fs chapter 1-5 edited

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Chapter 1THE PROBLEMThis chapter discusses the background of the study, objectives, scope and delimitations, as well as the methodology of the study. 1.1 Background of the StudyLambanog wine, also called coconut vodka, is an alcoholic beverage produced in the Philippines. It is a very popular alcoholic drink among men and women in the rural areas of the Southern Tagalog provinces, where it is widely produced. It is widely enjoyed by the locals and festive occasions are almost incomplete without it (www.sanpablounlimited.com). It is free from artificial chemicals because it is made purely from coconut sap. Lambanog processing starts with the pruning of the coconut flowers to let the sap drip from the blossoms. The sap is then collected and cooked using the fermentation process, producing coconut tuba. The tuba is distilled, cooled, and filtered to produce the coconut wine. It may be added with fruit flavors such as berries, raisins, calamansi, mango, and even gum flavor to offer a variety of taste.(Ascan, 2010)Lambanog wine is produced in the Southern Tagalog region particularly in the provinces of Quezon, Laguna, and Batangas. The Quezon province produces most of the lambanog wine because of abundance in coconut plantations in the area. In the province of Laguna, the Municipality of Liliw located in the eastern part, is considered as the major lambanog producer and distributor. Lambanog wine production has been in existence in Liliw since the time of the Spanish colonization. Processors take advantage of the abundance of coconut trees in the area. Lambanog wine production gives employment to many residents in Liliw. The market consists of townsfolk as well as nearby towns.Because lambanog has only recently begun its introduction onto the international market, trade data tracking export and import of this product is very limited. In terms of production, lambanog-making is still very much a cottage industry with deep historical roots. However, the industry has experienced setbacks a few years ago due to infestation of coconuts, shortage of raw materials, and competition from other substitute products (e.g. beer, gin, vodka). Still, the lambanog wine supply is not sufficient to meet its demand. The most pressing problem is the lack of consistent supply of tuba due to unfavorable weather conditions (Donato, 1989). Other common problems include loss of workers resulting to injuries, poor technology, lack of government support, high cost of maintaining karitan, high cost of acquiring production equipment, and stiff competition from the big distilleries of alcoholic beverages (Ascan, 2010). Currently, the industry is being revived but it needs to determine its current status, the problems besetting the industry, and what directions should it take to become more competitive.The only known lambanog manufacturing company is located in Old Poblacion, Maitum, Sarangani Province in General Santos City. Hence, the little exposure of Lambanog to people in the SOCSKSARGEN area prompted the researchers to conduct the study.

1.2 Statement of the ProblemThis study aimed to determine the feasibility of putting up of a Lambanog manufacturing company in General Santos City.Specifically, this study aimed to:1. Determine the profile of the major players of the Lambanog industry along the following areas:a. Services;b. Capacity of industry;c. Key success factors; andd. The market;2. Conduct a structural analysis on the Lambanog industry considering the following aspects:a. Barriers to Entry;b. Threats of Substitute;c. Bargaining Power of Supplier;d. Bargaining Power of Costumers; ande. Competition in the Industry; 3. Formulate strategies for a profitable Lambanog Manufacturing in General Santos City.

1.3 Significance of the StudyThis study may be beneficial for the following persons:The business-oriented persons. This study may give them insights on establishing Lambanog Industry in General Santos City as a good income-generating business. The results may also help them in considering General Santos City as a business-friendly urban place where they could start their planned business.The coconut farmers. This study may help them in understanding that their coconut plantations could also be used for production of Lambanog and not only buko products (buko juice, buko salad, buko pie, halo-halo, etc). They could maximize the use of their coconut plantations in producing Lambanog.The alcoholic drinkers. This study may encourage them to choose Philippine products like Lambanog instead of other branded alcoholic beverages. Lambanog is not only the cheapest, but it is also the strongest (80-90% alcohol). And also, if Lambanog is readily available in General Santos City, it would be easier to buy and much cheaper than other Lambanog brands from Luzon.The government officials. This study may provide them awareness on the current performance of the coconut industry that should be given more focus since the Philippines is a tropical country and they could make use of the coconuts produced. It could also aid in formulation of laws regarding the industry.The future researchers. This study may give them information and insight on the Lambanog industry and its feasibility within General Santos City and neighboring areas. This may also enlighten them with new ideas concerning the industry that may help in boosting the countrys economy.1.4 Scope and LimitationsThe study focused on the feasibility of putting up a Lambanog manufacturing industry in General Santos City. The researchers gathered facts to describe the present scenario of the Lambanog industry in the Philippines. Data came from Mallari Distillery, Capistrano Distillery, and Maitum, Sarangani Province. Moreover, readings from articles on the internet and journals were used for additional information.For the proposed project, this covered the five aspects of the feasibility study namely;1. Organizational aspect deals with the type of business, form of business organization, organizational set-up, hiring, utilization, and maintenance of employees.2. Technical and operational aspects includes the methods and means of production resulting from the type and quantity of manpower, machinery and equipment, raw materials and other supplies that will be used. It also include the study of climate, soil requirements, and farming tools3. Marketing aspect - includes the operation and the status of the product, the promotion and advertisement, the pricing structure, projected sales and the channel of distribution.4. Financial aspect covers the estimate of the total project cost, initial capital requirement, pre-operating cost, sources of financing and financial evaluation.5. Socio-economic aspect includes the economic significance, its contribution to government in the form of taxes from the workers, private and public business owners.

1.5 Research Design and MethodologyThe research methodology of this study concerns with the ways and means of approaches to be used to gather essential information related to the study. It includes research method, the respondents, locale of the study, research instrumentation, and data gathering procedure.1.5.1 Research MethodThis study employed the descriptive research design. It involves the description, recording, analysis, and interpretation of the present nature, composition, or process of phenomena. It focuses on prevailing conditions or how a person, group, or thing behaves or functions in the present. It often involves some type of comparison or contrast.This is the most appropriate design to be used in this study because it determines the feasibility of putting up a Lambanog manufacturing in General Santos City considering the organizational, technical and operational, marketing, financial, and socio-economic aspects. It also determined profile of the players in the industry.

A Feasibility Study on putting up a Lambanog Manufacturing Company in General Santos City

Respondents of the StudyServices OfferedLocale of the StudyGeneral Santos CityProfile of the Major Player of the Lambanog industry

Figure I. Research Design of the StudyPotential Establishment of a Lambanog Industry in General Santos CityResearch InstrumentManagement and organizationStructural Analysis of the Lambanog IndustryVicada DistilleryData gathering procedureInterviewQuestionnairePhone callsE-mailMallari DistilleryCapistrano Distillery Socio-economicPotential Establishment of a Lambanog Industry in General Santos CityFinancialTechnical MarketingCapacity of the Industry PlayersKey Success FactorsTarget Market

1.5.2 RespondentsThe respondents of this study are the 3 major players in the Philippines Lambanog Industry from Tayabas, Quezon Province, Mallari Distillery and Capistrano Distillery and Vicada Distillery from Maitum, Sarangani Province. The Mallari and Capistrano Distillery are just two of the big companies of lambanog in Manila. Vicada Distillery is owned and manage by the Vicada family which is a small business entity in Maitum Sarangani Province.1.5.3 Locale of the StudyThis study was conducted at General Santos City that is classified as ahighly-urbanized first class city. The city is the gateway to the opportunities, sights, sounds and culture ofSOCCSKSARGEN region. Backed with world class infrastructure today, GenSan and the whole of SOCCSKSARGEN region can be reached by air, land, or sea. The city's major economic activity is primarily anchored in two sectors namely the agro-industry andfishing industry.With the Agro-industry, endowed with rich volcanic soil, ample and well distributed rainfall all throughout the year and a typhoon-free climate, General Santos City produces export quality high valued crops such ascorn,coconut, pineapple, asparagus,bananaandrice. It also yields quality exotic fruits, vegetables and cut flowers. The city is also a top producer and exporter of quality livestock such aspoultry,hogs, an