The Influence of Internet Advertising and Social Media Marketing Strategies

in Increasing Brand Awareness on Koffie Journey

Lecturer : Gracia Ongkowijoyo S.E., M.Sc

By:

Sahira Septyaningrum Dody Putri

0106021810075

INTERNATIONAL BUSINESS MANAGEMENT – INTERNATIONAL

CLASS

FACULTY OF MANAGEMENT AND BUSINESS

UNIVERSITAS CIPUTRA

SURABAYA

2021
 CHAPTER 1

INTRODUCTION

1.1 Research Background

Coffee is one of the drinks that are currently very popular with the people of

Indonesia. The growth in coffee production in Indonesia shows that the

consumption of coffee and the number of coffee shops in Indonesia is increasingly

actually. This is also supported by coffee production in Indonesia, which continues

to increase every year.

COFFEE PRODUCTION
Coffee Production

769.63
731.6
727.9
685.8

2017 2018 2019 2020

Grafic 1.1 Coffee Production in Indonesia

Source: Indonesia Coffee Statistic (Badan Pusat Statistic, 2019)

It can be seen from the data in Graph 1.1 regarding the growth of coffee production

in Indonesia from 2017-2019, which has experienced a significant increase.

Moreover, from 2017 to 2018, an increase of 42.1 thousand tons. Until it continues

to increase in 2019 to 731.6 thousand tons. Meanwhile, in 2020, coffee production

grew significantly to 769.31 thousand tons. Smallholder plantations dominate this

coffee production. Smallholder plantations are managed by the people/planters,

grouped into smallholder plantation businesses and community plantation

household businesses. Smallholder plantations do not have a legal entity.

With the increase in the amount of coffee production in Indonesia,

Indonesia's level of coffee consumption has also increased. Based on Fitch Solution

Report, Indonesia's consumer spending on coffee is set to grow at an average rate

of 8.2% in coming years, reaching $ 2.2b in 2024 from $ 1.7b in 2020. This also

compares with an expected average growth of 6.5% over the same period for tea.

Figure 1.1 Coffee Consumption in Indonesia

Source: Indonesia Coffee Organization (2019)

According to the survey data processed by the katadata in Figure 1.1, coffee

consumption in Indonesia has increased significantly from year to year. This data

is taken based on the International Coffee Organization. In 2019, 4,800 bags with a

capacity of 60 kilograms (kg) were consumed by the Indonesian people. If

calculated, it is about 288,000 tons. Whereas in 2014, coffee consumption in

Indonesia only consumed 4,417 bags. Suppose, look at as many as 383 bags of

coffee with a capacity of 60 kilograms (kg) in consumption in Indonesia during the

last four years (2015-2019). Meanwhile, coffee consumption in 2019/2020,

according to the Global Agricultural Information Network, as many as 294,000 tons

of coffee have been consumed by the Indonesian people.

This makes it a very profitable business opportunity to do. Therefore, the

number of coffee shops in Indonesia continues to increase every year.

Coffee Shop in Indonesia

4000

3500

3000

2500

2000

1500

1000

500

0
2016-2017 2017-2018 2018-2019 2019-2020

Coffee Shop in Indonesia

Grafic 1.2 Coffee Shop in Indonesia

Source: Indonesia Coffee Statistic (Badan Pusat Statistic, 2019)

Based on data on the growth of coffee shops in Indonesia in Graph 1.2, which is

taken from the TOFFIN research results. Coffee shops in Indonesia grew by about

three times compared to 2016. In 2016 there were only 1,000 coffee shops in

Indonesia. Meanwhile, over time, coffee shops in Indonesia became 2,950 outlets
in 2019. In 2020 alone, according to Toffin (2020), coffee shop outlets in Indonesia

grew by around 15% or equivalent to 3,400 coffee shop outlets.

In East Java, coffee shop production is no less competitive than coffee

production in other regions.

Figure 1.2 Coffee Production in East Java Region

Source: Indonesia Coffee Statistic (Badan Pusat Statistic, 2019)
Coffee production in Indonesia itself is dominated by several regions in Indonesia,

according to data in Figure 1.2. The most significant coffee production in Indonesia

is South Sumatra, which is 26%. After that followed by 28 other provinces. East

Java alone produces 8.65 thousand tons of coffee, equivalent to 1.7% of Indonesia's

total production.

Based on the data above, it can be seen that the growth of coffee in Indonesia

through production to increasing coffee consumption in Indonesia is the reason for

Koffie Journey to open a coffee shop in one of the regions in East Java. Koffie

Journey is engaged in the Food and Beverages Industry in the Coffee Sector. Koffie

Journey itself has been established in January 2020 and is a project business located

on Jl. Raya Surabaya - Malang No.28, Sukorejo, Karang Jati, Kec. Pandaan,

Pasuruan, East Java, Indonesia

 In running its business, Koffie Journey has experienced a decline in sales

and visitors, especially during the pandemic last year. This decline occurred more

precisely in June 2020.

30,000,000

25,000,000

20,000,000

15,000,000

10,000,000

5,000,000

-
FEB 20 MAR APR MAY JUN JUL 20 AUG SEPT OKT NOV DEC JAN 21FEB 21
20 20 20 20 20 20 20 20 20

REVENUE

Grafic 1.3 Koffie Journey Revenue

Source: Processed Data (2021)

Based on data from Graph 1.3, Koffie Journey's revenue, in May to June 2020 sales

of Koffie Journey increased significantly, namely as much as approximately 15

million. However, after the increase in income, in August 2020, Koffie Journey's

income decreased by approximately 3 million compared to July 2020. This decline

in income continued until February 2021. Koffie Journey only received 15 million

in revenue.
 2,500

2,000

1,500

1,000

500

-
FEB 20 MAR APR 20 MAY JUN 20 JUL 20 AUG SEPT OKT 20 NOV DEC 20 JAN 21 FEB 21
20 20 20 20 20

CUP/DAY

Grafic 1.4 Koffie Journey Number of Visitors

Source: Processed Data (2021)

If viewed from the data on the number of visitors based on the sales of cups sold

each month in Graph 1.4, this is very sustainable because, in the previous months,

Koffie Journey could sell an average of up to 1000 cups/month. However, in

February 2021, there was a very significant decrease. Koffie Journey only managed

to sell 872 cups in February 2021.

Koffie Journey itself has also used Social Media, namely Instagram, to

market and increase Brand Awareness. With several followers of 2,391, Koffie

Journey should have been known by some people. However, with the increasing

number of coffee shops popping up in various regions in Indonesia, with various

marketing concepts and styles, Koffie Journey must be ready to compete in

increasing its Brand Awareness to compete with its competitors. Based on the

researcher's number of engagement, Koffie Journey had a low engagement at

0.90%, and the average number of likes per post was only 22 likes. Keller (2009)

has stated that brand awareness is about track or crowd power in consumers
'memories that reflect consumers' ability to remember or recognize a brand in

different conditions. Therefore, the decrease in the number of visitors and income

could be due to the lack of Brand Awareness created by Koffie Journey.

That way, the researcher has the idea of conducting a pre-survey as a

medium to find solutions to increase Brand Awareness on the Koffie Journey.

Businesses that can survive and thrive during this pandemic are those that have an

online presence (Teten Masduki, 2020).

How to Inrease Brand Awareness

Email Marketing

The use of Search Engine Optimization

Word of Mouth

Paid Promote and Endorsement

Social Media Marketing

Internet Advertising

0 2 4 6 8 10 12 14 16 18

How to Inrease Brand Awareness

Grafic 1.5 Pre Survey

Source: Processed Data (2021)
Based on the Pre-Survey results on 19 Respondents on how to Increase Brand

Awareness in Graph 1.5, it can be concluded that Social Media Marketing and

Internet Advertising can increase Brand Awareness on the Koffie Journey. The

findings pointed out by Fanion (2011) have shown that social media is a significant

tool in constituting and increasing brand awareness. Advertising attempts to make

consumers familiar and have an awareness of a product by providing information

about the product and its superiority compared to competitors (Shimp, 2003).
Research conducted by Gunawan & Dharmayanti (2014) shows that their

advertising research positively and significantly affects brand awareness. This is

also supported by the growth in the use of the Internet and Social Media in

Indonesia.

Internet and Social Media User in Indonesia

300.0

250.0

200.0

150.0

100.0

50.0

0.0
Total Population Internet Users Active Media Social Users

TH 2019 TH 2020 TH 2021

Grafic 1.3 Indonesia Internet and Social Media User

Source: Data Digital Reportal (We Are Social, 2019-2021)
Based on data taken through the We Are Social survey on the use of the Internet

and Social Media in Indonesia in Graph 1.1 taken from 2019-2021, it can be

concluded that the use of the Internet and Social Media has increased. The increase

in Internet users in 2021 increased by 27.2 million users from 2020. Meanwhile,

Social Media users increased by 10 million users.

Grafic 1.3 Indonesia Internet and Social Media User
Source: Data Digital Reportal (We Are Social, 2021)
Therefore, data on the Internet and Social Media usage were taken in January 2021

(Figure 1.3). There are 345.3 million Internet users in Indonesia and 170 million

Social Media users in Indonesia.

With the supporting data above, the researcher wants to find out more about

the impact of using Internet Advertising and Social Media Marketing which is

expected to increase Brand Awareness on the Koffie Journey. Thus the title of this

thesis is "The Influence of Internet Advertising and Social Media Marketing

Strategies in Increasing Brand Awareness on Koffie Journey"

1.2 Problem Statement

1. Does Internet Advertising have a significant impact towards Brand

Awareness of Koffie Journey ?

2. Does Social Media Marketing have a a significant impact towards Brand

Awareness of Koffie Journey ?

1.3 Research Objectives

 1. To know whether Internet Advertising have a significant impact towards

Brand Awareness of Koffie Journey

2. To know whether Social Media Marketing have a significant impact

towards Brand Awareness of Koffie Journey

1.4 Research Benefit

1.4.1 Theoretical Benefit

This research is expected to provide additional information as well as a

contribution of thought to academic actors. In addition, it is expected that

this study has contributed more to other similar studies in the use of Internet

Advertising and Social Media Marketing to increase Brand Awareness in

Koffie Journey

1.4.2 Practical Benefit

The results of this study are expected to provide knowledge and inspiration

to Koffie Journey to start utilizing Internet Advertising and Social Media

Marketing strategies to Increase their Brand Awareness

1.5 Research Scope

This research only focused on the influence of Internet Advertising and

Social Media Marketing in Increasing Brand Awareness on a business project,

which is Koffie Journey, that located in East Java, Indonesia. Other factor that can

influence to Increase their Brand Awareness will not be counted.

APPENDIX
REFERENCES

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https://www.journals.resaim.com/ijresm/article/view/74

BİLGİN, Y. (2018). THE EFFECT OF SOCIAL MEDIA MARKETING

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