revised feasibility study

Table of contents pages

Chapter 1 – Introduction 1

A. IntroductionB. Background of the studyC. Statement of the problemD. Framework of the studyE. Conceptual frameworkF. Significance of the studyG. Definition of terms

Chapter 2 – Research Methodology 3

A. Research designB. Study areaC. Respondents of the studyD. Instruments of the studyE. Data gathering procedureF. Validity of the instrumentsG. Statistical treatment of data

Chapter 3 – Technical study 8

1. How to make your product?2. Business location3. Labor requirements

Chapter 4 – Marketing Study

1. General Business Condition2. Competitive Condition3. Pricing Strategy and promotion4. Demand and Market research

Chapter 5 – Financial Study 9

Chapter 6 – Management Study and Organization 12

Chapter 7 Socio Economic Study 13

Chapter 8 – Summary of Finding, Conclusion and Recommendation 13

Chapter 1

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A. Introduction

Banana (Musa sp.) is a plant native in tropical areas such as Southeast Asia. It varies in sizes and colors. Its fruit is considered as staple fruit in that area of Asia. Philippines, being a tropical country, can be expected to have plenty of Bananas. It is widely grown fruit in the country and is a good source of income to 5.9 million farm households (Rivera, 2004). In fact, Philippines belong to top banana producing nations. Banana ranks next to coconut oil and prawns in terms of value earning during the last five years. According to FAOSTAT, the volume of production (in metric tons) of banana in the Philippines last 2009 is 9,013,200 and the yield (hg/ha) is 198,079.There are 80 distinct cultivars of banana in the Philippines. Some of which are Señorita, Lacatan, Latundan, Bungulan and Saba. The latter is the main source of commercial products made up of banana, like catsup and banana chips. Meanwhile, the other cultivars mentioned are grown for local market.There are various uses of banana. It can be consumed as a fresh fruit or as processed like catsup, chips, wine, vinegar, and many more. About 66% of the production is consumed locally and the 34% are exported (Rivera, 2004).

Vinegar is an acidic liquid, a condiment that is produced from fermentation. It has been used since ancient times and up until now. It can be from the juice of a fruit, or even from the peels of the fruit. Vinegar has also been an income source. In the Philippines, vinegar industry has made it internationally.

Vinegar is part of daily households. Aside from cooking purposes, it can be also used in house cleaning, and for medicinal and agricultural applications. Vinegars manufactured and sold in the market are made up from sugarcane and there are also which are made up from coconut, the Sukang Kaong.

B. Background of the study

Banana is the common name for a type of fruit and also the herbaceous plants of the genus Musa. Banana is amongst the most versatile and most widely eaten fruits in the world today. Bananas come in a variety of sizes and colours when ripe, including yellow, purple, and red. Bananas can be eaten raw though some varieties are generally cooked first. Depending upon cultivar and ripeness, the flesh can vary in taste from starchy to sweet, and texture from firm to mushy. Unripe or green bananas and plantains are used for cooking various dishes such as banana pudding and are the staple starch of many tropical populations. Banana sap is extremely sticky and can be used as a practical adhesive. Sap can be obtained from the pseudostem, from the fruit peelings, or from the fruit flesh.Vinegar is a versatile product that has been used in all corners of the world for over thousands of years. Having long been viewed as a necessity for every home with its various applications, vinegar is increasingly popular with consumers as new blends, uses and specialty products continue to enter the marketplace.

C. Statement of the Problem

1. How viable is the marketing aspect of the study?

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1.1 competitive condition1.2 target market1.3 pricing strategy

2. How viable is the financial aspect of the study?2.1 capitalization2.2 income statement2.3 balance sheet2.4 cash flow2.5 return of investment

3. How viable is the technical aspect of the study?3.1procedure

4. What is the management viability of the study taking into consideration of the ff:4.1 forms or ownership4.2 agreement partner4.3 job analysis

5. What is the socio economic significance of the study?5.1 employment5.2 taxes

D. Framework of the Study

In present time most of people are so conscious of their health. They look for genuine, natural and healthy products. The researchers found out that banana fruit has a good quality of a substitute of vinegar. The purpose of the researcher of this study is to fill the endless changing needs and wants of the consumers. Banana vinegar 100% natural and healthy product and is good substitute to the commercial vinegar sold in the market.

E. Scope and limitation of the study

This study is limited only on the utilization of banana as vinegar. The physiochemical analysis of the extract is not included due to financial constraints. And also the study is within Cagayan de Oro City. This was conducted from_____ until the deadline.

F. Significance of the study

Researchers:This study is helpful to the researcher for this will be a guide for future plans. By examining factors involved in putting up a business and managing one. They could improve their own business and understand more of the needs of their consumers.

Community:The members of the community would benefit from the study because of the taxes that the product could generate. The taxes would help for improvement of public facilities etc.

Market: This study is helpful to the market because of the availability of alternative and healthy vinegar to the consumer.

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Government:The government will benefit from the study because the product generates income and would pay taxes to the government.

G. Definition of Terms

Fermentation -a chemical reaction in which a fermentcauses an organic molecule to split into simpler substances, espthe anaerobic conversion of sugar to ethyl alcohol by yeast Related

Pasteurization - the process of heating beverages, such as milk, beer, wine, orcider, or solid foods, such as cheeseor crab meat, to destroyharmful or undesirable microorganisms or to limit the rate offermentation by the application of controlled heat.

Siphon - a tube or conduit bent into legs of unequal length, for use indrawing a liquid from one container intoanother on a lowerlevel by placing the shorter leg into the container above and the longer leg into The one below, the liquid being forced upthe shorter leg and into the longer one by the pressure of the atmosphere.

Chapter 2 – Research Methodology

a. Research Design The research study uses descriptive research method. The researcher collected information from the consumer in a form of a survey. Survey is conducted to gather information about consumer behavior and market potential data.

b. Study Area The researcher chooses five (5) locations for them to conduct their studies. These areas where found in two of market place here in Cagayan de Oro City and a much known establishment to where consumer pick/ purchase their groceries. The first establishment BALUT VENDORS in front of Gaisano mall, where the researcher posted near the area to gather information from the consumers. BALUT VENDORS is a known leisure and a wide variety of merchandise. You’ll find different class of people EATING PASSING at this area that’s why the researcher chooses this spot. The next spot is another BALUT VENDORS located at Cogon Market. The main service they offer is wet and dry market. We posted outside the store for us not to disturb the business inside. The third spot is the SMALL SARI-SARI STORE located at JR Borja St. another establishment around Cogon Market. We also posted outside where we can talk to consumer who is waiting for their ride. The fourth spot is the La Victoria Groceries. This establishment is mainly serving as dry goods store. If you go inside anytime you’ll find it crowded because it is known to be selling their goods less 2 to how many cents cheaper than other store around Cogon. The fifth spot is the is the housewife in the community (Camaman-an and Carmen).

c. Respondents of the Study The respondents of the study are mostly shoppers or buyers from the chosen five establishments. Some of them are just passersby but they do purchase and use vinegar. They are not force to

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http://dictionary.reference.com/browse/the

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answer the survey. If the chosen subject refuses to answer the survey then the researcher looks for another subject.

d. Instrument of the Study The study uses product survey questionnaire as an instrument to collect information from the consumers.The questionnaire was created by the researchers for the sole purpose of this study. The first question (1) is designed to identify the competition. The next question (2) is designed to find out the amount of product the consumer purchase. The next question (3) is designed to find out how satisfied is the consumer regarding the price of the product they purchase. The next question (4) is designed to find out how did the consumer learn about the brand they purchase. The next questions (5-11) are designed to find out the satisfaction level of consumer given the different indicators toward the brand of product they purchase.

e. Data Gathering Procedure The survey was conducted through a period four days from 4:00 pm -7:00 pm. The researchers posted at the selected spots to conduct the survey. It took approximately 5 minutes in completing a survey form. Then after the subject completed the survey the researcher jumped immediately to the next subject to start another survey and in order to ensure unbiased sample selection. Each researcher completed twenty surveys in the span of four days of posting at the selected area.

f. Validity of Instruments

Descriptive statistics analysis was use to find out the consumer behavior and market potential, due to nominal nature of the questions on the questionnaire.

g. Statistical Treatment of Data

Competition analysisThere are two major competition, Silver swan and Datu Puti. This two major brands competes the national market. They’re product is produce from cane vinegar. Here in Cagayan de Oro City people uses another kind of vinegar the synthetic vinegar made from chemicals mix in water.Consumers prefer buying product in small quantities. The reason we saw why is thou is the price. The smaller the quantity the lesser is the price. They find it more affordable this way.We asked the consumer how they learned of the brand they are using and we found that advertisement affects most of their buying decision and second to this is recommended to them showing that there are still people who believe in recommendation from others.Regarding to the satisfaction to the brand of product they use they are still not satisfied of what the brand provide them. These show that consumers needs and wants changes over time.

Result

What brand of vinegar do you purchase/use?

Frequency Percent Valid Percent Cummulative PercentSilver Swan 52 52.% 52.% 90Datu Puti 38 38.% 38.% 100others 10 10.% 10.%Total 100 100% 100%

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Table no. 1 show that the competition that got the most frequency is the brand Silver swan secondly is Datu Puti and ten percent uses other brand and or synthetic vinegar.

Volume of product consumer purchase.

Frequency Percent Valid Percent Cumulative PercentSachet 100ml 32 32% 32% 55Sachet 200ml 23 23% 23% 83Bottled 350ml 28 28% 28% 97Bottled 385ml 14 14% 14% 100Bottled 1000ml 3 3% 3%Total 100 100% 100%

Table no. 2 shows that consumers prefer buying in smaller amounts of the product.

Consumer amends to the price of the brand of product they purchase.

Frequency Percent Valid Percent Cumulative percentYes 78 78% 78% 100No 22 22% 22%Total 100 100% 100%

Table no. 3 indicates that most of the respondents are satisfied with the price of the brand they purchase.

How did the consumer learn of the brand of product they purchase?

Frequency Percent Valid Percent Cumulative PercentAdvertisement 53 53% 53% 67Been using before 14 14% 14% 100Recommended 33 33% 33%Total 100 100% 100%

Table no. 4 indicates that consumers rely on advertisement in choosing the brand of product they purchase

Acidity

Frequency Percent Valid Percent Cumulative PercentExcellent 24 24% 24% 71Good 47 47% 47% 93Fair 22 22% 22% 100Poor 7 7% 7%Total 100 100% 100%

Table no. 5

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Texture


Table no. 6

Packaging


Table no. 7

How important is the product to you and your family?


Table no. 8

How likely are you to recommend the brand to others?


Table no. 9

Rate the brand of the product compared to other brand?

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Table no. 10

Satisfaction level towards the product.


Chapter 3 – Technical Study

a. How to make the product? First gather the ingredients.- Bananas - Water

Procedure:- Wash ripe bananas.- Peel and cut into pieces.- Add water and boil for five minutes- Cool and strain..- Pour into suitable containers.- Plug mouthy and container with piece of paper to protect it from dust.- Ferment to two to three weeks.- Siphon out clear, fermented liquor into sterilized container.- Plug mouth of container with cotton and cover it with clean paper.- Ferment for one to two months.

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- Pasteurize at 70 degrees for 20 minutes.

b. Business Location

Banana vinegar was first introduced in Cagayan de Oro city by starting at small convenient stores. Convenient store is a good start since the product is not known to the public. People usually go to convenient stores when they forgot something from the grocery or need something immediately. Very accessible to people and has personal touch from the sales lady or owners of the stores. The owners or saleslady could just refer banana vinegar in place of their usual vinegar.

c. Labor Requirements Banana vinegar production is just a simple business; the organization structure will have a simple flow.For volume production of banana vinegar additional hand is very helpful. We will hire a laborer who’s responsible of heavy duties in production like carrying containers and finished products for delivery. Preferably laborer from near the production site to insure promptness and can do overtime work when needed. Another important reason is that people from nearest place can easily transport with their convenience since the business is small, the working force will be required from town itself or its vicinity. The owners on the other hand will give assurance to the workers like a good working condition, facilities for a conductive maintenance of their health incentives and many other benefits required by the labor code, plus benefits given by the company itself.

Chapter 4 – Marketing Study

a. General Business Condition There is currently no other banana vinegar on the market. Key differentiating quality is the uniqueness of the product. Hence our vinegar competes with no other equal product, but a variety of substitutes.The big challenge is convincing people to buy your product. And most consumer sticks to the brand their using unless somebody will introduce new brand or simply word of a mouth.

b. Competitive Condition Consumer health awareness is the edge of this product. Banana vinegar is made from the fruit of banana. The product will be market as healthy product by informing the consumers of the benefits they can get from this product. Aside from these there are a lot of uses of vinegar. Aside from food preparation it can be use in cleaning, medicinal, and agriculturally.

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c. Target Market The target consumers of the product would be female and male individuals. The range of age will be from 25 to 59 years old. It is intended for individuals that are capable of earning enough, capable of living by themselves, and or those have families. Individuals, regardless of their family status or class (i.e. low class, middle class, and high class) are the target market since the product is used and bought by individuals in daily life, especially in cooking. They should belong in the group of working people, can be young professionals, housewives or husbands and adults.

d. Pricing Strategy and Promotion The price of the commercial vinegar varies depending on the amount or size of the container (in ml) and what kind. If the price of bananas vinegar would be higher than in the existing vinegars in the market, there is a probability that it would not be bought by the target consumers. The price of banana as fruit and sugar is also considered. If its price increases, the banana peel vinegar’s price will also increase since the banana is one of the inputs of the product. It should be noted when prices of other vinegar decreases the demand for the banana vinegar decreases also. Meanwhile, if prices of substitutes increase, then the demand for banana vinegar will also increase.For the purpose of this feasibility study, the business will assume a 33 percent margin on goods sold.As have mentioned before the product is new in the market only few have known of its existence. The promotion should start in every community and barangay. Banana vinegar will be distributed and sold in a convenient store where people buy because

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they forgot or can’t be in a grocery or needed the product immediately. Very accessible to people and has personal touch from the sales lady or owners of the stores. The owners or saleslady could just refer banana vinegar in place of their usual vinegar. This will last until the 9th month, by this time a lot of consumer is already aware of the product. On the tenth month banana vinegar will be sold in the market. And on the second year banana vinegar can expand its market to nearby provinces.Banana vinegar will be advertised using the web. Using social networking sites like face book.

e. Demand and Market Research Resume The income of the consumers contributes to the demand of the product an increase in the income will also increase the demand for the product. Thus, if the income of the target consumers increases, the demand for the product will also increase. Since this product is not directly consumed and bought by all individuals in the market, age is also a factor that affects the demand. Those individual that belong below the target consumer age bracket, the demand of the product is relative low, and same thing might go for those individuals that belong above the target market age bracket.Since the banana vinegar is new in the market, the total demand for this is obtained using the per capita consumption of the similar product, which is then multiplied to the population of the target area in the last ten years.

Year Population ages 25 – 59, male and female

Per Capita Consumption Total demand in (ml)

2000 180, 304.00 2, 461.56 443, 829, 114.22001 184, 883.72 2, 461.56 455, 102, 369.82002 189, 579.77 2, 461.56 466, 661, 978.62003 194, 395.10 2, 461.56 478, 515, 202.42004 199, 332.74 2, 461.56 490, 669, 499.52005 204, 395.79 2, 461.56 503, 132, 500.82006 209, 587.44 2, 461.56 515, 912, 058.82007 214, 910.96 2, 461.56 529, 016, 222.72008 220, 369.67 2, 461.56 542, 453, 164.92009 225, 967.06 2, 461.56 556, 231, 476.22010 231, 706.62 2, 461.56 570, 359, 747.5

Table no. 11

Referring to the National Statistics Office, the population on different age bracket is already given for the year 2000 to 2007. And the population growth rate within 2000 to 2007 is 2.54. Assuming that the growth rate does not change, using this information the demand for the last ten years and next ten years was determined.

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Year Population ages 25 – 59, male and female

Per Capita Consumption Total demand in (ml)

2011 237, 591.97 2, 461.56 584, 846, 889.72012 243, 626.81 2, 461.56 599, 702, 010.42013 249, 814.93 2, 461.56 614, 934, 439.12014 256, 160.23 2, 461.56 630, 553, 775.82015 262, 666.70 2, 461.56 646, 569, 842.12016 269, 338.43 2, 461.56 662, 992, 705.82017 276, 179.62 2, 461.56 679, 832, 705.42018 283, 194.58 2, 461.56 697, 100, 450.32019 290, 387.72 2, 461.56 714, 806, 7962020 297, 763.57 2, 461.56 732, 962, 893.4

Table no. 12

Demand AnalysisI was not able to get the actual per capita consumption of the vinegar, and since it is commonly used by the individuals, I just interviewed some how much vinegar, in milliliters, do they consume in one day. After obtaining their answers, I got the average of it and multiplied it by 365, since there are 365 days in one year. To know the population of my target area, Cagayan de Oro City, I researched it on National Statistics website. There, the population according to gender and age bracket is already given. But the population given is until 2007 only. Using the statement there that the average growth rate of population from 2000 to 2007 is 2.54. I assumed that it did not change and will not change until the next ten years.

Chapter 5 – Financial Study

To start the business, starting capital is needed to cover insurance and operating expenses including appropriate licensing and permits. These needs will be funded through the start-up capital that the business secures prior to opening. The amount needed is estimated to be P2500.00.

The startup capital of P2500.00

Variable Cost

( 1Kg. of banana, 15 x 150ml)Banana - P100

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Wood - P20Bottle w/ cap P100Label P100

Total P320

Equipments:

Scale – P125Funnel - 20Boiling pot- 200Ladle 25Knife 15__

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Grand Total: P725

The price of the banana Vinegar is P10/bottle (150ml)

Chapter 6 – Management Study and Organization

Pre – operating period

During the pre – operating period the owners are responsible of dealing with some government agencies to secure the necessary documents needed for the project.

Operating period

During the operating period, the owners handled most of the position, task and responsibilities since the business is small and in the starting phase.

The accountant director is responsible for the books and the preparation of the company book of accounts. He also examines the financial status of the company.

The sales director will be responsible for the selling and finding markets for the product.

The production director is responsible for the production in order to insure the quality of the product and minimize production or manufacturing costs.

Chapter 7 – Socio Economic Study

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The business is at the starting phase and producing in small quantity. The employee needed is also limit to two. But as the production grow labor needed also increase. And it can help more in the economic status of Cagayan de Oro city by providing more jobs.

Cagayan de Oro City is a known as one of the fast rising highly urbanized city in the Philippines. Infrastructure and business is at boom. One factor for this is responsible remittance of the required tax to a business. It is the duty of every business in the community. That’s why this is very much responsible of paying the required taxes. And also we want to be a model in proper waste disposal.

Chapter 8 – Summary of findings/ Conclusion and Recommendation

The researcher think of a product is unique and innovative. The researcher found out that banana fruit vinegar is good substitute vinegar to the commercial vinegar. The researchers uses the fruit of banana and get the juice of the fruit and stored it for a few months. The researcher used vinegar starter and yeast to make a perfect vinegar substitute.

The researcher therefore conclude that this product is a good substitute vinegar for the commercial vinegar. This product have a good quality of odor, taste and color.

The researcher recommend this product as a good substitute of a commercial vinegar.

References

Rivera, R. A. (2004). Philippine Banana Production & Marketing.(n.p.).

http://www.census.gov.ph

WWW.practicalaction.org

WWW.FAO.ORG

Banana.(n.d.) Retrieved June 23, 2010 from http://www.da.gov.ph/tips/banana.html

Vinegar.(n.d.) Retrieved June 23, 2010 from elgu2.ncc.gov.ph

Bureau of Agricultural Statistic

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http://WWW.FAO.ORG/

http://WWW.practicalaction.org/

http://www.census.gov.ph/

Appendix

Product survey form

1. What brand of vinegar do you purchase/use?

Silver swan - ______

Datu puti - ______

Others - ______

2. Volume of product you purchase?

Sachet – 100 ml ______

200 ml ______

Bottled – 350 ml ______

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380 ml ______

1000 ml ______

3. Is the price of your vinegar affordable for you?

Yes - ______ No - ______

4. How did you learn about this rand of vinegar?

Advertisement - ________

Using ever since - ________

Recommended - _________

Indicators Very good

Good Not that good

Not good

Rate your brand of vinegar according to its acidity.Rate you brand of vinegar according to texture?Rate you brand of vinegar according to packaging?How important is the product to you and your family?How likely are you to recommend this to others?Rate your brand of vinegar compare to other brand.Your satisfaction level towards your brand of vinegar

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revised feasibility study

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