DOI: 10.36347/sjebm.2019.v06i02.002

Pages: 88-95

The study examined the structure, conduct and performance (S-C-P) of tobacco marketing in Jember Regency, East Java, Indonesia. The primary data were collected using structured questionnaire administered to 122 tobacco farmers, 6 middleman, 3 wholesalers, and 5 cigarette manufactures. S-C-P is one of the most influential approaches among various theories of industrial organization model that also can be used to examine the market system. This approach highlights the competitive conditions of a market by examining the structure of the players in relation to behavior (conduct) and performance of each player. This study seeks to investigate the tobacco market condition by analyzing their market structure, conduct and performance. The data were analyzed using Market share, Herfindhl Hirschman Index (IHH), Concentration Ratio (CR4), Marketing Margin, and Share price. The result indicated that the tobacco market tent to be oligopoly competition market which it also can be qualified as moderate concentration market. Furthermore, the higher concentration tents to be inefficient in the price allocation and probable of collusion among the market player. The study further revealed in the top market player had high market power to driving the tobacco price. The study recommends that Indonesian government should try to manage to reduce the monopoly power and increase competitive levels among the tobacco buyers. There are should be a policy which controlling the market power in order to protect small tobacco farmers from unfair market practices.