telkom focuses on building customer database by providing values to both high value and middle value customer segments
14
Both online and direct marketing are the effective marketing strategy to reach large number of customer.
15
5. Findings and Discussion
Statistical Data Analysis
This section discusses the strategy to carry out the data analysis. All the data are collected and analyze using descriptive statistics to summarize the data in a manageable form using the Mean, Median, Mode and Standard Deviation . After the analysis, the results of all the data are presented in graphs, tables and charts. The descriptive statistics are also used to compare the extent participants disagree and agree with the questionnaires. Additionally, the study uses the inferential statistics to present the results to answer the research questions and achieve the research objectives. The findings are presented in tables, words, charts and plots.
This study takes three steps in carrying out the quantitative data analysis. First, the study carries out the data preparation that involves cleaning and organizing of the data in coherent form. Moreover, the thesis describes the data using the descriptive analysis. The final step is by using the inferential statistics to present the results to answer the research questions and research objectives. (Trochim, & Donnelly, 2007). To carry out the data preparation, the researcher checks the data to enhance its accuracy. Moreover, the rsearcher enters the data into the computer to transform the data to develop database structure. Checking the accuracy of the data is to check whether the data are readable or legible. Moreover, the researcher checks whether all the questions are answered. The study also enters the data into the computer using the double entry to reduce the entry errors.
The next step in the descriptive statistics is to describe and summarize the basic features of the data. Using a graphic analysis, the descriptive statistics form the basis of quantitative analysis. While the descriptive statistics summarizes the whole data in a manageable form, inferential statistics are used to reach a conclusion about the data and infer what population will think about the data. The table 1 reveals the descriptive statistics of all the data collected that provide the summary of the primary data.
Table 1: Descriptive Statistics
Strongly Disagree
Disagree
Neutral
Agree
Strongly Agree
Mean
15,70%
15,20%
1,50%
36,10%
31,45%
Standard Error
1,62%
1,32%
0,29%
1,73%
1,52%
Median
13,00%
13,50%
1,50%
34,00%
30,50%
Mode
12,00%
12,00%
0,00%
34,00%
30,00%
Standard Deviation
7,26%
5,91%
1,28%
7,74%
6,81%
Sample Variance
0,53%
0,35%
0,02%
0,60%
0,46%
Kurtosis
54,09%
-29,34%
-109,01%
3,70%
81,06%
Skewness
110,50%
15,37%
25,25%
47,73%
77,46%
Range
27,00%
22,00%
4,00%
29,00%
27,00%
Minimum
5,00%
3,00%
0,00%
25,00%
20,00%
Maximum
32,00%
25,00%
4,00%
54,00%
47,00%
Sum
314,00%
304,00%
30,00%
722,00%
629,00%
Count
2000,00%
2000,00%
2000,00%
2000,00%
2000,00%
Level of Significant (95,0%)
3,40%
2,77%
0,60%
3,62%
3,19%
The table 2 below summarizes the results of the survey collected from the sample population.
Table 2: Summary of the Results
Strongly Disagree
Disagree
Neutral
Agree
Strongly Agree
1
Traditional advertising technique such as TV, Newspaper and Radio serve as the major advertising method used by the Telecommunication company
12%
14%
1%
40%
33%
2
Online marketing such as internet and social marketing serve as the major advertising method implemented by the Telecommunication company
32%
17%
0%
26%
25%
3
Both the traditional advertising and online marketing serve as the major advertising method used by the Telecommunication company
10%
12%
3%
34%
41%
4
Telecommunication company such as Telkom use 4Ps — Price, Place, Promotion and Product as the promotion method.
5%
3%
1%
44%
47%
5
Telkom promotes environment sustainability in the community its operates
14%
25%
4%
25%
32%
6
Paradox Marketing adopted by Telkom assists the company to achieve extra-ordinary high revenue advantages.
10%
12%
0%
54%
34%
7
Paradox Marketing technique makes the Telkom product and services accessible to consumers at affordable prices.
15%
22%
2%
34%
26%
8
Increase of profitability is the major reason that makes Telkom implementing paradox marketing model.
14%
15%
0%
41%
30%
9
Application of the sustainable digital business such as the optical fiber-based network assists Telkom to gain 13.2 Million subscribers in the optical fiber network.
22%
13%
3%
40%
22%
10
Telkom adopts paradox marketing to achieve sustainable marketing advantages through corporate social responsibility.
12%
25%
2%
31%
30%
11
Telkom sustainable marketing paradox strategy is by using part of the profits to revive the community .
31%
12%
0%
26%
31%
12
Providing customer with sustainable product is an effective method to enhance their personal shopping experience.
26%
13%
1%
26%
34%
13
Telkom is able to increase customer values to both high and middle value customer segments using paradox marketing
11%
24%
3%
32%
30%
14
Both online and direct marketing are the effective marketing strategy to reach large number of customer.
10%
12%
0%
33%
45%
15
Telkom has been able to achieve a growth rate by allowing Telkomsel to purchase the international call in bulk, and sell them to customers.
15%
13%
2%
34%
26%
16
Telkom uses creative innovation management to develop and produce digital business.
19%
15%
1%
34%
31%
17
Paradox marketing implementation makes private products available to many customers who are formerly limited to certain circles.
21%
19%
2%
38%
20%
18
Telkom uses Wholesale Customer to offer products in bulk to wholesalers whose in turn sell the products to consumer at cheap price.
12%
21%
0%
39%
28%
19
Telkom uses paradox marketing to provide greater value to customer using the WholesaleCustomer service principle.
11%
8%
3%
48%
30%
20
Telkom paradox marketing benefits large number of consumer because paradox marketing technique offers product to customer at cheap price.
12%
9%
2%
43%
34%
Analysis of Primary or Secondary Sources / Secondary Studies
“Scholarly writing requires careful, accurate, and transparent use of source material, whether journal articles, books, Web content, personal communications, or other resources. While AJN encourages authors to include their own opinions and experiences in manuscripts, accurate sourcing is required for facts, quotations, theories, and research. In all cases, it is important to use primary sources whenever possible.” (Wilkins, 2009 p 76).
The scholarly sources can be primary or secondary sources used to achieve the research findings, and this section provides the primary and secondary sources that the study uses to complete the research. Primary research is the data collected from the real world about a given subject. In other word, the primary data are the type of data the researchers collect by themselves. Examples of primary research include survey, observations, interviews survey and ethnographic research. More importantly, the primary sources are the data collected during the time the study is written. However, it is still necessary to supplement the secondary research with primary research to deliver effective and efficient research results.
The primary data collected has assisted the study to achieve the research objectives and answer the research questions. Several benefits this study derives from using the primary research as a source of data. First, the study has been able to collect data from professionals who have accumulated years of experience in the marketing field in Indonesia. The strategy has assisted the researcher to collect data tailored to the research topic. Moreover, the primary research assists the researcher to take a greater control on the research design. For example, by using the age group to categorize the participants, the study has been able to understand the age segment that favors the application of the paradox marketing. The findings of the study can assist other telecommunication companies to carry out a marketing plan that will assist them to achieve sustainable market advantages.
More importantly, the primary research has assisted the researcher to implement a greater control of the data collected, which assist in deciding the time frame to collect data, location of the research and the size of the target population. With primary research, the researcher is able to collect data tailored to the specific issues investigated that assists in spending the research time efficiently.
Despite the benefits that the study derives from the primary research, the primary research has some shortcomings. The primary data is more expensive than the secondary data because the researcher incurs high costs to collect data from reliable resources, such as the costs of sending emails and the costs of telephone call to make respondents filling and returning the questionnaire on time . Moreover, the primary research is time consuming because it requires the development and execution of research plan. The time taken to design the questionnaire, distributing the questionnaire to the target population and collecting the questionnaire from respondents are often longer. The shortcoming identified from the primary sources makes this study to use the secondary sources as the supplement to achieve reliable and valid research outcomes. A secondary research analyzes and interprets already written research to achieve research outcomes.
“A secondary source analyzes, interprets, assigns values to, provides conjecture on, summarizes, reorganizes, or draws conclusions about events reported in primary sources..” (Wilkins, 2009 p 77). In other words, a secondary research refers to the analysis of the data that other researchers have already collected. This study collects secondary data from different online academic database that include EBSCO Publishing, Google Scholar, Science Direct, JSTOR, ProQuest, Questia, and Elsevier. All these databases consist of millions of scholarly research articles, citations, and thesis. The researcher also collects secondary data from university library and public library. The thesis derives several benefits from using the secondary sources.
First, the secondary sources are readily available since the data have already been collected and stored in the database. A readily availability of data saves the researcher enormous amount of time. Moreover, the secondary data are cost effective since they can be easily collected with few costs Despite the benefits that this study stands to derive from using the secondary sources, however, secondary sources have several limitations. Some secondary sources may not address the research objectives and answer the research questions. Moreover, some secondary sources may be outdated and may be of sub-quality standards.(Goodwin, 2012). Based on the benefits derived from using both the primary and secondary research, the study integrates both the primary and secondary research to complete this study.
Findings
This section provides the findings of the whole dissertation, and the findings have been used to achieve the research objectives and answer the research questions. The study provides the demographic data to enhance a greater understanding of bio-data of the participants. From the survey results, 74 males and 26 females participate in the survey. The male participants outnumber the female participants because male personnel working in the telecommunication industry outnumber the female personnel. The table below reveals summary of the demographic results.
Results of Demographic Data
Gender
Participants
Results
Percentages Results
Male
74
74%
Female
26
26%
Age of Participants
Under 18
0
0%
18-24
5
5%
25-34
22
22%
35-44
38
38%
45-54
29
29%
55-64
6
6%
65 and above
0
0%
Marital Status
Single
14
14%
Married
45
45%
Living with Partners
12
12%
Separated
6
6%
Divorced
19
19%
Widowed
3
3%
Prefer not to Answer
1
1%
Employment Status
Employed full time
Vocational or Trade
0
0%
Not employed
0
0%
Retired
0
0%
Student
0
0%
Your education level
Some high school
3
3%
High school graduate
11
11%
Trade or Vocational degree
6
6%
19
19%
Associate degree
22
22%
Bachelor’s degree
27
27%
Professional or Graduate degree
12
12%
The results reveal that sample population between the age of 25 and 54 form the largest percentages of the participants. Typically, 89% of participants are between the age of 25 and 54 revealing that larger number of participants have more years of experience that can make them participating in the survey effectively. Moreover, 45% of participants are married, while 14% are single. However, 19% of participants have been divorced. More importantly, 100% of the participants are full time employees showing that participants have adequate knowledge to participate in the survey. All the selected sample population are in the telecommunication industry and all of them have adequate knowledge of the application of paradox marketing.
Additionally, 49% of the participants have the Bachelor degree and Associate degree and 12% of participants have the graduate or professional degrees. The level of education of the participants reveals that they possess adequate educational background to understand the contents of the survey.
Results Using the Primary Research
This section provides the results using the primary research, which has been able to provide to achieve the research objectives and answer the research questions. The results of the survey shows that the Telkom has been able to achieve sustainable business in the Indonesian telecommunication company. The results of the question 9 reveals that Telkom has achieved sustainable business advantages using the paradox marketing. For example, 62% of the participants agree that the Telkom has used the sustainable market advantages to record 13.2 million subscribers in the optical business. The results of the survey 10 has also revealed that Telkom has used the paradox marketing technique to achieve sustainable market advantages. As being revealed in the survey results, 61% of the participants agrees that Telkom has been able to achieve sustainable market advantages using the corporate social responsibility.
Survey Results
Strongly Disagree
Disagree
Neutral
Agree
Strongly Agree
9
Application of the sustainable digital business such as the optical fiber-based network assists Telkom to gain 13.2 Million subscribers in the optical fiber network.
22%
13%
3%
40%
22%
10
Telkom adopt paradox marketing to achieve sustainable marketing advantages through corporate social responsibility.
12%
25%
2%
31%
30%
11
Telkom sustainable marketing paradox strategy is by using part of the profits to revive the community .
31%
12%
0%
26%
31%
12
Providing customer with sustainable product is an effective method to enhance their personal shopping experience.
26%
13%
1%
26%
34%
Saeed & Arshad (2012) argue that CSR is an important business issues in the sustainable market advantages. In the competitive market environment, businesses in Asia are facing acute problems in acquisitions of profitability and resources because of the economic situation in the Asian country. Contrary to business organizations in the western countries such as the United States, Canada, and other western countries, many countries in Indonesia face challenges to enhance market sustainable market advantages because many of them do not implement the CRS. The Telkom has used the CRS to achieve market advantages. The survey results 11 and 12 have also revealed that Telkom has been able to achieve sustainable market advantage because up to 60% of the respondents in the survey 11 and 12 agree that Telkom has used the paradox marketing to achieve sustainable market advantages. The results from the descriptive statistics has also been able to achieve the research objective and answer the research questions because based on the Mean value of the primary data, large number participants agree and strongly agree that the Telkom has achieved the sustainable market advantages with Paradox marketing. For example, more than 67% of respondents agree Telkom has achieved the sustainable market advantages with Paradox marketing.
Table 1: Descriptive Statistics
Strongly Disagree
Disagree
Neutral
Agree
Strongly Agree
Mean
15,70%
15,20%
1,50%
36,10%
31,45%
Standard Error
1,62%
1,32%
0,29%
1,73%
1,52%
Median
13,00%
13,50%
1,50%
34,00%
30,50%
Mode
12,00%
12,00%
0,00%
34,00%
30,00%
Standard Deviation
7,26%
5,91%
1,28%
7,74%
6,81%
The results have shown that Telkom is an Indonesian largest telecommunication company, and the company is one of the largest telecommunication in Asian continent. The company provide services for both national and international customers, however, Telkom has achieved a business transformation by broaden its business portfolio in the TIMES “(Telecommunications, Information, Media, Edutainment and Services)”(Yahya, 2013 p 110). Moreover, Telkom has introduced the Paradox marketing to take advantages of new waves of business in the telecommunication sector. In essence, the paradox marketing has assisted the Telkom to achieve sustainable market advantages making Telkom to become the largest telecommunication company in the world providing services to over 147.5 million customer. The paradox marketing strategy has also made the Telkom to become the 7th largest cellular operator globally. In essence, vast resources that Telkom possesses makes the company to implement the paradox marketing model successfully.
The focus of the Telkom is to deliver services to every corner in Indonesia. To realize its objective, the company deploys more than 1 millions Wifi hotspots across Indonesia, and development of WiFi has made the Telkom to make its services accessible to millions of customers across Indonesia at cheap price. Typically, the WiFi delivers automatic cellular traffic through the mobile data network that provides great benefits to a provider such as Telkomsel. Typically, extensive investment in the WiFi assists Telkomsel to reduce costly investment in WiFi.
The Telkom also uses the USeeTV Sky as a tool to execute paradox marketing to achieve sustainable market advantages. Typically, Telkom uses the USeeTV Sky to slash down the subscription online TV from $1.87 to $0.93. The USeeTV also offers up to 100 channels making large number of consumer to have access to various television chains at cheap prices. The low subscription price has two strategic benefits. First, the company has been able to reduce the cost of operations with the low subscription. Moreover, the company is able to increase the customer base across Indonesia.
More importantly, a small amount of revenue that Telkom obtains regularly has led to an increase in sustainable large amount of revenue within a limited time. The income statements and balance sheet of the Telkom in Appendices reveal that the company has achieved the sustainable marketing advantages from the application of paradox marketing model.
Additionally, the Telkom uses the leverage to deliver standardized affordable price to consumer. The company use the SIAP Online to improve the quality of education in Indonesia. The company also believes that one of the strategies that can be employed to achieve sustainable market advantages is to promote high quality education in the country, which will assist in enhancing technological innovation in the country. Typically, application of technological innovation in various schools has made Telkom to enjoy market advantages schools in Indonesia. For example, increasing number of schools have used Telkom to organize their inventories, handling asset management, organize students’ progress report, and financial reports.
Moreover, teachers in various schools have used Telkom application to manage classes, organize students’ profile as well as maintaining communication with students and guardians. The application also assists the students to submit their coursework and assignment online and communicate with their teachers. Parents and guardians also use the applications to monitor the progress of their children at schools, and class attendance, and keep parents abreast of school’s administrative obligations. The Ministry of National Education also use the Telkom application to monitor the progress of schools in Indonesia as well as budget allocated to schools. Telkom believes that there is a real demand for educational technology, thus, the Telkom has developed application to assist schools and Ministry of Education in Indonesia More importantly, Telkom allows the Ministry to purchase the application in bulk that make the price per unit to be less expensive. Thus, hundreds of schools in Indonesia are using this application .
More importantly, Telkom is leveraging price to implement paradox marketing to achieve business sustainability in Indonesia. Leveraging price is the strategy that Telkom uses to adopt paradox marketing. In the context of leveraging price, Telkom uses two types of customers that include retail and wholesale, and implementation of leveraging price is appropriate for both Telkom and Telkomsel since both companies are un the technological sector. By using the retail-wholesale business strategy, the Telkom’s profit rate has increased by 40% between 2009 and 2011. Telkom has also achieved the amazing results using the retail-wholesale business strategy.
Conclusion
Telkom is the largest telecommunication company in Indonesia, and the competitions that Telkom has faced in the last few years makes Telkom to implement the paradox marketing to achieve the sustainable market advantages. The thesis uses the quantitative technique to collect and analyze data. The study collects data from 100 sample population selected from people operating in the telecommunication industry. The data collected describe the demographic data of participants, and the application of Telkom paradox marketing for the sustainable marketing advantages. The quantitative data analysis is carried out using descriptive statistics to summarize the raw data in a manageable form. The Mean, Mode, Median and Standard Deviation are used to evaluate the extent paradox marketing model is used to achieve competitive market advantages. The overall results reveal that large percentages of the participants agree that application of paradox marketing model has been used to achieve the sustainable marketing advantages. The comprehensive secondary data are collected by searching online data database such as Science Direct, EBSCO Publishing, JSTOR, Google Scholar, ProQuest, Elsevier, and Questia. The databases contain millions of scholarly research articles, thesis, and citations. The study also collects secondary data from public library and university. The research integrates both the primary and secondary research base on the benefits derived from the research methods. One of the benefits of secondary research is that it reduces the costs and time frame to complete the thesis. The results of the primary research are tailored to achieve the research objectives and answer the research questions .
After Telkom has implemented the paradox marketing model, the company has increased the number of cellular subscriptions in Indonesia. Thus, the findings of thesis has achieved the following objectives:
To investigate the implementation of paradox marketing to achieve business sustainability by Indonesian telecommunication company.
To explore the concept of a paradox marketing and its application to Indonesia telecommunication industry.
To investigate factors that make Telkom implementing paradox marketing within the telecommunication industry.
The thesis has also answered the following research questions.
Research Questions
What are the impact of paradox marketing on consumer experience?
To what extent the paradox marketing has assisted the Indonesia telecommunication industry to achieve sustainable market advantages?
How does the paradox marketing assists Telkom to achieve sustainable marketing advantages?
The research questions are answered because Telkom uses paradox marketing model as a marketing strategy to achieve superior market advantages. The company has used the marketing technique to position its product and brand in a correct way above the competitors in the telecommunication industry. The Telkom uses the marketing mix for its marketing execution to achieve significant positive results. Typically, the marketing 4 Ps have assisted Telkom to achieve market effectiveness and an increased revenue. Marketing management assists the Telkom to improve its business advantages by using the motivation, budgeting and coordination of the marketing activities to achieve competitive marketing objectives. The brand leadership is one of the effective methods of achieving the business results using the paradox marketing model .
The thesis provides several contributions. First, research findings have revealed that paradox marketing model can enhance sustainable marketing advantage in the telecommunication industry. Based on the benefits that the Telkom derived from paradox marketing, companies in the other industry can use the model to achieve sustainable marketing advantages. The research findings also fill the gap created with the paucity of research on the application of paradox marketing in Indonesia. The research enhances a greater understanding of the academic community and business environment on the benefits of paradox marketing for organizational development.
The study also enhances a greater understanding of business managers on how to apply the paradox marketing model to achieve competitive market advantages. It is essential to realize that large number of companies in the emerging markets still focus on traditional marketing strategy. The research findings have enhanced a greater understanding of business managers that combination of paradox marketing with traditional marketing technique can assist business organizations to achieve sustainable market advantages.
Despite the benefits that Telkom achieves from the paradox marketing implementation, the Indonesian government still needs to use different strategies to attract large communication companies from advanced countries to invest in the telecommunication services to make large number of Indonesian population enjoying the telecommunication services at cheaper prices.
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Yahya, A. (2013).Paradox Marketing: Unusual Way To Win. Jakarta. Gramedia Pustaka Utama.
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Appendices
Summary of the Results
Strongly Disagree
Disagree
Neutral
Agree
Strongly Agree
1
Traditional advertising technique such as TV, Newspaper and Radio serve as the major advertising method used by the Telecommunication company
12%
14%
1%
40%
33%
2
Online marketing such as internet and social marketing serve as the major advertising method used by the Telecommunication company
32%
17%
0%
26%
25%
3
Both the traditional advertising and online marketing serve as the major advertising method used by the Telecommunication company
10%
12%
3%
34%
41%
4
Telecommunication company such as Telkom use 4Ps — Price, Place, Promotion and Product as the promotion method.
5%
3%
1%
44%
47%
5
Telkom Company promotes environment sustainability in the community in the pace that its operates
14%
25%
4%
25%
32%
6
Paradox Marketing adopted by Telkom assists the company to achieve extra-ordinary high revenue results.
10%
12%
0%
54%
34%
7
Paradox Marketing technique makes the Telkom product and services accessible to consumers at affordable prices.
15%
22%
2%
34%
26%
8
Increase of profitability is the major reason that makes Telkom to implement paradox marketing model.
14%
15%
0%
41%
30%
9
Application of the sustainable digital business such as the optical fiber-based network assists Telkom to gain 13.2 Million subscribers in the optical fiber network.
22%
13%
3%
40%
22%
10
Telkom adopt paradox marketing to achieve sustainable marketing advantages through corporate social responsibility.
12%
25%
2%
31%
30%
11
Telkom sustainable marketing paradox strategy is by using part of the profits to revive the community .
31%
12%
0%
26%
31%
12
Providing customer with sustainable product is an effective method to enhance their personal shopping experience.
26%
13%
1%
26%
34%
13
Telkom is able to increase customer values to both high and middle value customer segments using paradox marketing
11%
24%
3%
32%
30%
14
Both online and direct marketing are the effective marketing strategy to reach large number of customer.
10%
12%
0%
33%
45%
15
Telkom has been able to achieve a growth rate by allowing Telkomsel to purchase the international call in bulk, and sell them to customers.
15%
13%
2%
34%
26%
16
Telkom uses creative innovation management to develop and produce digital business.
19%
15%
1%
34%
31%
17
Paradox marketing implementation makes private products available to many customers that are formerly limited to certain circles.
21%
19%
2%
38%
20%
18
Telkom uses Wholesale Customer to offer products in bulk to wholesalers whose in turn sell the products to consumer at cheap price.
12%
21%
0%
39%
28%
19
Telkom uses paradox marketing to provide greater value to customer using the WholesaleCustomer service principle.
11%
8%
3%
48%
30%
20
Telkom paradox marketing benefits large number of consumer because paradox marketing technique offers product to customer at cheap price.
12%
9%
2%
43%
34%
Table 1: Descriptive Statistics
Strongly Disagree
Disagree
Neutral
Agree
Strongly Agree
Mean
15,70%
15,20%
1,50%
36,10%
31,45%
Standard Error
1,62%
1,32%
0,29%
1,73%
1,52%
Median
13,00%
13,50%
1,50%
34,00%
30,50%
Mode
12,00%
12,00%
0,00%
34,00%
30,00%
Standard Deviation
7,26%
5,91%
1,28%
7,74%
6,81%
Sample Variance
0,53%
0,35%
0,02%
0,60%
0,46%
Kurtosis
54,09%
-29,34%
-109,01%
3,70%
81,06%
Skewness
110,50%
15,37%
25,25%
47,73%
77,46%
Range
27,00%
22,00%
4,00%
29,00%
27,00%
Minimum
5,00%
3,00%
0,00%
25,00%
20,00%
Maximum
32,00%
25,00%
4,00%
54,00%
47,00%
Sum
314,00%
304,00%
30,00%
722,00%
629,00%
Count
2000,00%
2000,00%
2000,00%
2000,00%
2000,00%
Level of Significant (95,0%)
3,40%
2,77%
0,60%
3,62%
3,19%
Balance Sheet (USD)
Annual | Quarterly
QUARTER ENDING
31-MAR
2014
30-JUN
2014
30-SEP
2014
31-DEC
2014
31-MAR
2015
Cash & Equivalents
1.83B
0
0
1.42B
1.55B
Short-Term Investments
234M
0
0
225M
232M
Accounts Receivable
600M
0
0
574M
647M
Inventories
66.7M
0
0
38.1M
41.0M
Pre-paid Expenses
403M
0
0
452M
508M
Deferred Tax Assets
0
0
0
0
0
Other Current Assets
7.77M
0
0
4.58M
4.35M
Total Current Assets
3.14B
0
0
2.71B
2.98B
Property, Plant & Equipment
7.69B
0
0
7.62B
7.18B
Goodwill & Intangibles
133M
0
0
198M
197M
Other Long-term Assets
550M
0
0
785M
824M
Total Long-Term Assets
8.38B
0
0
8.61B
8.21B
Total Assets
11.5B
0
0
11.3B
11.2B
Accounts Payable
922M
0
0
960M
880M
Accrued Expenses
0
0
0
0
0
Short-Term Debt
424M
0
0
146M
153M
Other Current Liabilities
460M
0
0
1.03B
1.01B
Total Current Liabilities
2.29B
0
0
2.56B
2.49B
Long-Term Debt
936M
0
0
927M
877M
Capital Lease Obligations
373M
0
0
339M
314M
Deferred Income Tax
250M
0
0
221M
189M
Other Long-term Liabilities
383M
0
0
362M
382M
Total Long-term Liabilities
1.94B
0
0
1.85B
1.76B
Minority Interest
1.63B
0
0
1.47B
1.47B
Total Liabilities
5.86B
0
0
5.88B
5.73B
Preferred Stock
0
0
0
0
0
Common Par
445M
0
0
405M
385M
Additional Paid-In Capital
205M
0
0
233M
221M
Retained Earnings
5.50B
0
0
5.09B
5.12B
Treasury Stock
-513M
0
0
-308M
-293M
Other Equity
24.2M
0
0
30.6M
27.4M
Total Shareholder’s Equity
5.66B
0
0
5.45B
5.46B
Telkom Income Statement (USD)
Annual | Quarterly
QUARTER ENDING
31-MAR
2014
30-JUN
2014
30-SEP
2014
31-DEC
2014
31-MAR
2015
Total Revenue
1.88B
0
0
1.80B
1.80B
Cost of Revenue
799M
0
0
815M
864M
Gross Profit
1.08B
0
0
985M
937M
Research & Development
0
0
0
0
0
SG&A
455M
0
0
482M
383M
Amortization & Deprec
0
0
0
0
0
Other Expenses
-28.8M
0
0
-69.2M
-23.9M
Total Operating Expenses
426M
0
0
413M
359M
Operating Income
651M
0
0
571M
578M
Other Income
-5.56M
0
0
-5.88M
14.0M
EBIT
645M
0
0
566M
592M
Minority Interest
136M
0
0
150M
129M
Interest Expense
34.5M
0
0
36.3M
33.8M
Income Before Taxes
475M
0
0
379M
429M
Income Taxes
152M
0
0
143M
138M
Net Income from Continuing Ops
322M
0
0
236M
291M
Income – Discontinued Ops
0
0
0
0
0
Extraordinary Items
0
0
0
0
0
Effect of Accounting Changes
0
0
0
0
0
Other Items
0
0
0
0
0
Net Income
322M
0
0
236M
291M
Preferred Dividends
0
0
0
0
0
Net Income to Common
322M
0
0
236M
291M
Telkom Balance Sheet (USD)
Annual | Quarterly
QUARTER ENDING
31-MAR
2014
30-JUN
2014
30-SEP
2014
31-DEC
2014
31-MAR
2015
Cash & Equivalents
1.83B
0
0
1.42B
1.55B
Short-Term Investments
234M
0
0
225M
232M
Accounts Receivable
600M
0
0
574M
647M
Inventories
66.7M
0
0
38.1M
41.0M
Pre-paid Expenses
403M
0
0
452M
508M
Deferred Tax Assets
0
0
0
0
0
Other Current Assets
7.77M
0
0
4.58M
4.35M
Total Current Assets
3.14B
0
0
2.71B
2.98B
Property, Plant & Equipment
7.69B
0
0
7.62B
7.18B
Goodwill & Intangibles
133M
0
0
198M
197M
Other Long-term Assets
550M
0
0
785M
824M
Total Long-Term Assets
8.38B
0
0
8.61B
8.21B
Total Assets
11.5B
0
0
11.3B
11.2B
Accounts Payable
922M
0
0
960M
880M
Accrued Expenses
0
0
0
0
0
Short-Term Debt
424M
0
0
146M
153M
Other Current Liabilities
460M
0
0
1.03B
1.01B
Total Current Liabilities
2.29B
0
0
2.56B
2.49B
Long-Term Debt
936M
0
0
927M
877M
Capital Lease Obligations
373M
0
0
339M
314M
Deferred Income Tax
250M
0
0
221M
189M
Other Long-term Liabilities
383M
0
0
362M
382M
Total Long-term Liabilities
1.94B
0
0
1.85B
1.76B
Minority Interest
1.63B
0
0
1.47B
1.47B
Total Liabilities
5.86B
0
0
5.88B
5.73B
Preferred Stock
0
0
0
0
0
Common Par
445M
0
0
405M
385M
Additional Paid-In Capital
205M
0
0
233M
221M
Retained Earnings
5.50B
0
0
5.09B
5.12B
Treasury Stock
-513M
0
0
-308M
-293M
Other Equity
24.2M
0
0
30.6M
27.4M
Total Shareholder’s Equity
5.66B
0
0
5.45B
5.46B
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