Indonesia is the worlds third-largest motorcycle market, so it represents a large opportunity for marketers of motorcycle engine oils. Taking advantage, according to one domestic supplier, requires understanding Indonesian consumers, who decide on their own what brand to buy and who increasingly believe in the superiority of thinner oils.
In a presentation during the ICIS Asian Base Oils & Lubricants Conference in Singapore in June, an official from PT Federal Karyatama shared some of the insights into Indonesias motorcycle oil market gleaned from a company-conducted survey.
When you conduct a consumer survey of which factors influence [motorcycle owners] the most when choosing oil, there will always be hidden drivers, said Patrick Adhiatmadja, president director of Federal Karyatama.
We must know our consumers, their aspirations, their perceptions, and their buying criteria, he said. The methodology used in Indonesia may not work in Malaysia.
Advertising, promotions, gimmicks and recommendations from peers, relatives or mechanics all influence lubricant choices by Indonesias motorcycle owners, he said. More than 75 percent of consumers have made up their mind on the oil brand before going to the shop.
Lately, with the digital media influence, friends and relatives recommendations have become, more than ever, a push factor for consumers, Adhiatmadja said, …with about 55 percent of the younger generation using Facebook or social media to ask friends for recommendations.
Federal Karyatama also discovered a growing perception among consumers that thinner is better, in terms of a lubricants viscosity. It is the perception, he said. If consumers do not perceive that [your companys product] is good oil, it will not sell no matter how good your oil is. Thinner oil is also perceived to suit newer motorcycle engine models less than five years old, he added.
The minority of customers who do ask mechanics for advice may receive recommendations that are influenced by relationships with suppliers. Trade incentives for shop owners and mechanics play a big role as a push factor, Adhiatmadja said.
Indonesia is the worlds third-largest motorcycle market in the world, behind just China and India, and followed by Vietnam, according to the Freedonia Group. TheAssociation of Southeast Asian Nations Automotive Federation reported that Indonesia had 7.7 million sales of new motorcycles in 2013.
There are currently more than 80 million motorcycles on the road in Indonesia, and motorcycle oil demand per year is about 225,000 kiloliters, according to Adhiatmadja. The company expects Indonesias motorcycle population to continue to grow.The Indonesian government is not building roads, he said. So people will have the first motorcycle and a second motorcycle.
Federal Karyatama was the engine oil provider to Honda Powersports until early 2010. When Astra Honda Motor, Hondas motorcycle manufacturer, decided to market their own brand of lubricants, Federal Karyatama shifted all of its sales focus to its own brand, Federal Oil. Within two years it claimed more than 20 percent of the local motorcycle oil market share with more than 13,000 outlets.
Federal Karyatama is a member of MPM Group, a distributor of Honda motorcycles and spare parts. Federal Karyatamas lubricants are produced in two factories in Jakarta Industrial Estate Pulogadung. Total blending capacity for both plants is about 45,000 kiloliters per year and close to 100,000 kiloliters per year for filling and packaging.