Paradox Marketing Background and Importance

This dissertation proposal will focus on the telecommunications industry in Indonesia which is in the process of developing quickly. The internal and external environments for this industry currently represent and interesting mix of different market forces. This scenario has led to companies implementing strategies that are inconsistent in some respects. For example, Telkom, Indonesia's largest telecommunications company, has implemented a marketing strategy known as paradoxical because of its inconsistencies regarding its marketing position composed of the 4P (product, price, promotion, & place). This strategy is interesting not only for stakeholders of the company, but also for anyone who is interested in non-conventional marketing strategies.

Aim and Objectives

This analysis will attempt to delve deeper into what constitutes a paradox marketing strategy and apply this model within the telecommunications industry in Indonesia. Since this industry is developing rapidly, it has been difficult for companies to develop along traditional lines. Furthermore, since this industry requires a significant amount of infrastructure to be built to support operations, this adds another level of complexity for consideration. This proposal aims to identify many of the factors that are responsible for Telkom trying to utilize a paradox marketing strategy within this market.

Indicative Literature

The international business world has grown immensely complex and competitive as organizations are perpetually trying to identify opportunities to create value for customers and stakeholders. Arief Yahya, Telkom's president director, last year introduced a strategy called paradox marketing, which utilizes the company's product, price, place and promotion in seemingly contradictory ways to harness more overall value (Globe Asia, 2013). The company has created new pricing models with one of its subsidiaries, Telkomsel. It allowed the subsidiary to purchase international call volume in bulk and market these services to its client in smaller packages. As a result, the company tripled its volume in the international calls sector in Indonesia but had a cannibalistic effect on its gross margins.

Much of the reasoning behind such creative partnerships between partners and creating a paradox in its marketing strategies is fuelled by its massive growth strategy. Telkomsel represents one of the parent company's primary growth drivers and has helped the company acquire more resources to continue developing its infrastructure to try to stay ahead of its competitors in terms of market penetration. Using this strategy, Telkom has been able to achieve a triple-digit growth streak (10.4% growth in revenues, 10% growth in EBITDA, and 11.9% in net income) (Tekom Indonesia, N.d.). To maintain this position of growth, the organization will have to continue finding new ways to leverage its paradox marketing strategy.

A paradox marketing strategy is defined as one that combines elements of marketing that were previously thought to be mutually exclusive or contradictory to each other based on the traditional formulation of a marketing strategy that utilizes the 4Ps of marketing -- product, place, price, and promotion (Triayantoro, 2013). Internet user in Indonesia are growing at a quickly increasing rate and bringing on millions of new users each year through traditional WiFi channels or through mobile broadband. One of the strategies that has helped Telkom develop the industry in regards to internet penetration has been through free WiFi hotspots that are scattered throughout Indonesia at a variety of parks and other public places (Triayantoro, 2013). Users that are generated by providing free WiFi access are then subject to advertising which is revenue generating. These customers also become more acquainted with online access and might choose to purchase other Telkom services.

Telkom as Telkomsel's reinforcement, broadband development and international expansion is the business focus in 2013 and broadband development program focused on Indonesia Digital Network (IDN) 2015. IDN was later equipped by Convergence ID which was a network service node infrastructure development towards integrated NGN (Next Generation Network) for multi-screen and multi-service. This represents domestic growth services both along horizontal and vertical channels. For international expansion, some countries has been carried out, such as East Timor, Australia, Singapore, Hong Kong and Myanmar, while Telkom recently also officially entered Malaysia (Zulfikar, 2014). The company is planning to purchase cellular virtual network operators and enter these markets with only marketing expenditures and no actual physical development (Bisara, 2013).

Telkom's strategy to win the competition was to think mega (strategic thinking), which was more oriented to the needs of communities (nation and state), instead of customer (macro) and the company (micro) only. "To be able to think mega, we must have the spirit...

Telkom also did organizational culture transformation through The New Telkom Way, which included the spirit of "always the best" as basic belief, while Great Spirit as a core value. It is this vision that is measured by what Telkom refers to as a Net Promoter Score (NPS). If the company is successful in meeting its vision, the net promoters of the service will vastly outweigh the net detractors. It is interesting to note by their scale that the detractors' category represents perceptions ranking 1-6 while promoters are only 9-10.
Figure 1 - Marketing NPS (Armstrong, 2014)

Research Design and Methods

The research design should be focused on Telkom customers and their current perceptions of the products and services that the organization offers. The research can design a survey that asks respondents to rate the company along the traditional marketing components -- product, place, price, and promotion. The hypothesis that Telkom is really creating a paradoxical marketing position within their customer base. Thus the research could test if the company's intended marketing position is consistent with the actual perceptions of a sample of its customers.

The surveys could be given online and in-person through paper-based surveys. The online method represents a more convenient way to sample customers however it may be difficult to find enough respondents to gather enough data. The researchers could approach Telkom directly to see if they would provide access to their customers email data, however their cooperation should not be counted on. Paper-based surveys could also be instrumented in several locations to generate data. This method of surveying respondents could create a larger and randomized sample big enough to meet the population requirements which will be calculated at a later time.

Ethics

One of the primary challenges to data collection will be finding an ample number of respondents. Even if Telkom does offer to assist in providing information about potential respondents, this could also pose an ethical problem because the organization may wish to edit or alter some of the questions and thus creating a problem of independence. The solution will likely be to create enough respondents to a survey by surveying people in public spaces. An incentive will likely have to be offered to create willingness to gather the required data and the survey should be kept as short as possible to not take up too much time. Confidentiality can be maintained by only collecting respondents email addresses and not personal information. The University will be provided a survey before it is administered to ensure that all ethical requirements are met.

Risks and Contingencies

One of the primary risks will be the ability to generate enough data to accurately generate insights on the public's perception towards Telkom's market position. If this is a challenge for the researchers, then volunteers could be collected to administer the survey in additional locations. Another risk is that potential respondents will be unwilling to complete the survey. A strong incentive for their cooperation should be created so that it increases the likelihood that they will cooperate. For example, upon completing the survey, the respondents could be entered into a lottery to win a big prize which might be a new phone or something else of value. This would increase the likelihood of compliance and make it easier to collect data from the public. Another risk is that the respondents do not take the time to give accurate answers or complete the surveys. To mitigate this risk the researchers can make the survey as short and as simple as possible so that it is easy for the respondents to complete.

Timescales

The research project should be completed within one semester. The planning stages should take no more than three weeks. A literature review stage that identifies more information relative to Telkom and paradox marketing should not take more than a month. This should leave approximately two and a half months to collect the data, analyze the data, and present the final findings.

Resources

Most of the resources needed to complete this proposal will be based on free and volunteer student assistance. However, the research will also need the assistance of the University's ethics committee to approve the study. It will also need to offer an incentive for respondents to complete the survey which will require a prize of roughly two-to-three hundred dollars or more. Given the fact that the study is based on the telecommunications industry, a new cellular smartphone might be an adequate and relevant prize to offer.

References

Armstrong, B. (2014). Retail Strategy and Execution. Retrieved from Telkom: http://www.telkom.co.za/ir/apps_static/ir/pdf/presentations/investor_day/Brian_Armstrong_COO_Investor_Day_2014.pdf

Bisara, D.…