chapter 2 revised anne
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Chapter II
MARKET STUDY
Marketing aspects is the sum total of all business activities which deal with
the movement of goods or product from the producer to the ultimate user. This
chapter tackles the different marketing strategies and techniques to be used in
order to reach, maintain and increase perspective higher. The major
consideration of the study is whether, there is an ample demand for the product
being produced or proposed to produce. If ample demand exist, then it is
important now to find out if it is met by the current producers. In other words, it
determines whether substantial excess demand so that a new firm could enter
the industry. During the study if the demand was discovered not enough for the
product, a new demand will be created. If not, then the product must be
abandoned before and substantial loss will be incurred.
On the other hand, if the findings indicate that the demand was sufficient
for the product, then the firm’s competitive position in the industry will be
investigated. Other information shall be gathered on the prevailing pieces for the
interest of the quality development and adoption of the product relative to the
current existing related product.
Objectives of the Study
The general objective of the study is to determine the market feasibility of
K-embutido in the market.Specifically, it attempts to discuss the following
objevtives:
1. To identify the target market of the proposed business;
2. To identify the demand and supply of the product;
3. To establish the desired market share after analyzing the demand
and supply situation
4. To formulate the appropriateness marketing strategies and
programs in order to penetrate the market.
Methodology
The proponents used the descriptive method in collecting data necessary
for the study. The researchers visited the Batangas City to search data gathering
their target market in order to determine the demand and supply of the proposed
product. They will conduct personal interviews and proportionally distributed
survey questionnaire to the household selected belonging to individuals from 15-
69 years old in Batangas City. The proponents will implement the following plan
to acquire appropriate data to be used in the study.
Since the feasibility is concerned with the determination of the profitability
of Saba embutido manufacturing business using present statistical information,
the descriptive method of research is deemed to be the most appropriate method
to be used.
Research Design
The study used descriptive type of research design. The descriptive type
of research design is used in the study involving present condition. Its purpose is
to find the truth. Studies using descriptive design are valuable in providing facts.
They provide essential knowledge about the future of objects and persons
(Calmorin and Calmorin, 2001). This method concerns on the present condition.
It describes the nature of a situation as it is existed at the time of the study and
explores the cause of a particular phenomenon.
Subject of the Study
The subject of the study were households residing in urban barangays of
Batangas City with the family income of Php 10 000 above. These barangays
include Poblacion 1-24; Alangilan, Balagtas, Calicanto, Cuta, Gulad Itaas, Gulad
Labac, Kumintang Ilaya, Libjo, Malitam, Pallocan Kanluran, San Isidro, Sta.
Clara, Sta Rita Aplaya, Sta. Rita Karsalla and Wawa. They were chosen by the
proponents to represent the target market for the reason that they are considered
potential buyers of K- Embutido. On the other hand the proponents prepared
questionnaires that will be distributed to the target market. The information
gathered from the surveys is used to know if the target market is willing to buy or
purchase the proposed product.
Data Gathering Instrument
The proponents relied and depended on primary and secondary sources
of information in gathering and collecting data needed in the study. Surveys,
interviews and distributed will be conducted to serve as primary data. On the
other hand, journals, magazines, books and other related material resources will
also serve as the secondary data.
An evaluation research questionnaire was used for data gathering,
which was also the tool for obtaining data from the respondents. A letter was
prepared by the proponents with the approval of the adviser in order to gain
access to the corresponding respondents.The proponents made two sets of
questionnaires, one the household respondents and the other for the retailers
which include supermarket and stalls in old and new public market. The
questionnaire served as a tool for gathering data, to have systematic and reliable
basis in determining demand and supply of the proposed observations to
determine the accuracy of the given data. The respondents are given enough
time and can freely answer the question. The question for the supplier covers the
form of their establishment, the cost of selling the embutido and how much they
are willing to sell and buy embutido.. the questionnaire for retailers was used to
determine the market potential of the K-embutido. The other questionnaire was
for the consumers. The questionnaires covers the monthly income of the
consumers that determines their capacity to buy the product, if they buy
embutido, how many embutido they consume and how much they spend for
embutido. The proponents prepared the questionnaires and presented it in an
organized manner in accordance to the approval of the adviser.
Data Gathering procedure
The mains task to gather information is to find related files and documents
that already have the data that you need. The proponents visited libraries to
gather the necessary data from books and other research materials that are
related to the proposed product. They also gathered other information in the
internet for additional data. The proponents make sure that the data gathered
was reliable and accurate. Other related studies also served as their reference
for the background procedures of the study in gathering data.
The researchers will also prepare the questionnaires to be used to
determine the feasibility of the proposed product on the target market. The
proponents will give the questionnaires to the chosen retailers and consumers to
provide the projected demand and supply needed for the study. The proponents
will make survey to the 24 Barangays of the Batangas City with the 396
questionnares distributed proportion to their population. The proponents will
gather other information if possible and interviews to gather specific details as
accurate as possible for any other improvements that can be applied to the
product to be more successful to the market.
Determining the success of the operation is also one factor that is
considered to determine if the business should be established or not. One of
these was determining the possible disbursements in the business. Besides the
income the proponents also considered the possible out flow in the business.
The proponents made a canvass when for the prices of the materials,
utilities and equipment needed for the establishment and operation of the study
in the supermarkets, old and new market, malls and other stores. This
determines the projected expenses and capital needed in the business and to
project the profit outcome. This study will also determine the possibility of
establishing the business in a cheaper yet profitable and high quality product to
be more efficient and effective as a business.
Statistical Treatment Data
Profitability sampling was used to obtain the estimated sample size based
on the population of the target market in determining the sample size.
n= __N__
1+ Ne2
In which
n = the size of the sample
N = the size of the population
e = the margin error
n= ____37 390_____
1+ 37 390(.05)2
n= ____37 390____
94.475
= 395.76 or 396
Table 2.1
Respondent per Barangay
Barangays Household number Number of questionnaires
1 269 3
2 249 3
3 142 2
4 289 3
5 238 2
6 552 6
7 238 2
8 196 2
9 105 1
10 132 1
11 191 2
12 505 5
13 142 1
14 105 1
15 39 1
16 28 1
17 44 1
18 203 2
19 203 2
20 198 2
21 374 4
22 70 1
23 176 2
24 701 7
Alangilan 2686 28
Balagtas 1678 18
Bolbok 2600 27
Calicanto 2483 25
Cuta 2364 25
Gulod Itaas 930 10
Gulod Labac 531 6
Kumintang Ibaba 2399 25
Kumintang Ilaya 2215 25
Libjo 2149 24
Malitam 1120 12
Pallocan Kanluran 1356 14
San Isidro 1166 12
Sta. Clara 2898 31
Sta, Rita Aplaya 457 5
Sta. Rita Karsada 3684 39
Wawa 1285 13
Demand
The demand for a product is the quality of goods that buyers are willing to
buy (CM Pagoso, 1990). In this case where holding all other to factors constant,
the price of a good or service increase as the demand increases. An analysis of
demand is a part of the important task of identifying the needs of the consumers
and determining whether they are willing and have the capacity to pay for the
product a business in contemplating on production.
Major consumer of the product
As a new business in the market, various factors are considered by the
proponents in order to respond effectively in the needs and wants and
preferences of the prospective buyers and to increase sales and profit. Before
penetrating the desired market, the proponents should first identify the
consumers.
The proponents will use the category of households as the major
consumer of the K- Embutido residing in urban Batangas City with the monthly
income of Php 10 000 above.
Historical Demand
Projected Demand
Supply
Supply of the product is the quantity of goods that sellers are able to
provide. It shows how the quantities offered for sale as the good is dependent on
its determinant. The most important of which is the price of goods is sold (CM,
Pagoso 2001).
Historical Supply
Projected Supply
Demand and Supply Analysis
Market Share
SWOT Analysis
To understand the business environment of a particular firm, you need to
analyze both the general environment and the firm’s industry and competitive
environment. Generally, firms compete with other firms in the same industry. An
industry is composed of a set of firms that product similar methods of production.
Gathering industry information and understanding competitive dynamics among
the different companies in your industry is the key to successful strategic
management (dess/Lump Kin/ Eisner, 2007)
Strength
Availability of the resources. The proposed products raw materials are
very easy to find in the market most likely the Saba banana, a major component
of the product. It is one of the most typical fruits not only in Batangas Province
but also the whole Philippine country.
Health Benefits. The proponents’ product K- embutido has the potential
to meet demands on the market. It is best for maintaining and keeping the body
healthy. People who do not eat pork could eat the K- Embutido considering that it
is made out of Saba banana.
Weakness
Proponents do not have adequate experience. Since the business is
newly established for operation its management lacks enough knowledge and
experience in the business. The management may encounter problems
especially during the first year of its operation. Having all these things in mind,
the proponents are willing contribute all they know in order to have a smooth flow
and operation profitable operation.
Limited Capital. Since the business proponents are just starting a new
source of income. There would be limited capital for the business. The business
will also be limited for big finances.
Opportunities
Support of Sales force trades. With the continuous increase and with
the fluctuation of the value of the peso, this is a tendency to set a high price on
the product. It would be difficult for the company to attract investors and creditors
whenever appropriate since the business do not have any records and still
building their trust
Increasing retail store. In present time many of the retail stores in
business and that would also be an increase in prospective retailers for the
proposed product. It could also increase the sales because of the large number
of retailers.
Population Development- inflation. Because of the inflation, there would
be a large number of consumers and demand in the market. It could result to
increase sales and profit.
Threats
Competition to large companies. There is a big advantage for the large
companies that produce embutido in the market since they are already well
known. It would be hard for the business to penetrate the market because of the
consumer’s trust that was earned by the existing companies before us.
Consumer’s preference. Not all of the consumer could widely accept the
idea of the embutido made out of Saba banana. Consumers might find it
inadequate. The product must catch up to the taste preferred by the consumers.
Marketing Strategies
The Marketing Mix model (also known as the 4 P’s) can be used by
marketers as a tool to assist in implementing the M. strategy. M. managers use
this method to attempt to generate the optimal response in the target market by
blending 4 (or 5, or 7) variables in an optimal way. It is important to understand
that the MM principles are controllable variables. The MM can be adjusted on a
frequent basis to meet the changing needs of the target group and the other
dynamics of the M. environment. The function of the marketing mix is to help
develop a package that will not only satisfy the needs of the customers within the
target markets, but simultaneously to maximize the performance of the
organization. (Nirmalya Kumar - Marketing As Strategy)
Many qualities in the product must be determine which are the function,
quality, appearance, packaging, brand, service, support, and warranty. The
success of the business depends mainly upon the product and good product
means a higher opportunity for recognition. One of the factors that must be
considered is the price. The price composed of list price, discounts, financing,
leasing options and allowances. It determines the value of the product and its
affordability to the consumers. Right place is also important in the service
considering the target market and other factors like channel members, channel
motivation, market Coverage, and service levels. One great factor that
determines the business is on where the business would be established.
Determining the nature of the business and its appropriateness to the place must
be considered. And the last is promotion, the most critical part of a starting a
new product is the promotion. It determines on how the public will recognize the
product. Factors that should be considered are the advertising, public relations,
message, and the budget.
Product
Product can be classified as tangible or intangible that can be offered in
the market for attention, acquisition, use or consumption that might satisfy a need
or want of the consumers. It not only includes physical objects, but also persons,
ideas and services as well (Pagoso et. Al, 2002). This indicates the proposed
product’s attributes, benefits packaging and pricing. It deals with the consumers
to be marketed.
The proponents’ firm is named “Nutri-Steamed Food Manufacturing
Enterprise” and manufactures “K-embutido”, which is made up of mixture of
grinded Saba banana, bell pepper, black pepper, egg, salt, bread crams, soy
sauce, chopped onion and carrot. It does not contain pork that made it different
from other related product.
Product Size/Quantity/Category
K-Embutido belongs to food/viand category. Embutido is now widely eaten
now a day’s paired to our rice. It is often serve in Filipino occasions like wedding
and in different celebrations.
The proposed product is going to be manufactured per pack at 450
grams .Each pack of product contains 5 pieces of embutido inside and file
horizontally to each other. Just like an ordinary embutido it is rolled also in
aluminum foil for better packaging and preservation. Its taste will give you a so
delighted feelings that catch your attention to buy the product
Brand Name
Choosing the right product is very important. It should be a name that can
be easily remembered. The name should describe the product’s character and
what it can offer to the consumers.
The proponents derived their brand names from its main ingredient. From
this, the proponents believe that using the name K-Embutido will not only create
positive outlook and provides consumers a product that is made up of nutritious
ingredients.
Packaging
The first thing that attracts a consumer to a product is how it is presented
visibly, that is , how it look and what perception is elicited by the product (Young
& Pagoso,2008).This is referred to packaging.
K-Embutido is packed in a transparent packaging film that allow
attractive product presentation as the packaged product is visible.A pack has
5pcs.of K-Embutido and weighs 450grams. Its design and logo portrays the
delicious and mouth-watering taste of the product.
Figure 2.1Product Label
Figure 2.2Logo
Pricing
Pricing is one of the four major elements of the marketing mix.The
other three aspects are product, promotion and place.It is an important
strategic issue because it is related to product positioning.(Svend
Hollenson,
Table 2.2Pricing Component of K-Embutido
450g/pack(Daily Process)
Manufacturing Cost Price/pack with 5 piecesDirect Materials Php10.71Direct Labor 3.00Factory Overhead 3.00Total 16.71Mark-up (60%) 10.02Selling Price to Retailers 26.73Input vat 12% 3.20Suggested Selling Price Php29.73
Table 2.3Related Price of Competitors
Other Commercial Brand Price /pack WOW Embutido Special Php32.00/3 piecesJMD Pork Embutido Php50.00/5 piecesPampanga’s Best Embutido Php47.10(250g)
Place of Distribution
Distribution system is the determination of the best distribution network
that a company should adopt in order to facilitate profitability flow of goods from
the warehouse and factory to the respective retail outlets. The firm best prospect
markets are household people of Batangas City. The firm will be established at
barangays 015 Poblacion Evangelista Street, Batangas City. The location of the
firm is chosen for making the product widely available and accessible to target
markets. The consumer goods marketing channel that will be used by the firm is
one-level channel which contains one selling intermediary, the retailers. Direct
marketing channel will be observed also through mail order and manufacturer.
The proponents will negotiate to possible retailers in the the in the old and the
new market. The proposed selling price of the K-embutido would be 20 pesos.
On determining the retailer’s price, the proponents will conduct a survey that is
currently organizing.
Figure 2.1
Channes of Distribution
Promotion
Promotion in the broad sense consists of coordinated seller initiator efforts
to establish channels of information and persuasion to foster the sale of a good
or service, or the acceptance of ideas or point of views. (Young and Pagoso ,
2008). It also encourages the consumer to purchase the product which the
product is selling K- Embutido, Saba embutido.
The proponents took different promotion mix strategies used to direct
persuasive communication to target buyers and public.
MANUFACTURER
RETAILER
CONSUMER
Table 2.4
Promotion Mix Strategies
What Who When Where How Budget
Internet marketing
Proponents 10 days before the operation
Facebook / Twitter
This site from the contest for firm’s history, mission and products. Interesting information will be updated regularly to prevent staleness and encourage return visit.
Php 500 standaed user (blog). The proponents will use blog to advertise our product.
Radio advertising
Proponents 5 days before the operation
GB 99 Through radio interview and mentioning of our product by friend DJs
Free
Product Launching
Proponents On the day of the proposed product will be introduced.
NutriSteam Food Manufacturing enterprise
This will start with ribbon cutting in the enterprise and introduce the newly proposed product.
P 5000
Total Php5,500.00
Generalization
This feasibility study is conducted to test the viability of producing and
selling K-embutido in the market. It gave emphasis on the product tself. The taste
and quality of the product price, place and promotion were identified.
In the market study, the proponents gave some point of view about the
supply and demand of embutido to its market. In order to identify them, the
market plan and its strategies for the dissemination of the said product market
were established by the proponents.
At first, the proponents determine the potential market and target market.
They had taken into consideration the general factors like the powered sources,
communication and availability of raw materials to fill in the demand of embutido
in the area. Informal interview and distribution of questionnaire will be done.
On the other hand, SWOT analysis was order to identify strengths and
opportunities to take advantage of it. Weaknesses and threats were also
considered to avoid possible problems that may be encountered in the near
future.
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