Marketing Channel and Margin Analysis of Grouper in Pulau
Terong, Belakang Padang District, Batam
Karnila, and Shinta Wahyu Hati
Department of Business Management, Politeknik Negeri Batam, Jl.Ahmad Yani, Batam, Indonesia
Keywords: Marketing Channel, Market Margin, Grouper.
Abstract: This study aims to examine the pattern of marketing channels used by the Fishermen of Pulau Terong in
distributing fish to end consumers in Singapore and determine the amount of marketing margins between each
level of marketing used. The problems examined include internal and external factors that affect the
performance of fishermen in fishing efforts such as a lot of capital spent and adequate weather. The analytical
approach used is a qualitative descriptive analysis for marketing channel patterns and quantitative descriptive
in the form of a formula for calculating marketing margins.
Batam is geographically one of the cities in Indonesia
which is located on the international shipping lane.
The area of Batam reaches 1,038.84 km2 and the area
of its waters is 2,791.09 km2. So, it can be concluded
that Batam has a greater water area than the land area.
Seeing from the sea area, many of Batam residents
also earn a living as fishermen, due to the supporting
geographical factors. some of them are in Pulau
Terong, one of the islands that is located in Belakang
Padang District, Batam.
Based on data from Pulau Terong Village, the
population of Pulau Terong is known to be 3,117
people with 963 households. Pulau Terong also has a
land area of 5.79 km2 with a sea area of 110.89 km2.
Pulau Terong is also one of the major fish productions
contributing islands in the Belakang Padang District.
The northern part of Pulau Terong is directly
bordered with Pecung and Kasu. The western part of
Pulau Terong is bordered with the Sea. The east itself
is bordered with Bulang Lintang island while the
southern part is directly bordered with Karimun
Regency. Pulau Terong is one of the islands
surrounded by the sea and it is reasonable if many of
the residents who work are mostly fishermen.
Fisherman is a term for people who work daily to
catching fish or another marine biota. According to
data from the village of Pulau Terong, it can be seen
that the number of fishermen is 563 people, which
means that more than 60% of the population of Pulau
Terong earn a living as fishermen.
Among a variety of fish found in the waters of
Pulau Terong, according to one of distributor on
Pulau Terong, there are several fish that are the main
products of Pulau Terong such as Mackerel,
Memparang, Tondan, Unga, and Grouper. One of the
biggest commodities in Pulau Terong is grouper fish,
both in terms of fishing and in terms of cultivation.
Grouper fish is one of the marine products that has a
high enough price and is usually exported abroad.
Based on the results of an interview with one of
the distributors on Pulau Terong, it can be seen that
the sale value of grouper fish from Pulau Terong can
be classified based on the types. Grouper fish can be
calculated from a price range of Rp. 25,000 to Rp.
200,000 per kg. The more difficult and rarer the fish,
the more expensive the price offered. Next, there are
8 types of grouper fish in Terong Island.
Table 1: Type of Grouper in Pulau Terong.
No Type of Grouper Price
1 Gopak Grouper Rp. 25.000
2 Rice Grouper Rp. 40.000
3 Black Grouper Rp. 60.000
4 Tiger Grouper Rp.70.000
5 Line and Line size
Rp.70.000 and
Rp. 115.000
6 Gertang Grouper Rp.80.000
7 Cantang Grouper Rp.100.000
8 Sonu Grouper Rp.200.000
Karnila, . and Hati, S.
Marketing Channel and Margin Analysis of Grouper in Pulau Terong, Belakang Padang District, Batam.
DOI: 10.5220/0010354000210028
In Proceedings of the 2nd International Conference on Applied Economics and Social Science (ICAESS 2020) - Shaping a Better Future Through Sustainable Technology, pages 21-28
ISBN: 978-989-758-517-3
2021 by SCITEPRESS Science and Technology Publications, Lda. All rights reserved
Based on the data in the table above, the lowest
price of grouper is found in the type of gopak with the
price of Rp. 25,000 which have the characteristic of
being brown with yellow speckled tails, while the
grouper fish with the highest price of Rp.200,000 is
owned by the Sonu grouper with the characteristic of
red colour and large size. The high level of price of
grouper makes fishermen directly sell grouper fish
directly to distributors as an intermediary to
consumers in the village, looking at the side of the
village economy. This price determination is also
seen from the high protein content of the Grouper.
Grouper fish such as Sonu are valued more highly
because of their large size and high protein content
according to one of the distributors on the Pulau
Terong called Mr. Eri (Research Informant).
Fish on Pulau Terong can be caught by using
various kinds of fishing gear such as Nelon Nets,
Tansi Nets, ordinary fishing rods or using Bubu and
aquaculture. Grouper fish in Pulau Terong itself are
mostly obtained using fishing gear and fish traps, then
they are distributed to fish distributor. The fulfilment
and distribution of grouper fish is also inseparable
from how the flow or Pattern of Marketing Channels
are found in Pulau Terong.
Marketing channels can be compared to pipelines
where water flows from its source to its final
boundary. Marketing Channels are a vital element in
the marketing activities of a product. Nowadays,
fishermen are not only faced with production
problems but also marketing and distribution
problems. How the fish can be caught by fishermen
and reach the consumers on time or can be more
efficient. Fishermen and distributor as well as
retailers must pay attention to the freshness of the
fish. Timeliness in the provision of ice and fish box
also affects the quality of fish to the end consumer.
Long distribution patterns can cause complexity and
inhibit the smooth arrival of fish into the hands of
consumers so that it can cause spoilage, quality
degradation, and lack of marketing margins.
Fishermen certainly expect a profitable marketing
margin for their business. To Get a profitable
marketing margin, fishermen must pay attention to
the quality of its products, distribution, and
marketing. Marketing is an activity carried out to
exchange offers between customers and producers to
create an agreement between the two parties.
Marketing was created to provide value in order to
achieve the target market and desired benefits.
Determination of price of grouper on Pulau
Terong is also seen from the interest of grouper
consumption by end consumers, the price of oil at the
time of distribution, to packaging of fish that requires
additional costs such as ice blocks and fish boxes.
However, in managing Marketing Channels, there are
still several obstacles and consequences such as
timeliness and the number and quality of consumer
The focus of this research was started from grouper
fish producers, in this case Pulau Terong Fishermen,
then continued with the distribution phase of the
marketing flow carried out by Distributors on Pulau
Terong or fishermen sending their fish directly to
distributors from Pulau Terong. The series of
processes is also accompanied by an analysis of
marketing margins arising from marketing channel
Figure 1: Research focus.
Researchers apply data analysis methods in the
form of qualitative and quantitative descriptive
analysis. To determine the market structure,
marketing channels, and market behaviour,
researchers used a qualitative descriptive analysis
while the quantitative descriptive analysis in this
study aims to analyse business income based on
revenue and costs from the distribution process,
marketing margins, as well as profits and costs. This
study also uses interviews and field observations,
which are collecting data with questions that are
directly given to informants and visiting survey sites
that related to research. This research was conducted
with analysing distribution patterns and also by
paying attention to marketing margins from the
relevant regions.
In conducting data processing, researchers used
several formulas, including:
1. Marketing Margins
M = Hp - Hb (1
M: Marketing Margin
Hb: Purchase rate price
HP: Price level of sales
2. Profit Margins
П = M - Bb (2
ICAESS 2020 - The International Conference on Applied Economics and Social Science
П = Benefits
M = Marketing Margin
Bp = Marketing Costs
3. Marketing Efficiency
"MM" = SP / CP × 100% (3)
MM = Market Margin
SP = Selling Price
CP = Cost Price
MM >50% means that marketing was efficient
MM <50% means that marketing was Inefficient
Pulau Terong has six inhabited islands including
Pulau Terong, Tumbar, Geranting, Buce Island,
Tanjung Ladan Island and Seberang Island. The
population in the Pulau Terong urban village is 3,332
people with 989 families (family cards). Pulau
Terong has 5 units of neighborhood and 14 units of
hamlet. The land area is 5.79 km2 with the sea area of
110.89 km2. From this fact, it can be seen that most
of Pulau Terong is surrounded by ocean, so it is not
surprising that many residents of Pulau Terong make
a living as fishermen.
From the several fish commodities in Pulau
Terong, grouper is one of the biggest commodities
compared to other fish. According to one grouper
producer, high market demand for grouper is a
challenge for Pulau Terong fishermen to increase the
production and quality of grouper fish in their area.
the type of grouper that is most often obtained on
Pulau Terong is the type of grouper or regular grouper
which in one catch can reach up to 7 to 8 fish. Besides
that, there are also groupers of petals, rice, and also
sonu, which are often obtained by fishermen of Pulau
Terong, while the type of grouper abstraction, tiger,
and barren are rarely found by fishermen. The
groupers on Pulau Terong will be distributed to
distributors in Pulau Terong.
Marketing Channels are formed from the
relationship between producers, consumers and
intermediary traders. Marketing channel for grouper
in Pulau Terong involves fishermen to the consumer
that described in the picture below:
Figure 2: Marketing channel.
From the picture above it can be seen that the
grouper marketing channel in Pulau Terong begins
when there is a flow of information received from
each level or level of grouper marketing. Initially
from the Jurong Singapore distributors will first read
the market and consumer demand for grouper in
Singapore, then from Singapore distributors will
inform to distributor Pulau Terong about consumer in
Singapore that has a demand from the fish, both
distributors of fishing boat owners to the distributor
of Pulau Terong, then from these distributors arises a
request to fishermen to meet the needs of fish grouper
at the Singapore Market. Usually, there is no limit on
how many groupers that need to be supplied and
delivered to Singapore because of the large number
of fish in Singapore.
The marketing functions performed by fishermen
on Pulau Terong include:
1. Fish Sales. Pulau Terong fishermen sell their fish
directly to distributors, not to consumers directly.
2. Fish storage. Fishermen go out to sea for 3 days
so that the packaging and storage of fish must also
be considered by fishermen. Pulau Terong
fishermen use a box called pebe to store fish. The
pebe will later be filled with ice to maintain the
freshness of the fish.
The marketing functions performed by fishermen
on Pulau Terong include:
1. Purchase. The types of purchased by the majority
of traders are fresh fish at a relatively higher price
than fish that have experienced a decline in
2. Sales. The distributor resell fish without changing
the condition of the fish. In this case the collecting
trader only estimates the selling price that applies
in accordance with the market price.
Marketing Channel and Margin Analysis of Grouper in Pulau Terong, Belakang Padang District, Batam
3. Price Estimation. In estimating prices, distributors
are required to be able to estimate various types of
fish prices in the process of purchasing fish from
fishermen and reselling them to subsequent
4. Sorting the quality of fish. The activity of sorting
fish in this case requires the traders to be able to
determine the quality of fish in order to obtain fish
that are in accordance with the desires and the
right price.
5. Fish packaging or storage. Distributors also carry
out fish packaging activities so that fresh fish is
guaranteed before reaching the hands of the next
distributor. This packaging is included in the
preservation of fish by using a box or fish crates
which contains ice cubes.
6. Fish Delivery. The fish that has been packaged by
the distributor will then be delivered to the fish
shipping vessel to Singapore.
The following is the flow pattern of the grouper
marketing channel in Pulau Terong:
Figure 3: Marketing channel pattern.
From the picture above it can be seen that the first
marketing channel, fishermen, sell their fish to
distributors in Pulau Terong. In Pulau Terong there
are 7 Distributors who have their subordinates
(fishermen) so that when the fishermen return from
fishing, fishermen directly distribute their fish to their
distributors except for a few fishermen who do not
have a permanent distributor, they tend to choose the
distributor who at that time provide the most
attractive price. From the distributor in Pulau Terong,
it is then distributed to the Distributor of the owner of
a fishing boat to Singapore. Furthermore, from the
distributor of the owner of the fishing boat, the fish
will be distributed again to Singapore's Jurong
Fishery Port. The vessel would check the immigration
office at Belakang Padang beforehand continue the
journey to Singapore. After the ship arrived in
Singapore, traders in Jurong will pick up the fish and
pay taxes to the owner of the ship while paying the
price of the fish. Furthermore, from traders in
Singapore Jurong, the fish are then distributed to
consumers by selling the fish at Jurong Singapore.
The second grouper commodity trading channel is
almost the same as the first marketing channel
pattern, except that the fishermen do not deliver their
fish through the intermediary distributor from Pulau
Terong but the fishermen distribute the fish directly
to the Distributor of the owner of the fishing vessel?
It is from the ship's distributor that the fish are
brought to Singapore as usual through immigration
checks and stop at Jurong Fishery Port and then the
fish are transported and paid for by traders in
Singapore Jurong. After that, Singapore Jurong
Traders will start distributing their fish to Singapore
consumers by selling the fish at Jurong Singapore.
The following is the flow pattern of the grouper
marketing channel from Pulau Terong Fisherman to
the distributor in Pulau Terong:
Figure 4: Marketing channel pattern.
From the picture above it can be seen the
correlation or relationship between fishermen and
distributors depicted with arrows indicating the
mutual relationship that occurs between the two
parties. When there is demand for fish from
consumers, the distributor who first has this
information will share it with fishermen, so the
fishermen will start fishing, using either a fishing rod
or using a trap. Previously, fishermen would first
prepare provisions and transportation for fishing
which usually takes place for 3 days at a time of
Usually in one departure, fishermen will need a
capital of Rp. 648,500 which includes the cost of
supplies, packaging, fish storage and transportation
used. Not all of this capital comes from fishermen,
they are also from distributors who provide loans to
fishermen in the form of purchasing machinery when
it is damaged or in the form of too long of fuel money.
This loan capital then binds fishermen to always sell
their fish to distributors who are owed. But there are
also some fishermen who use private capital to
finance all of their fishing costs so that fishermen like
this will not be bound to any one distributor and have
the right to sell their fish to the distributor who offers
the most attractive price.
In fishing, sometimes fishermen also experience
several obstacles such as uncertain weather
ICAESS 2020 - The International Conference on Applied Economics and Social Science
conditions and poor planning. The weather factor is
one of the important determinants for fishermen to get
fish. Unfriendly weather often inhibits fishermen
from catching fish because strong currents or high
waves make the fishermen's stability in fishing
disrupted and the fish obtained are not according to
the expected target. Usually fishermen will get fish in
satisfying and profitable quantities during the north
wind season, where the situation and conditions at sea
are very good and many fish commodities make the
fishermen always succeed in bringing home groupers
in large quantities and of course with high incomes
Besides in the northern season, fishermen will
also usually get high income when the Chinese New
Year is getting close because the consumers will
accommodate and need a lot of fish, the more fish that
consumers want, the greater the offer of attractive fish
prices to distributors or fisherman. Likewise, for
Pulau Terong fishermen, by offering a high price
from the distributor, makes fishermen competing to
get a lot of fish at sea and get high prices on the price
of the fish so that it will increases income fisherman.
Besides the northern monsoon and Chinese New
Year, there are also several seasons which have a big
impact on reducing the income of the fishermen of
Pulau Terong. Among them is the south wind season
where the water usually becomes murky and many
fishermen choose not to go to sea at this time because
it can have a detrimental effect due to the fish
obtained cannot return the capital spent. In addition,
there is a western season where the wind at that time
will be very strong and make fishermen quite
dangerous to go to sea because of the swift currents
and unpredictable weather that makes it difficult to
concentrate on getting fish. In addition to the season,
other factors such as the presence of large vessels
anchored in the usual fishing grounds also disrupt the
fishing process, because sometimes the fishing rod or
nets used by fishermen for fishing get caught and
break up due to being hit by the ship and harming the
fisherman. Even though the docked ship has paid
Rp.10,000,000 per month, but that still does not cover
the loss of fishermen because the money will be
distributed to the entire community of Pulau Terong
even those who are not fishermen or who do not fish
in the area docked.
Regardless of the obstacles that fishermen face
when going to sea, the average fisherman will get a
few kilos of fish to be sold to distributors. Decisions
about the marketing channel system used are one of
the most important decisions faced by management or
business entities or individuals. All marketing
decisions are influenced by the channel chosen. But
at the same time, the marketing strategy is able to
influence the choice of the channel itself while still
paying attention to segmentation, targeting, and
positioning. Pulau Terong fishermen decide to sell
their fish directly to distributors without first selling
it to consumers directly. In contrast to research
conducted by Ezihe, et al (2014) which in addition to
going through distributors, consumers also buy fish
directly from fishermen. This is done with
consideration of the convenience of fishermen in the
transaction and also because the price sold for
grouper is very high so consumers on Terong Island
rarely buy this fish.
Table 2: Income of the Fisherman.
Fishermen can meet the target if there are dozens
of kilos of fish obtained that return the capital spent
by fishermen. The fish sold by fishermen also vary,
but the most obtained are grouper fish and unga. The
price of each fish certainly varies according to the
type of fish obtained. Fish groupers that commonly
obtained by fishermen, such as ordinary Line grouper,
black grouper, gopak grouper and sonu grouper have
varying prices that can range from Rp.25,000 -
Rp.200,000 per kilo. Usually, the grouper is obtained
according to size. Regular grouper for Rp.100,000 per
kilos is sold from fishermen to distributors.
From the picture above, it can be seen that if a
fisherman can produce 20 kg at a time at sea, the
fisherman will get a gross income of Rp. 2,000,000 so
that he can return the capital or costs previously
issued at Rp. 648,500 so that the total net income of
fishermen in one catch can reach Rp. 1,350,500.
Marketing Channel and Margin Analysis of Grouper in Pulau Terong, Belakang Padang District, Batam
Fishermen usually fishing grouper fish every 3 days,
so in 1 week, there are 2 fishing process and in one
month there will be 6 fishing processes, because 10
days at the end of the month will be a time for
fishermen to rest. Therefore, the income of fishermen
in a month can reach Rp.8,103,000. However, this
income cannot be determined precisely because the
amount of fishermen's income depends on the large
number of fish produced by fishing at the time. The
more fish obtained, the greater the income that can be
received by fishermen. Conversely, the smaller the
results of fishermen fishing, the smaller the income
earned which can even be a loss because they cannot
the capital such as capital at the sea, transportation
and storage capital.
In addition, the price of grouper can also increase
or decrease in accordance with the target in the
market and the quality of fish sold. If the number of
fish sold is small and consumers need a large supply
of fish, the higher the price of fish offered to
fishermen and distributors. On the other hand, if the
fish in distributor experience abundance, the fish
offered by fishermen will experience a slight price
decline and also have an impact on decreasing profits
of fishermen and distributors. But this rarely happens
because usually from the distributor side always
requires a supply of fish from outside. In addition to
fish quotas, the quality of fish is also a consideration
for the price of fish obtained, the better the quality of
fish maintained, the better the price given.
It is important for fishermen and distributors to
always maintain the freshness of the fish. It starts
when fishermen get fish while fishing. When going to
sea, fishermen must prepare a fish storage box in the
form of a box or pabe and also ice cubes that are put
in the box so that it does not melt easily. The fish box
is also given a small hole to keep the ice from melting
easily. When the fish is obtained, the fishermen will
let it die and then put it in a fish cage that is coated
with ice and closed as tightly as possible so that the
quality of the fish and ice is maintained. After
packaging and storage and fishing are finished, the
fish will then be immediately taken to the distributor.
When the fishermen are about to go home from
the sea, the fisherman will first notify via telephone
the distributor where the grouper is delivered and then
the distributor will prepare ice and fish storage and
wait for the fishermen to come home. After arriving,
there will be a process of transporting fish by a
distributor to the fish that the fisherman gets. Usually
the distributor will use a pulley or rope to lift the fish
from the sea. The fish that have been transported are
then separated by species and weighed for the amount
to be calculated. Usually, in determining the price the
distributor will take at least Rp. 5,000 - Rp. 10,000
per kilo of fish sold by fishermen. This advantage is
taken by considering the price of transportation,
storage, and also the fuel that will be spent by the
distributor when delivering fish to the next
distributor. The following is income from Pulau
Terong distributors
Table 3: Income of Pulau Terong Distributor.
If the distributor buys fish from the fisherman at a
price of Rp. 100,000, then the distributor will resell
the fish at a price of Rp. 110,000. That way, the
marketing margin obtained by the distributor is
Rp.10,000 (5.88%). If in a day the distributor delivers
an average of 100 kilograms of fish, the fish
purchased to the fisherman is Rp. 10,000,000 with a
total price of Rp. 11,000,000, taking into account the
transportation, storage, and fuel costs of Rp.305,000,
so that the total net income of the distributor is Rp.
695,000. If the fish calculated per kilo, a distributor's
profit of margin is Rp. 6,950 at a cost of Rp. 3,050.
Besides fishermen, distributors also experience
several obstacles in running their business. The
formal education of distributors in Pulau Terong is
still very low and makes the distributor's ability to
analyse fish quality and the lack of sensitivity to fish
quality so that sometimes distributors have to suffer
losses because they cannot identify and estimate fish
quality when they arrive at the next distributor.
Usually, fish delivered by fishermen will be paid
directly by the distributor at a price set by the trader
ICAESS 2020 - The International Conference on Applied Economics and Social Science
in Singapore. Furthermore, the distributor will
receive payment from the Singapore side after the fish
arrives at Singapore and the fish quality is checked. If
there is a change in quality, the distributor will suffer
losses because the price of fish will decrease
dramatically along with the decline in fish quality.
For example, the distributor pays Rp. 100,000 per
kilogram to fishermen and only receive half the price
from Singapore due to the reduction in fish quality.
Sometimes, the fish sent are not paid for or repatriated
because of very poor quality.
The distributor had first bought fish from the
fisherman at the normal price and got a refund at a
lower price and caused losses. In addition,
distributors always use family ways to establish
business relationships with fishermen. The same is
true of accounts payable and credit. Sometimes, in a
business, there are fishermen who find it difficult to
pay their debts to distributors who have previously
provided loans for business capital. Usually, if there
is a little fish season like the south season, distributors
tend to give loans to fishermen for the capital of the
sea because at this time, usually the fishermen will
need capital to cover a small amount of income and
this will also burden the distributor.
Based on the results of research and discussion,
conclusions can be drawn. The marketing channel of
grouper on Pulau Terong can be described from the
fishermen of Pulau Terong who deliver their fishing
products to distributors without first selling their fish
personally to consumers on Pulau Terong so that the
marketing pattern used in Pulau Terong is Indirect
marketing because fishermen on Pulau Terong prefer
to distribute their fish through intermediaries.
From the chosen marketing pattern, fishermen got
several problems in their marketing of fishing catch,
including limited information on grouper prices,
uncertain whether that makes it difficult for fishermen
to predict grouper catches. This is also influenced by
the formal education of Pulau Terong fishermen who
are still relatively low. For distributors themselves
there are several problems such as the declining
quality of fish when they arrive at consumers causing
a significant difference in prices between those given
by distributors to fishermen. In addition, there are
some fishermen who find it difficult to pay debts to
distributors, making distributors sometimes have to
lose money.
The marketing margin obtained by the distributor
is Rp. 10,000 (5.88%). If in a day the distributor
delivers an average of 100 kilograms of fish, the fish
purchased from the fisherman is Rp.10,000,000 with
a total price of Rp.11,000,000, taking into account the
transportation, storage, and fuel costs of Rp. 305,000
so that the total net income of the distributor is Rp.
695,000. If calculated per kilo, a distributor's profit
margin is Rp. 6,950 at a cost of Rp. 3,050.
Acknowledgments addressed to all of participant or
informant who helped researcher find data about
marketing channel in Pulau Terong. I would like to
thank the fishermen for providing information about
the fish and cost incurred. I am grateful for
distributors who have given information about
marketing channel from fishermen to consumers, cost
and margin of groupers, and also document needed to
support research. I am Thankful The head fishermen
in Pulau Terong who have given permission to carry
out research in Pulau Terong.
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