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A Market Study On Rattan Furnitures
A Market Study On Rattan Furnitures
A Research Proposal
Presented to the
Faculty of the School of Business and Economics
University of San Carlos
Cebu City, Philippines
In Partial Fulfillment
of the Requirements for the course
BUSINESS RESEARCH (BA 109N)
By
ALSOLA, QUENNIE MARIE A.
LAUREL, DEMI C.
LEPON, LINDY JILL S.
MANUEL, MARGIE R.
TAN, STEPHANIE C.
Chapter 1
INTRODUCTION
Rationale of the Study
Hailed as the furniture capital of the Philippines, Cebu lives up to its
reputation as it steadily enjoys a substantial percentage share of the
countrys furniture export sales, which is over 60 percent of the total annual
figures, yet Cebu manufacturers comprise only 20 percent of the entire
Philippine furniture industry. Manifestations of the considerable strength
amidst soaring prices was evident, when despite the plummet of the peso,
the Cebu furniture still registered a positive growth.
Most of the significant achievements in the industry were done in the
last ten years. From the fledging start in the rattan pole trading, the furniture
industry has grown into one of the major contributors to Philippine economy,
with furniture classified among the top five export commodities in the
country.
Moreover, Cebus furniture industry is now the forerunner of the
provinces thrust toward global competitiveness. Due to its rich tradition in
furniture-making as well as its impressive track record both as a major export
earner and net exporter, the Cebu furniture industry has long been
considered as having one of the greatest potentials in the world market. True
enough it has been included in the list of 15 export winners under the
Medium Term Development Plan.
THE PROBLEM
Statement of the Problem
The main purpose of this study is to know rattan furniture products
better. Specifically, it will attempt to achieve the following research
objectives:
1. To determine the competitive features of rattan furniture products.
2. To be acquainted with the sources and suppliers of rattan materials.
3. To classify the competitors.
4. To identify the possible customers.
a. High-end customers
b. Export and local market
5. To study how to counter barriers of new entry rattan products in the
industry.
Statement of Assumptions
1. It is assumed that there are no problems with the supply of rattan in
making the furniture.
2. Products introduced by the companies engaged in rattan business
have best quality and reasonable prices that can make buyers
patronize their rattan furniture products.
3. Rattan business companies increased their attention to the most
effective ways of marketing their furniture products such as branding.
Statement of Hypothesis
The rattan furniture product will make a huge mark in the furniture
business in the Philippines and in other countries. With its excellent features
and usefulness, it is not impossible that it will boom the furniture industry.
The demand for rattan furniture products will increase, here and abroad.
To the local rattan furniture makers that they may maintain their
standing in the export market.
consists
of
the
summary,
conclusion,
and
the
Chapter 2
THEORETICAL BACKGROUND
Review of Related Literature
Manufacturers use rattan to make umbrella handles, walking sticks,
furniture, basket, ship cables, and chair bottoms. Rattan is strong, bends
easily, and lasts long. His statements regarding rattan show us reasons why
people prefer rattan furniture. Furthermore, rattan palms have strong, tough,
slender, many jointed stems of uniform diameter (Seigler, 1991).
In a rattan-based small scale cottage industries in urban and semiurban, most of the entrepreneurs (70%) managed their capital from their
own sources and the remaining entrepreneurs (30%) usually took capital
from large-scale rattan-based industries to which they were compelled to sell
their products with fixed and nominal prices. Processing is the key issue for
further development and utilization of rattan. All types of well decorated
furniture like sofa set, chair, table, rocking chair, bed, Mora, cradle,
decorative partition, bookshelf, different types of basket, and walking stick,
were copiously produced in the industry. Productivity depends on the
availability of raw material which means that if raw materials are available
throughout the year then, the production per month throughout the year
remains constant.
Profitability varies depending on quality of finished products, which in
turns depends mostly on the quality of the raw material and the efficiency of
the tools used. Scarcity of rattan was the leading constraint in the rattanbased small scale cottage industries, which were struggling for existence. To
ensure a sustainable supply, rattan should be regenerated and cultivated in
the forests and outside the traditional forestlands. Prospects of any industry
depend on availability of raw materials, its cheapness and proper marketing
facilities (Miah and Rahman, 2002).
are:
customer
expectation,
customer
perception,
customer
Some
manufacturers,
especially
having
continuous
production
considered their past sales record and market surveys. Buyers are also able
to establish preference for certain rattan variation in quality, design,
packaging, reputation and the services provided.
Bargaining Power of Suppliers This relates to what your suppliers
can do in relationship with you. This will also determine the costs of raw
materials and other inputs. This will typically involve the number and size of
suppliers, switching costs, unique service or product and the ability to
substitute.
Raw materials are one of the biggest factors that rattan manufacturers
consider. Different studies have found out that there are scarce for raw
materials. In order for the rattan firms to continue to produce they have
rattan concessions to assure the availability of the materials. Some also have
their local suppliers and some large firms have to import to meet their large
raw material requirements.
Threat of Substitute Products and Services This includes relative
price performance of substitutes, switching costs and buyer propensity to
substitute. On a free market, buyers always have the choice if there is a
viable alternative. Substitution means the same product is sources by two or
more distributors.
Product differentiation occurs in rattan manufacturing. Furniture
products vary in terms of kind, function or use, design, size, shape, and
quality. Other rattan products substitutes are wood, bamboo, plastics and
metals. Variations also arise upon the form of rattan used and species as well
as other materials are used in combination with rattan, the type of finishing
touches like color, whether natural or dyed.
Competitors It is the major determinant of the competitiveness of the
industry. This involves the competition online and offline companies, the
level
of
advertising,
powerful
competitive
strategy
and
competitive
Conceptual Framework
Using the four Ps we will be able to find ways on how to properly
promote rattan furniture products. The diagram follows:
Place This will help us know on what location there are abundant
sources of raw materials, where we will place the warehousing, the
plantation, and the company and the proper location to put up the business,
where the products will be saleable. In the export aspect, it will help us
determine the countries to where rattan furniture products will be
demandable in the market.
Product This will give us the features of rattan furniture, its
advantages and disadvantages against other furniture. This will tell us on
what to develop in the product for it to be saleable. The rattan furniture
products should be durable and strong for it to boom in the market.
Promotion This will help us find ways to how we sell the rattan
furniture. It would be very helpful to the company if there is a very good
advertising for the product.
Chapter 3
RESEARCH METHODOLOGY
Our study will use the descriptive method in coming up how rattan
products reach the market and the manner to which it is promoted. The data
needed for this study will be obtained through the use of survey and
interviews as well as questionnaires.
Research Environment
The group identified some rattan users within the Cebu area and will
conduct our research on the vicinity to complete the study.
For the
Figure 6: White
Research Respondents
Our respondents are classified in three types, high-end costumers
under which are hotels, condominiums, resorts, bar and restaurants, and
subdivisions; export local markets and company advertising departments.
Chosen high-end customers must have used in their furniture or fixtures
rattan made products that adds beauty and attraction to their structure and
have continued patronage from the aforementioned companies products. In
random, some of the manufacturers staffs will be made to answer the
questionnaire base on their gained experience and knowledge on the
promotional aspects of the rattan products in their respective companies.
Lastly, the export local markets are rattan industries aforementioned whose
primary customers are global.
Their
unbiased
comments
and
observations
are
taken
into
n=
Nz2p(1-p)___
NE2+z2p(1-p)
MARKET
No. of customers
(N)
Percentage
Sample size
Crown Regency
20%
2.89
Marco Polo
20%
2.89
Sumo Sam
20%
2.89
20%
2.89
Rattan Furniture
Philippines Cebu
20%
2.89
15
100%
14.44
TOTAL
Computed as follows:
n=
15(1.962)(.5)(.5)
15(.052)+(1.962)(.5)(.5)
=14.406
0.9979
=2.89
Research Instruments
We
will
use
survey
questionnaires
in
checklist
type.
This
questionnaire and after the respondents answered it, it is then collected and
interpreted.
Treatment of Data
From the results of the survey, we have to come up with the marketing
practices of the selected rattan company.
Chapter 4
PRESENTATION OF DATA, INTERPRETATION, AND ANALYSIS
they buy it. Satisfaction will be followed by quality and style. These factors
will be considered side by side. Many of us will really look for quality furniture
for our homes and at the same time stylish enough to satisfy our desire.
Others factors are the price and who made the furniture (manufacturer).
These are the factors that people usually think about before buying rattan
furniture.
now started to break, after years of use and abuse. Shown at left picture are
rattan seedlings. (http://www.nativeleaf.com/Materials.html)
retailers
and
agents
in
international
markets
and
are exploring
CHAPTER 5
CONCLUSION AND RECOMMENDATION
Conclusion
After gathering all data, we conclude that the market is no that
ignorant about rattan products. Therefore, rattan manufacturers need more
to dwell on rattan products be improved in terms of pricing, features, styles
or designs and the promotion. The study suggest to be more focus in terms
of prices and be aware of the different substitutes and how rattan products
could be the first choice among other substitutions.
Upon thorough investigation on the data, the researchers have
gathered and compiled that leads us to a conclusion that rattan products are
sellable and can compete both locally and internationally. 67% of the
respondents answered that they have bought rattan products; 40% of these
buy/will buy rattan furniture, 26% buy/will buy rattan home decors and 26%
buy/will buy souvenir items. Despite the price 53% of the respondents
answered it is practical to own rattan products for it has good quality, style
and the satisfaction it can bring to them. This data gathered says clearly that
majority of the respondents patronize rattan products and promoting it won't
be much of a problem. For the competition in this line of business 73%
answered there is a strong competition between the existing companies and
this makes it difficult for the new entrants to survive.
Rattan furniture shows prestige and pride thus local market may not
afford but it doesn't mean that exporting is the only market.There are a lot of
Filipinos that is willing to buy good quality rattan products despite of it's
expensive price.
Recommendation
We suggests that we should only not do or sell our rattan products for
exports but also let the Filipinos buy and experience the beauty of our own
rattan products.