MARKETING PLANNING FOR INDIGO CREATIVE NATION

PROGRAM BY MDI VENTURES

FINAL EXAM

Max Suyatno Samsir

29319170

Master of Business Administration Program

School of Business and Management
Institut Teknologi Bandung
2019
 1

TABLE OF CONTENTS

Executive Summary……………………………………………………………………….2
1. Introduction……………………………………………………………………………3
1.1 Background………………………………………………………………………..3
1.2 Vision……………………………………………………………………………...3
1.3 Mision……………………………………………………………………………..3
2. Market Analysis and Objectives………………………………………………………4
2.1 Market Analysis………………………………………………………………….. 4
2.1.1 Market Environment Industry……………………………………………..4
2.1.1.1 PESTEL Analysis…………………………………………………4
2.1.1.2 Porter’s Five Forces………………………………………………5
2.1.2 SWOT Analysis…………………………………………………………...7
2.1.3 Competitive Analysis……………………………………………………...8
2.1.4 Netnography……………………………………………………………….9
2.2 Objectives
2.2.1 Business Objectives………………………………………………………11
2.2.2 Marketing Objectives……………………………………………………. 11
3. Marketing Plan………………………………………………………………………. 12
3.1 Strategy…………………………………………………………………………...12
3.1.1 Segmentation……………………………………………………………..12
3.1.2 Targeting………………………………………………………………… 13
3.1.3 Positioning………………………………………………………………..13
3.2 Tactics…………………………………………………………………………… 14
3.3 Budget…………………………………………………………………………… 15
3.4 Implementation Schedule………………………………………………………...16
3.5 Reporting and Contingency Plan…………………………………………………17
3.5.1 Reporting System………………………………………………………... 17
3.5.2 Contingency Plan…………………………………………………………18
4. Conclusion……………………………………………………………………………19
4.1 Conclusion Statement…………………………………………………………….19
 2

Executive Summary

From telecommunications, finance, banking, and all other industries where the incumbents
conquer for a really long time are now starting to decline. Either they innovate, or they die
in the hands of the smaller firms with outstanding growth and innovation. The biggest
telecommunications firm, Telkom Indonesia realized that the services that they offer will
not be relevant soon due to the disruption that occurs in all around the world which caused
by those smaller firms that society calls “start-ups”. The number of new start-ups are keep
growing day by day. With the fuels in form of financing and mentoring by venture capitals
(VC), start-ups are looking more dangerous than ever in the view of the incumbents. This
is why MDI Ventures was born, to diversify Telkom Indonesia businesses by investing to
those start-ups, and hoping it could source talents and innovation that they could acquire to
support their existing businesses or gaining financial returns in the liquidity event such as
merger and acquisition (M&A) or an initial public offering (IPO).
MDI Ventures is a type of corporate venture capital (CVC) firm that combines the
traditional VC model with resources provided by their holding company. MDI Ventures
invest in early to late-stage start-ups between the pre-series A and pre-IPO stages, depends
on what their investment thesis and their exit goals. MDI aims to maximize their VC
portfolios value within the Telkom Group businesses, as well as empowering the growth
of digital entrepreneurship and helping to build the region’s startup ecosystem. To achieve
those vision, other than acquiring start-ups to support their existing businesses, MDI
Ventures built a program named Indigo Creative Nation to support the growth of digital
entrepreneurship in Indonesia, as well as making deal flow for their investments to the
early-stage start-ups.
Indigo Creative Nation is a start-up incubation and also accelerator program. It was started
in 2013 and have nurtured some of the world-class startups. PAYFAZZ, the first Indonesia
start-ups that has joined Y Combinator, is one of the program alumni. Y Combinator is one
of the best start-up accelerator in the world, known by all entrepreneurs in all over the world
with the acceptance rate of 2 percent. This shown the capabilities of Indigo Creative Nation
could do with excellent entrepreneurs like Hendra Kwik, the CEO of PAYFAZZ.
We believe that we could generates more success if we could attract excellent entrepreneurs
like him to join the program. This report is all about the marketing planning of Indigo
Creative Nation program by mostly leveraging our successes in the past.
 3

CHAPTER I
INTRODUCTION

1.1 Background
MDI is a corporate venture capital initiative by Telkom Indonesia, focusing to invest on
early and mid-stage companies with the aims to maximize the venture capital (VC)
portfolio value within the Telkom Group. To achieve their aims, MDI uniquely combines
a VC model with resource access from Telkom Group. MDI is based in Jakarta with global
offices across Singapore and Silicon Valley.
MDI operates their business incubator program called “Indigo Creative Nation” program
to support digital entrepreneurs. Indigo Creative Nation is a comprehensive program
designed specifically to support the development of Indonesia through the startup
incubation and acceleration. The output of this program is the digital business entity that
has great prospects in the national and global levels, based on IT products favored by the
market.
In order to find great talents while supporting the existing businesses of Telkom Group,
MDI realizes the benefits of increasing the awareness of their business incubator program.
With a great marketing campaign, MDI believes that they could leverage their business
incubator program to gather more talented entrepreneurs.

1.2 Vision
The vision of MDI Ventures consists of:
 Maximize the VC portfolio within the Telkom Group.
 Empower the growth of digital entrepreneurship.
 Help to build the region’s startup ecosystem.

1.3 Mission
The mission of MDI Ventures consists of:
 Invests in high growth businesses that could enhance digital experience and provide
excellent services that lead to an unparalleled customer experience.
 Work closely with global accelerators and VCs to bring proprietary technologies from
other mature markets into various businesses of Telkom Indonesia.
 4

CHAPER 2
MARKET ANALYSIS AND OBJECTIVES

2.1 Market Analysis

To see the attractiveness of the incubator industry, we analyze the external environment of
the industry and also the internal capabilities of MDI Ventures. This analysis was done to
forecast the future of the startup incubator business and also the success of MDI Ventures
in running their startup incubator business.
2.1.1 Market Environment Industry
2.1.1.1 PESTEL Analysis
A. Political
 Strong Government Support (Opportunity)
- Indonesian government trying to push the growth of startups
landscape in Indonesia.
 Global Political Instability (Threat)
- Could decrease the Indonesia Foreign Direct Investment in the future.
- Startups are highly dependent on investments.
B. Economic
 Rising GDP per capita from 2016 to 2018 (Opportunity)
- GDP per capita increased from 3968.1 USD in 2016 to 4284.7 USD
in 2018 with CAGR of 5.02%.
 Increasing Indonesia Foreign Direct Investment (Opportunity)
- Foreign Direct Investment (FDI) jumped 17.8 percent year-on-year to
USD 7 billion in the September quarter of 2019.
C. Social
 Big Population Size in Indonesia (Opportunity)
- Indonesia has a population of 264,162,000 people in 2018.
- A really big market for startups.
 Huge Population of the Youths (Opportunity)
- More than 50 percent of the population are youths ranged from 0-39
age group.
- Most of them are tech-savvy.
 5

 Highly Dependent on Technology (Opportunity)

- Technology ease people in doing their daily jobs.
D. Technological
 Increasing Technological Integration in Businesses (Opportunity)
- Almost all of the big firms in Indonesia are focusing on their corporate
innovation program.
 Increasing Technological Awareness (Opportunity)
- More and more people are becoming tech-savvy, since most of their
activities are eased with technologies.
E. Environmental
 Increasing Environmental Awareness Across the Globe (Opportunity)
- More and more social movements exist to spread environmental
awareness, forcing firms to make their business more environment-
friendly.
 Increasing Sustainable Business Trends (Opportunity)
- More and more green startups are appearing to focus on environmental
problems.
 Increasing Energy Efficiency Trends (Opportunity)
- Firms are looking for alternative and renewable sources of energy.
F. Legal
 Government Deregulation (Opportunity)
- Deregulation to increase the ease of doing business in Indonesia would
support startups investments landscape.
 Adapting Regulations in Technology Sector (Threat)
- Regulations could decrease the innovative capabilities of startups.

2.1.1.2 Porter’s Five Forces Analysis

A. Rivalry among Existing Competitors (Weak Force)
 Moderate Number of Competitors (Moderate)
- There are moderate amount of business incubators in Indonesia.

 High Quality Differences (Weak)

- Almost all incubators provides mentoring, networking access, funding
opportunities, and co-working spaces.
 6

- However, Indigo Creative Nation provides infrastructures, such as

Telkom Group market access, Telkom Group resources, Telkom
Group application programming interface (API), etc.
- Startups could leverages all of Telkom Group infrastructures, which is
the competitive advantages of Indigo.

 Strong Brand Identity (Weak)

- Indigo Creative Nation has a strong identity in the startup industry.
- Their best portfolio include PAYFAZZ, the first startup from
Indonesia to make it to Y Combinator and has raised $21.1M of
funding. Other portfolios are PrivyID which raised $3M from their
Series A round, and also Goers which raised $1M from their Pre-
Series A round.

B. Threat of New Entrants (Weak Force)

 High Capital Requirement (Weak)
- Business incubators need a huge amount of capital since they have to
fund the startups from the day one.
- Providing high quality mentors also need massive amount of capital.
 Strong Cumulative Experiences in Startup Industry (Weak)
- Indigo Creative Nation was started in 2013 and has incubated more
than 100 startups until today.
- Nurtured successful startups, such as PAYFAZZ, PrivyId, etc.

C. Threat of Substitutes (Weak Force)

 Moderate Availability of Substitutes (Moderate)
- There are moderate substitutes that could replace Indigo Creative
Nation in the incubator industry.

 Low Performance of Substitutes (Weak)

- However, compared to Indigo, Indigo has more capabilities to be the
best incubators for the entrepreneurs due to their resources.

D. Bargaining Power of Buyers (Weak Force)

 Huge Number of Demands (Weak)
 7

- There are a lot of entrepreneurs out there who needs access to

resources.
- Indigo received more than 300 applicants for every batches.
- However, Indigo could only accept 9 to 12 startups every batches.

 Huge Differences Between Competitors (Weak)

- Only Indigo Creative Nation offers resources such as market access
and the technological infrastructures that could be used for the
entrepreneurs.

 Huge Advantage for Entrepreneurs (Weak)

- By gaining access to the incubators program, entrepreneurs could get
maximum benefits for their venture.

E. Bargaining Power of Suppliers (Strong Force)

 High Cost of Hiring Best Mentors (Strong)
- Providing high quality mentors to support entrepreneurs would be
costly.
 Low Time Availability of Mentors (Strong)
- Time availability is a problem since mentors are usually busy
professionals.

2.1.2 SWOT Analysis

By using the SWOT analysis tools, we could observe what is the strengths, weaknesses,
opportunities, and threat of MDI Ventures. Below is the SWOT Analysis of MDI
Ventures.

Tabel 2.1 SWOT Analysis of MDI Ventures

Strengths Weaknesses
- Strong brand equity - High capital requirements to operate.
- Backed by Telkom Group, Indonesian largest - High pressure from the holding company to
telco firm. find synergetic investments and innovation.
- Strong resources to support startups growth. - Empty chair for the CEO position.
- Strong exit performance on their investments
 8

Opportunities Threats
- Government initiatives in promoting - Fast changing government regulations.
technology entrepreneurs. - New entrants from the big firms.
- Rising purchasing power of the middle- - Global economic instability could affect
income people. investment activities.
- Increasing number of arising entrepreneurs.
- Growing technological landscape.

2.1.3 Competitive Analysis

There are several competitors of MDI Ventures in the startup incubator business. Here
are the competitive analysis for some of the competitors:
Table 2.2 Competitive Analysis of Startup Incubator Business
Companies Indigo Creative Nation IDX Incubator Merah Putih Inc.
7Ps
Product - Mentoring - Mentorship - Capital &
- Funding - Network fundraising
- Telkom Group - Funding through - Network
market access easier IPO listing - Mentorship
- Telkom Group - Co-working space - Managed services
resources and - Co-working space
Telkom API
- Global VC &
incubator/accelerator
support
- Co-working space
Price Equity positions Equity positions Equity positions
Promotion - Social media - Social media - Social media
- Official website - Official website - Official website
Place - Jakarta - Jakarta - Jakarta
- Bandung - Bandung
 9

- Yogyakarta - Surabaya
- Makassar
People - Mentors - Mentors - Mentors
Process - Submission - Registration - Registration
- On desk selection - Selection - Selection
- Initial pitching - Start of the program - Start of the
selection for 6 months. program
- Pitching selection - Preparing for an
- Start of the program IPO
for 6 months.
- Demo day to
introduce startups
products or services.
Physical - Portfolio companies - Portfolio companies - Portfolio
Evidence companies

2.1.4 Netnography
By doing internet ethnography, we are trying to understand what the entrepreneurs
expect for joining an incubator program. Below is the images of things that the
entrepreneurs expect.

Figure 2.1 First Insight from Quora

 10

Figure 2.2 Second Insight from Quora

Figure 2.3 Insight from a Blog 1

 11

Figure 2.4 Insight from a Blog 2

From the research, we found out that entrepreneurs expect a lot of things, consists of:
- Experienced mentors from various industry related to startups.
- Easier access of seed funding.
- Community access to broaden their network.
- Technological and physical infrastructures to support their progress.
- Instant market access to reach customers.

2.2 Objectives
2.2.1 Business Objectives
To meet our goal of having more qualified entrepreneurs for the incubator program, we
want to achieve 1000 registrants for the first batch of 2020.
2.2.2 Marketing Objectives
In order to meet our business objectives of having 1000 registrants for the first batch of
2020, here are the things that we will do:
A. Increase monthly visits on official website to 100,000 visits within 6 months.
B. Increase conversion rate to 1% by within 6 months.
 12

CHAPTER 3
MARKETING PLAN

3.1Strategy
We used the segmentation, targeting, and positioning (STP) strategy to
position Indigo Creative Nation program to the potential criteria of
entrepreneurs that we want.
3.1.1 Segmentation
Table 3.1 Market Segmentation for Indigo Creative Nation Program
Segmentation Products and Services

Types of Segmentation Segmentation Criteria Indigo Creative Nation

Geographic Region Indonesia

Density - Urban
- Rural
Demographic Age 20 - 39

Gender - Males
- Females
Educational - Completed secondary
- University degree from target schools
Occupation - Professional working for top firms
- Self-employed
- University student
Life-stage - Young
- Older
Behavioral Benefits - Mentoring
- Networking
- Funding
- Co-working spaces
- Access to resources
 13

Psychographic Personality - Teachable

- Problem solver
- Motivated
- Mentally tough
- Passionate

3.1.2 Targeting
Based on the segmentation, young professionals are what I considered as the best
segment to be targeted, since they have more lifetime value, making them the most
attractive segment. Potential customer’s profile of Indigo Creative Nation are young
professionals which graduated from top universities, working for top firms, that are
teachable, motivated, mentally tough, problem solver, and passionate.

3.1.3 Positioning

Figure 3.1 Marketing Campaign Statement for Indigo Creative Nation

The three main factor of the positioning statement are:

 Target segment : Young professionals
 Points of difference : Best startups incubator in Indonesia
 Points of parity : Partner
 14

“For young professionals who wants to make an impact by building their venture,
Indigo Creative Nation supports you with exclusive benefits by maximizing Telkom
Group resources. The perfect place to start your entrepreneurial journey.”.

3.2Tactics
To gain the business and marketing objectives of Indigo Creative Nation, there is have to
be some tactics developed to fulfil those objectives. Using the 7Ps of marketing mix, the
tactics that are developed for Indigo Creative Nation marketing campaign are as follows:
A. Product
 High quality mentorship to advice the entrepreneurs.
 Easy access of funding to support the growth of the startups.
 Access to Telkom Group market access, consists of 150 million mobile
customers, 3 million Indihome subscribers, and 200 thousands corporate
customers
 Telkom Group technological infrastructures, consist of hosting, account
manager, Telkom API, etc., to develop the products or services offered.
 Access to follow-on funding by renowned investors.
 Co-working space to be the place to work and connect within the communities.
B. Price
 All of the benefits offered are free.
 Seed funding in exchange for equity positions.
C. Promotion
 Social media, such as YouTube to in order to gain the attention of potential
entrepreneurs as well as showing every details and the values that Indigo offers.
 Working with the alumni to make contents. For example, Hendra Kwik, the CEO
of Payfazz, to share their journey and experiences when he first joined the Indigo
Creative Nation.
 Since Indigo is backed by Telkom Group, a public company and the Indonesian
multinational telco conglomerate, every innovation and achievements made by
them would be covered by the media, getting themselves earned media.
 LinkedIn ads to reach the professionals.
 Instagram and LinkedIn to share the activities and progress of Indigo Creative
Nation and also their portfolio companies.
 15

 Offline tours to introduce Indigo Creative Nation Program.

D. Place
 Digital lounge as the collaborative co-working spaces, located in Tangerang,
Makassar, Medan, Aceh, Malang, Bandung, Bekasi, Pekanbaru, Bogor,
Balikpapan, Depok, Surabaya, Solo, Denpasar.
 Digital valley as the incubator location, located in Bandung, Jakarta, and
Yogyakarta.
E. People
 High quality mentors, such as investors, startups C-suite, and practitioners.
 Hostile staffs to support the entrepreneurs needs.
F. Process
 Startup submission through official website.
 On desk selection.
 Initial pitching selection as the semi-final stage.
 Pitching selection as the final stage.
 Start of the program for 6 months.
G. Physical Evidence
 Portfolio companies of Indigo Creative Nation, such as PAYFAZZ, the first
Indonesian startup to join Y Combinator, the best startup accelerator in the
world.
3.3Budget
By estimating that the annual revenue of MDI Ventures is $2,500,000 in 2019, I developed
the budgeting system for their marketing campaign to promote their Indigo Creative Nation
program. Below is the marketing budget plan that I proposed for MDI Ventures.

Table 3.2 Marketing Budget Plan

Summary Low Monthly High Monthly
Total Marketing Budget $18,750 $25,000
Digital Marketing Budget $11,250 $15,000

Detail Low Monthly High Monthly

Offline tour $7,500 $10,000
 16

Search advertising $1,130 $1,510

Display advertising $670 $890
Social advertising $5,625 $7,500
Email $500 $670
SEO/Content $1,125 $1,500
Hiring agency $1,500 $2,000
Marketing technology $700 $930

Total marketing budget generally range from 7% to 12% of annual revenue. For MDI
case, I range them from 9% to 12 % of their annual revenue. Digital marketing budgets
commonly consume 25% to 45% of the total budget, and are considerably higher for
many cases. For MDI case, I proposed to consume 60% of the total budget since we
really want to focus on the online advertising, especially on LinkedIn to send more
targeted ads to the professionals. I separated the budget to low monthly and high
monthly based on how aggressive the campaign we want. This make sure that the
marketing team has much flexibilities to adjust whether budget for some of the
advertising channels needs to be invested more, or to be allocated for the other
advertising channels.

3.4Implementation Schedule
To fulfill the business objectives of MDI Ventures, an implementation plan with a certain
timeframe is needed to make sure their Indigo Creative Nation program is on the right track.
Below is the proposed implementation plan for Indigo Creative Nation marketing
campaign.

Table 3.3 Implementation Plan for Indigo Creative Nation Marketing Campaign

Timeframe
Key Activities December January February PIC Notes
1 2 3 4 1 2 3 4 1 2 3 4
Obtain board
COO
approval
Hire marketing
COO
manager
Hire marketing
Marketing manager
staff
 17

Contract
marketing Marketing manager
consultancy firm
Develop
Marketing
marketing
consultant
campaign strategy
Provide the team
with necessary Marketing manager
tools
Provide the team
with job Marketing manager
descriptions
Provide the team
Marketing manager
with SOP
Create content Marketing
campaign consultant
Implement search
Marketing manager Daily
advertising
Implement
display Marketing manager Daily
advertising
Implement social
Marketing manager Daily
advertising
Implement SEO Marketing manager Daily
E-mail
prospective Marketing manager Daily
entrepreneurs
Go for the offline
Incubator manager Monthly
tours

3.5Reporting and Contingency Plan

3.5.1 Reporting System
To make sure the campaign is going to be successful, MDI Ventures have to measure
the progress, showing value, identifying actionable steps to improve the marketing
performance and meet their goals. This could be done by developing a reporting system
of the campaign. A good reporting system would allow for a higher success chance of
the marketing campaign. Below is the proposed reporting system for Indigo Creative
Nation marketing campaign.
 18

Table 3.4 Reporting System

Activity Performed by Frequency
Checking metrics Marketing Staff Weekly
Evaluation meeting Marketing Manager Monthly
Measure results against
Marketing Manager Monthly
projection
Conduct survey Marketing Manager Annually
Diagnose any problem, identify
causes, and recommend Marketing Manager As necessary
corrective measures
Take corrective action Marketing Manager As necessary

3.5.2 Contingency Plan

By developing a marketing contingency plan, MDI Ventures could prepare more for
unexpected events that could interrupt their marketing activities. Contingency planning
is required to establish strategic actions that MDI Ventures could execute when goals
substantially deviate from the company forecast. Below is the contingency plan of
Indigo Creative Nation marketing campaign.

Table 3.5 Contingency Plan of Indigo Creative Nation Marketing Campaign

Risk Event Trigger Action
- Reduce marketing
Low financial performance Revenues drop above 25%
expenses
Monthly visits below 50% - Gather a research
Low monthly visits
of the target - Re-evaluate campaign
Conversion rate below - Gather a research
Low conversion rate
50% of the target - Re-evaluate campaign
 19

CHAPTER 4
CONCLUSION

4.1 Conclusion Statement

Marketing plays a really big part in the growth of any businesses. In case of startups
incubator, we need to understand what kind of entrepreneurs you want. Other than that,
you also need to understand what the entrepreneurs need and want. For MDI Ventures,
excellent entrepreneurs are without a doubt the central foundation for their Indigo Creative
Nation program. With the capabilities they offers and the excellency of the entrepreneurs,
MDI Ventures believe they could create a lot of entrepreneurs like the previous alumni,
Hendra Kwik.
With the proposed marketing plan for Indigo Creative Nation marketing campaign, we
believe that MDI Ventures could gather those excellent entrepreneurs. With management
support, Indigo Creative Nation program would find itself in a more knowledgeable
position. Those marketing investments in time and other resources would be well
rewarding in the future as more and more targeted entrepreneurs will know the benefits that
Indigo Creative Nation program offers and their achievements in the past.
To empathize the role of marketing for incubators, Peter Drucker have a really good
statement that could be restated as follows:
“The aim of marketing in the incubator environment is to know and understand the
incubator stakeholder community, including its clients, so well that the incubator meets
their needs and sells itself. Ideally, incubator marketing activities should result in
stakeholders who are ready to actively support it.”
The most important point of this marketing campaign, other than gathering those excellent
entrepreneurs, is to know what they expect from an incubator program so MDI Ventures
could add more value to the Indigo Creative Nation program. Marketing is only for short-
term goal. The long term is to add more improvement based on the information gathered
from their marketing campaign.