ISSN:2527-273X (Online) JIA (Jurnal Ilmiah Agribisnis) : Jurnal

Accredited by Ministry of Education, Culture, Agribisnis dan Ilmu Sosial Ekonomi Pertanian
Research, and Technology with the ranking 2023:8(6):459-466
of Sinta (S4) SK NO.105/E/KPT/2022, https://ejournal.agribisnis.uho.ac.id/index.php/JIA
7th April 2022 doi: http://doi.org/10.37149/JIA.v8i6.486

THE ANALYSIS OF MARKETING EFFICIENCY OF SIOMPU ORANGES

IN SIOMPU DISTRICT

Sulastina1*), Surni1), Rosmawaty1)

1
Department of Agribusiness Faculty of Agriculture, Universitas Halu Oleo Kendari 93232

*Corresponding author: sulastina1999@gmail.com

To cite this article:

Sulastina, S., Surni, S., & Rosmawaty, R. (2023). The Analysis of Marketing Efficiency of Siompu Oranges in
Siompu District. JIA (Jurnal Ilmiah Agribisnis) : Jurnal Agribisnis Dan Ilmu Sosial Ekonomi Pertanian, 8(6), 459–
466. https://doi.org/10.37149/jia.v8i6.486

Received: March 03, 2023; Accepted: November 20, 2023; Published: November 25, 2023

ABSTRACT

This research aims to determine the marketing channel patterns, analyse the marketing
margins, and assess the marketing efficiency of Siompu oranges. The Simple Random Sampling
technique will be used to ascertain the sample for the investigation. The participants and marketing
firms in this research were selected via Snowball Sampling. The sample consisted of 34 farmers, 5
collectors, and 7 shopkeepers. The findings indicated the existence of two marketing channels for
Siompu oranges in Siompu District: marketing channel I, which involves producers, collectors, and
merchants and ultimately reaches the end customers. Marketing channel II begins with farmers and
merchants and then promotes directly to end customers. The cost per kilogram in Marketing Channel
I is IDR 1,398.69, while in Marketing Channel II it is IDR 323.69. The total margin per kilogram in
Marketing Channel I is IDR 10,000, while in Marketing Channel II, it is IDR 5,000. The proportion of
the farmers' share in Marketing Channel I is 80%, while in Marketing Channel II, it is 90%.

Keywords: marketing channels; marketing efficiency; marketing margins; Siompu District; siompu
oranges.

INTRODUCTION

Agriculture is the human-driven use of biological resources to create food, industrial raw
materials, and energy sources and to manage the environment. The actions involving the use of
biological resources in agriculture, such as growing plants or farming, are generally comprehended by
people. (Arwati, 2018) .
Indonesia is a country famous for its tropical fruit. The opportunity to develop tropical plants is
perfect, supported by fertile tropical nature. The development of tropical fruit in Indonesia has great
potential because large market opportunities support it. Developing a tropical fruit planting system can
increase added value and be a new source of economic growth for society, especially for farmers, to
improve welfare. Oranges are one of the raw materials for fruit that can be developed commercially
(Directorate General of Horticulture, 2014).
Indonesia is known to have many local citrus varieties that are known nationally, including the
nambangan pomelo, pacitan sweet, batu pulung and madura tangerines, as well as silver lime from
East Java, honey siam, rice tepu tangerines and sipirok from North Sumatra. Some known tangerines
include peanut tangerines from West Sumatra, arrowroot tangerines from West Java, Siompu
tangerines from Southeast Sulawesi, and other oranges.
Sweet oranges are a source of income for the community. The large demand for sweet oranges
comes from large revenues, total costs and marketing value. Farmers rarely even calculate detailed
agricultural economic analysis. This means not explaining the costs incurred or calculating the
amount of harvest income. Therefore, it was unknown how much profit the plant would make. This is
due to limited training and knowledge of the farmers themselves (Asmidah et al., 2014).
Precise agricultural analysis gives farmers an accurate picture of their farming costs and what
factors contribute to the success of agribusiness, directly affecting their income. The amount of
income farmers earn influences their motivation to participate in agriculture. The large income farmers

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earn makes them more active and enthusiastic in farming. Likewise, on the contrary, farmers will be
lazy and unenthusiastic in carrying out their farming business when their income is small (Rangkuti,
2006).
The development land area used in the Siompu orange garden is 17 Ha of productive plants,
46 Ha of newly planted plants, and 75 Ha of reserve land for further development on Siompu Island
(BPS Buton Selatan, 2019).
The data indicates that orange output in 2017 amounted to 127.5 tonnes, cultivated on a land
area of 28.2 hectares. In 2018, the output quantity amounted to 120 tonnes, using a land area of
27.22 hectares. Similarly, in 2019, the production quantity reached 111 tonnes, utilising the same land
area of 27.22 hectares. This shows a decline in orange production in 2018 and 2019 since a mass
disease attack occurred in 2015. Apart from that, Siompu orange seeds are also challenging to
develop and distribute outside the island because the taste and texture will differ.
Farmers' income increases if farmer production increases, but in reality, the production results
of each farmer are different because several things influence it, such as land area, capital, labour,
fertiliser and the technology used. Differences in production factors can affect farmer income. The
not-yet-optimal level of use of production factors (inputs) by farmers has resulted in a decline in
agricultural production. Therefore, the production of sweet oranges in Siompu District is also
influenced by non-optimal use of land area, capital, labour, fertiliser, and technology (Suriadi et al.,
2021).
Marketing has a crucial role because it is an intermediary between producers and consumers
in sales transactions to satisfy consumer needs and desires. The marketing of Siompu oranges
carried out by farmers and marketing institutions involved in Siompu District is still only oriented
towards the local market because local farmers have not been taught about productivity procedures,
including marketing aspects.
The success of selling siompu oranges is contingent upon the marketing channel layout.
Marketing efficiency refers to the effectiveness of marketing strategies to enhance product flow from
manufacturers to customers. When analysing marketing efficiency, one might see variations in the
prices received by producers before they are paid by end customers, as well as the equity of prices
offered to producers and the goods they create. The marketing operations of Siompu Orange will
undergo many stages, including the selection of marketing channels, which will incur expenditures
due to the aggregation of these processes. Achieving reduced expenses will enhance the efficiency of
the marketing system and decrease the marketing margin. Reduced marketing margins will lead to
higher producer profits and lower consumer costs (Sudana, 2019).
An effective marketing strategy will provide advantages for all stakeholders in the
manufacturing process up to the final sales. Efficient execution of marketing operations relies on the
presence of robust customer buying power and effective distribution channels. A lengthy distribution
chain leads to elevated marketing expenses because each intermediate trader seeks to recover the
spent marketing expenditures, which are a factor in setting consumer pricing. Consequently, this
impacts producer prices as consumer buying power remains constrained (Ismail et al., 2008 ).
Some farmers in Siompu District, South Buton Regency, are carrying out the process of
increasing their income and standard of living. Siompu orange farming is an activity carried out by
farmers, starting from input and then processing and producing output. The input requires production
costs, while the output in orange production will be distributed to consumers through marketing
institutions.
In the Siompu sub-district, South Buton Regency, to carry out Siompu orange farming
activities, it is necessary to analyse the marketing channel process from producers to consumers. If
marketing is profitable and efficient, the marketing of Siompu oranges can continue to be distributed,
and the cultivation of Siompu oranges can continue to be developed. Thus, it is essential to analyse
the marketing efficiency of Siompu orange marketing in Siompu District.
This research aims to identify marketing channels for Siompu oranges in Siompu District,
South Buton Regency, Southeast Sulawesi, analysing marketing margins, marketing efficiency and
profits for each Siompu orange marketing institution in Siompu District, South Buton Regency,
Southeast Sulawesi.

MATERIALS AND METHODS

This research was conducted in Siompu District, South Buton Regency, Southeast Sulawesi
Province. This research was conducted from 1 November to 30 November 2022. The location of this
research was determined purposively with the consideration that this location is the production site
and marketing centre for Siompu oranges. This location was chosen because this area is the only

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island that produces siompu oranges. The population used in this research were all Siompu orange
farmers in Siompu District, South Buton Regency, Southeast Sulawesi, totalling 136 Siompu orange
farmers. The respondents were selected using a simple random sampling method, where all Siompu
orange farmers in Siompu District had the same opportunity to be selected as samples.
Meanwhile, to determine the marketing institution, the snowball sampling method was used
with 5 collecting traders and 7 retail traders. Samples were obtained from searches, namely following
marketing channels based on information from sample farmers. Determining the sample of Siompu
orange farmers follows what Arikunto (2010) stated: if the research population is less than 100, the
sample taken is between 10%-15% and 20%-25%. With the formula above, the sample taken is 25%,
of which the 25% results are 34 samples.
Data gathering methods included several approaches, including observation, interviewing,
recording, and documentation studies. The variables examined in this study encompass the
demographic characteristics of the participants, such as age, educational attainment, business
expertise, and number of family dependents. Additionally, the research investigates the marketing
channels for Siompu oranges, the prices at which farmers sell these oranges, the marketing
institutions involved in the process, and the marketing margins, costs, and profits associated with the
oranges.
The data analysis used in this research includes descriptive analysis and quantitative
analysis, as follows: the marketing channel for Siompu oranges is known by tracing the marketing
channels from the producer to the final consumer and the data obtained is analysed descriptively,
knowing the performance of the Siompu orange marketing channel, namely by using analysis.
Marketing margin and marketing efficiency. Marketing margin analysis is used to ascertain the
disparity between the price obtained by manufacturers and the amount disbursed by customers. The
marketing margin formula proposed by Surni et al. (2020) is as follows:

M= He-Hp or M = B + π or π = M - B (1)

Information: M = Marketing Margin (IDR/kg); He = Price at consumer level (IDR/kg); HP = Price at

farm level (IDR/kg); B = Marketing costs; Π = Marketing profit

According to Surni Surni (2015), determining marketing efficiency is done by calculating the
size of the share received by farmers or what is usually called a farmer's share. The share received
by farmers (farmer's share) is formulated as follows:

FS = 1-M/He ×100% (2)

Note: Fs = Farmer's Share (%); M = Marketing margin obtained by traders (IDR/kg); He = Sales Price
(IDR/kg). Efficiency indicator: Fs ≤ 50% = Means that the marketing channel is not yet efficient. Fs >
50% = This means the marketing channel is efficient because the share production farmers receive is
relatively large.

RESULTS AND DISCUSSION

Respondent Identity
According to Kusuma (2017), marketing institutions are people or business entities or
institutions directly involved in the flow of goods from producers to consumers. These marketing
institutions can be intermediaries, collecting traders, wholesalers and retailers.
In Siompu Orange's marketing activities, there are marketing agents called traders. Traders
have a very important role in marketing siompu oranges, namely in stabilising and facilitating the
smooth distribution of siompu oranges from producers to consumers.

1. Identity of Collecting Trader Respondents

Collecting traders buy or collect agricultural products from farmers and then sell them again to
other traders. The following is the identity of traders collecting Siompu oranges in the Siompu
District.Based on Table 1, it can be seen that the age of the collecting trader respondents is in the
productive age range of 15-64 years. At this age, traders can still manage marketing to consumers of
siompu oranges to increase the efficiency and effectiveness of marketing cayenne peppers. The
education level of the collecting traders was 2 junior high school graduates (40%) and 3 high school
graduates (60%). All respondents from marketing institutions have attended formal education with
different levels of education. The level of education will influence marketing institutions in reading

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market information and existing technological changes in a gradual process. However, this is not a
reference factor for collecting traders because experience and hard work when marketing Siompu
oranges are enough to carry out business and marketing of Siompu oranges.

Table 1. Identity of collecting trader respondents in Siompu District

Number of Collecting Traders Percentage
No Description
(People) (%)
1 Age (Years)
a. 15-64 5 100
2 Education
a. Junior High School 2 40
b. Senior High School 3 60
3 Trading Experience (Years)
a. 5-10 3 60
b. >10 2 40

Based on Table 1, it can be seen that the age of the collecting trader respondents is in the
productive age range of 15-64 years. At this age, traders can still manage marketing to consumers of
siompu oranges to increase the efficiency and effectiveness of marketing cayenne peppers. The
education level of the collecting traders was 2 junior high school graduates (40%) and 3 high school
graduates (60%). All respondents from marketing institutions have attended formal education with
different levels of education. The level of education will influence marketing institutions in reading
market information and existing technological changes in a gradual process. However, this is not a
reference factor for collecting traders because experience and hard work when marketing Siompu
oranges are enough to carry out business and marketing of Siompu oranges.
The length of time they have been farming will also influence their experience in marketing
siompu oranges. There are 3 people (60%) who have been in business as collecting traders with 5-10
years of experience and 2 people (40%) who have been in business for >10 years. The longer their
business, the easier it is for collecting traders to sell siompu oranges because they are well-known to
consumers and marketed to retailers.

2. Identity of Retailer Respondents

Table 2. Identity of retailer respondents in Siompu District
Number of Retailers Percentage
No Description
(Person) (%)
1 Age (Years)
a. 15-64 7 100
2 Education
a. Junior High School 3 43
b. Senior High School 4 57
3 Trading Experience (Years)
b. 5-10 5 71
c. >10 2 29

Based on Table 2, it can be seen that the age of the retailer respondents is in the productive
age range of 15-64 years. At this age, retailers can still process the marketing of Siompu oranges to
increase the efficiency and effectiveness of marketing Siompu oranges. Productive age means that
retailers still can work, have enthusiasm, and are very willing to meet the living needs of retailers and
their families (Satriawan et al., 2021).
The educational level of retailers is that 3 people (43%) have completed junior high school,
and 4 people have completed high school (57%). The level of trading education is related to trading
skills (Wahyono, 2017). Trading skills are capital for traders to get customers. However, this is not a
reference factor for retailers in marketing Siompu orange farming products.
The length of business for respondents who were retailers of Siompu oranges ranged from 5-10
years for 5 people (71%) and >10 years for 2 people (29%). Based on the long trading experience of
retail traders this will influence the marketing process they carry out, such as a fast sales cycle
compared to retail traders whose trading experience is not long enough. Traders with trading
experience can read the market situation when conditions are busy or quiet so they can apply the
right strategy in trading to get the expected income (Suprapti, 2018).

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Siompu Orange Marketing Channels in Siompu District

Based on the research results, it is known that the common marketing channels for Siompu
oranges in Siompu District are the following 2 marketing channels: Marketing channel I, namely
farmers, collecting traders, retailers and consumers; Marketing channel II, namely Farmers, Retailers
and Consumers; Marketing channel III, namely Farmers and Consumers.
Marketing channel I the process of distributing siompu oranges where there are farmers who
distribute siompu oranges to collecting traders, where collecting traders come directly to the homes of
farmers who have become customers and collecting traders directly distribute siompu oranges to
retailers, then the retail traders take them to market and distribute siompu oranges to consumers.
Marketing channel II, siompu orange farmers sell siompu oranges to retailers by visiting retailers
directly in markets, and then retailers sell siompu oranges obtained from farmers to consumers.
Marketing channel III, farmers sell directly to consumers. The number of Siompu orange farmers
based on the marketing channels used in marketing Siompu oranges can be seen in Table 3.

Table 3. Number and percentage of Siompu orange farmers based on marketing channel patterns in
Siompu District
Number of Farmers Percentage
No Channel Type
(Person) (%)
1 Marketing Channels I 18 53
2 Marketing Channels II 16 47
Amount 34 100

Table 3 shows that the marketing channel for Siompu oranges in Siompu District, South
Buton Regency, consists of two marketing channel patterns, where orange farmers tend to use
marketing channel I, as many as 18 Siompu orange farmers (53%) while the remaining 16 Siompu
orange farmers (47%) using marketing channels II. To smooth the flow of goods from producers to
consumers, one of the essential factors to pay attention to is choosing the right distribution channel
(Nizam et al., 2019). Farmers choose channel I because their homes are too far from the market, so
they prefer to be visited directly by collecting traders. Meanwhile, farmers who choose marketing
channel II are not too far from the market, so they prefer to take their oranges directly to retailers.

Marketing Margin and Efficiency of Siompu Oranges

The percentage of the price received by farmers from the total price paid by consumers can
be used as a measure of marketing efficiency. If the share of the price received by farmers is ≤ 50%,
then the marketing channel is not yet efficient, and conversely, if the share of the price received is ≥
50%, then the marketing channel for Siompu oranges is efficient.

1. Marketing Margin and Efficiency of Oranges in Channel I

In marketing channel I, oranges originating from Siompu orange producers or farmers are
purchased by collectors, who are then resold to retailers and reach consumers.

Table 4. Margin and marketing efficiency of siompu oranges in marketing channel I in Siompu District
Collector Trader Retailer
No Description
(IDR/kg) (IDR/kg)
1 Purchase price 40,000 45,000
2 Selling price 45,000 50,000
3 Marketing costs
- Transportation 567.63 242.77
- Dos 53,763 40,462
- Labour 583.87 202.31
- Bag 40,462
- Total cost 1,075.26 526,004
4 Profits Earned 3,924.74 4,473,996
5 Marketing margin 5,000 5,000
6 Farmer's share (%) 90 90

According to Table 4, marketing channel I consists of two types of traders: collectors and
merchants. Siompu orange farmers sell their orange produce to collectors at a rate of 40,000/kg. The
collectors then sell it to retailers for 45,000/kg, who sell it to ultimate customers for IDR 50,000/kg.

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The difference in price between the traders who collect the goods and the retailers is IDR
5,000 per kilogramme. This price difference includes labour expenses of IDR 483.8 per kilogramme,
dosage costs of IDR 53,763 per kilogramme, and transportation costs of IDR 537.63 per kilogramme,
resulting in a total cost of IDR 1,075.26 per kilogramme. The marketing charges to retailers are equal
to IDR 5,000/kg. The transportation costs are IDR 242.77/kg, the dosage costs are IDR 40,462/kg, the
bag costs are IDR 40,462/kg, and the labour costs are IDR 202.31/kg. The total cost is IDR
526,004/kg. Siompu orange growers, as producers, do not bear any marketing expenses since the
Siompu oranges they cultivate are directly bought by dealers at the farmers' premises.
These price factors and marketing costs will significantly influence the marketing margin on
the marketing channels used, where the marketing margin at the collecting trader level is IDR
5,000/kg (90%), and the marketing margin at the retailer level is IDR 5,000/kg (90%). The farmer's
share in the marketing channel I received from respondent farmers was 90%, which means that the
marketing of siompu oranges in this marketing channel has been included in the efficient criteria. The
higher the farmer's share, the higher the share of the price received by farmers (Khaswarina et al.,
2018).

2. Marketing Margin and Efficiency of Oranges in Channel II

Marketing channel II, Siompu oranges originating from farmers in Siompu District are
purchased directly by retailers who then go through the retailers to consumers. The costs, margins
and marketing efficiency of Siompu oranges in the Siompu District can be seen in Table 5.

Table 5. Cost, margin and marketing efficiency of Siompu oranges in channel II in Siompu District
Retailer
No Description
(IDR/kg)
1 Purchase price 45,000
2 Selling price 50,000
3 Marketing costs
- Transportation 242.77
- Dos 40,462
- Labour 202.31
- Bag 40,462
- Total cost 526,004
4 Profit 4,473,996
5 Marketing margin 5,000
6 Farmer's share (%) 90

Table 5 shows that farmers market siompu orange production to retailers for IDR 45.00/kg,
and then retailers sell it to final consumers for IDR 50,000/kg. The brevity of marketing channel II
results in the higher price received by siompu orange farmers.
The margin between farmers and retailers is IDR 5,000/kg, with marketing costs at retailers
consisting of transportation IDR 242.77/kg, dose IDR 40,462/Kg, bag IDR 40,462/kg and labour IDR
202.31/kg for a total total IDR 526,004/kg. The farmers' share in marketing channel II is 90%. So, the
two marketing channels, namely, I and II, are included in the efficient criteria. Marketing efficiency can
also be seen from the length and shortness of the marketing channels used in the marketing process.
The longer the marketing channel, the more marketing institutions are involved, the more inefficient
the marketing is (Khaswarina et al., 2018).

Marketing Institute Benefits

Profit refers to the residual income remaining after deducting all variable expenditures and
fixed operating costs. A positive difference indicates a gain, whereas a negative difference indicates a
loss. If the reduction findings are negative, it indicates that the variable costs are too high. The
following figure represents the cumulative profit derived from marketing siompu oranges via channels
I and II:
The overall profit of selling Siompu oranges in Table 6 is IDR 1,825,000. Channel I has a
sales volume of 465 kg to collecting dealers, with a profit per kilogramme of IDR 3,942.74/kg. For
retailers, the weight is 865 kg, and the profit per kilogramme is IDR 4,473.74. Therefore, the total
profit amounts to IDR 3,870,000. The merchants in channel II generate a sales volume of 865 kg, with
a profit margin of IDR 4,673.99 per kilogramme.

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Consequently, the total profit amounts to IDR 3,870,000. The substantial gains in each
channel may be attributed to variations in the magnitude of sales and purchases conducted by
marketing organisations in each channel. Each institution wants to make a profit, so the prices paid by
each marketing institution are also different (Surni, 2015).

Table 6. Total profits obtained from marketing Siompu oranges in Siompu District
Sales Volume Profit Total
No Channel
(Kg) (IDR/kg) (IDR)
1 Channel I
- Collector Trader 465 3,942.74 1,825,000
- Retailer 865 4,473.74 3,870,000
2 Channel II
- Retailer 865 4,473.99 3,870,000

CONCLUSIONS AND RECOMMENDATIONS

The selling of Siompu oranges in Siompu District, South Buton Regency, follows three distinct
patterns. Channel I comprises farmers, intermediary traders, retailers, and consumers. Channel II
comprises agricultural producers, retailers, and consumers, while Channel III directly exchanges
goods between farmers and customers. Marketing Margin: In marketing channel I, the margin for
intermediaries and retailers is IDR 5,000 per kilogramme. The marketing margin for merchants in
channel II is similar to IDR 5,000/kg. Marketing Efficiency: Both marketing channels (I and II) have a
high-efficiency level, as shown by a farmer's share value of 90%. The aggregate profit for channel I is
IDR 1,825,000 from sales to collecting traders, with a sales volume of 465 kg, and IDR 3,870,000
from sales to retail traders, with a volume of 865 kg. The merchants in channel II generated a total
profit of IDR 3,870,000 on a sales volume of 865 kg. Recommendations for Farmers: Farmers should
choose a marketing channel that facilitates the promotion of Siompu oranges since both channels
have shown effectiveness. Channel I is a viable option for farmers with limited availability to transport
their produce to the market. Still, channel II may be selected by farmers with a more hands-on
approach to selling their products.

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