DEVELOPING MARKETING STRATEGY TO ACQUIRE POTENTIAL CUSTOMERS UNDER 35 YEARS OLD FOR DIETARY SUPPLEMENTS COMPANY: CASE STUDY OF 4LIFE INDONESIA FINAL PROJECT In partial fulfillment of the requirements for the Master’s Degree from Institut Teknologi Bandung By KATHLENE RONAULI MARTINI Student ID: 29322113 Master of Business Administration Program INSTITUT TEKNOLOGI BANDUNG March 2024 ii ABSTRACT DEVELOPING MARKETING STRATEGY TO ACQUIRE POTENTIAL CUSTOMERS UNDER 35 YEARS OLD FOR DIETARY SUPPLEMENTS COMPANY: CASE STUDY OF 4LIFE INDONESIA By Kathlene Ronauli Martini Student ID: 29322113 Master of Business Administration Program The current market trend of dietary supplements was driven by the segment of people under 35 years old and their rising awareness of health, well-being, and performance enhancement. This market research focuses on the marketing strategy that can be applied by 4Life Indonesia, a dietary supplement company headquartered in the United States, in acquiring these potential customers and increasing the company’s revenue. The primary research objective is to comprehend the under- 35 market's purchasing behavior, as well as propose suitable value propositions and a marketing strategy. This research combines qualitative interviews with 12 potential customers and a quantitative online questionnaire with 110 participants. Tools such as PESTLE, Porter’s Five Forces, and Competitive Profile Matrix (CPM) were used to analyze the external environment of the company. Customer Journey 5A was used to analyze the customer’s journey. Marketing Mix 4P, STP, Value Chain Analysis, and VRIO were used to analyze the internal environment. SWOT analysis was later developed from these results to create the possible value proposition and marketing strategy. Findings reveal economic, sociocultural, and technological influences on the segment’s behavior, as well as the product uniqueness, personalization, recommendation, and online reviews. The proposed value proposition focuses on high-quality ingredients, extensive research, transparent labeling, and customer-centric features. The proposed strategic marketing is a differentiation strategy, aiming to raise awareness of 4Life Indonesia’s brand. These research findings will help 4Life Indonesia to acquire and strategically position itself as a unique preventive health solution to the segment under 35 years old, fostering sustained growth of the company. Keywords: Acquisition, dietary supplements market research, marketing strategy, value proposition iii ABSTRAK MENGEMBANGKAN STRATEGI PEMASARAN UNTUK MENDAPATKAN PELANGGAN DIBAWAH USIA 35 TAHUN UNTUK PERUSAHAAN SUPLEMEN KESEHATAN: STUDI KASUS 4LIFE INDONESIA Oleh Kathlene Ronauli Martini Student ID: 29322113 Program Studi Magister Administrasi Bisnis Pasar suplemen kesehatan saat ini didominasi oleh segmen masyarakat berusia dibawah 35 tahun karena adanya peningkatan kesadaran kesehatan, kesejahteraan, serta dorongan performa fisik. Riset pasar ini berfokus pada strategi pemasaran yang dapat diterapkan oleh 4Life Indonesia, sebuah perusahaan suplemen kesehatan yang berasal dari Amerika Serikat, untuk mendapatkan segmen pelanggan berpotensi ini dan meningkatkan pendapatan perusahaan. Tujuan utama penelitian ini adalah untuk memahami perilaku pembelian segmen pasar dibawah 35 tahun terkait suplemen kesehatan, serta mengajukan proposisi nilai dan strategi marketing yang cocok untuk segmen tersebut. Penelitian ini mengkombinasikan metode kualitatif dalam bentuk wawancara terhadap 12 pelanggan berpotensi, dengan metode kuantitatif dalam bentuk kuesioner yang dilengkapi oleh 110 peserta. Metode analisa bisnis seperti PESTLE, Porter’s Five Forces, dan Competitive Profile Matrix (CPM) digunakan untuk menganalisa lingkungan eksternal dari perusahaan. Customer Journey 5A digunakan untuk menganalisa perjalanan pelanggan. Marketing Mix 4P, STP, Value Chain Analysis, dan VRIO digunakan untuk menganalisa lingkungan internal dari perusahaan. Dari hasil analisis tersebut, analisa SWOT dibuat untuk menentukan proposisi nilai dan strategi marketing yang sesuai. Hasil penelitian menunjukan pengaruh faktor ekonomi, sosial-budaya, dan teknologi, dalam perilaku segmen tersebut, serta keunikan produk, personalisasi, rekomendasi, dan ulasan daring. Proposisi nilai berfokus pada tingginya kualitas, kedalaman riset produk, pelabelan yang transparan, serta fitur yang berfokus pada pelanggan. Strategi marketing yang dibuat menggunakan strategi diferensiasi, bertujuan untuk meningkatkan kesadaran akan brand 4Life Indonesia. Hasil dari penelitian ini akan membantu 4Life Indonesia untuk mendapatkan dan menempatkan diri secara strategis sebagai solusi unik dari masalah kesehatan dari segmen dibawah 35 tahun sehingga mendukung perkembangan perusahaan yang berjangka panjang. Kata kunci: Akuisisi, proposisi nilai, riset pasar, strategi pemasaran, suplemen kesehatan DECLARATIONOFNON-PLAGIARISM Plagiarismisconsideredastheactofdishonestyandabreachofacademicethicswhichis stronglyagainsttheSchool’spolicyandregulation.IdeclarethatmaterialspresentedinthisFinalProjectaremyownworkanddonotinvolve plagiarism.ShouldIplagiarizeinthisFinalProject,herebyIamwillingtoacceptany consequencesdeterminedbytheSchool. Date:31/1/2024 Name:KathleneRonauliMartini StudentID:29322113 Signed, KathleneRonauliMartini VALIDATION PAGE DEVELOPING MARKETING STRATEGY TO ACQUIRE POTENTIAL CUSTOMERS UNDER 35 YEARS OLD FOR DIETARY SUPPLEMENTS COMPANY: CASE STUDY OF 4LIFE INDONESIA By Kathlene Ronauli Martini Student ID: 29322113 Master of Business Administration Program Business Leadership Executive Institut Teknologi Bandung Approving, 31 January 2024 Counselor, Sonny Rustiadi, SE., MBA., Ph.D., CBAP. NIP: 115110005 v FINAL PROJECT GUIDANCE Unpublished masters’ final project is registered and available in the Library of Bandung Institute Reproduction or publication of parts or whole of the final project must be under the consent of the Head of Graduate School, Bandung Institute of Technology. Martini, K. R. (2024): Developing Marketing Strategy to Acquire Potential Customers Under 35 Years Old for Dietary Supplements Company: Case Study of 4Life Indonesia, Masters’ Final project, Institut Teknologi Bandung. of Technology, and is open for public, provided that the author owns the copyright in accordance with the intellectual property rights that are applicable in the Library of Institut Teknologi Bandung. Bibliographical references are allowed to be used in a limited manner, however the citation and summarization can only be proceeded upon the author’s permission and must include the scientific norm of stating this final project as the source. This final project has to be cited as: vi This final project is dedicated to J.J. vii ACKNOWLEDGEMENT The greatest gratitude to the Father Lord for without His Grace this final project named as one of the requirements to finish the writer’s study at the Business Leadership and Executive Master of Business Administration Program at Institut Teknologi Bandung will not be completed. The writer would also thank her thesis guidance counselor – Sonny Rustiadi, SE., MBA., Ph.D., CBAP., colleagues at 4Life Indonesia and 4Life Global, classmates at the BLEMBA 32 program, parents, friends, and partner for all the support. The writer hopes what comes from this research may become a highly valued and beneficial information for everyone that needs it, especially to 4Life Indonesia and 4Life Global to be able to improve their business growth in Indonesia. viii TABLE OF CONTENTS ABSTRACT .................................................................................................................................... ii ABSTRAK ..................................................................................................................................... iii VALIDATION PAGE ................................................................................................................... iv FINAL PROJECT GUIDANCE ......................................................................................................v ACKNOWLEDGEMENT ............................................................................................................ vii TABLE OF CONTENTS ............................................................................................................. viii LIST OF APPENDICES ................................................................................................................ ix LIST OF FIGURES .........................................................................................................................x LIST OF TABLES ......................................................................................................................... xi Chapter I Introduction I.1 Background .......................................................................................................................1 I.2 Company Profile ...............................................................................................................7 I.3 Business Issue .................................................................................................................23 I.4 Research Questions and Research Objectives .................................................................27 I.5 Research Scope and Limitations .....................................................................................27 Chapter II Literature Review II.1 Theoretical Foundation ..................................................................................................29 II.2 Conceptual Framework ..................................................................................................33 Chapter III Research Methodology III.1 Research Design ...........................................................................................................50 III.2 Data Collection Method ...............................................................................................51 III.3 Data Analysis Method ..................................................................................................58 Chapter IV Results and Discussion IV.1 PESTLE Analysis .........................................................................................................71 IV.2 Porter’s Five Forces Analysis ......................................................................................84 IV.3 Competitive Profile Matrix ..........................................................................................98 IV.4 Customer Journey 5A Analysis ..................................................................................104 IV.5 Marketing Mix 4P Analysis .......................................................................................123 IV.6 STP Analysis ..............................................................................................................134 IV.7 Value Chain Analysis .................................................................................................138 IV.8 VRIO Analysis ...........................................................................................................143 IV.9 SWOT Analysis .........................................................................................................146 IV.10 Value Proposition Recommendation ........................................................................147 IV.11 Proposed Marketing Strategy ...................................................................................151 Chapter V Conclusion and Recommendation V.1 Conclusion ...................................................................................................................154 V.2 Recommendation .........................................................................................................156 REFERENCES ............................................................................................................................161 APPENDICES .............................................................................................................................165 ix LIST OF APPENDICES Appendix A Interview Respondents’ Profile ...............................................................................165 Appendix B 4Life Products and Its Availability in Indonesia .....................................................168 Appendix C 4Life Affiliate Levels and Qualifications ................................................................172 x LIST OF FIGURES Figure II.1 Conceptual Framework ................................................................................................33 Figure II.2 PESTLE/PESTEL Framework ....................................................................................34 Figure II.3 Porter’s Five Forces Framework. .................................................................................36 Figure II.4 The New Customer Journey 5A’s. ...............................................................................39 Figure II.5 The 4Ps Marketing Mix ...............................................................................................40 Figure II.6 Illustration of Segmenting (left), Targeting (middle), and Positioning (right) ............41 Figure II.7 VRIO Framework Illustration ......................................................................................44 Figure II.8 The Value Chain ..........................................................................................................45 Figure III.1 Research Design .........................................................................................................50 Figure IV.1 Questionnaire Respondents’ Age ...............................................................................62 Figure IV.2 Questionnaire Respondents’ Domicile .......................................................................64 Figure IV.3 Questionnaire Respondents’ Occupation ...................................................................65 Figure IV.4 Questionnaire Respondents’ Income ..........................................................................66 Figure IV.5 Questionnaire Respondents’ Expense ........................................................................67 Figure IV.6 Respondents’ Disposable Income on Dietary Supplements .......................................69 Figure IV.7 The Customer Journey 5As ......................................................................................105 Figure IV.8 Responses on Question CJ1 .....................................................................................107 Figure IV.9 Responses on Question CJ2 .....................................................................................108 Figure IV.10 Responses on Question CJ3 ...................................................................................111 Figure IV.11 Responses on Question CJ5 ...................................................................................114 Figure IV.12 Responses on Question CJ6 ...................................................................................116 Figure IV.13 Responses on Question CJ7 ...................................................................................118 Figure IV.14 Responses on Question CJ8 ...................................................................................119 Figure IV.15 Responses on Question CJ9 ...................................................................................121 Figure IV.16 Customer Journey Based on In-depth Interviews ..................................................122 Figure IV.17 Perceptual Map .......................................................................................................138 xi LIST OF TABLES Table I.1 Quarterly Sales Data of 4Life Indonesia from Q1 2019 - Q3 2023 (in Rp.B) ...............23 Table I.2 4Life Indonesia’s Distributor/Affiliates by Age .............................................................24 Table II.1 Example of Competitive Profile Matrix (CPM) ............................................................36 Table II.2 Possible Organizational SWOT ....................................................................................43 Table III.1 Interview Questions .....................................................................................................49 Table III.2 Questionnaire ...............................................................................................................53 Table III.3 Validity Test Result .....................................................................................................57 Table IV.1 Interview Respondents General Information ...............................................................59 Table IV.2 Questionnaire Respondents’ Age ................................................................................61 Table IV.3 Questionnaire Respondents’ Domicile ........................................................................62 Table IV.4 Questionnaire Respondents’ Occupation .....................................................................63 Table IV.5 Questionnaire Respondents’ Income ...........................................................................64 Table IV.6 Questionnaire Respondents’ Expense .........................................................................66 Table IV.7 Questionnaire Respondents’ Disposable Income on Dietary Supplements .................67 Table IV.8 Pearson Correlation Test .............................................................................................68 Table IV.9 Thematic Analysis: Political Influence ........................................................................70 Table IV.10 Thematic Analysis: Economic Influence ...................................................................72 Table IV.11 Thematic Analysis: Sociocultural Influence ..............................................................74 Table IV.12 Thematic Analysis: Technological Influence ............................................................76 Table IV.13 Thematic Analysis: Environmental Influence ...........................................................78 Table IV.14 Thematic Analysis: Legal Influence ..........................................................................80 Table IV.15 Thematic Analysis: Customers’ Opinion on New Entrants .......................................84 Table IV.16 Thematic Analysis: Customers’ Opinion on Substitutes ...........................................86 Table IV.17 Thematic Analysis: Customers’ Opinion on Buying Preference ...............................90 Table IV.18 Thematic Analysis: Customers’ Opinion on Bargaining Power of Suppliers ...........92 Table IV.19 Thematic Analysis: Customers’ Opinion on Competitive Landscape .......................94 Table IV.20 Identifying The Critical Success Factors ...................................................................97 Table IV.21 Identifying The Weight of Each Critical Success Factor ..........................................98 Table IV.22 Competitor Profile Matrix .......................................................................................100 Table IV.23 Thematic Analysis: ‘Aware’ Phase .........................................................................104 Table IV.24 Thematic Analysis: ‘Appeal’ Phase .......................................................................108 Table IV.25 Thematic Analysis: ‘Ask’ Phase ..............................................................................111 Table IV.26 Thematic Analysis: ‘Act’ Phase ..............................................................................115 Table IV.27 Thematic Analysis: ‘Advocate’ Phase .....................................................................118 Table IV.28 Thematic Analysis: Product .....................................................................................122 Table IV.29 Thematic Analysis: Price .........................................................................................125 Table IV.30 Thematic Analysis: Place ........................................................................................127 Table IV.31 Thematic Analysis: Promotion ................................................................................130 Table IV.32 Segmenting, Targeting, Positioning ........................................................................138 xii Table IV.33 Value Chain Analysis of 4Life Indonesia ................................................................142 Table IV.34 VRIO Analysis of 4Life Indonesia ..........................................................................144 Table IV.35 Strength, Weakness, Opportunity, and Threats .......................................................146 Table IV.36 Value Proposition Recommendations .....................................................................150.