CASE STUDY ANALYSIS REPORT

PARAGON TECHNOLOGY AND INNOVATION (PTI) : WARDAH’S

INTENTION TO BECOME INTERNATIONAL PLAYER IN
COSMETICS & SKINCARE INDUSTRY

NATIONAL STUDENT COMPETITION FOR BUSINESS,

MANAGEMENT, AND FINANCE SCIENCES
INTERNATIONAL EXHIBITION OF MARKETING CASE STUDY
COMPETITION

Arranged by :

Faishal Dzaky Affianto 1900710 2019

Ellian Irfan Juliano 1905057 2019
Nadine Nirwesti Syahida 1902758 2019

UNIVERSITAS PENDIDIKAN INDONESIA

BANDUNG
2021

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TABLE OF CONTENTS

TABLE OF CONTENTS............................................................................................................ i
1.1 Backgrounds............................................................................................................ 1
1.2 Company Profile ..................................................................................................... 2
1.3 Analysis .................................................................................................................... 3
1.3.1 Porter’s Competitiveness ............................................................................. 3
1.3.2 Market Driven Strategy ............................................................................... 5
1.3.3 Brand Perception Mapping ......................................................................... 8
1.3.4 Ecosystem and Stakeholder Analysis........................................................ 10
1.3.5 Program Recommendations and Business Process ................................. 13
1.4 Answering The Questions .................................................................................... 15
1.5 Conclusion ............................................................................................................. 19
Attachment .................................................................................................................. 21

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1.1 Backgrounds
In recent years, the Indonesian cosmetic
market has continued to increase. this increase
comes from the middle class population in
Indonesia. This affects their shopping behavior
which has been recognized as one of the main drivers of the growth of the
cosmetics market. 115 Million of the 267 Million people who make up almost
half of the total population in Indonesia today are the prospective middle class.
It can be said that Indonesia is the fastest growing beauty market among other
Asian countries in terms of compound annual growth rate (Euromonitor
International, 2019). In the next 10 to 15 years, it is undeniable that Indonesia
is expected to be among the top five largest cosmetic markets in the world
(EIBN, 2019).
The large cosmetic market is dominated by hair products by 35.8%; skin
care by 31.7%; makeup products by 10.5%; Fragrance 7.2%; cleaning products
14.8% and CAGR (Compound Annual Growth Rate) for mass beauty and
personal care of 13.1% in the period 2012-2017. CAGR of mass beauty is
predicted to increase by 12% in the period 2019-2023 (Euromonitor
International, 2018). These conditions make the industry's attractiveness even
greater, giving birth to many new cosmetic brands and very big competition in
the industry.
Local and international brands, such as Unilever, P&G, L'Oreal, Mandom,
and Wardah, still dominate beauty and personal care products in the
international market. Even so, Oriflame, Revlon, and L'Oreal are the largest
shareholders in the cosmetics sector, it does not mean that local brands can be
said or not developed, because local brands such as Wardah are predicted to
grow rapidly in the cosmetics sector (Euromonitor International, 2018). This
situation is also supported by the demand for halal products including
cosmetics which continues to increase with the ratio of the Indonesian
population being Muslim as much as 87% (EIBN, 2019).
Wardah is the first halal cosmetic
brand in Indonesia which was
founded by Nurhayati Subakat in
1995, which made this home
industry develop into a national scale producer. Wardah with Make Over,
Emina, Putri, and Innovative Salon are beauty product brands at PT.
Technology and Innovation Paragon. Wardah's growth is very consistent,
exceeding the Indonesian cosmetic market. Data proves Wardah experienced a
growth of 32%, while the industry grew 18% in 2018 and at its highest point,
grew more than double the industry growth rate. Wardah's brand share is the
fourth largest among national and international brands as well as one of the

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most popular cosmetic brands in Indonesia. Wardah has developed its business
into four categories, namely makeup, skin care, hair care, and body care and
has more than 400 product lines. Wardah has succeeded in producing 135
million units of beauty products per year only by operating one factory and
employing 100,000 employees. Wardah conquered the Indonesian and
Malaysian cosmetic markets which are Wardah's distribution centers today by
echoing the values, namely Pure, Safe, Innovation, and Love through inclusive
marketing with the tagline 'feel the beauty'. This shows that beauty is universal
and can come from the heart.

1.2 Company Profile

Former Name : PT. Pusaka Tradisi Ibu (1985)

Current Name : PT. Paragon Technology and Innovation (2011)
Founder : Nurhayati Subakat
Founded Year : February 28th, 1985
Vision : To become a company that benefits society and
continues to grow in various fields by making
today better than yesterday.
Mision : 1. Develop competent employees to create a good
working environment to satisfy the customer's
favor;
2. Continuously provide products and services of
high quality and meet the needs of customers
through a good marketing program;
3. Develop a healthy operation of the company in
all aspects;
4. Keep innovating, master of science, applying
new technologies and innovating for customer
satisfaction; and
5. Develop various business units laterally.
Factory Location : Jatake Industrial Estate, Jalan Industri Raya IV
Blok AG No. 4 Tangerang.
Head Office Location : Jl. Swadharma Raya, Kampung Baru III no. 60,
South Jakarta.
Brand Name : Make Over, Emina, Kahf, Putri, and Wardah

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1.3 Analysis
1.3.1 Porter’s Competitiveness
Porter's Five Forces is a model that identifies and analyzes five
competitive forces that shape every industry and helps determine an
industry's weaknesses and strengths. Five Forces analysis is frequently
used to identify an industry's structure to determine corporate strategy.
Wardah Porter Five (5) Forces Analysis for Cosmetics Industry
a. Threats of New Entrants
New entrants in Cosmetics brings innovation, new ways of doing
things and put pressure on Paragon Group through lower pricing
strategy, reducing costs, and providing new value propositions to the
customers. Paragon Group has to manage all these challenges and
build effective barriers to safeguard its competitive edge.
How Wardah can tackle the Threats of New Entrants
1) By innovating new products and services. New products not only
brings new customers to the fold but also give old customer a
reason to buy Paragon Technology and Innovation’s products.
2) By building economies of scale so that it can lower the fixed cost
per unit.
3) Building capacities and spending money on research and
development. New entrants are less likely to enter a dynamic
industry where the established players such as Wardah keep
defining the standards regularly. It significantly reduces the
window of extraordinary profits for the new firms thus discourage
new players in the industry.
b. Bargaining Power of Suppliers
All most all the companies in the Cosmetics industry buy their raw
material from numerous suppliers. Suppliers in dominant position can
decrease the margins Wardah can earn in the market. Powerful
suppliers in Cosmetics sector use their negotiating power to extract
higher prices from the firms in Cosmetic sfield. The overall impact of
higher supplier bargaining power is that it lowers the overall
profitability of Cosmetics Services.
How Wardah can tackle Bargaining Power of the Suppliers
1) By building efficient supply chain with multiple suppliers.
2) By experimenting with product designs using different materials so
that if the prices go up of one raw material then company can shift
to another.
3) Developing dedicated suppliers whose business depends upon the
firm. One of the lessons Wardah can learn from Safi and L’Oreal
is how these companies developed third party manufacturers whose
business solely depends on them thus creating a scenario where

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these third party manufacturers have significantly less bargaining
power compare to Safi and L’Oreal.
c. Bargaining Power of Buyers
Buyers are often a demanding lot. They want to buy the best
offerings available by paying the minimum price as possible. This put
pressure on Wardah profitability in the long run. The smaller and
more powerful the customer base is of Wardah the higher the
bargaining power of the customers and higher their ability to seek
increasing discounts and offers.
How Wardah can tackle the Bargaining Power of Buyers
1) By building a large base of customers. This will be helpful in two
ways. It will reduce the bargaining power of the buyers plus it will
provide an opportunity to the firm to streamline its sales and
production process.
2) By rapidly innovating new products. Customers often seek
discounts and offerings on established products so if Wardah keep
on coming up with new products then it can limit the bargaining
power of buyers.
3) New products will also reduce the defection of existing customers
of Wardah to its competitors.
d. Threats of Substitute Products or Services
When a new product or service meets a similar customer needs in
different ways, industry profitability suffers. The threat of a substitute
product or service is high if it offers a value proposition that is
uniquely different from present offerings of the industry.
How Wardah can tackle the Treat of Substitute Products /
Services
1) By understanding the core need of the customer rather than what
the customer is buying.
2) By increasing the switching cost for the customers.
e. Rivalry among the Existing Competitors
If the rivalry among the existing players in an industry is intense
then it will drive down prices and decrease the overall profitability of
the industry. Wardah operates in a very competitive Cosmetics
industry. This competition does take toll on the overall long term
profitability of the organization.
How Wardah can tackle Intense Rivalry among the Existing
Competitors in Cosmetic industry
1) By building a sustainable differentiation
2) By building scale so that it can compete better
3) Collaborating with competitors to increase the market size rather
than just competing for small market.

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Implications of Porter Five Forces on Wardah
By analyzing all the five competitive forces Wardah strategists can
gain a complete picture of what impacts the profitability of the
organization in Cosmeticsindustry. They can identify game changing
trends early on and can swiftly respond to exploit the emerging
opportunity. By understanding the Porter Five Forces in great detail
Wardah's managers can shape those forces in their favor.

1.3.2 Market Driven Strategy

a. Customer Focus
1) Segementing
Table 1. Segmenting Analysis
VARIABEL IMPLEMENTATION
GEOGRAPHIC
Region Indonesia and Urband Area
DEMOGRAPHIC
Age 20 – 40 years old
Gender Woman
Life Cycle Female who like to take care of
themselves, whether it's taking care of
the face and body and also Female
who are Muslim
PSYCHOGRAPHIC
Social Class Lower Middle Class
Lifestyle Consumptive
Personality Daily Makeup User, Loyality,
BEHAVIORAL
Benefits Become a solution for consumers to
take care of their faces and make up
themselves.
Usage Status The habits of consumers who want to
use skin care products even though
they don't leave the house so that their
skin is maintained and use basic
makeup for daily makeup. Repeated
use and good quality make consumers
want to buy for a long period of time.

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2) Targeting
Table 2. Targeting Analysis
VARIABEL IMPLEMENTATION
GEOGRAPHIC
Region Big City, such as Jakarta, Bandung,
Bali, Medan, Surabaya, Makassar, etc.
DEMOGRAPHIC
Age 16 – 30 years old
Gender Female
Life Cycle Female who like to take care of
themselves, whether it's taking care of
the face and body, Female who are
Muslim, and career woman
PSYCHOGRAPHIC
Social Class Lower Middle Class
Lifestyle Consumptive
Personality Users of technology and the internet
and are socially active.
BEHAVIORAL
Benefits Currently, Wardah is not only focused
on beauty products, but has been
innovating by issuing various facial
care products.
Usage Status The habits of consumers who want to
use skin care products even though
they don't leave the house so that their
skin is maintained and use basic
makeup for daily makeup. Repeated
use and good quality make consumers
want to buy for a long period of time.
3) Positioning
Wardah's positioning brand itself is a cosmetic product that is a
pioneer of halal products, so that when people hear about halal
cosmetic products, what immediately comes to mind is Wardah.
Until now, the company still uses Wardah's positioning as "Pure
and Safe Cosmetics". Wardah feels this principle is quite striking
in the minds of the people. With the pure word, people consider
Wardah as a halal and safe product as a guarantee of security in
using this product.

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b. Competitor Intelligence
Wardah Safi L’Oreal
Target Female 20-40 Female 17-40 Female 20-45
Market
SES Mid to high Mid to High Mid to High
Communic Inspiring Halal, Natural, Beauty fot All,
ation tone Beauty, Feel andTested Because You’re
The Beauty, #EnjoyYourBr Worth it.
Beauty from ightDays,
Within, #SafiBrighten
yourstepmatter YourDay
s #Kindness
#thankful
Product Make Up, Skin Skincare and Skincare and
Category care, Hair care, Hair Care Makeup
and Body Care
Scent
Variant Acne Series, Age Defi, Revitalift Series,
Basic Series, White Expert, White Perfect,
Make Up and White UV Perfect, Pure
Series, Natural Clay Mask,
Lightening Micellar Water
Series, and
Personal Care
Sales Wardah Beauty Key Opinion Salesforce
Force Advisor Leader Marketing
Cloud
c. Cross Functional Coordination
The PT Paragon Technology and Innovation factory is led by a
commissioner who oversees a president director. The Commissioner
is responsible to shareholders and oversees all implementation of
company policies, takes all implementation of company policies,
makes all decisions regarding important issues and problems faced by
the company. The main director is responsible to the commissioners.
This position is in charge of operations manager, product manager,
finance manager and marketing manager. The operational manager
oversees several departments/departments, namely purchasing,
logistics, QAS (Quality Assurance and Safety), QCL (Quality
Control), production, INL (Innovation and Lean), MAI
(Maintenance), PPIC (Product). Planning and Inventory Control),
MRE (Management Representative), Business Solution (BSN),
Distribution Center (DC), internal halal coordinator, legal and IT

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(information technology) team. While the product manager is in
charge of the Product and Development (Prodev) team and the
Research and Development (R&D) team, the marketing manager is in
charge of Business Development, art, marketing, GIP teams.
d. Distinctive Capability
Because of its quality, Wardah has been present in the national
market, even now its products are starting to be known in international
markets, such as Malaysia. Wardah's product design looks simple and
elegant, so that it can attract consumers according to the type of
product and market mark. Quality service is also a hallmark of
Wardah, PTI has accounts for customer service and the PTI website.
Products that have been tested and are halal can be an advantage for
Wardah.
e. Matching Customer Value
In addition to being a halal cosmetic product, Wardah has a
different concept of beauty. There are three beauty concepts that are
carried by Wardah. First, Pure and Safe, with Wardah producing
beauty products from selected, natural and safe ingredients. In making
products, Wardah hires many pharmacists.
Second, Beauty expert with Wardah's initial image as a cosmetic
aimed at Muslim women has developed rapidly into a product that can
be enjoyed by a wider audience. Wardah believes that being beautiful
is universal. Wardah always innovates and is creative in responding
to every beauty need of Indonesian women by offering a series of
cosmetics that effectively frame the face with fresh colors. So that
these high-quality skin care products place Indonesian women as
prima donna who come with their own uniqueness.
Third, Inspiring beauty with Wardah who always believes in
inspiring beauty. Indonesian women may have adopted the dynamics
of world progress, but they have never abandoned the values of polite
eastern culture. For Wardah women, cosmetics are not only for the
body but also for the soul.

1.3.3 Brand Perception Mapping

PT. PUSAKA TRADISI IBU has made products with market
segments that are rarely thought of by the general public and thoughts
about futuristic markets. They have "read" the market that in the future
halal and healthy cosmetic products will boom and become a trend for
Indonesian society, where most of the population embraces Islam.
The success of PT. PUSAKA TRADISI IBU does not just happen. It
takes a real struggle and twists and turns of existing obstacles.
Recognized by PT. Paragon Technology & Innovation, the company that

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produces Wardah cosmetics, stated that until the 7th year it was a difficult
time to market products with a narrow market segment like this (halal),
it was even felt that carrying the "halal" label seemed to make the
business space "limited".
Now, after experiencing a "difficult" period with a narrow segment,
Wardah has got a lot of space in the hearts of its consumers. It is proven
by the establishment of 1,500 outlets spread throughout Indonesia. This
is because the consistency of the concept that Wardah has always
maintained so that consumers who are really interested and get what they
want in Wardah's products will be loyal to use it. For example, the
concept that carries "halal and Islamic" cosmetics has never been shaken
and is consistently followed by the company both in manufacturing and
marketing. So as if imprinted in the minds of consumers when they hear
the word natural cosmetics, they will remember Wardah.
The image brought by Wardah is in accordance with her vision and
mission as Halal cosmetics which has been maintained until now, which
is sharia-compliant beauty. Wardah dynamics to meet market demand.
Wardah's products currently reach 200 halal cosmetic products, including
make-up cosmetics to perfumes. The variety of products makes it
difficult for consumers to justify switching to other brands.
Products that have a narrow market segment such as Wardah does
have its own obstacles because it serves a special market. The advantage
of having a market that is as narrow as this is limited business
competition because not all companies are able to enter into certain
special segments, there will be natural selection automatically and the
company may become the "master" of the market. If you have mastered
the market, promotion will be something that is not the main thing. In
addition, if it can be managed with a solid strategy, it is not impossible
that it will be accepted by the wider target market.
SWOT Analysis
a. Strength
1) Wardah sales history which is quite successful
2) Wardah has an infrastructure that allows to change marketing
strategy
3) To be the only cosmetic with halal products
4) Very affordable product prices
5) There is a service that is supported by a reliable Beauty Advisor
6) Products that are not in demand by the public
7) Many promotional media that can be used
b. Weaknesses
1) Lack of sales team and promotion team ready to keep up with
changes in marketing strategy

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2) Lack of promotion team
3) Quality supplier to meet consumer demand
4) Packaging that tends not to vary
5) Special products for Female
6) Don't often do sales discounts
c. Opportunity
1) Not yet the number one cosmetic in Indonesia, the possibility of
developing is very possible
2) People's purchasing power is strong
3) Many people are loyal to Wardah products
4) The trend of wearing hijab is increasing
5) The lifestyle of people who want skin care
6) The majority of the population is Muslim
7) Improved community welfare
d. Threat
1) There are many competitors in the cosmetic field
2) Counterfeit products have started circulating
3) Prices are not controlled because there are parties who play price
4) Many beauty salons offer more complete facilities
5) Products that are not in demand by the public
6) New Halal products are emerging

1.3.4 Ecosystem and Stakeholder Analysis

Cosmetics consumer safety is regulated by the Indonesian Food and
Drug Supervisory Agency, which provides electronically integrated
business licensing services for the drug and food sector. BPOM issues
distribution permits that are produced by producers and/or imported by
importers of drugs and food to be circulated in the territory of Indonesia
based on an assessment of safety, quality, and efficacy.
To ensure the safety of cosmetic products, the public can check the
expiration date of the product. In addition, the public can also take
advantage of the application provided by BPOM to check the legality of
cosmetic products. To be able to distribute cosmetic products in
Indonesia, the product must have a Marketing Permit issued by BPOM
RI. In 2019, there were 66,824 cosmetic products that had obtained
Marketing Permit Approval from BPOM.
Cosmetic packaging is standardized by international regulations
issued by the International Organization for Standardization, and is also
regulated domestically by BPOM RI. In accordance with the cosmetic
notification scheme in force in the ASEAN region, there is no approval
of labels and cosmetic advertisements prior to distribution (premarket);
Supervision of labels/packaging and cosmetic advertisements is focused

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on post-market supervision. So that in addition to fulfilling the interests
of product promotion, business actors are still required to make cosmetic
labels/packaging and advertisements in accordance with applicable
regulations.
Labels and Promotions
A good cosmetic product label basically includes information that
explains the product composition, product legality, including uses and
how to use it to get optimal results.
According to the Regulation of the Head of BPOM No. 19 of 2015,
labels must include information, at least regarding: Product name;
Benefits/Usage (in Indonesian); How to use (in Indonesian);
Composition (in INCI name); Name and country of producer; The full
name and address of the Notification Applicant; Batch number; Size,
content, or net weight; Expiration date; Notification number; and
Warnings/attentions and other information, if required (in Indonesian)
For products that are clearly known to be useful/usable and how to use
them in general, such as powder, lipstick, shampoo, etc., there is no need
to include this information.
Halal
Halal is one of the topics that is now often discussed and is in the
spotlight of all parties. Previously, halal certification was voluntary, but
with the issuance of Law no. 33 of 2014 concerning Halal Product
Guarantee, then halal certification becomes mandatory (mandatory). In
accordance with the regulation, it is emphasized that products that enter,
circulate, and are traded in the territory of Indonesia must be certified
halal.
The definition of a product that must be certified halal here is one of
the categories of cosmetics. In the Regulation of the Minister of Religion
No. 26 of 2019 has also stated that the phase of the obligation to be
certified halal for cosmetic products circulating in Indonesia is given
until October 17, 2026. Referring to the Decree of the Minister of
Religion No. 464 of 2020, that cosmetics and cosmetic ingredients are
types of products that must be certified halal.
In Indonesia, halal registration is centered at one door, namely the
Halal Product Guarantee Agency. HPGA is an agency under the auspices
of the Ministry of Religion established by the Government, which has
been mandated to organize Halal Product Assurance and guarantee the
halalness of products that enter, circulate, and are traded in Indonesia.
Before cosmetics are circulated in Indonesia, cosmetic products and
ingredients must have a Halal Certificate issued by HPGA or from an
Overseas Halal Institution that has collaborated and been recognized by
HPGA.

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Marketing Mix
Marketing Mix is used by marketers so that their products can enter
the target market or target market. Marketing mix items include:
a. Product
Wardah products are widely known to the public as halal and safe
cosmetics. Wardah Cosmetics presents innovative formula cosmetics
that are safe, halal, practical, help in skin care, accompany daily
makeup, and even meet the needs and tastes of every woman.
1) Acne Series : anti-acne products to prevent and treat skin
breakouts. Consists of Acne cleansing gel, Agne gentele scrub,
Pore tightening toner, Acne Perfecting Moisturizer Gel, Acne
Treatment Gel.
2) Basic Series: basic care products are suitable for beginners and
want a mild and safe formula (eg pregnant & lactating mothers).
This type of product consists of: Facial Wash, Cleanser, Instant
Remover, Hydrating Toner, Sunscreen Gel SPF 30, Moisturizer
Cream, Moisturizer Gel, Intensive night cream, Peeling cream,
Facial scrub, Facial Mask.
3) Make Up Series : facial makeup products including compact
powder, two way cake, eyeshadow, mascara, blush, lipstick, etc.
4) Lightening Series : skin lightening products with gentle active
substances. These types of products consist of Lightening gentle
wash, Lightening facial scrub, Lightening milk cleanser,
Lightening face toner, Lightening face mask, Lightening Body
lotion, Lightening two way cake, Lightening day cream and
lightening night cream.
5) Personal Care : body skin care products and perfumes. Such as:
Hand & Body lotion, Olive Soft scrub, Body mist, etc.
b. Price
Wardah products offer prices that are quite expensive, but not
cheap, and quite competitive. In addition to being safe and halal,
Wardah prioritizes the quality of its products, so that the ingredients
of some of the products offered are imported.
Wardah sells its products per piece, but they recommend
purchasing per package according to skin type and customer needs so
that customers can easily choose the right cosmetic package for them
to use through the catalog and Wardah Sales Girl who is quite friendly
in explaining the variety of Wadah products. Details of the Wardah
products’s price will be listed in the attachment.
c. Place
Generally Wardah can be purchased in big cities, such as Jakarta,
Bandung, Surabaya, Medan, and other areas. However, it is possible

12
to buy it in other areas too.
Wardah products are sold in several stores or outlets, such as
Indomart, Alfamart, and other Drugstores, even in almost all
marketplaces, such as Shopee, Lazada, Tokopedia, and others.
Export products to new countries, for example with Wardah
Indonesia's cosmetic marketing network which has reached Malaysia.
Wardah cosmetics in Malaysia and Indonesia have the same type and
quality, but Wardah Indonesia can outperform Wardah Malaysia.
d. Promotion
Promotions through social media are carried out by wardah not
only through their official accounts. Wardah uses social influencers in
promoting their products. They do support for social influencers so
they do a review of the product. This is a fairly effective means
considering this promotion will increase word of mouth
communication. Reviews made by social influencers send a positive
message to consumers, and make consumers curious about the
product.
Wardah often does flash sales during the national online shopping
day or at the same date and month (7th July, 8th August, 9th September,
etc.). And also other moments, for example on Indonesia's
independence day there will be a 'merdeka sale' which will help
promote the Wardah product itself.
Furthermore, this promotion aims when consumers already have a
positioning on Wardah products, for example Wardah Exclusive
Matte Lip Cream, they will be persuaded to buy these goods. When
the product can meet their expectations of course word of mouth
promotion will take place. This technique has made Wardah Exclusive
Matte Lip Cream products successful in the market.

1.3.5 Program Recommendations and Business Process

Representing the Indonesian cosmetics and personal care industry, as
an industry and trade association, Wardah is in a strategic position to
make changes at the pre-competitive level. Starting from the
sustainability programs that have been implemented by our members,
Wardah invites all its members to share best practices and encourage
systemic changes for the health of the earth and improving the quality of
life of the community.
Wardah is currently collecting information from members regarding
existing sustainability initiatives, so that reports can be prepared and
updated regularly, and the impact of the sustainability program can be
measured.

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The Social Impact of the Cosmetics Industry
Wardah identified 3 areas, where our members can effectively carry
out sustainable initiatives relevant to the cosmetics industry, namely:
a. Sustainable production and consumption
b. Sustainable environment
c. Well-being and quality of life
Sustainable Development Goals (SDGs)
Before the implementation of the
Millennium Development Goals
(MDGs) ended, at the 2010 UN
Summit on MDGs, a post-2015
world development agenda was
formulated. This was reinforced by
the agreement on the document "The
Future We Want" at the 2012 UN Conference on Sustainable
Development. preparation of the post-2015 development agenda agreed
at the UN General Assembly in September 2015, namely the 2030
Agenda for Sustainable Development Goals (SDGs).
These targets highlight not only the environmental challenges facing
the world today, but also the effects of unsustainable approaches on
communities and people around the world. Each of the 17 Goals has
indicators that give companies and governments the ability to drive the
achievement of these goals.
Individually, WARDAH member companies work with various
initiatives to encourage the achievement of the 17 SDGs. Members have
also made some inspiring sustainability innovations and we showcase
them in industry best practices to help inspire and motivate other industry
players.
Business Process

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1.4 Answering The Questions
1.4.1 If paragon want to expand, which countries in Asia Pacific that could be
promising for Wardah and other Paragon brand expansion? Please
elaborate your answer.
Answer :
The popularity of halal cosmetic products in Asia has an increasing
trend at this time so that it can encourage national cosmetic exports and
provide opportunities for Wardah who has experience in pioneering
cosmetic products with halal labels. Halal products are considered as an
indicator of the safety of raw materials used due to natural tendencies, so
that consumer awareness to use natural beauty products due to safety and
increased improvement can have an impact on increasing consumption
of halal cosmetic products. Wardah's various variations of halal cosmetic
products can encourage exports of these cosmetics, especially to other
countries such as Asia Pacific.
Many countries in Asia Pacific are suitable for Wardah to expand its
products, one of which is Brunei Darussalam, Philippines, Pakistan, and
Afghanistan. Because these countries match the results of our analysis,
both in terms of conditions, religion, region, and customer behavior in
that country.
a. Brunei Darussalam & Phillipines
Brunei Darussalam has an area of 5,765 km2 with a population of
459,500 people. The population of this country in the north of the
island of Borneo is predominantly Muslim, with a percentage of 67%.
Coupled with the population aged 15-54 years as many as 304,600
people (Kemlu.go.id, 2018). This is one of the reasons why Brunei
Darussalam is a suitable country for the expansion of wardah products
and other Paragon products when viewed from the population and the
majority of the population's religious adherents.
The development of Islam in the Philippines can be said to be
increasing, currently there are 11% of the population who embrace
Islam in the Philippines from the total population. The country which
has an area of 300,000 km2 makes an Islamic country the second
largest country in the country. This can also be used as a reason why
Wardah has to market its products in the Philippines (Kemlu.go.id,
2018).
In terms of conditions, it can be said that Brunei Darussalam and
the Philippines are very close to Indonesia, from region, ethnicity,
climate, and others. This of course will affect consumer behavior and
consumer needs in the country which is almost the same as Indonesia.
Wardah will be very suitable if it has markets in Brunei Darussalam
and the Philippines.

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If Wardah will expand to Brunei Darussalam and Phillipines, this
will add to the development of bilateral relations between Indonesia
and Brunei Darussalam which has never been done before.
b. South Korea & Thailand
South Korean and Thai women are synonymous with healthy and
beautiful skin. Along with the times, South Korea and Thailand
continue to innovate to present a variety of cosmetic and skincare
products and have succeeded in dominating the world's beauty
industry. Seeing the rapid development, with the skincare trends that
are presented, many are curious. Apparently, the development of
skincare in both countries is quite drastic. If in the past the products
and treatments used were simpler, now women apply 10 steps to take
care of their beauty. Because of these conditions, South Korea and
Thailand were deemed suitable for Wardah to spread his wings.
c. Afghanistan, Pakistan, & Bangladesh
Indonesia now as ranks first for the largest number of Muslims in
the world and even in Asia Pacific. In Asia Pacific itself, the largest
Muslim population besides Indonesia are Pakistan, India, Bangladesh,
and Afghanistan. About 99.7% of Afghanistan's population is
Muslim, 96.5% of Pakistan's population is Muslim, and the majority
of Bangladesh's population is Muslim too with a percentage of 90.4%.
Meanwhile, India only has 11% Muslim population of the total
population. This is the basis that the three countries are compatible
with Wardah products, which are pioneers of halal and safe products
and get rid of India from the target country to be addressed.
Even though the country is not used to using daily makeup
products, this could be an opportunity for Wardah to introduce her
products to the people in the country, moreover Wardah not only
excels in makeup products but skincare, body care, and hair care as
well. Increasing brand awareness is very easy to do because there are
not many cosmetic products that can compete with Wardah. This can
also be a marketing channel for other products from Paragon.

1.4.2 What is going to be the entry mode for Wardah? What kind of
customers/insights that suit Wardah as a brand? Which product-line that
need to be prioritized to suits with the targeted consumer needs and
wants? Please elaborate your answer
Answer :
Sunscreen
Sunscreen can be a product that opens the way for Wardah, especially
when there is an uproar about the importance of using sunscreen, and
there have been many reviews from people who have tried Wardah's

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sunscreen products.
Sunscreen is one of a series of facial skin care products. There are
several forms of sunscreen, namely sunscreen in the form of sticks,
lotions, sprays and gels. Sunscreen is very important to use, especially in
tropical climates such as Indonesia because it can protect the skin from
UVA and UVB radiation. According to research, about 95% of the causes
of skin cancer are caused by UV radiation from the sun. By using
sunscreen, we can reduce the risk of skin cancer.
There are three types of sunscreen that can be adjusted to the needs of
facial skin, namely physical sunscreen, chemical sunscreen, and hybrid
sunscreen. Physical sunscreen can work optimally after 20-30 minutes of
use, very suitable for owners of sensitive skin and dry skin. Chemical
sunscreen can work optimally after 15-20 minutes of use, very suitable
for owners of combination skin and oily skin. Hybrid sunscreen is a type
of sunscreen that combines physical and chemical sunscreens. This
product is being loved because it has a light texture, like chemical
sunscreen, but the way it works is to reflect UV rays like physical
sunscreen.
Wardah UV shield Sunscreen Gel Enriched with Broad Spectrum
Protection which is 30x more optimal in protecting facial skin from
exposure to UV A and UV B rays as well as blue light rays that are
harmful to the skin, alcohol free, Wardah sunscreen SPF gel has a light
and non-sticky texture. Combined with the content of vitamin E which
can ward off free radicals and Pro vitamin B5 which is beneficial for the
skin in meeting daily nutrients and maintaining skin moisture.

Micellar Water
Micellar water is an alternative to clean the face without having to
rinse with water. This product can help remove makeup easily, however,
micellar water may not be very effective on oily or acne-prone skin,
unless a special formula is included for these skin problems, micellar
water consists of purified and demineralized water, along with micelles,
Tiny oil balls that stay suspended in the water, Micell acts like a tiny
magnet to attract impurities on the skin's surface, such as dirt, oil and
makeup.
Micellar water is said to be very effective at removing surface dirt
without removing oil from the skin. Wardah Seaweed Cleansing Micellar
Water contains seaweed and cucumber extracts which are known to
soothe normal skin conditions and are quite effective in preventing the
appearance of black spots and fading acne scars. In addition to the two
main ingredients, this product is also formulated with active ingredients
from processed olive oil which works optimally in cleansing the skin

17
from various dirt and makeup residue gently without clogging the pores.
The Multi Action Formula content in this product will keep the skin
moisturized without causing a greasy feeling when used. In addition, this
product is also safe for all skin types because Wardah does not add
ingredients such as parabens, alcohol or fragrance. This product also has
a liquid texture and from the aroma there is a refreshing smell of seaweed
and olive oil.

1.4.3 What kind of distribution and channel strategy that need to be done? Are
there any supply chain requirement and specific standard that Wardah
need to adjust (i.e.: FDA in USA). Please elaborate your answer
Answer :
Before Wardah exports goods abroad, Wardah must first find out what
licensing requirements must be met in the destination country. Because
each country has different requirements, it is important to find
information on the permits that must be obtained so that the trade process
runs smoothly like the FDA in the USA.
To be able to export successfully, it is not enough just to offer our
products outside. However, we must ensure quality, complete licensing,
prepare packaging, and anticipate risks with insurance.
In terms of government support, the Indonesian Ministry of Trade
assesses that the potential for export of cosmetic products is still wide
open. The reason is that world demand for world cosmetics and perfume
products in 2019 is estimated to reach US $ 82.40 billion or around Rp
1.207 trillion. Meanwhile, exports of Indonesian cosmetic products were
only around US$ 135.67 million or Rp. 1.97 trillion in January-August
2020.
The current export destination countries for Indonesian cosmetic
products are Thailand with a share of 18.89% of total exports and
Singapore (16.58%). Malaysia is in 3rd position with a share of 10.71%
followed by the Philippines 9% and Japan 6.04%. Meanwhile, to
maintain the performance of the non-oil and gas export trade sector in the
midst of the COVID-19 pandemic, the Indonesian Ministry of Trade said
it would selectively regulate imports of consumer goods to protect
domestic business actors so that the trade balance surplus can be
maintained. Other efforts made by the government to maintain foreign
trade performance this year include providing non-fiscal economic
stimulus as well as securing the availability of medical devices and
utilizing international trade cooperation forums. The Ministry of Trade
is also preparing the Trade Expo Indonesia Virtual Exhibition as a way
to promote Indonesian products to foreign markets.
Entering international market is a business decision that need to be

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carefully planned and executed. One of factor that need to be considered
for feasibility studies on expanding to international market is marketing
and communication strategy.
In regards of Marketing and communication, there are several muslim
women figure that could be the face of Wardah because of their
popularity with their distinctions as muslim women. They are Salama
Khalid (social media personality/influencers), Ibtihaj Muhammad
(fencing athlete), Halima Aden (international supermodel & UN
ambassador), Aminah Idrissi (UK model) and Noora Al Matroshii (first
Arabic woman astronaut candidate).

1.4.4 Should Wardah keeps the brand architecture and current communication
tone or not? Should Wardah has international personality or not? Please
elaborate your argument.
Answer :
In our opinion, Wardah should maintain their brand architecture and
communication tone. Why is that, because Wardah is a pioneer in
marketing halal and safe products. If we maintain it, it will be an
advantage for Wardah to market globally because it does not yet exist on
an international scale. If Wardah changes or adapts to international tastes
or culture, what Wardah currently has will be contaminated with foreign
matter and will damage the authenticity and purity of Wardah products
that have been made for a long time.
With the principles of Pure and Safe, Beauty Experts, and Inspiring
Beauty, Wardah has a unique identity. This will also maintain Wardah's
uniqueness even though it has expanded globally.
Regarding the color that Wardah has appointed, it is turquoise. In
color psychology, the color tosca or turquoise has the meaning of
emotional balance, stability, calm and also patience. This has been built
for a long time by Wardah. We believe that Wardah is able to Go
International with local taste.
Despite having a local taste, Wardah must have an international mind.
This is considered necessary because Wardah is now ready to expand to
other countries. Surely this international thinking is very important for
Wardah to succeed on an international scale.

1.5 Conclusion
Wardah's brand image as a beauty product must be maintained as well as
possible, because today's consumer behavior is very selective in spending
their money. Only quality products and have a good brand image are
important factors that will determine consumer decisions, in the buying
decision process. Therefore, what determines whether buyers are satisfied

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or dissatisfied with their purchases lies between consumer expectations and
perceived product performance. If the product is far below consumer
expectations, the consumer will be disappointed. Vice versa, if the product
meets expectations, the consumer is satisfied, and if it exceeds expectations,
the consumer will be very happy. Based on the results of the researcher's
preliminary survey, through observations and brief interviews, brand beauty
products.
Wardah is a beauty product that is quite famous and sticks in the minds
of its users. The advantages that make this product preferred by customers
are good quality and the halal content contained in Wardah products is the
tendency of people to use or even switch from other brands to the Wardah
brand.
Wardah products are the first pioneers of beauty products that prioritize
halal in the manufacture of their products and obtained a halal certificate
from the Indonesian Ulema Council (MUI) and received an "International
Halal Award" from the World Halal Council as a pioneer of halal cosmetics
in the world. This award will certainly raise the image of the product quickly
as evidenced by the field observations that the author did to see the number
of Wardah outlets visited by consumers to purchase Wardah products.
However, until now the data on Wardah's consumer growth has not been
able to be obtained by the author.

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Attachment
1.1 Price in Marketing Mix
a. Acne Series
Product Price
Acne Cleansing Gel (60ml) Rp19,500.00
Acne Gentle Scrub (60ml) Rp19,500.00
Acne Face Powder (25gr) Rp37,500.00
Acne Perfecting Moisturizer Gel SPF 15 (40ml) Rp28,500.00
Acne Treatment Gel (15ml) Rp18,500.00
Acne Pore Tightening Toner (100ml) Rp25,000.00

b. Basic Series
Product Price
Cleanser (150ml) Rp19,500.00
Facial Mask (60ml) Rp15,000.00
Facial Massage Cream (60ml) Rp16,000.00
Facial Scrub (60 ml) Rp13,000.00
Facial Wash (60ml) Rp12,000.00
Hydrating Toner (150ml) Rp18,000.00
Intensive Night Cream (40ml) Rp32,000.00
Moisturizer Cream (30 gr) Rp16,000.00
Moistirizer Gel (40ml) Rp15,000.00
Peeling Cream (60ml) Rp15,000.00
Sunscreen Gel SPF 30 (40ml) Rp28,000.00

c. Make Up Series
Product Price
Make Up Remover Rp26,500.00
Matte Lipstick Rp28,500.00
Compact Powder Rp37,000.00
Blush On Rp37,500.00
Double Function Kit Rp43,500.00
Luminous Face Powder Rp33,000.00
Luminous Liquid Foundation Rp32,000.00
Luminous Two Way Cake Rp41,000.00
Lipgloss Rp24,000.00
Hydrogloss Rp28,500.00
Lip Palette Rp55,000.00
Long Lasting Lipstik Rp40,000.00
Exclusive Lipstik Rp33,000.00
Creamy Foundation Extra Cover Rp32,000.00

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Creamy Foundation Light Feel Rp31,000.00
Perfect Longlash Curling Mascara Rp70,000.00
Profesional Make Up Kit Rp700,000.00
Special Edition Make Up Kit Rp375,000.00
Spon TWC Rp10,000.00
Eyeliner Pencil Rp40,000.00
Eyebrow Pencil Rp30,000.00
Eyeliner Liquid Rp50,000.00
Eyeshadow Rp39,000.00
Wondershine Rp31,000.00
Refill Compact Powder Rp27,500.00
Refill Luminous Face Powder Rp18,000.00
Refill Luminous Two Way Cake Rp28,500.00

d. Lightening Series
Product Price
Day Cream Step 1 30gram Rp37,000.00
Day Cream Step 1 20mili Rp24,000.00
Day Crean Step 2 30gram Rp40,000.00
Day Crean Step 2 20mili Rp25,000.00
Milk Cleanser 15 mili Rp24,000.00
Night Cream Step 1 30gram Rp38,500.00
Night Cream Step 1 20mili Rp24,000.00
Night Cream Step 2 30gram Rp41,000.00
Night Cream Step 2 20mili Rp27,000.00
Face Mask 60mili Rp16,500.00
Face Toner 150mili Rp20,000.00
Facial Scrub 60 mili Rp14,500.00
Facial Serum 5x5mili Rp50,000.00
Gentle Wash 60mili Rp13,000.00
Body Lotion 150mili Rp24,000.00
Two Way Cake Extra Cover 12gram Rp50,000.00
Two Way Cake Light Feel 12gram Rp47,000.00
Refill Two Way Cake Extra Cover 12gram Rp34,000.00
Refill Two Way Cake Light Feel 12gram Rp32,000.00

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