FARMMGT 12

C. THE 4PS OF BUSINESS: PRODUCT, PRICE, PLACE AND PROMOTION

1. PRODUCT

 th
e

item offered for sale

 features and design need careful consideration
 what product features will appeal to the target market?
 manufacturing the product
 purchasing the product for resale
 Who is the product aimed at?
 What benefit will customers expect from it?
 What will be its advantage over competitor products? Unique selling point?
 How does the firm plan to Position the product within the market?

2. PRICE

 Wrong price = product will not sell

 Pricing strategies must cover at least your costs unless the price is being used to attract
customers to the business (loss leader pricing)
 Product worth = how much the people are prepared to pay for it
 depends on product/service features and the target market's budget
 Consider competitor pricing and factors within your marketing environment.

3. PLACE

 Where the product is made?

 Where the product is stored?
  How the product is transported to the customer?
 Ensure that the product gets to the right place at the right time without damage or loss.

Ideal Place
 Convenient for the customer and the business
 Accessible for the customer if it is the place where the product is sold
 Low cost or free for the customer if it is the place where the product is sold
 Reasonable cost to the business

4. PROMOTION

 Any activity to raise awareness of a product or to encourage customers to purchase a

product
 Advertising is a form of promotion but not all promotions are advertisements.
 Promotional activities for consumer sales will be different to promotional activities for
business to business sales.

Factors influencing on how a firm chooses to promote its product:

 Promotional campaign purpose

 Budget for the promotional campaign
 Legal rules about what you can promote and how
 Target market for the product
 Marketing environment in which the firm operates

5 ESSENTIAL BUSINESS PERMITS AND LICENSES IN THE PHILIPPINES

 Licenses and permits must be consistent with your business category to avoid facing lawsuits.
 Identify first what type of business you are going to pursue before registering for business
permits and licenses
 Familiarize with the business permits and licenses that should be secured to prevent future loss
 sole proprietorship, partnership, or corporation

1. Bureau of Internal Revenue (BIR)

 most important requirement

 necessary to acquire other permits and licenses
 all Philippine-based businesses, individually owned or corporation, must submit a tax
statement at the end of each fiscal year; thus, having a tax identification number (TIN) is
crucial

Four (4) kinds of BIR forms are mainly used for registration:

 1901Mixed-income and self-employed individuals

 1902Employees with full compensation, nonresidents, and resident aliens
 1903Corporations and partnerships
 1904One-time taxpayer who just rendered business in the Philippines for a year

2. Barangay Clearance

 certifies that your business complies with the requirements of the local barangay where
your business will operate

Requirements needed to secure a barangay clearance:

 Community tax certificate or cedula

 Application form
  Valid ID (SSS ID, passport, postal ID, or any government-issued ID)

3. Department of Trade and Industry (DTI) Business Name (BN) Registration Certificate

 This certificate authorizes you to use your own trading name for any business-related
operation.
 It also secures your name from being used by someone else.

Requirements for obtaining DTI registration certificate:

 Come prepared with a list of business names.

 Applicants must be a Filipino citizen and 18 years old and above.
 Note that some businesses, such as services, brokers, dental clinics, hospitals, may need
other requirements.
 Fees apply depending on the scope of your business: Barangay – Php 200; City/Municipality
– Php 500; Regional – Php 1,000; and National – Php 2,000.

*** The business name certificate is valid up to 5 years from the date of registration.

4. Mayor’s Permit / Business Permit

 sometimes referred to as business permit, since it is processed in the office of the mayor
 all cities have different ordinances, securing a mayor’s permit ensures that your business is
safe to operate under your city’s ordinance
 can only be done after registering your business with DTI (for self-employed individuals) and
Securities and Exchange Commission (SEC; for corporations and partnerships)
 Mayor’s permit needs to be renewed annually.

Requirements in obtaining Mayor's Permit:

 DTI Business Name Certificate for Self-Employed Individuals

 SEC Registration Certificate for Corporations and Partnerships
 If the nature of your business is similar to that of cinemas, malls, restaurants, then public
liability insurance is needed.
 SSS
 Community tax certificate or cedula
 Lease contract or tax declaration
 Barangay clearance

5. SEC Registration Certificate

 Business that involves two or more persons and have an agreement to contribute time,
money, or property falls under the corporation or partnership categories.
 Corporations, either stock or nonstock, must obtain a SEC certificate to be considered legal

Requirements needed for SEC certificate:

 Name verification slip, which can be secured online or at SEC Name Verification Unit
 Articles of incorporation and by-laws
 Joint affidavit of two incorporators to chance corporate name
 For nonstock only: List of members certified by the corporate secretary and list of the
names of contributors or donors and the amounts contributed or donated certified by the
treasurer

GOVERNMENT-MANDATED PERMITS FOR BUSINESSES WITH EMPLOYEES

  SSS Employer’s Registration
 Business owners are obliged to register their employees to SSS to ensure that these
employees are covered with insurance benefits, such as disability, sickness, maternity,
death and others, in accordance with Republic Act No. 8282.

 PhilHealth Employer’s Registration

 Business owners must register their employees to PhilHealth, which covers health
insurance.

TOP 5 PRINCIPLES OF ECONOMICS FOR ENTREPRENEURS

1. People respond to incentives

2. Not all incentives are tangible
3. People face tradeoffs (opportunity cost)
4. Specialization helps
5. Take rational risks

References
http://tycoon.ph/business-permits-licenses-philippines/3/
https://en.wikipedia.org/wiki/Marketing_mix
http://under30ceo.com/top-5-principles-of-economics-for-entrepreneurs/

ACTIVITY

1. Using Top 5 Principles of Economics for Entrepreneurs Think of a specific agri product or service and
identify your target market.
2. How will you provide the proper pricing to make it acceptable to the market? How much mark-up?
Why? Give basis of your computation.
3. Where will you establish your business?
4. What will be your strategy/activity to promote your product/service? Will it be worth it (cost that
will be incurred by such promotional activities)?