PFS SwapAndStack PDF

UNIVERSITY OF SANTO TOMAS PAGE 1
1. INTRODUCTION
1.1 Executive Summary
1.1.1 Rationale
Makeup cosmetics are used to protect the skin and to provide safety
and comfort, but their main purpose is as a beauty product to make the face
and skin attractive. There are base makeup products and decorative makeup
products; the former is used to hide imperfections such as stains and wrinkles,
to adjust skin tone, and to add firmness or translucence to make the skin look
beautiful (Nakamura, 2017).
The growth of the cosmetics industry has significantly increased in the
21st century. The sales of colour cosmetics has been continually growing since
year 2003, based from data collected from Euromonitor International, and is
forecasted to grow more for the next 5 years.
Figure 1.1 Sales of Colour Cosmetics in Philippines

Several cosmetic brands emerged and brought the increase of makeup
enthusiasts all over the world. Several people use makeup on a daily basis.
Makeup consists of several products - foundation, powder, eye makeup,
lipstick and more, and to for easy application and evenly distribution of these
makeup products, people use makeup brushes.
There is a wide range of makeup products, therefore corresponds a
wide range of makeup brushes. This leads to inconvenience of having to fit
several makeup brushes in a bag or to bring several makeup brushes from one
place to another, especially for people on-the-go.
The researchers proposed a 3-in-1 stackable makeup brush which is
convenient, portable and lightweight. According to the study from Euromonitor
International, facial makeup has the highest sales in the Philippines as of 2017,
among all the other cosmetic products which amounts to PHP 5959.0 Million.
This justifies the need for the product to consist of brushes for facial make-up.
Table 1.1 Sales of Colour Cosmetics by Category

The Swap & Stack makeup brush consists of a foundation brush, a
powder brush, and a blush brush. All of which are used to apply facial makeup.
This is exactly designed for the convenience of people who are using makeup
brushes to apply their makeup. The foundation brush flawlessly blends and
buffs makeup for a perfectly even finish. The powder brush evenly diffuses
loose powder for less concentrated color that won’t smudge the foundation.
The blush brush is designed to evenly apply colors to the cheeks. This product
is also retractable, it comes with a cover which makes each brush unexposed
when kept, this decreases risk of the acquisition of unknown bacteria on skin
as it is no longer exposed unlike the design of standard brushes.
This study shall benefit users of cosmetic products, as it aims to provide
convenience to them through the proposed product’s space saving features
and functionalities. In addition, this study aimed to prove the marketability,
technical feasibility, and financial feasibility of the proposed product which can
be used as basis in pursuing the project for implementation or future business.
Its effectiveness along with other factors such as cost, economic impact, and
life span were evaluated in this study through intensive research and
experimentation.
1.1.2 Name of the Firm
Figure 1.2 Logo of the Company

The KDT Corporation is created to determine the feasibility of
manufacturing and distributing the “Swap & Stack” stackable makeup brush in
the National Capital Region.
1.1.3 Brief Description of the Project
Makeup brushes and applicators play a key role in the success of
cosmetic industry. It is increasingly important to have a serviceable collection
of makeup brushes to anyone who uses makeup on a regular basis. The
proposed product by the proponents is a compact & retractable 3-in-1 makeup
brush ideal for travelling on-the-go. It’s an all in one tool that contains all that
is needed for perfectly blended face makeup results: a foundation brush,
powder brush, and blush brush.
1.2 Project Background and History
1.2.1 Project Proponents
Five proponents constitute the KDT Corporation and shall function as
the corporation’s main shareholders. The proponents are fifth year students
and a professor from the Industrial Engineering Department of the University
of Santo Tomas, namely: Korina Sofia S. Elamparo, Kate Ingrid T. Ferrer,
Trisha Lyn S. Jalandoni, Danica P. Liclican, and Engr. Charmina Lou C.
Bautista.
Table 1.2 Project Proponents
1.2.2 Type of Business Organization
The KDT Corporation have decided to run a corporation to be able to
manufacture and produce quality products to the market. KDT Corporation also
aims to contribute greatly to the cosmetics industry through makeup brushes
and possible cosmetic products in the future.
1.2.3 Location of the Business
In manufacturing the product, the proponents decided to buy its own
property where the company’s manufacturing plant may be built. The
manufacturing plant would be located at San Miguel, Bulacan. This location
was chosen carefully considering several factors like price and land area. This
location was chosen as it was the best deal offered considering that it has a
large area with a low yet reasonable price because of family related
connections. The chosen location has a total land area of 154 square meters
which is ideal for a manufacturing plant.

1.3 Industry Analysis
Cosmetics Industry
Cosmetics have been discovered more than 6,000 years ago. It was the
time of the Homo sapiens when cavewomen discovered natural resources
such as ochre and started applying it to their face. As time passed, Ancient
Egyptians had learned the art to distill essential oils and from this was the rise
of science of perfumery in Egypt. From the use of a cleansing cream made of
animal or vegetable oil mixed with powdered lime and perfume as alternative
for soap for the prevention of dry skin due to the bad climate, to the use of
essential oils for spiritual purposes. Egyptian priests believed that different
types of oil depending on its scent could add personal power. In addition,
Egyptians were known for their distinctive eye makeup. They used black kohl
and other powders for their eyes. French researchers in the modern age
discovered that the powder Egyptians used contains salts that increased the
production of nitric oxide which can further result to boosting of immune system
and prevention of eye infections.
Makeup brushes were associated with mirrors back in 1835, for without
a mirror, a makeup brush isn’t a very useful tools. Mirrors were expensive
luxuries back then and makeup brushes are primarily tools of the wealthy. The
brushes are used by maidservants to apply makeup to women of a certain
rank. Makeup brushes were said to be invented by Egyptians, as a bronze

makeup brush was found in a Saxon cemetery and thought to date back to 500
to 600 AD.
As the price of mirrors declined, so did makeup brushes. The Japanese,
who were using animal-hair brushes for their calligraphy since the B.C. days,
transferred their skills to making cosmetic brushes. This brush making has then
moved to other areas of Asia, mainly Korea, Taiwan, and China.
Around 3000 BC, few more evidences have been found in China with
the usage of cosmetics. Chinese people used to stain their fingernails with gum
arabic, gelatin, beeswax and egg. The colors on their fingernails used to
represent the social class they belong. In India, they use turmeric germicidal
cream which is composed of gram flour or wheat husk mixed with milk to
remove dead cell tissues. With Indians exploring other uses and benefits of
turmeric, they used a special bathing cosmetics especially made for newly
married brides named Ubtan, to achieve a fair and glowing skin.
The rise of global cosmetics evolved, Japanese used crushed safflower
petals to paint the eyebrows, eyes and lips. Whereas, rice powder for the face.
In the middle ages, lower classes were intimidated by the skin complexion of
higher classes which has the lightest-looking skin. As a result, European
people tempted to lighten their skin by using white powder or white lead paint
applying it directly on their faces to look more aristocratic. (Chaudhri & Jain,
2009)
Due to the Industrial Revolution, mass production of cosmetics was
made easy. Several people continued inventing cosmetic products at home.
Multinational corporations invested on advertising and started using women’s
interest in beauty to gain profit. In the late 20th century, due to technology
innovation, plastic surgery became common in the market. (Lambert, 2018).
Today, cosmetics industry continues to evolve and grow. Manufacturers
must adapt to changing consumer preferences. In the Philippines, according
to Euromonitor, the growth of colour cosmetics records a 2017 current value
growth of 10% and forecasts an increasing sales for the upcoming years. The
market is expected to grow annually by 4.7% (CAGR 2018-2021). Therefore,
more cosmetic products must be introduced in the market for it will continue to
pave way in the future.
1.3.1 Top Players in the Cosmetic Industry
Avon Cosmetics Inc.
Avon Cosmetics, a known company for women, is a leading global
beauty company and one of the world’s largest direct sellers, with nearly $11
billion in annual revenue. Avon sold through more than 6 million active
independent Avon Sales Representatives in over 100 countries and the
product line includes color cosmetics, skincare, fragrance, fashion and home
products, featuring such well-recognized brand names. For over 125 years,
Avon stood for beauty, innovation, optimism and above all for women.
L’Oréal Philippines Inc
L’Oréal Philippines has been involved in the adventure of beauty for
more than a century. It is the number one cosmetics group worldwide with 4.54
billion euros in operating profit as of December 31 2016. Their main objectives
is to win over another one billion customer around the world by creating the
cosmetic products that meet the infinite diversity of their beauty need and
desires.
Ever Bilena Cosmetics Inc
Ever Bilena celebrates its 35 years in beauty industry. This company
takes pride not only being the leader in color cosmetics, but as a Filipino brand.
Ever Bilena started as a business that sells nail polish. Today, they carry a full
cosmetic line, bath and body care, fragrances and hair styling products among
others. They provide high quality products with affordable prices.
1.3.2 Industry Growth for the Past Five (5) Years
Table 1.4 Colour Cosmetics Industry Growth for the Past Five (5) Years
Source: Euromonitor International from official statistics, trade associations,
trade press, company research, store checks, trade interviews, trade
sources
1.3.3 Industry Category Data
Table 1.5 Sales of Colour Cosmetics by Category: Value 2013 to 2017
source
Table 1.6 Sales of Colour Cosmetics by Category: % Value Growth 2012

to 2017
Source: Euromonitor International from official statistics, trade
associations, trade press, company research, store checks, trade interviews,
trade sources
Table 1.7 Forecast Sales of Colour Cosmetics by Category: % Value Growth
2017 to 2022
sources
1.3.4 Societal-Environmental Analysis
1.3.4.1 Economic Factors
By 2022, the Colour Cosmetics Industry is expected to record a 8%
increase in the value of Compound Annual Growth Rate which caused a rise
in sales to Php 21.3 billion. As the demand in cosmetics continue to grow, there
is also an increase in the demand for more cosmetic products. The fact that
people, men and women alike, have this strong desire to look good, it aided in
nurturing the cosmetics industry, worldwide.
According to the Philippine Statistics Authority, the Philippine economy
grew by 6% in the second quarter of 2018. The main drivers for this quarter
were Manufacturing, Trade, and Construction. Reaching 106.2 billion
projected population, the country’s per capita GDP grew by 4.3%. GDP is one
of the primary measures of economic activity and serves as a good indicator
to track the economic health of a country. This means there is a growth in
business, jobs, and personal income which increases the buying power of
consumers and allows a better standard of living. Furthermore, the Philippine’s
inflation rate hit 6.4% in August of 2018 from 5.7% in the previous month. It is
considered the highest reading since March of 2009 due to the increase in cost
of food and non-alcoholic beverages, but will continue to fluctuate for the next
10 years as indicated in the forecasted inflation, obtained through moving
average (3 period) technique, shown below. Likewise, the dollar exchange rate
increased a peso equivalent rate of Php 54.0950 as of October 2018. Alarming

it may seem, but the impact of the forecasted inflation rate below will yield to a
decrease on dollar value over time.
Table 1.8 Forecasted Inflation Rate for Year 2018 to 2029
In addition, the employment rate in April 2018 was estimated at 94.5
percent. With the increase of job opportunities, as well as the purchasing
power of consumers, people will be able to invest more on cosmetic products.
1.3.4.2 Legal factors
Some makeup brushes are made with real animal hair, animals were
either farmed and killed in a slaughterhouse or trapped. According to Republic
Act 8485 Section 6 it shall be unlawful for any person to use the animals in
research or experiments not expressly authorized by the committee on Animal
welfare. The KDT Corporation is firm as its stand against animal cruelty.
1.3.5 Porter’s Five Forces of Competition Model
Figure 1.3 Porter’s Five Forces of Competition Model
1.3.5.1 Threat of New Entrants
Cosmetic industry continuously developed over the years. As Filipinos’
income and spending continue to arise, their consumption of makeup and other
skincare products also grow. As a response to this development, a lot of beauty
boutiques pop up to different establishments. “People who usually go to stand-
alone boutiques already know what they want,” said Mutya Laxa Buensuceso,
Luxasia’s country manager in the Philippines. According to Patrick Chong,
Luxasia CEO, the only thing that will set market players apart is peculiarities.
As recorded in Euromonitor (2017), Avon Cosmetics dominates the
cosmetic industry with a 20.9% retail value. It is important to consider that with
product differentiation and domination of an existing competitor, new entrants
must overcome customer loyalty. This factor could hinder the success of new
players in this industry. On the other hand, access to distribution channels is
manageable because of social media and store-based retailing.
Despite the factors mentioned above, claims such as “Cruelty-Free” and
“Hypoallergenic” makeup brushes must be based on the fact that the raw
materials or products are not currently tested on animals and produces fewer
allergic reactions. This is regulated by the Food and Drug Administration. This,
therefore, could greatly deter the entry of new players in this industry due to
incurred cost and time.
1.3.5.2 Bargaining Power of Suppliers
The bargaining power of suppliers is moderate because of the large
supply of different product in the market. There are many makeup brushes
available in the market developed by both large and small scale
manufacturers. This makes switching done easily. However, the price of the
makeup brushes is still dependent on the cost of the supply which goes to
show that suppliers somehow control the industry.
1.3.5.2 Bargaining Power of Buyers
The boom of cosmetic industry has resulted to companies investing
heavily in research to gather relevant information about market trend and
launch new items to attract more customers. Resulting to a high bargaining
power of customers. This is due to increase in competition in the market.

Buyers have a choice to switch among various products regardless of the
price. According to Moj Mahdara, the C.E.O of Beautycon, with “millennials”
now representing the largest share of the makeup market, they tend to base
their purchase decision on the product’s brand and the quality it offers.
1.3.5.4 Threat of Substitute Products
The high availability of different styles and kinds of makeup brushes and
applicators in the market indicate an increase in the threat of substitute
products. The threat is moderate as it will depend on which the customer will
prefer to use. The difference between a distinctive product than that of
undifferentiated one is the benefits offered. (e.g., ease of use) Overall,
deducing the statements above, threat of substitutes is moderate and will still
highly depend on the customer.
1.3.5.5 Intensity of Rivalry
In the cosmetic industry, the intensity of rivalry is high because of the
rapid changes due to customer preferences and market trends. However for
the makeup brush itself, the intensity of rivalry is considered low as it is a new
product to be introduced in the Philippines market.

1.3.6 SWOT Analysis
Figure 1.4 SWOT Analysis
In this analysis, it shows the positive and negative impacts of the
proposed product in the cosmetics industry. The strengths and opportunities
are based on actual statistics that the cosmetics industry is continuously
expanding and that there is only a limited number of competitors that produce
stackable makeup brushes. The design of the product as well is considered a
strength because it is engineered according to consumer’s needs - their
frequently used makeup brushes.
In contrast to these, the weaknesses and threats for this type of industry
fall under competition against other established brands that produce single
makeup brushes. In addition, there is also a limited number of suppliers for

makeup brush bristles in the Philippines. Another limitation is that the product
is only limited to people who use makeup brushes to apply makeup.
1.4 Problem Statement/s
85.2% of 244 respondents from the National Capital Region experience
inconvenience in fitting all their makeup brushes in one makeup kit or bag. In
addition to this, more problems have been identified from the data collected by
the proponents through the survey questionnaire, these problems include
brushes occupying significant space in bag, prone to dust, and potential
accumulation of acne after repeated use. The problems have a percentage of
49.6%, 46.7% and 43% respectively. Hence, it can be concluded that there are
problems identified with the design of existing makeup brushes. The
proponents have seen this as an opportunity to innovate a product with a
design that is best suitable to address the identified problems.
1.5 Objectives of the Study
1.5.1 General Objectives
The main objective of the study was to introduce a new product which
contains three of the most commonly-used makeup brushes for everyday
makeup in one makeup brush. This shall reduce the space occupied by several
makeup brushes in the user’s makeup bag and this promotes a more hygienic
way of usage since the product comes with a cover unlike the existing makeup
brushes that are exposed to all kinds of dirt. Furthermore, this study aimed to
determine the marketability and feasibility of the proposed product in terms of
its financial and technical aspects.

1.5.2 Specific Objectives
• To determine the percentage of the target market that would purchase the
proposed product in the cities of National Capital Region
• To set up a startup corporation that would be responsible for everything that
has to do with the said product
• To evaluate whether the proposed product would function as intended to
achieve its purpose
• To determine whether the proposed product is superior as compared to the
existing ones
• To promote products that are cruelty-free through the production of the
proposed product
• To test the feasibility of the stackable makeup brush in terms of marketing,
production, and distribution
• To assess whether the Return on Investment (ROI) of the proposed device
would be less than 5 years
1.6 Significance of the Study
The results of this study shall contribute to the benefit of users of
makeup brushes that experience problems such as makeup brushes
occupying significant space and its excessive exposure to dirt. This justifies
the need for a product which could eliminate these problems. Thus, with the
production of the proponents’ proposed product, there would be a reduction on
the space that three makeup brushes takes up in a bag or a purse, and the
risks of exposure to dirt shall be greatly reduced through the proposed
product’s retractable design. This study may also be used as reference once
the project will be pursued by future researchers, either to be implemented or
subjected to further studies.
1.7 Scope & Limitations
Most of the data available is limited to cosmetic products and does not
specifically state the inclusion of makeup brushes, however the proponents
assumed the inclusion and relates the gathered data to the study accordingly.
This study mainly focused on the following: marketability, technical feasibility
and financial feasibility of the proposed product. The technical feasibility of this
study determined whether the device would function as intended to achieve its
purpose, and if it would be superior compared to other devices that are already
available in the market.
The data of this study, obtained through distribution of survey
questionnaires, were gathered from people aged 13-60, who use makeup
brushes and residing within the 17 cities of National Capital Region. The
proponents made use of a sample size of 400 respondents.
The proponents focused particularly on the Top 3 facial makeup
brushes that are frequently used according to the survey - which resulted to
the powder brush, foundation brush and blush brush.

1.8 Research Methodology
The proponents used two types of research methods throughout this
project feasibility study: qualitative and quantitative research.
Qualitative research involves the process of collecting, analyzing, and
interpreting data obtained through the observation of people’s actions and
responses from interviews etc. These responses are then further analyzed to
identify and define people’s insights regarding the topic being discussed. While
on the other hand, quantitative research requires quantifiable data involving
numerical and statistical explanations. It primarily focuses on gathering
numerical data and generalizing it across the groups of people.
1.9 Review of Related Literature
1.9.1 Continuous growth of Cosmetics Industry
According to statistics, Asia Pacific has the largest share in beauty and
personal marketing which accounts to 32% of sales worldwide. A study
conducted by Orbis Research (2018) proved that aging demographics has led
to the growing demand for anti-aging products in order to enhance their
physical features, creating room for new innovations in cosmetics, thus
escalate the industry growth. Despite the unexpected economic downturn, the
sales of cosmetics is expected to maintain a certain overall volume due to the
continuous growth in usage of products by women and men all over the world.
In addition, due to increasing popularity of social media channels such
as Instagram and YouTube, creating a demand for beauty products was made
to be easier. Because of this, the gaps between the consumers and cosmetic
brands were filled.
1.9.2 Self-esteem on makeup involvement
Self-esteem is a simple term for varied and complex mental states
pertaining to how an individual view oneself. (Bailey, 2003) Further study has
shown that children as young as 8 years old is experiencing judgement of self-
esteem within themselves that can be distinguished through evaluation of
specific characteristics of oneself. (Harter, 1999) A positive self-esteem
possesses a drive for self-improvement and perceives stability in terms of
social relationships. Conversely, a person with negative self-esteem find
themselves as a source of self-dissatisfaction and being a heavy reliance to
others. (Moon et al.,2003) Basically, a self-esteem is also an attractive
psychological construct since it can help predict certain outcomes. (Berkovic,
2017) Such outcomes affect trend, interest, self-confidence when positive-
esteem is involved, whereas a negative self-esteem encouraged the joy driven
by compassion or often times, leading to impulsive purchases. (Lee, 2018)
Majority of the research about women nowadays have been tracked that
their self-esteem is strongly related to how they feel about their body.
Dissatisfaction of body-image and over-reliance on appearance are few of the
many sources that affects the self-esteem of a woman. It is proven through a
research that women tend to focus more on appearance to feel better about
themselves. (Jarry et al., 2005) Due to negative impact of having low self-
esteem, women resulted in using make up as something they can easily wear
and could further improve their appearance, thus increasing confidence.
(Manivel et al.,2016)
2. MARKETING
STUDY
2.1 Product/ Service Description
2.1.1 Name of the Product
The researchers decided “Swap & Stack Brush” to be the name of the
product. The proponents arrived at this name because it generally describes
how to use the product, to be able to swap from brush to another, the user
must stack it.
2.1.2 Properties of the Product
Physical Properties
Packaging
Swap & Stack brush will come in a rose gold metal stainless steel body
and cap wherein the name of the product is printed in the body. The volume
content, date manufactured, and the name of the company is found at its
bottom part.
The design of the whole packaging will be aesthetically pleasing leading
to the assumption that the product possesses excellent quality starting from
the packaging to the product itself.
Makeup brush
The product will have three different type of brushes mainly: blush brush,
foundation brush, and powder brush. The bristles will be made up of synthetic
hair.
The characteristics of the Swap & Stack brush stated above were based
on the results of the survey conducted by the proponents - having excellent
quality, high durability, reasonable price, portability, and good aesthetic.
2.1.3 Uses of the Product
Swap and Stack mainly functions as a tool to apply a makeup. By using
it, it will help achieve a more precise and even application. It will enable user
to get a better coverage and more defined makeup look. Furthermore, it is
more sanitary because of the cover of the makeup brushes which prevents
exposure to dust. The design is ideal for storage, travel and on-the-go
application as it is all held together in one compact cylinder.
2.1.4 Major Users of the Product
According to Euromonitor, due to the increasing product availability and
affordability, coupled with the rising influence of social media platforms such
as YouTube, Facebook and Instagram, Filipinos are starting to buy colour
cosmetics at a younger age, with even tweens, an age group of 8 to 12, are
aware of and desiring certain brands, particularly those that have a fashionable
packaging and image. In addition, according to the survey administered by the
proponents, girls as young as 13 years old wear makeup and use makeup
brush to apply makeup, which aligns with the data from Euromonitor. The
proponents conclude that the age range of makeup users are varying through
time because of changing taste and preferences of consumers, especially in
this generation. The researchers will need to continue to adapt to changing

consumer preferences, particularly among younger generations, due to the
fast moving world of social media, with trends quickly coming and going.
Affordability and product availability will be key to targeting younger consumers
due to their limited budgets and ability to move from one place to another.
2.1.5 Geographical Areas of Distribution
In manufacturing the product, the proponents decided to produce their
product in their own factory in San Miguel, Bulacan. This area shall be divided
in two floors, the first floor for the factory and second floor for the main office.
The areas of distribution can be anywhere in the National Capital Region. The
product shall be delivered directly to customers through the co-branding
partners (ex. Lazada, Shopee, BeautyMNL etc.) using a courier.
2.2 Survey Result Analyses
2.2.1 Sampling Design
The researchers used cluster sampling as the sampling design for the
market study. The cluster chosen by the researchers are based from the
number of population of the cities and municipalities within National Capital
Region (NCR). Given that there shall be equal opportunity for all cities to
answer the survey. The proponents distributed a personal survey for the the
top 5 populated cities in NCR which are 1) Quezon City, 2) Manila City, 3)
Caloocan City, 4) Taguig City and 5) Pasig City. Subsequently, the proponents
made use of convenience sampling to distribute an online survey questionnaire
to the remaining cities in NCR.
To determine the sample size needed, the proponents used the Discrete
Sampling Formula. The total population of NCR, and the cities and municipality
included in the region, were gathered from available data in the National Statistics
Office of the Philippines. The total population of NCR based of 2015 results was
12,877,253.
Discrete Sampling Formula:
n=p(1-p)(ZE)2
n= sample size required
p= proportion of population
Z= standard normal distribution
E= designed margin of error
Computation for the sample size of population:
Using a 95% confidence level, 5% margin of error, and 50% proportion of
population we get,
n=0.5(1-0.5)(1.960.05)2
n=384.16 ≈385 samples
Table 2.1 Survey Questionnaire Distribution

Total Number of Respondents = 400 respondents

2.2.2 Graphical Representation
Figure 2.1 Age of Respondents
The survey gathered a total of 400 respondents, 397 of the respondents are
within 16 to 57 years old which is the age of the target market.
Figure 2.2 Gender
Based on the figure above, 90% who answered the survey are female while
the remaining 10% of the 400 respondents are male.

Figure 2.3 Respondents per City in National Capital Region
The proponents decided to prepare an online and physical survey
questionnaire. The target population shall be distributed proportionally in 17 cities
in the National Capital Region (NCR). The figure shows that Manila City holds the
largest number of respondents for this study with 16%, followed by Quezon City.
The data shows that the proponents were able to obtain the required number of
respondents per city.

Figure 2.4 Monthly disposable income
Based from the survey, 70% of the respondents have a disposable income
of at least Php 1000.00 while the remaining 15% are those who have a disposable
income of below 1000.

Figure 2.5 Usage of makeup
88% of the respondents claimed to be using a makeup, making them valid
as respondents and also their answers to the survey questionnaires. However, the
other 12% of the respondents contributes to the invalid survey questionnaires.
Figure 2.6 Usage of makeup brush
Out of 352 respondents, 78% of the respondents uses makeup brush when
applying makeup while 22% of the respondents does not.

Figure 2.7 Percentage of those who are buying makeup
The date shows that 89% of the respondents prefer to use a separate brush
when applying makeup.
Figure 2.8 Common problems encountered in using makeup brush
As seen in the figure above, the major problem that the respondents
encountered in using makeup brush is it occupies space in the makeup kit, to be
followed by it is prone to dust due to absence of cover and potential accumulation
of acne after multiple use.

Figure 2.9 Most frequently used makeup brush
The proponents asked the most frequently used makeup brush. Blush brush
has 160 votes which is the leading used makeup brush. To be followed by the
powder brush which has 153 votes. Next, foundation brush who has 122 votes.
There are 63 and 56 votes for contour brush and concealer brush. Lastly, there
are 48 votes for the fan/highlighter brush.

Figure 2.10 Buying place
Respondents primarily purchase their beauty products at department
stores, drugstore and physical store which are the top 3 in the survey results. This
result may be used in deciding where to sell and distribute the product, and to
determine the best location/s for its Distribution center.

Figure 2.11 Monthly disposable income allotted for beauty products
Since the product being introduced by the proponents is not considered a
necessity, disposable income of the respondents must be determined. Based on
the administered survey, it shows that 94 of the 244 respondents allot at least
Php1,000 for beauty products monthly.

Figure 2.12 Number of makeup brush the respondents buy per year
The respondents were asked the number of makeup brush that they buy
every year. 96 out of 244 respondents answered that they buy only 1 makeup
brush every purchase.

Figure 2.13 Brands of makeup brush
The proponents asked the respondent the brand of makeup brush they use.
Nichido hold the most number of votes who has 38.9 percent.
Figure 2.14 Number of times the respondents buy makeup brush every year
The proponents asked the number of times the respondents buy makeup
brush every year to know the purchasing rate. Based on the results, 38.11% of the
respondents buys makeup brush twice a year.
Figure 2.15 Percentage of respondents who experience inconvenience in fitting

all their makeup brushes in their bag
Majority of the respondents which is 85% experience inconvenience in
fitting all their makeup brushes in their bag.

Figure 2.16 Percentage of respondents who heard about stackable makeup

brush
Based on the chart above, majority of the respondents have not yet heard
about stackable makeup brush.
Figure 2.16 Willing to buy the product
Based on the results, 78% of the samples are respondents who are willing to buy
the product. The remaining 22% consists of those who are not willing to buy the proposed
product.
Figure 2.17 Price willing to pay
The respondents were asked how much are they willing to pay for the
product. 80 percent of the respondents answered PhP 1,000.00 - 1,500.00, 12
percent answered PhP 1501.00 - 2,000.00, 4 percent answered PhP 2,001.00 -
2,500.00, 2 percent answered Php 2,5001.00 - 3000.00 and PhP 3,001.00 and
above.
Figure 2.18 Number of brushes preferred
The respondents were asked the number of brushes the respondents prefer
to be stacked in one compact cylinder. 42 percent of the respondents answered 3,
33 percent of the respondents answered 4 brushes while 25 percent of the
respondents answered 5 brushes.

Figure 2.19 Important criteria in choosing makeup
The respondents were asked to rank the following criteria:
durability, aesthetics, price, quality, and portability from 1-5. 1 being as
the highest and 5 being is the lowest. Majority of the respondents
ranked quality as the most important in choosing a makeup brush with
158 votes to be followed by durability which has 79 votes. Next, price
who has 81 votes, aesthetics who has 80 votes, and lastly portability
who has 81 votes.

Figure 2.20 Preferred makeup brush to be stacked
The respondents were asked to choose the brushes they prefer to be in the
stackable makeup brush. 79.8 percent of the respondents voted for blush and
powder brush, 59.9 percent for the foundation brush, 38.1 percent for the contour
brush, 34.9 percent of the respondents for the concealer brush and 26 percent for
the fan/highlighter brush.

2.3 Market Segmentation
The proponents divided the whole market into segments in order to
effectively identify the target market which will be the basis of decisions
regarding the product’s price, advertising medium, distribution channel, and
other marketing strategies. The researchers have chosen the whole population
in the National Capital Region (NCR) as its target market, particularly those
consumers aged 16 to 60 years old. Since the product is not considered as a
necessity, the researchers only targeted those having an average disposable
income of Php1,000.00 and above allotted for beauty products. Disposable
income is the amount available to be spent on non-necessities. However, the
product aims to eliminate the need to bring all types of makeup brushes from
one place to another and also to promote a more hygienic way of usage, thus,
only those consumers who initially applies makeup, use makeup brushes to
apply them, and buy a separate makeup brush aside from the brush that
comes with the makeup. Moreover, the target market was further reduced to
those who are willing to buy the product, so as to assure that the target market
has the purchasing power adequate to purchase the product at its possible
cost.
Figure 2.21 Market Segmentation
2.4 Demand Analysis
2.4.1 Determination of Demand
The proponents have forecasted the total demand for the product of the population
of households residing within the 17 cities in the National Capital Region (NCR),
particularly 16 to 60 years old and those who are willing to purchase the product
for the next 10 years, from 2020 to 2029. Using the Future Value Formula, the total
consumer household population in NCR from 2020 to 2029 was projected using
1.72% annual growth rate taken from 2015.
F=P(1+i)n
Equation 2.1 Future Value Formula
Where:
F = Projected Consumer Household Population
P = Present Consumer Household Population
i = Annual Population Growth Rate
n = No. of Years Projected

Due to the limited data of National Statistics Office (NSO), the present household
population used was the data obtained from the Census 2015 total population of
household in NCR.
Table 2.2 Total Forecasted Population From Year 2020 to 2029
2.4.2 Projected Population and Target Demand
The values acquired will then be multiplied to the percentage value of those
consumers aged 16 to 60 years old, have an average disposable income of at least
Php1,000.00 allotted for beauty products, who wears makeup, use makeup
brushes, and willing to purchase the product.

Table 2.3 Table of Percentage of Market Segmentation
The table below summarizes the forecasted target demand from year 2020
up to 2029.
Table 2.4 Total Projected Demand from Year 2020 to Year 2029
Consumers who
buy a separate Consumers with
Projected Consumers
Consumers who makeup brush monthly disposable
Consumer Ages 15-54 Consumers who willing to
Year use makeup aside from the income of Php 1,000 Target Demand
Population years old use makeup puchase the
brush brush that already and above allotted
(NCR) product
comes with the for beauty products
makeup
(H) =
(A) (B) =.9925 (D) = .88 ( E) = .776 (F) = .894 (C ) =.385 (G) =.78
A*B*C*D*E*F*G
2019 13,786,329 13,682,932 12,131,969.52 10,698,191.30 12,324,978.13 5,307,736.67 10,753,336.62 2,508,513.24
2020 14,023,454 13,918,278 12,340,639.52 10,882,200.30 12,536,967.88 5,399,029.79 10,938,294.12 2,551,659.70
2021 14,264,657 14,157,672 12,552,898.16 11,069,373.83 12,752,603.36 5,491,892.95 11,126,432.46 2,595,548.17
2022 14,510,009 14,401,184 12,768,807.92 11,259,766.98 12,971,948.05 5,586,353.47 11,317,807.02 2,640,191.58
2023 14,759,581 14,648,884 12,988,431.28 11,453,434.86 13,195,065.41 5,682,438.69 11,512,473.18 2,685,602.85
2024 15,013,446 14,900,845 13,211,832.48 11,650,434.10 13,422,020.72 5,780,176.71 11,710,487.88 2,731,795.25
2025 15,271,677 15,157,139 13,439,075.76 11,850,821.35 13,652,879.24 5,879,595.65 11,911,908.06 2,778,782.08
2026 15,534,350 15,417,842 13,670,228.00 12,054,655.60 13,887,708.90 5,980,724.75 12,116,793.00 2,826,577.16
2027 15,801,541 15,683,029 13,905,356.08 12,261,995.82 14,126,577.65 6,083,593.29 12,325,201.98 2,875,194.32
2028 16,073,328 15,952,778 14,144,528.64 12,472,902.53 14,369,555.23 6,188,231.28 12,537,195.84 2,924,647.75
Table 2.5 Total Target Demand Based on Market Share
2.5 Supply Analysis
Based from the Euromonitor, some of the present top players in
the Colour Cosmetics Industry in the Philippines today are Avon Cosmetics Inc
and L'Oréal Philippines Inc. In addition to this, according to the results from the
conducted survey, Nichido and Real Techniques are the top most frequently
used brands for makeup brushes. The proponents consider these brands as
the direct competitors of the Swap & Stack Makeup Brush.
However, the specific data for the sales of makeup brushes of the brand
competitors are not available. Therefore the proponents have concluded that
there are very limited data regarding the supply. As deriving for the supply may
lead to weak assumptions to describe the market that may lead to the
inaccuracy of the results.
The proponents have also decided not to consider the supply because
as per the results of the conducted survey, 312 respondents out of 400
respondents (78%) are willing to buy the product, therefore establishing a
conclusion that there is a demand for the product. In addition to this, the target
demand amounted to 2,508,513.24 for 2019 and is continuously increasing
from the forecasts until 2029.

2.6 Price Study & Strategy
The following forecasted inflation rates was used to project the final
selling price from year 2018 to year 2029. These inflation rates were obtained
through a 3-period moving average forecasting technique since it yields the
lowest MAD value as compared to other forecasting methods. it is also the
most appropriate method to use considering the given data. The forecasted
inflation rates was also used for the projection of other marketing costs.
Table 2.6 Forecasted Inflation Rate for Year 2018 to 2029
All projected price and costs in this chapter was computed through the following
formula:
Price = Price
next year (1 + Inflation rate
current year )
current year
Equation 2.2 Projected Price Formula

2.6.1 Survey-Based Pricing
Figure 2.22 Price that consumers are willing to pay
Based on the survey results, majority of the respondents stated that they
are willing to pay Php1000 - Php1500 for the product. Thus, the proponents have
decided to follow this preferred price by the respondents.
The table below shows the forecasted survey-based pricing of the product for year
2020 to 2029.
TABLE 2.7 Forecasted Survey-Based Price of Swap and Stack Brush from Year
2020 to Year 2029
Year Inflation Rate (%) Price (Php)

2020 3.57 1,545
2021 3.79 1,600.16
2022 3.45 1,660.80
2023 3.6 1,718.10
2024 3.61 1,779.95
2025 3.54 1,844.21
2026 3.59 1,909.49
2027 3.58 1,978.04
2028 3.57 2,048.86
2029 3.58 2,122
2.6.2 Cost-Based Pricing
Table 2.8 Raw Materials Breakdown Cost
This approach was done by adding the costs of all the raw materials
needed to produce the stackable makeup brush. The table above shows the
breakdown of the cost. Based on the computations, an initial selling price of
50% greater than Php 105.51 was chosen by the proponents.
The estimated cost of the product was forecasted from year 2020 to
2029 on the table shown below.

Table 2.9 Minimum Selling Price of Swap and Stack Brush from Year 2020 to
2029
2.7 Price Strategy
The proponents have chosen a pricing strategy that shall ensure that
the corporation shall gain reasonable profit, resorting to a price estimate of
Php560. The proponents chose this price estimate based on the conducted
survey where majority of the respondents answered that they are willing to
purchase the product with the price range of Php1000-1500. With this
certainty, the proponents are confident to lower down the price to Php560,
which is relatively close to the prices of the makeup brushes in the Philippines,
maintaining close competition with the product’s indirect competitors.

2.8 Marketing Programs & Strategies
2.8.1. Target Market
Table 2.10 Target Market

2.8.2. Product-Mix Strategies
78% of the total number of respondents representing the whole
population in NCR are willing to purchase the product, thus accounts to the
expected demand for the Swap & Stack brush. The proponents used their
answers to the survey conducted as basis in deciding for the variety of
products that will be offered by the company.
Figure 2.23 Criteria
According to the survey results shown above, 158, 79, 81, 80, and 88
out of the 312 respondents wanted the product to be of excellent quality,
durable, with a reasonable price, aesthetically designed and portable,
respectively. These were taken into consideration by the proponents, thus,
integrating these consumer preferences into the design of the product.

2.8.3. Branding & Packaging
The name of the product “Swap & Stack” emphasizes the product’s
main purpose, to swap brushes after stacking them on top of each other -
enabling it to be space saving and very handy. Starting from the brand name,
consumers would easily remember its function and be differentiated with the
existing products.
The packaging for the product will be outsourced to another company
that specializes in the production of packaging, following the design
specifications set by the proponents. The packaging used for the Swap & Stack
Brush is a clear box with a dimension of 6 cm x 2.5 cm x 15 cm. The packaging
design used shall be minimalist yet resembles a classy and demure vibe.
Design in the lateral area of the box includes the name of the product, core
features of the product, product logo, and a brief description of the product and
how to use it at the back of the box. Items inside the box consists of the main
product only.
Figure 2.24 Packaging Design

Breakdown of cost of the packaging is shown in the following table below.
Table 2.11 Projected Packaging Material Cost from Year 2020 to 2029
PACKAGING COST
Quantity Projected Cost

Year
Needed (PhP)
2020 25,085 749,292.83

2021 25,517 791,014.60
2022 25,955 832,392.24
2023 26,402 877,335.80
2024 26,856 924,653.11
2025 27,318 973,611.74
2026 27,788 1,025,926.31
2027 28,266 1,081,165.70
2028 28,752 1,138,864.34
2029 29,246 1,199,983.07
2.8.4. Channel of Distribution
KDT Corporation is the manufacturer and distributor of Swap & Stack
brush. Based on thorough research, online marketing offers a cost effective,
brandable and scalable way to acquire customers directly. Thus, the
proponents chose to make online distribution the main channel of distribution
for the Swap & Stack brush. The proponents shall make use of social networks
to create a business profile and further drive traffic through online advertising,
social media marketing. The product shall be sold in online shopping platforms
such as Shopee, Lazada, BeautyMNL, OLX and more. The proponents also
plans to distribute the product in physical stores such as concept stores within
the most populated cities in NCR - Quezon City, Manila, Caloocan, Pasig, and
Taguig.
2.8.5. Transportation & Delivery
The proposed product will be distributed in the National Capital Region
since it is the target of the company. The company will distribute the product
through courier. The tables below show the incurred costs for transporting and
delivering the products.
Table 2.12 Projected Total Annual Transportation and Delivery Cost
Cost per Total Annual

Inflation Target No. of Boxes To
Year shipment Transportation and
Rate Demand Be Delivered
(in PhP) Delivery Cost (in PhP)
2020 3.57 25,085.13 52.26 207.14 10,825.28
2021 3.79 25,516.60 53.16 214.99 11,428.81
2022 3.45 25,955.48 54.07 222.41 12,026.46
2023 3.6 26,401.92 55.00 230.41 12,673.72
2024 3.61 26,856.03 55.95 238.73 13,357.09
2025 3.54 27,317.95 56.91 247.18 14,067.81
2026 3.59 27,787.82 57.89 256.06 14,823.50
2027 3.58 28,265.77 58.89 265.22 15,618.27
2028 3.57 28,751.94 59.90 274.69 16,454.07
2029 3.58 29,246.48 60.93 284.53 17,336.26
2.8.6 Marketing & Sales Force
The proponents suggest the use of direct sales force, consisting of full-
time paid employees who would work exclusively for the company. The sales
force will be responsible for handling its sales. It will be their duty to ensure
that the sales objectives of KDT are met. KDT Corporation will focus on selling
Swap and Stack brushes in Department stores in Quezon City, Manila,
Caloocan, Pasig, and Taguig.
The promotional sales associate will be responsible in selling and
promoting products to customers by presenting the product’s value and
demonstrating knowledge of the product being sold.
In order to determine the total labor cost of Sales and Marketing
Department, there is the need to determine the number of employees per
position per year. The company decided to maintain the number of employees
from Year 0 to Year 10 since it is only a start-up company.
The table below shows the summary of annual salary per position.
These figures will be used in projecting the future salary of employees.

Table 2.16 Number of Marketing and Sales manager & Promotional Sales
Associate
Number of
Year Promotional
Sales Associate
2020 10
2021 10
2022 10
2023 10
2024 10
2025 10
2026 10
2027 10
2028 10
2029 10
Table 2.17 Total Annual Salary of Promotional Sales Associate
Number of Annual Salary

Monthly Salary per Total Annual
Year Promotional per Employee
Employee (in Php) Salary (in PhP)
Sales Associate (in PhP)
2020 10 16,110 193,320.00 1,933,200.00
2021 10 16,110 193,320.00 1,933,200.00
2022 10 16,110 193,320.00 1,933,200.00
2023 10 16,110 193,320.00 1,933,200.00
2024 10 16,110 193,320.00 1,933,200.00
2025 10 16,110 193,320.00 1,933,200.00
2026 10 16,110 193,320.00 1,933,200.00
2027 10 16,110 193,320.00 1,933,200.00
2028 10 16,110 193,320.00 1,933,200.00
2029 10 16,110 193,320.00 1,933,200.00
2.8.7 Advertising and Promotions
Advertising is essential to build brand awareness and connect with
potential customers. For an effective marketing communication of the product,
advertising and promotion strategies were established through the results of
the administered survey and other factors.
From the survey, the respondents acquire their knowledge of makeup
products through social media, word of mouth marketing, magazines and
advertisements. The strategy of the proponents will not be based solely on the
survey results but also on other factors such as costs with respect to certain
advertisements. Therefore, the medium used for the product were word of
mouth marketing, social media advertising, magazine advertising.
Furthermore, vehicle wrap advertisements and product launch were also used.
2.8.7.1 Word of Mouth Marketing
A study conducted by Ogivly, Google and TNS (2014) said that the
Word of Mouth is the most powerful factor in terms of consumers’ relationship
with brands. Based on the study who interviewed nearly 2,500 consumers who
recently purchased a product, 74% identify that word of mouth was the key
influencer in their purchasing decisions. In addition, 92% of consumers believe
that recommendations from friends and family is effective compared to other
forms of advertising. (Nielsen, 2014) In this study, the proponents initially
introduced the product through the word of mouth marketing since it has no
cost and it is the easiest way to persuade consumers to switch to Swap and
Stack Brush instead of using common makeup brushes.
2.8.7.2 Social Media Advertising
A lot of companies, big or small, took advantage of social media
advertising emerging trend because it is effective, has lesser cost, and less
requirements. The proponents plan to make social media accounts like
Facebook and Instagram wherein they will post promotional materials from
time to time. For Facebook advertisement, the proponents chose the Likes per
Day pricing. The amount that Facebook charges depends on the likes per day
garnered by the promotional post. Therefore, with an estimate of 139 likes per
day, Facebook charges 130.00 PHP on the daily. Through the use of Facebook
Ads, the proponents may grow more brand awareness.
The advertising in Instagram is similar with Facebook advertisements
since both are in the same network however, it costs Php 265.00 for every
1000 impressions.
Table 2.18 Estimated Costs for Facebook Advertisement
Facebook Total Amount

Advertising Facebook
Year
Cost per Day Advertising
(in PhP) Cost (in PhP)
2019 130 47,450

2020 130 47,450
2021 130 47,450
2022 130 47,450
2023 130 47,450
2024 130 47,450
2025 130 47,450
2026 130 47,450
2027 130 47,450
2028 130 47,450
Table 2.19 Estimated Costs for Instagram Advertisement
Instagram Total Amount

Advertising Cost Target Instagram
Year
Per Thousand Audience Advertising
Reach (in PhP) Cost (in PhP)
2019 265 25,085 6,648

2020 265 25,517 6,762
2021 265 25,955 6,878
2022 265 26,402 6,997
2023 265 26,856 7,117
2024 265 27,318 7,239
2025 265 27,788 7,364
2026 265 28,266 7,490
2027 265 28,752 7,619
2028 265 29,246 7,750
2.8.7.4 Product Launch
A product launch event is a great way to introduce and showcase the
product, increase hype about it and even make sales right at the event. The
proponents will organize and create a feeling of excitement and expectation
for its release. The product launch will commence at the start of the year 2019.
The proponents will invite industry analysts, experts, beauty gurus and
bloggers as they have a huge influence to their viewers. Free samples of Swap
and Stack brush will also be given and distributed for the guests to try on and
make reviews about it. The table below shows the estimated cost for the
product launch.
Table 2.20 Estimated Costs for Product Launch

Estimated Cost
(in PhP)
Invitations 3,000
Public Relations
Host 3,000
Online advertising 1,000
Advertising Print advertising 3,000
Radio advertising 3,000
Venue & Catering
60,000
Product Proper Services
Launch Product samples 5,000
Photographer 3,000
Product Launch
10,000
Support Team (10)
Sales Force
Marketing Sales
10,000
Force/Promotion (10)
Total 101,000
2.8.7.6 Sponsorships
The proponents will allot a budget for sponsorships of beauty gurus,
makeup enthusiast, and beauty vloggers/bloggers. These are Michelle Dy,
Raiza Contawi, Rei Germar, Anne Clutz, and Anna Cay. The proponents will
pay them in exchange with an agreement of advertising the product. They will
make a video wherein they will only use and discuss about the product itself.
This will help for the promotion of Swap and Stack brush to the market since
they play a big part in the viewers’ and readers’ buying behavior. In this
medium, the proponents will send free samples for product review and
giveaways that can be distributed to their audience.
Table 2.21 Estimated Costs for Sponsorships
No. of Budget per Total Sponsorship

Year
Vloggers Vlogger (in Php) Cost (in Php)
2020 10 100,000.00 1,000,000.00
2021 10 100,000.00 1,000,000.00
2022 10 100,000.00 1,000,000.00
2023 10 100,000.00 1,000,000.00
2024 10 100,000.00 1,000,000.00
2025 10 100,000.00 1,000,000.00
2026 10 100,000.00 1,000,000.00
2027 10 100,000.00 1,000,000.00
2028 10 100,000.00 1,000,000.00
2029 10 100,000.00 1,000,000.00
2.8.7.7 Co-Branding
The proponents will collaborate with other brands to effectively build up
the brand to the customers, boost awareness, and break into the market. Co-
branding partnership is the opportunity to earn more customers and gain the
interests of each other market. It can verify the credibility, extend reach and
increase the company’s marketing budget. It can have a good and powerful
hold over penetrating the market.
2.8.8 Market Research & Development Program
Newly released products today easily become the word of mouth of
many due to the several channels of advertising today, especially for products
that are new and fresh to the customer’s eyes. People nowadays buy the
newest products to be able to go with the newest trends. Upon realizing this
consumer behavior, the proponents were able to use this by releasing a new
product in the market. In addition, the corporation commits itself in providing
“new” to the consumers by continuously innovating its products on a constant
basis through its Market Research and Development program.
2.8.8.1 Research References
The company will be subscribing to different resources, both online and
published, such as newsletters and publications that involve news, market, and
industry analysis, to stay up to date with latest developments and trends that
shall be helpful in the innovations to be made in the existing product and to
keep at pace with changing consumer demands.
• Cosmetics Business Digital Subscription delivers the latest news,
research innovation, reports and analysis to business professionals
working in the global cosmetics and personal care industries. Its
focus areas are: Soap, Perfumery and Cosmetics, Cosmetics
Business News, Cosmetics Business Markets and Pure Beauty.
Table 2.22 Annual Online Subscription Fee to Cosmetics Business Digital
Subscription
Cosmetics Business Digital Subscription

Year Inflation Rate Subscription fee (Php)
2020 3.57 31,057.57
2021 3.79 32,234.65
2022 3.45 33,346.74
2023 3.6 34,547.23
2024 3.61 35,794.38
2025 3.54 37,061.50
2026 3.59 38,392.01
2027 3.58 39,766.44
2028 3.57 41,186.11
2029 3.58 42,660.57
Table 2.23 Projected Research and Development Expenses from Year 2020 to
2029
Personnel
Materials Costs of Total Research
Inflation
Year consumed in persons and Development
Rate
R&D Projects involved in R&D Expenses
Projects
2020 3.57 7,210.00 5,150.00 12,360.00
2021 3.79 7,467.40 5,333.86 12,801.25
2022 3.45 7,750.41 5,536.01 13,286.42
2023 3.6 8,017.80 5,727.00 13,744.80
2024 3.61 8,306.44 5,933.17 14,239.61
2025 3.54 8,606.30 6,147.36 14,753.66
2026 3.59 8,910.97 6,364.98 15,275.94
2027 3.58 9,230.87 6,593.48 15,824.35
2028 3.57 9,561.34 6,829.53 16,390.86
2029 3.58 9,902.68 7,073.34 16,976.02
Table 2.24 Projected Total Market Research and Development Program Costs
from Year 2020 to 2029
Total Market Research and Development Program Expenses

Research and
Cosmetics Business Total Market Research
Inflation Development
Year Digital Subscription and Development
Rate Department
Fee Program Expenses
Expenses
2020 3.57 31,057.57 900,946.89 932,004.45
2021 3.79 32,234.65 946,754.78 978,989.42
2022 3.45 33,346.74 991,137.82 1,024,484.56
2023 3.6 34,547.23 1,037,458.78 1,072,006.00
2024 3.61 35,794.38 1,084,803.04 1,120,597.42
2025 3.54 37,061.50 1,132,585.07 1,169,646.57
2026 3.59 38,392.01 1,181,756.87 1,220,148.88
2027 3.58 39,766.44 1,231,891.77 1,271,658.21
2028 3.57 41,186.11 1,283,018.30 1,324,204.41
2029 3.58 42,660.57 1,335,346.36 1,378,006.93
2.8.9 Marketing Forms
Delivery Receipt
Sales Invoice
Official Receipt
2.9 Total Marketing Program Cost
TOTAL MARKETING PROGRAM COST

Market Research
Packaging Transportation and Marketing and Sales Advertising and Total Annual Cost
Year and Development
Materials (in PhP) Delivery (in PhP) Force (in Php) Promotions (in Php) (in Php)
Program (in Php)
2020 749,292.83 10,825.28 1,933,200.00 1,155,097.56 12,360.00 3,860,775.67
2021 791,014.60 11,428.81 1,933,200.00 1,054,211.90 12,801.25 3,802,656.56
2022 832,392.24 12,026.46 1,933,200.00 1,054,328.20 13,286.42 3,845,233.32
2023 877,335.80 12,673.72 1,933,200.00 1,054,446.51 13,744.80 3,891,400.83
2024 924,653.11 13,357.09 1,933,200.00 1,054,566.85 14,239.61 3,940,016.66
2025 973,611.74 14,067.81 1,933,200.00 1,054,689.26 14,753.66 3,990,322.47
2026 1,025,926.31 14,823.50 1,933,200.00 1,054,813.77 15,275.94 4,044,039.52
2027 1,081,165.70 15,618.27 1,933,200.00 1,054,940.43 15,824.35 4,100,748.75
2028 1,138,864.34 16,454.07 1,933,200.00 1,055,069.26 16,390.86 4,159,978.53
2029 1,199,983.07 17,336.26 1,933,200.00 1,055,200.32 16,976.02 4,222,695.67
2.10 Gantt Chart of Marketing Activities

III.
TECHNICAL
STUDY
3.1 Product Properties
3.1.1 Physical Properties
Swap & Stack brush will come in a rose gold metal stainless steel
body and cap wherein the name of the product is printed in the body. The
volume content, date manufactured, and the name of the company is found
at its bottom part.
The design of the whole packaging will be aesthetically pleasing
leading to the assumption that the product possesses excellent quality
starting from the packaging to the product itself.
The product will have three different type of brushes mainly: blush
brush, foundation brush, and powder brush. The bristles will be made up of
synthetic hair.
The characteristics of the Swap & Stack brush stated above were
based on the results of the survey conducted by the proponents - having
excellent quality, high durability, reasonable price, portability, and good
aesthetic.
3.2 Product Design
3.2.1 Perspective Drawing

3.2.1 Perspective Drawing

3.2.3 Parts Lists

3.2.4 Bill of Materials

3.2.5 Product Structure Tree
3.3 Process Design
3.3.1 Process Flowchart

3.3.2 Assembly Chart

3.3.3 Route Sheet
The summary of the operations and standard time is shown in Table
3.1. The basis for the standard time per unit is from the worker capabilities with
10% allowance factor. The summation of the set-up time, operating time and
the allowance time were computed to get the standard time per operation.
Table 3.1. Route sheet for Swap and Stack Makeup Brush, 1 unit
3.3.4 Operations Process Chart

3.4 Plant Capacity and Production Schedule
3.4.1 Capacity of the Plant
Due to the decision of the proponents of not utilizing machines,
production will primarily rely on workers. Therefore, using the average
productivity effective rate of the workers based on the demand from the
previous chapter, the capacity of the plant will be determined. Below is the
table that shows the worker capacities per unit time (minute, hour and day).
Table 3.2 Worker capacities hour, and day
Worker Capacity/Hour Capacity/Day
Worker 1 15 units/hour 120 units/hour
3.4.2 Level of Utilization
In order to determine the level of utilization, the proponents used the
target demand per day based from the estimated market share and the
capacity of the plant. Addition of scrap allowance is also incorporated in the
calculation of the target output per year. The formula of target output per year
is shown below:
Target Output per year = Target demand per year x (1 +
Scrap Allowance %)
Figure 3.1. Target Output per year formula
The proponents use a 3% scrap allowance for the production because
a start-up business company aims to achieve 3 sigma which only allowance
3% scrap. Part of the quality assurance officer’s job is to ensure that the
production maintains at least 3% allowance.
WORKER 1: LEVEL OF UTILIZATION
TARGET TARGET CAPACITY

OUTPUT DEMAND OF WORKER
YEAR PER OF BRUSH WORKER UTILIZATION
YEAR PER DAY 1
A B=A/12/20 C D=(B/C)*100
2020 25,838 108 120 90%
2021 26,283 110 120 91%
2022 26,734 111 120 93%
2023 27,194 113 120 94%
2024 27,662 115 120 96%
2025 28,138 117 120 98%
2026 28,622 119 120 99%
2027 29,114 121 120 100%
2028 29,615 123 120 100%
2029 30,123 126 120 100%

YEAR TARGET TARGET CAPACITY

OUTPUT DEMAND OF WORKER
PER OF BRUSH WORKER UTILIZATION
YEAR PER DAY 2
A B=A/12/20 C D=(B/C)*100
2020 25,838 108 120 90%
2021 26,283 110 120 91%
2022 26,734 111 120 93%
2023 27,194 113 120 94%
2024 27,662 115 120 96%
2025 28,138 117 120 98%
2026 28,622 119 120 99%
2027 29,114 121 120 100%
2028 29,615 123 120 100%
2029 30,123 126 120 100%

TARGET
TARGET CAPACITY
DEMAND
OUTPUT OF WORKER
YEAR OF
PER WORKER UTILIZATION
BRUSH
YEAR 3
PER DAY
A B=A/12/20 C D=(B/C)*100
2020 25,838 108 120 90%
2021 26,283 110 120 91%
2022 26,734 111 120 93%
2023 27,194 113 120 94%
2024 27,662 115 120 96%
2025 28,138 117 120 98%
2026 28,622 119 120 99%
2027 29,114 121 120 100%
2028 29,615 123 120 100%
2029 30,123 126 120 100%

TARGET CAPACITY
TARGET
DEMAND OF
OUTPUT WORKER
YEAR OF WORKER
PER UTILIZATION
BRUSH 4 PER
YEAR
PER DAY DAY
A B=A/12/20 C D=(B/C)*100
2020 25,838 108 120 90%
2021 26,283 110 120 91%
2022 26,734 111 120 93%
2023 27,194 113 120 94%
2024 27,662 115 120 96%
2025 28,138 117 120 98%
2026 28,622 119 120 99%
2027 29,114 121 120 100%
2028 29,615 123 120 100%
2029 30,123 126 120 100%

3.4.3 Line balancing
Required Cycle Time = Operating Time per Day / Desired Output Rate
8 hrs x 60 mins
Required Cycle Time = ,-. /012342
= 4.44 mins = 264 seconds
(6789: 69;< 6=>?)(A?>9BC D?E A9F)

Minimum Number of Workstations =
G0HI1JKLHM NLO4 P40 QRS
(T,U.,T ;?W)(, >=B/Y- ;?W) (,-. ZE[;\?;)

Minimum Number of Workstations = . \E; ] Y- >=B;
= 0.8217 WS
Task No.
Incremental
WS Activity Time of
Utilization
(sec) WS
1 A 2.00 0.01 0.75%
1 A,B 63.00 0.24 23.65%
1 A,B,C 63.46 0.24 23.82%
1 A,B,C,D 97.57 0.37 36.63%
1 A,B,C,D,E 117.57 0.44 44.13%
1 A,B,C,D,E,F 124.42 0.47 46.70%
1 A,B,C,D,E,F,G 125.50 0.47 47.11%
1 A,B,C,D,E,F,G,H 128.33 0.48 48.17%
1 A,B,C,D,E,F,G,H,I 129.12 0.48 48.47%
1 A,B,C,D,E,F,G,H,I,J 179.12 0.67 67.24%
2 A,B,C,D,E,F,G,H,I,J,K 219.12 0.82 82.25%

^=B=>[> _[>Z?E 7` a7E<;898=7B;
Utilization = bW8[9: _[>Z?E 7` a7E<;898=7B;
-..T,c
Utilization = ,,
= 82.17%
T,U.,T
Present Efficiency = Y,(,,) x 100 = 32.66%
T,U.,T
Proposed Efficiency = TYd(,) x 100 = 83%
3.4.4 Production Schedule
Production Schedule is an essential function in production management
in order to meet customers demand and to ensure time is well-utilized. A good
production planning can maximize productivity, reduce costs, and improve
process flow which is beneficial to the company.
In order to produce the best quality, there should be a series of
procedures that must be followed. The summary of the processes can be seen
in the production schedule using a precedence diagram which is shown in
Figure 3.2.
Table 3.3. Activities of Swap and Stack Makeup Brush

Figure 3.2. Precedence Diagram of Swap and Stack Makeup Brush
The minimum cycle time is 61 seconds while the maximum cycle time is 219.12
seconds.
3.5 Machinery and Equipment Requirements
3.5.2 Material Handling Equipment Requirement
• Platform Cart - This is used to transport the units that are produced
inside the plant. The equipment can also be used in transporting the
raw materials and other elements inside the plant.
PLATFORM CART
Cost Php 1,800.00 each
Capacity 300 lbs
Dimension 29”L X 18-5/8”W
Quantity 2
Source Ace Hardware

• Steel Drawer – This equipment is used for storing parts such as the
aluminum cover, aluminum ferrule, taklon bristles and aluminum
cover.
STEEL DRAWER
Cost Php 7,275 each
Capacity 60 drawer storage unit
Dimension 552mm x 306mm x 150mm
Quantity 3
Source RS Components (Online)

• Plastic Tray – This equipment is use to carry & hold the raw materials
and the finish product. It can hold up to 50kg of materials.
PLASTIC TRAY
Cost Php 300 each
Capacity 50 kg
279.4 mm x 330.2 mm x 76.2

Dimension
mm
Quantity 3
Source RS Components (Online)

3.6 Facility Location
3.6.1 Plant location
Plant location have a crucial effect on the company’s profitability. Many
factors such as costs and benefits must be considered when selecting the
suitable site. It is recommended to have different alternative sites to be
assessed in order to have high chance on choosing the best site for the
company.
Due to budget constraints, it was decided to choose the land the
proponents currently own. In case that the land is less costly, we added one
more that can be rented. An ideal location is one where the cost of the product
is kept to minimum and gives the lowest unit of cost of production and
distribution.
Location Cavite Bulacan Pasig
Area 200 sq-m 154 sq-m 336 sq-m
#9003
26 Tecson
PLDT
St. Brgy.
Subdivision, San
Poblacion,
Address Barangay II, Miguel,
San
Amaya, Pasig City
Miguel,
Tanza,
Bulacan
Cavite
Rent per Php

N/A N/A
Month 67,200
Payment
N/A N/A Monthly
Terms
Minimum
N/A N/A 1 year
Lease
Long
Term N/A N/A 5 years
Lease
Table 3.4 Factor Rating Technique
No. Factors Weight (%)
1 Accessibility 0.25
2 Proximity to Supply 0.20
3 Lot Size 0.10
4 Legal and Fiscal Regulation 0.05
5 Price of Land 0.15
6 Duration of Contract 0.05

7 Geographical Location 0.15
8 Leasing Terms 0.05
TOTAL 1.00
The most important factor to be considered given a 25% weight by the
proponents is the accessibility since it is essential for the company to be
flexible in resolving possible problems that may occur. In addition, the
proponents want the products to be delivered and raw materials to be received
in time. A weight of 20% is given to proximity to suppliers since the proponents
mainly focuses on assembling the parts, it is important for the company to have
an easy access to the suppliers. A weight of 15% is given to the price of land
because as much as possible, the proponents wants to reduce the cost and
geographical location because it gives the company an access to a larger pool
of customers which can result to profit increase. Other factors that were
considered covers the stability of the company in a site where the product is to
be made.
Table 3.5. Factor Rating Technique

Factor Weight Cavite Score Bulacan Score Pasig Score
1 0.25 60 15 50 17.5 70 17.5
2 0.2 60 12 70 14 70 14
3 0.1 40 4 80 8 60 6
4 0.05 80 4 80 4 70 3.5
5 0.15 100 15 100 15 80 12
6 0.05 100 5 100 5 60 3
7 0.15 70 10.5 90 13.5 40 6
8 0.05 100 5 100 5 60 3
Table 3.6. Summary of the Factor Rating Technique
Factor Cavite Bulacan Pasig

1 15 12.5 17.5
2 12 14 14
3 4 8 6
4 4 4 3.5
5 15 15 12
6 5 5 3
7 10.5 13.5 6
8 5 5 3
TOTAL 70.5 77 65
The result of the factor rating technique shows that option 2, which is the site
in Bulacan City, is the optimal site of the facility considering all the important
factors for site selection.
In doing the factor rating technique, the proponents defined the scores as the
basis for the evaluation. The reasons are qualified to avoid biases.
Factor 1: 50 - 65 Inaccessible roads

66 - 80 Slightly accessible roads
81 - 100 Accessible roads
Factor 2: 40 - 60 Far from the suppliers
61 - 100 Near the suppliers
Factor 3: 50 - 70 Inadequate location area
71 - 100 Adequate location area
Factor 4: 50 - 70 Strict legal regulations & high fiscal regulations
71 - 100 Just legal regulations & low fiscal regulations
Factor 5: 50 - 65 High cost of rent
66 - 80 Normal cost of rent
81 - 100 Low cost of rent
Factor 6: 50 - 70 Short contract duration
71 - 100 Long contract duration
Factor 7: 50 - 70 Flood and landslide prone
71 - 100 Flood and landslide free area
Factor 8: 50 - 70 Inappropriate leasing terms
71 - 100 Appropriate leasing terms
3.6.2 Head office location
Since the chosen plant location can accommodate the office area
without an additional cost, the proponents decided to locate the head office in
the same area. The administration area would be placed parallel to the
worker’s area. The management can also monitor the production activity if
the office is located in the same warehouse. They can immediately respond
to problems and identify inventory levels of the plant.
3.6.3 Sales offices location
The proponents have decided to build the main factory and the head
office in one location, besides from having a lesser cost for the land, this way
shall create an advantage for management decision making as production
information can easily be relayed to management with no delay, as well as
having lesser cost for land. The proponents have chosen to build the facility in
Quezon City, as per the result from the Factor Rating, it is the most optimal
location to choose, as it would ensure accessibility, proximity to supply, optimal
lot size, strict legal regulations, geographical location, leasing terms and the
like.
3.7 Facility Layout
3.7.1 Space utilization

The space utilization in the plant is determined in order to maximize the
productivity and minimize the operational costs. The movement spaces and
the number of workers are considered. The company will be located at 26
Tecson St. Brgy. Poblacion, San Miguel, Bulacan with a plant size of 104
square meters. The table 3.7 shows the space utilization of each department
inside the plant.
Table 3.7. Space Utilization
Space Utilization (1st Floor)

Department Space Allocation Space Utilization
Raw Materials Storage 15 14.42%
Assembly Area 30 30.00%
Packaging Area 15 14.42%
Quality Control 30 30.00%
Finished Goods and Loading Area 14 13.46%
Space Utilization (2nd Floor)
Department Space Allocation Space Utilization
Administrative Office 17.5 16.83%
Sales and Receiving Office 17.5 17.50%
Dining Area 27 25.96%
Inventory Area 27 27.00%
3.7.2 Relationship Chart
3.7.3 Relationship Diagram
Table 3.8. Relationship Diagram Legend
Representation No. Value Closeness Rating Color Code
A 4 Absolutely Important Pink
E 3 Especially Important Yellow
I 2 Important Green
U 1 Unimportant Blue
X -1 Undesirable Violet
The relationship diagram shown below illustrates and summarizes the
relationship chart of the facility layout together with its corresponding
relationship with each other.
Figure 3.3 Relationship Diagram
3.7.4 Block Diagram

3.7.5 Layout
Ground Floor
Second Floor
3.8 Building and Facilities
3.8.1 Site, type and costs of building and land
Site Bulacan City
Type Commercial Space
Floor Area 154 sq.m.
Cost N/A
Physically, the building itself is in a satisfactory status. It will be made sure
that the site will comply with the National Building Code which states that all
sanitary and industrial plumbing installations inside building and premises
shall conform to the provisions of the National Plumbing Code.
3.8.2 Construction cost
The renovation of the plant will include the construction of the built-in
cabinets for the inventory area. Below is the summary of total construction
cost.
Table 3.9. Total Construction Cost
Labor Wage Quantity Working Day Total

Cost
Construction workers 512/day 3 3 4,608.00
Material Cost Quantity Total Cost
¾ Plywood 1,220.00 10 12,200.00
Finishing Nail 210.00 3 kilos 210.00
4 L Paint 530.00 3 1,590.00
Paint brush 50.00 3 150.00
Total Construction Cost 18,758.00

3.8.3 Land improvement cost
The land improvement to be done on the plant will consist on
improvement on the lighting system. The improvement cost for lighting system
will consist of the cost of new fluorescent light bulbs for replacing old light
bulbs. The proponents assumed that the luminance of light bulbs will degrade
every year, it will provide poor lighting.
Table 3.10. Total Land Improvement Cost
Year Quantity of Cost of each Total

Light Bulb light bulb Cost
2020 10 100 1000
2021 10 100 1000
2022 10 100 1000
2023 10 100 1000
2024 10 100 1000
2025 10 100 1000
2026 10 100 1000
2027 10 100 1000
2028 10 100 1000
2029 10 100 1000
Total Land Improvement Cost 9000

3.8.4 Allowances for future expansion
The allotted size for each department of the company will be able to
accommodate the ten years operation period of the company including the
increase in the production volume since the allotted size for each department
includes the space needed for next nine years operations period.
3.9 Raw Material and Supplies
3.9.1 Projected Raw Material Requirements
In manufacturing the Swap and Stack Makeup Brush, the raw materials
include synthetic fibers, aluminum ferrules, body, and handles, and the
packaging shall consist of acetate These materials cover all the requirements
needed to produce the packaging and the actual product. The table below
summarizes the composition of the Swap and Stack Makeup Brush.
Table 3.11. Composition of Swap and Stack Makeup Brush

3.9.2 Descriptions and Specifications
The descriptions and specifications of the raw materials used in
manufacturing the Swap and Stack Makeup Brush are shown in the table
below.
Table 3.12. Descriptions and Specifications

Raw
Description Specification
Materials
The synthetic fibers consists

of polyester and nylon.
Synthetic fibers are used
because it has a unique
characteristic as the bristles
The fibers should be
naturally gravitate toward
shaped to be a
Synthetic each other, allowing for more
foundation brush, a
Fiber precise, smooth and streak-
powder brush, and a
free application, and it is also
blush brush.
much easier to wash
because the bristles aren’t
coated with anything and
don’t shed as much as
natural ones.
Aluminum is a silver-white
metallic element, light in
weight, ductile, malleable, The aluminum shall
and not readily corroded or conform with the
tarnished, occurring specific lengths
Aluminum combined in nature in assigned for each
igneous rock, shale, clay, brush, with a radius of
and most soil: used in alloys 2 cm and length of 13
and for lightweight utensils, cm.
castings, airplane parts, etc.
The packaging shall

follow the design
Acetate is a thin piece of specifications set by
clear plastic with writing or the proponents. The
Acetate drawing on it that you can packaging used for
show on a wall or screen the Swap & Stack
using an overhead projector Brush is a clear box
with a dimension of
15 cm x 4 cm x 6 cm.
3.9.3 Projected Cost of Raw Materials
• Aluminum Handle
The Aluminum handle has a length of 5 cm and a width of 2.5 cm each
which costs Php75 each. The proponents will consume 3 aluminum
handle for each product.
Table 3.13. Projected Cost of Aluminum Handle
ALUMINUM HANDLE
Volume Projected
Year Needed Cost (Php)
2020 77,513 5,813,478.88
2021 78,848 5,913,564.75
2022 80,201 6,015,071.25
2023 81,582 6,118,663.50
2024 82,985 6,223,878.00
2025 84,413 6,330,946.50
2026 85,865 6,439,869.00
2027 87,342 6,550,645.50
2028 88,844 6,663,276.00
2029 90,370 6,777,760.50
• Taklon Bristles
The volume needed for the year 2020 is 1,505,108 in grams to be able to
meet the demand which costs Php 7,892.79.
Table 3.14. Projected Cost of Taklon Bristles
TAKLON BRISTLES
Volume Projected
Year Needed in Cost
grams (Php)
2020 1,505,107.80 7,892.79
2021 1,530,996 8,028.54
2022 1,557,328.80 8,166.63
2023 1,584,115.20 8,307.10
2024 1,611,361.80 8,449.98
2025 1,639,077 8,595.32
2026 1,667,269.20 8,743.16
2027 1,695,946.20 8,893.54
2028 1,725,116.40 9,046.51
2029 1,754,788.80 9,202.11
• Aluminum Ferrule
The price per unit of aluminum ferrule costs Php 5 each. The projected cost
for the year 2020 is Php 387,565.26.
Table 3.15. Projected Cost of Aluminum Ferrule
ALUMINUM FERRULE
Volume Projected
Year
Needed Cost (Php)
2020 77,513 387,565.26
2021 78,848 394,237.65
2022 80,201 401,004.75
2023 81,582 407,910.90
2024 82,985 414,925.20
2025 84,413 422,063.10
2026 85,865 429,324.60
2027 87,342 436,709.70
2028 88,844 444,218.40
2029 90,370 451,850.70
• Thread
One spool of thread costs Php 85. The proponents assumes to consume 8
spool of thread per year to be able to meet the demand.
Table 3.16. Projected Cost of Thread
THREAD
Number
Projected
of spool
Year Cost
needed
(Php)
per Year
2020 8 680.00
2021 8 680.00
2022 8 680.00
2023 8 680.00
2024 8 680.00
2025 8 680.00
2026 8 680.00
2027 8 680.00
2028 8 680.00
2029 8 680.00
• Glue
The price of one gallon of heavy duty glue costs Php 420. The proponents
assumed that 5 gallons per year will be enough to be able to meet the
demand.
Table 3.17. Projected Cost of Glue
GLUE
Quantity
Projected
of
Cost
Gallons
(Php)
Year Needed
2020 5 2,100.00
2021 5 2,100.00
2022 5 2,100.00
2023 5 2,100.00
2024 5 2,100.00
2025 5 2,100.00
2026 5 2,100.00
2027 5 2,100.00
2028 5 2,100.00
2029 5 2,100.00
• Aluminum Cover
The price of per unit of the aluminum cover is Php 25. The projected cost
for the year 2020 is Php 645,942.10.
Table 3.18. Projected Cost of Glue
ALUMINUM COVER
Volume Projected
Year Needed Cost (Php)
2020 25,838 645,942.10
2021 26,283 657,062.75
2022 26,734 668,341.25
2023 27,194 679,851.50
2024 27,662 691,542.00
2025 28,138 703,438.50
2026 28,622 715,541.00
2027 29,114 727,849.50
2028 29,615 740,364.00
2029 30,123 753,084.50
• Packaging Cost
One unit of packaging box costs Php 29.87 for the year 2020. The
proponents assumes that the costs of packaging will increase for the
next years due to inflation rate.
Table 3.19. Packaging Cost
PACKAGING COST
Quantity Projected
Year
Needed Cost (Php)
2020 25,838 771,771.62
2021 26,283 814,757.81
2022 26,734 857,348.16
2023 27,194 903,658.61
2024 27,662 952,391.64
2025 28,138 1,002,821.93
2026 28,622 1,056,710.95
2027 29,114 1,113,609.74
2028 29,615 1,173,032.72
2029 30,123 1,235,962.28
3.9.4 Sources of raw materials and supplies
Table 3.20. Aluminum Handle Supplier Details
MINIMUM ORDER Price per

SUPPLIER ADDRESS
QUANTITY unit (PhP)
Guangzhou
Huangpu,
DZD Industrial 1,000 Php 75
China
Co.
Table 3.21. Taklon Bristles Supplier Details
MINIMUM ORDER Price per

SUPPLIER ADDRESS
QUANTITY bundle (PhP)
Guangzhou
DZD Huangpu,
1000 bundles Php 182
Industrial China
Co.
Table 3.22. Aluminum Cover Supplier Details
MINIMUM ORDER
SUPPLIER ADDRESS PRICE
QUANTITY
Guangzhou
DZD Huangpu,
1,000 Php 25
Industrial China
Co.
Table 3.23. Aluminum Ferrule Supplier Details
Price per
MINIMUM ORDER
SUPPLIER ADDRESS unit
QUANTITY
(PhP)
Guangzhou
DZD Huangpu,
1000 Php 5
Industrial China
Co.
Table 3.24. Packaging Box with Plastic Tray Supplier Details
Minimum Order Price per

Supplier Address
Quantity unit (PhP)
3132 First
Street Sta.
RM Box Mesa, 1000 Php 29.87
Manila
Philippines
Table 3.25. Thread Supplier Details
Minimum Order Price per

Supplier Address
Quantity unit (PhP)
Magic
Lazada 4 Php 85
Deal
Table 3.26. Glue Supplier Details
Price per
Minimum Order
Supplier Address unit
Quantity
(PhP)
Craft
Lazada 4 Php 420
Headquarters
3.9.5 Availability and continuity of supply
All the suppliers for the Swap and Stack Makeup Brush were picked
thoroughly among the other suppliers. The chosen suppliers that the
proponents contacted are capable to provide the annual needs of Swap and
Stack Makeup Brush and are reliable in terms of the ability to produce the
quantities needed yearly. The proponents also chose the suppliers that are
from the Philippines to avoid high shipping costs.

3.10 Utilities
3.10.1 Projected Electricity/power supply & cost
Electricity in the plant and office will be provided by Manila Electric
Company or MERALCO. The average typical consumption in the year 2018
is used as the rate per consumption for MERALCO in the year 2019, which is
5.1013 per kilowatt.
Table 3.27. MERALCO monthly typical consumption level in year 2018
Month Typical Consumption Level (Rate/KwH)
January 4.0768
February 4.6548
March 5.2962
April 5.4735
May 5.0523
June 4.9828
July 5.2651
August 5.3491
September 5.2719
October 5.1908
November 5.2725
December 5.3303
AVERAGE 5.1013
Table 3.28. Electricity Cost
Table 3.29. Projected Electricity Cost
PROJECTED ELECTRICITY COST
Year Inflation Rate Projected Total Costs (Php)

2020 3.57% 77,235.38
2021 3.79% 80,162.60
2022 3.45% 83,200.76
2023 3.60% 86,354.07
2024 3.61% 89,626.89
2025 3.54% 93,023.75
2026 3.59% 96,549.35
2027 3.58% 100,208.57
2028 3.57% 104,006.48
2029 3.58% 107,948.32
3.10.2 Projected Fuel supply & cost
The proponents decided that the finished products will be delivered
through courier, therefore there will be no fuel cost.

3.10.3 Projected Water Supply & Cost
Table 3.30. Projected Water Supply & Cost
YEAR 2020
Water Monthly Monthly Yearly
Operating Rate/Cu.m
Consumption/ Consumption Costs Costs
Days (Php)
day (Cu.m) (Php) (Php)
0.6 20 12 170.67 2,048.04 24,576.48
Inflation Projected Total Costs

Year Rate (Php)
2020 3.57% 24,576.48
2021 3.79% 25,507.93
2022 3.45% 26,474.68
2023 3.60% 27,478.07
2024 3.61% 28,519.49
2025 3.54% 29,600.38
2026 3.59% 30,722.23
2027 3.58% 31,886.60
2028 3.57% 33,095.11
2029 3.58% 34,349.41
3.10.5 Projected Communication system & cost
The proponents chose an Internet bundle package from PLDT, which
costs 2,899.00 pesos monthly in the year 2019, inclusive of 50 MBPS, unlimited
FIBR, 3 Google Wifi points, and free landline with unlimited calls. Inflation rate
was used to compute for the communication cost for the next 10 years.
Table 3.31. Projected Communication System Cost
PROJECTED COMMUNICATION SYSTEM COST
Year Installation Cost/Month Cost/Year

Fee
2020 3,200.00 1,969.00 62,028.00
2021 - 1,969.00 23,628.00
2022 - 1,969.00 23,628.00
2023 - 1,969.00 23,628.00
2024 - 1,969.00 23,628.00
2025 - 1,969.00 23,628.00
2026 - 1,969.00 23,628.00
2027 - 1,969.00 23,628.00
2028 - 1,969.00 23,628.00
2029 - 1,969.00 23,628.00

3.11 Waste Management
3.11.1 Types of wastes
The KDT Corporation’s wastes includes the 3% scrap allowance
allocated for the products that will be produced. This will most likely reflect on
the inspection or quality check part where there is possibility of reject.
3.11.2 Disposal methods
The products that are defective are going to be reworked if it does not
pass inspection. The scraps and wastes shall be sold in junk shops in order
for the company to gain income from the monetary exchange from the
scraps. In addition, synthetic hair scraps from production will be donated to
organizations that make synthetic wigs for cancer patients.

3.12 Labor Requirement
There are three different kinds of labor: direct, indirect, and
administrative. Direct labor is considered to be the production workers
directly working on the productions of the products. Indirect labor supports
the production process, but does not work directly to the production.
Administrative labor plan, direct, and coordinate the organization.
3.12.1 Administrative
Table 3.32. Administrative Personnel Salaries
Monthly Annual
No. of
DEPARTMENT Position Salary Salary
Employees
(Php) (Php)
PRODUCTION,
Production
SUPPLY
and Quality
CHAIN AND 354,000.00
Assurance 1 29,500.00
QUALITY
Manager
ASSURANCE
Accounting
&
FINANCE 18,382.00 220,584.00
Budgeting 1
Officer
Sales and
SALES AND
Marketing 1 17,800.00 213,600.00
MARKETING
Manager
3.12.2 Direct
Table 3.33. Direct Personnel Salaries
Average Average
Type of No. of
Monthly Annual
Labor Employees
Salary Salary
Production
4 12,530 601,440.00
Staff
3.12.3 Indirect
Table 3.34. Indirect Personnel Salaries
Average Average
Type of No. of
Monthly Annual
Labor Employees
Salary Salary
Janitor 1 11,700.00 140,400.00
Security Guard 1 12,144.00 145,728.00
Sales
1 14,500.00 174,000.00
Representative
3.12.4 Projected Administrative, Direct, & Indirect Labor
Requirements
Table 3.35. Projected Administrative, Direct, & Indirect Labor
Projected
Inflation
Year Annual Salary
Rate
Cost
2020 3.57 ₱1,905,244.56
2021 3.79 ₱1,973,261.79
2022 3.45 ₱2,048,048.41
2023 3.60 ₱2,118,706.08
2024 3.61 ₱2,194,979.50
2025 3.54 ₱2,274,218.26
2026 3.59 ₱2,354,725.59
2027 3.58 ₱2,439,260.24
2028 3.57 ₱2,526,585.75
2029 3.58 ₱2,616,784.86

3.13 Total Projected Production Cost
Table 3.36. Total Projected Production Cost
PRODUCTION COSTS (overhead)

RAW INDIRECT RENT
UTILITIES TOTAL
MATERIALS MATERIALS EXPENSE
2020 7,629,430.65 3,630.00 - 163,839.86 7,796,901
2021 7,790,431.50 3,630.00 - 129,298.53 7,923,360
2022 7,952,712.04 3,630.00 - 133,303.44 8,089,645
2023 8,121,171.61 3,630.00 - 137,460.14 8,262,262
2024 8,293,966.82 3,630.00 - 141,774.38 8,439,371
2025 8,470,645.35 3,630.00 - 146,252.13 8,620,527
2026 8,652,968.71 3,630.00 - 150,899.58 8,807,498
2027 8,840,487.98 3,630.00 - 155,723.18 8,999,841
2028 9,032,717.63 3,630.00 - 160,729.58 9,197,077
2029 9,230,640.09 3,630.00 - 165,925.73 9,400,196
IV.
MANAGEMENT AND
SOCIO-ECONOMIC
STUDY
4.1 Job Design and Salary Administration
4.1.1 Organization Chart
Since the corporation has only one product, the operations are less
complex. Hence, a smaller organization chart. There is a Chief Executive
Officer that handles three managers in three different departments:
Finance, Production, Marketing & Sales Department Manager.
Figure 4.1. Organization Structure
A. Selection of best hair, Mixing of hair to stabilize product
quality
B. Molding the hair into a bundle depending on the type of
brush to be produced (powder brush, foundation brush, blush
brush), Attaching and gluing of the bristles to the ferrule, Let the
brushes dry
C. Separating of brush head according to type, Transports
brush heads for quality check
D. Inspects quality of brushes if within control limits

E. Attachment of brush head to body
F. Stacking of the three brushes and final quality check
G. Packaging
4.1.2 Salary Rates and Benefits
• Social Security System (SSS)
The Philippine Social Security System (SSS) is a social insurance
program for the employees in the Philippines that provides retirement and
health benefits to all paid up employees in the Philippines. This ensures
that employees will receive protection from the government when needed.
Figure 4.2. SSS Contribution Schedule 2019

• 13th Month Pay
Presidential Decree No.851 states that all employers are required
to pay all their employees receiving a basic salary, regardless of their
employment, a 13th-month pay not later than December 24 of every year.
• Philippine Health Insurance (PhilHealth)
The Philippine Health Insurance Corporation (PhilHealth) was
created in 1995 to implement universal health coverage in the Philippines.
It is a tax-exempt, government-owned and government-controlled
corporation (GOCC) of the Philippines, and is attached to the Department
of Health. Its stated goal is to ensure a sustainable national health
insurance program for all. Contribution of each employee depend on the
amount of salary they receive every month.
Figure 4.3. PhilHealth Premium Contribution 2019
• Home Development Mutual Fund (Pag-IBIG Fund)
The Home Development Mutual Fund (HDMF), more popularly
known as the Pag-IBIG Fund, is a Philippine government-owned and
controlled corporation under the Housing and Urban Development
Coordinating Council responsible for the administration of the national

savings program and affordable shelter financing for Filipinos employed by
local and foreign-based employers as well as voluntary and self-employed
members. It offers its members short-term loans and access to housing
programs. This company offers the cheapest housing loans which
employees can repay up to 30 years.
Figure 4.4. PAGIBIG Contribution
• Service Incentive Leave
It is stated in the constitution that an employee who has worked for
at least one year in entitled to a five days leave of absence with pay. If
these absences are not availed, the employer may mandate the employee
to take a leave or convert these into cash equivalents if the employee
should opt to.
• Overtime Pay and Holiday/Rest Day Pay
An employee who works more than eight hours a day should be
compensated with an overtime pay. This amounts to his regular hourly
wage plus 25% thereof. On the other hand, an employee who worked on a
holiday/on his rest day, he is to be compensated with a least 130% of his
regular wage for a day.
4.1.4 Projected Salary & Benefits Expenses
Below are the tables for the projected salary cost and employer share.
Table 4.1. Projected Salary & Benefits Expenses

4.2 Management Proposal
4.2.1 Management Style
Effective management style is a vital element of business. A
knowledgeable employees that is fully aware of their own job responsibilities
as well as expectations of the company is a high-functioning unit that
provides superior service to the customers. KDT Corporation will be
transparent in providing their employees with reasonable salary structure
which determines the increase of salary when an employee is given a
performance appraisal. This will motivate all employees to work hard
because they will receive an increase in their salaries. It will benefit both the
employees and the company as well, for it will increase productivity of each
employee which is in the line with the overall productivity, efficiency and
effectiveness of the company. Every position in the company will have a
specific job description which will determine their specific duties, task and
responsibilities. KDT Corporation will start as small unit and will eventually be
open for expansion.
4.2.2 Company Policies
4.2.2.1 Management Rights
The management of KDT Corporation has all the rights in
managing the company. This includes determining the company’s goals
and strategies in achieving these goals. The management also has the
rights to establish company policies such as employment policy,
attendance policy, dress code policy, and the like. In addition, it has the
right to make workload assignments in order to have an efficient working
environment.
4.2.2.2 Employment
All newly hired employees shall undergo an orientation regarding
the company and what their role will be. There will be a one day training
before the officially start their work.
4.2.2.3 Attendance
All employees are expected to conduct themselves professionally
during their employment by practicing good attendance habits. Office
hours shall be from Monday to Friday, 8:00AM to 5:00PM.
This includes the following practices:
• Coming to work on time
• Working on their scheduled shift
• Leaving at their scheduled time
• Remaining at their respective workstations and not loitering
• Taking breaks only when necessary (water/restroom breaks)
• Notifying their supervisor in case they will be absent for work
4.2.2.4 Dress Code
All employees are obliged to demonstrate professionalism even
through their appearance. All must be aware that their appearance reflects
KDT Corporation's culture and any inappropriateness may cause a

damaged reputation to the company. The following guidelines regarding
dress code must always be followed:
• All employees must be clean and well groomed
• All plant workers must be wearing a hairnet and gloves
during the course of their work. Their attire must be strictly a
white shirt and any pants with closed shoes.
• Administrative workers must wear appropriate clothes for
office. The wearing of corporate attire is not necessary.
Smart casual clothes are recommended , in order to project
a professional image ato customers, potential buyers, and
visitors. Shorts, slippers, sleeveless clothing are strictly
prohibited.
4.2.2.5 Safety
KDT Corporation is fully committed in maintaining a safe
environment, being fully aware of the safety of all employees and of the
machines used in the manufacturing area.
4.2.2.6 Environment
Being a manufacturing company, KDT Corporation will fully adhere
to applicable environmental laws and standards.
4.2.2.6 Illegal Drugs, and Alcohol at Workplace
The possession of illegal drugs and alcohol is strictly prohibited in
the premises of the workplace. Anyone caught under the possession

of/under the influence of drugs and alcohol shall be held under
investigation and shall be suspended for 3 days.
4.2.2.7 Violence and Weapons at Workplace
Any form of violence, misbehavior, and use of abusive language
within the premises of the workplace shall lead to disciplinary action.
Carrying of any kind of weapon at the workplace shall likewise be
prohibited.
4.2.3 Functions of Administrative Departments
• Administration
The Administration Department is the backbone of the organization.
Its main job responsibility is to ensure the efficient and effective
performance of all departments. It plays an important role in linking
between an organization’s various departments and to assure the smooth
flow of information from one part to the other.
• Operations/Production
The Operations Department is in-charge for smooth and profitable
production. It is responsible for making sure that consumers’ order are
filled on schedule and ensure the well-ordered delivery of services with a
maximum efficiency and minimize errors.

• Sales and Marketing
Sales and Marketing Department is responsible for analyzing and
creating a plan for engaging the target market to gain more customers and
retaining them. It will be their duty to ensure that the sales objectives of
the company are met.
• Quality Control
Quality Control performs as an audit function in the manufacturing
and production areas of the organization. They are responsible in
reviewing all production records for accuracy and completeness before
approving for distribution.
• Supply Chain Management
Supply chain management department is responsible for managing
resources to meet the needs of customers, incorporating functions to
ensure the overall performance benefits, and integrating processes to
increase profitability.
4.2.4 Training and Development Programs
In partnership with TESDA, the company will have an Apprenticeship
Program for machine operators. This aims to provide a mechanism that will
ensure the availability of skilled workers when defective machines arise. The
program ranges for a minimum of four months and a maximum of six months.
After the program, the KDT Corporation will guarantee the participants of the
program a slot should they apply for a full time regular job.
The company will allow its administrators to join seminars of their own
specialization. This will help them widen their skills and adapt it for the
betterment and improvement of the organization. Also, the company will allot
Php 50,000 yearly for this endeavor.
Lastly, in order to promote camaraderie among employees, the company
will hold an annual trip with their families included. The budget allocated for this
is Php 100,000.00
4.2.5 Auxiliary Services/Facilities for Employees
The company will provide the employees dining area with pantry for them
to have a place to eat and relax when breaks. There will also be television for the
employees to enjoy during their free time. Pantries are for storage of their food
and a sink in the pantry so employees can be able to wash their dishes and
containers after eating.
4.3 Government Taxes and Regulatory Requirements
Government Taxes
KDT Corporation is subjected to the following taxes under the
Republic Act No. 8424 or the Tax Reform Act of 1997: (1) Corporate Income
Tax, (2) Individual income tax, (3) Value-added Tax. and (4) Documentary
Stamp Tax. The following are discussed below:

A. Corporate Income Tax. This tax is imposed on corporations in the
Philippines for 30% contribution.
B. Individual Income Tax. This tax is imposed on the employees of a
company. This is computed as is with the withholding tax of an employee,
depending on the status in life - either married, with dependents or
single/married, without dependents.
C. Value-Added Tax. Tax is imposed on all commodities in the Philippines
with 12% tax contribution.
D. Documentary Stamp Tax. Tax imposed on all the documents signed
and notarized by and for KDT Corporation.
Regulatory Requirements
Starting a business in the Philippines require some paper works and a
little amount of investment to register the business legally. To register the
business, the proponents need to undergo the following process:
A. Verify and reserve the company name with the Securities and
Exchange Commission (SEC). The process would take a day to accomplish
and would incur a Php 40 cost.
B. Notarize articles of incorporation and treasurer’s affidavit at the notary.
This would take about a day and Php 500 to accomplish.
C. Register the company with the SEC and receive pre-registered
Taxpayer Identification Number (TIN). This would take 3 days and arround
php 2,665 to complete.

D. Obtain Barangay clearance. Around Php 500 is needed a day to
complete
E. After issuance of the SEC certificate of incorporation, pay the annual
community tax and obtain the community tax certificate (CTC) from the City
Treasurer's Office (CTO). It would cost Php 500 and a day to complete.
F. Obtain the business permit application form from the Business Permits
and Licensing Office (BPLO). A day to complete and has no associated cost.
G. Obtain the business permit to operate from the BPLO. An associated
cost amounting to Php 4939 and would take 6 days to complete.
H. Buy special books of accounts in the bookstore. 1 day to complete with
Php 400 associated cost.
I. Apply for Certificate of Registration (CORr) and TIN at the Bureau of
Internal Revenue (BIR). Can be accomplished in 2 days and has an
associated cost amounting to Php 1,115.
J. Obtain the authority to print receipts and invoices from the BIR. No
costs incurred as it is connected to the previous procedure and would take
about a day to complete.
K. Print receipts and invoices at the print shops. 7 days to complete and
would cost Php 3,500.
L. Have books of accounts and Printer’s Certificate of Delivery (PCD)
stamped by the BIR. 1 day to complete and no cost incurred.
M. Register with the Social Security System (SSS). 7 days to accomplish
and has no associated cost.

N. Register with the Philippine Health Insurance Company (PhilHealth). 1
day to complete and has no associated cost.
4.4 Environmental Impacts
Since the KDT Corporation is a cruelty free company. The proponents
decided to use synthetic bristles rather than using natural hair. People are
now switching from natural to synthetic not only because of the cruelty free
advocate but also because synthetic brush are now capable of range of
advantages compare to natural hair bristles. Since synthetic brushes are
made up of Taklon fibres, it have antibacterial properties that do not allow
bacteria to grow on the surface of the bristles, which makes synthetic
brushes more hygienic compared to natural brushes. Natural brushes are not
recommended for people who have sensitive skin. Synthetic brushes have
longer lifespan. Natural brushes are prone to breakage and over time
deterioration.
V.
FINANCIAL
STUDY
5.1
Financial study is the most essential and crucial part of the Project
Feasibility Study. In this section of the study, it is determined whether the
project is feasible enough when the financial benefits/profitability from all the
expenses and income projected to be obtain. Furthermore, various
assumptions were made as to have bases to financial computations.
Major Assumptions are as follows:
• The base year of the project is 2020.
• The study is for a period of 10 years.
• Inflation rate starts at 3.57%
• All expenses are projected through the projected inflation rate
• There is 6 months pre-operating expense
• The accounts receivable will be 10% of sales at the end of each year
• Allowance for doubtful accounts is 3% of the ending balance for the
inventory
• All costs, except labor costs, are vatable
• The useful life of the fixed assets is 5, 10 and 15 years
• The fixed assets will be depreciated using the straight line method with
10% of the cost as salvage value
• At the end of life of the fixed assets, they will be sold at salvage value for
cash.
• The employees of KDT Corporation are assumed single all throughout the
study for the purposes of computing their withholding tax

• All sales are vatable
• Repairs and maintenance is assumed to be 10% of the brand new fixed
asset and 30% for secondhand fixed assets
• Value added tax is 12%
• Income tax rate is 30%
• Minimum rate of return is 8.50%
5.2 Total Project Cost
The total project cost consists of the fixed capital, pre-operating
expenses and working capital. The allotted time for the pre-operating
expenses and working capital is 6 months. Table 5.1 shows the total project
cost.
Table 5.1. Total Project Cost

5.2.1 Fixed Capital Cost
Fixed Capital Cost includes the store equipment, tools, and its
installations. Included also is the cost for office furniture, fixtures, and the
equipment. These are the long term tangible property owned and used for
the daily operations of the company. The fixed capital cost account for 2.73%
of the total project cost, totaling to PhP 173,111.00.
5.2.2 Pre-Operating Expense
Pre-operating expenses are the expenses accounted 6 months before
the start of operation of the company on the last semester of 2019. It includes
the advertisements and promotional expenses for the product launch, legal
requirements to start a company is being processed in this time period. It
also covers the construction costs. The breakdown of Pre-Operating
Expense is shown below. The pre-operating expense account for 10.89% of
the total project cost, totaling to PhP 690,504.78.
5.2.3 Working Capital
Working Capital includes all the expenses that can be incurred for the
first six months of operation. It includes the advertising and promotion
expense, raw materials, salaries, utilities expense, and supplies expense. It
accounts for 82.04% of the total project cost amounting to PhP 5,466,926.44.
5.3 Sources of Financing
Table 5.2. Total Capital Investment from Other
Name of Proponent % Share in Capital Amount to Invest

Elamparo, Korina Sofia S. 20% 1,268,356.32
Ferrer, Kate Ingrid T. 20% 1,268,356.32
Jalandoni, Trisha Lyn S. 20% 1,268,356.32
Liclican, Danica P. 20% 1,268,356.32
Bautista, Charmina Lou C. 20% 1,268,356.32
TOTAL CAPITAL INVESTMENT FROM OWNERS 6,341,781.61
5.4 Financial Statements
The section of the study consists of the ten year projection for the Cash
Flow statement, Income Statement, and Balance Sheet
5.4.1 Cash Flow Statement
The Cash Flow Statement of KDT Corporation basically summarizes
the company’s cash and cash equivalent entering and leaving the company.
The table below shows from the initial year prior the company started its
business to the first year the company started operating until to its 10th year.
Table 5.3. Cash Flow Statement
YEAR CASH FLOW

2020 3,199,924.34
2021 1,409,753.41
2022 2,824,154.34
2023 2,607,259.70
2024 4,232,504.14
2025 2,601,427.48
2026 4,180,198.95
2027 4,771,715.15
2028 5,398,483.84
2029 6,119,000.76
5.4.2 Income Statement
The income statement measures the company’s performance over the
specific accounting period. Financial performance assessed through the
summary of its revenues and expenses through operating and non-operating
activities. Below is the summary of income statement for its ten years of
operation.
Table 5.4. Income Statement
YEAR INCOME STATEMENT

2020 2,208,045.81
2021 1,514,398.31
2022 1,965,572.17
2023 2,403,800.47
2024 2,879,658.17
2025 3,406,849.44
2026 3,941,821.11
2027 4,516,301.74
2028 5,123,819.90
2029 5,763,917.87
5.4.3 Balance Sheet
The balance sheet summarizes the company’s assets, liabilities, and
owner’s equity. The table below shows the company’s summary Balance
Sheet for its ten years operation.
Table 5.5. Balance Sheet
OWNER'S LIABILITIES AND

YEAR ASSETS LIABILITIES
EQUITY OWNER'S EQUITY
2020 8,427,309.06 1,772,574.60 6,654,734.47 8,427,309.06
2021 11,428,632.55 900,011.92 10,528,620.63 11,428,632.55
2022 16,029,702.40 1,825,049.61 14,204,652.80 16,029,702.40
2023 20,412,709.07 2,093,795.81 18,318,913.26 20,412,709.07
2024 26,336,286.77 3,427,255.33 22,909,031.43 26,336,286.77
2025 30,733,267.13 2,706,926.26 28,026,340.87 30,733,267.13
2026 36,713,248.66 3,034,626.67 33,678,621.99 36,713,248.66
2027 43,291,598.24 3,386,214.52 39,905,383.73 43,291,598.24
2028 50,497,689.22 3,758,025.59 46,739,663.63 50,497,689.22
2029 58,364,066.30 4,150,024.80 54,214,041.50 58,364,066.30
5.5 Financial Ratio Analysis
5.5.1 Vertical Analysis
The vertical analysis for the income statement will be used to determine
the account titles in terms of percentage of total sales, and gross profit.
Table 5.6. In Terms of Percentage of Sales

In terms of Percentage of Sales
Year 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Cost
of
58.23% 56.32% 54.35% 52.64% 50.91% 49.24% 47.66% 46.12% 44.64% 43.22%
Goods
Sold
Gross
41.77% 43.68% 45.65% 47.36% 49.09% 50.76% 52.34% 53.88% 55.36% 56.78%
Profit
Figure 5.1. In terms of Percentage of Sales
Table 5.7. In Terms of Percentage of Gross Profit

Figure 5.2. In terms of Percentage of Gross Profit
The vertical analysis for the statement of financial position will be used to
determine the account titles in terms of percentage of total assets, and total
liabilities and equity.
Table 5.8. In terms of Percentage of Total Assets
The vertical analysis for the statement of financial position will be used to
determine the account titles in terms of percentage of total assets, and total
liabilities and equity.

Figure 5.3. In terms of Percentage of Total Assets
Table 5.9. In terms of Percentage of Total Liabilities and Equity
Figure 5.4 In terms of Percentage of Total Liabilities and Equity

5. Test of Liquidity
The liquidity ratio measures the ability of the company to cover short
term debt obligations and cash flows by having sufficient current assets to
pay the due liabilities. The most liquid assets are those that can’t be easily
converted to cash for paying the short term liabilities. The projected financial
data of the KDT Corporation, which manufactures Swap and Stack Makeup
Brush, is used to determine the financial ratio comparison of project feasibility
study of the proponent’s company within its industry.
Table 5.10. Financial Ratios

5.1 Current Ratio
The current ratio measures the ability to pay the current liabilities using the
current assets. It is the ratio of current assets to current liabilities.
Table 5.11. Current Ratio
Figure 5.5. Current Ratio
The current ratio of the KDT Corporation is continuously increasing as
seen in the figure above. This shows that the company can therefore easily
pay its current liabilities.

5.2 Acid-test Ratio
The acid test ratio measures the ability to pay the current liabilities. The
current ratio is equal to the acid test ratio because there is no inventory
and prepaid expenses. It is the ratio of quick assets to current liabilities.
Table 5.12. Acid-test Ratio
Figure 5.6. Acid-test Ratio
The acid test ratio of the KDT Corporation is continuously increasing, it is
therefore understood that the liquidity of the company increases and
creditors can be easily paid by the company.

5.3. Debt to Asset Ratio
The lower the debt to assets ratio, the better which there are more assets
than the liabilities. It is the ratio of liabilities to assets.
Table 5.13. Debt to Asset Ratio
Figure 5.7. Debt to Asset Ratio
The debt to assets ratio of the KDT Corporation is shown above. Upon
analyzing this graph, it is seen that the debt to asset ratio is declining,
therefore it can be understood that the company has fewer debts and more
assets to use. It can also be noted that the DTA is less than 1, which means
the company has more assets than liabilities.

5.4 Debt to Equity Ratio
The debt to equity ratio of the liabilities to the equity. Lower value of this
rate indicates that there is greater value in equity compare to the liabilities.
Table 5.14. Debt to Equity Ratio
Figure 5.8. Debt to Equity Ratio
The debt to equity ratio of the KDT Corporation is declining, therefore it
can be concluded that there is greater value in equity compared to its
liabilities.
5.5 Net Profit Margin
The net profit margin is the net income generated from the sales. The
net profit margin of the KDT Corporation is continuously increasing. This
means that the company is more efficient at converting sales into actual
profit.
Table 5.15. Net Profit Margin
Figure 5.9. Net Profit Margin
5.6 Operating Ratio
The operating ratio is the firm’s operating expenses as a percentage
of sales. High ratio indicates that the firm is required to have a large
percentage of sales in order to maintain the expenses of the operations. The
operating ratio of the KDT Corporation is decreasing, this therefore indicates
that operating expenses are becoming an increasingly smaller percentage of
the net sales.

Table 5.16. Operating Ratio
Figure 5.10. Operating Ratio
5.7 Gross Profit Margin
Gross profit margin is what remains from sales after a company pays out
its cost of goods sold. It shows how efficiently a business is using its
materials and labor in the production process. It is the ratio of gross profit
and sales.
Table 5.17. Gross Profit Margin

Figure 5.11. Gross Profit Margin
For the 10 years of operation, the gross profit margin of KDT Corporation is
increasing, this means that it is profitable.
5.8 Total Asset Turnover
The total asset turnover ratio measures the ability of a company to use its
assets to efficiently generate sales. This ratio considers all assets, current, and
fixed. It is the ratio of sales and total assets.
Table 5.18. Total Asset Turnover

Figure 5.12. Total Asset Turnover
The total asset turnover of the KDT Corporation is declining, therefore it
can be understood that the company may not be using its assets efficiently
and most likely have management or production problems. The company
shall then use this projection to address and to prevent the problem from
happening.
5.9 Fixed Asset Turnover
The fixed asset turnover ratio is the ratio of net sales to net fixed assets
(property, plant, and equipment). A high ratio indicates that a company is
doing an effective job of generating sales with a relatively small amount of
fixed assets.
Table 5.19. Fixed Asset Turnover

Figure 5.12. Fixed Asset Turnover
KDT Corporation has a continuously increasing fixed asset turnover, which
indicates that the company’s assets are being utilized efficiently and large
amount of sales are generated using a small amount of assets.

5.10 Sensitivity Analysis
5.10.1 Break-even volume analysis
The break-even volume analysis is the number of units required to be
produced to cover the total costs spent. The assumption for the break-even
volume analysis is that the company will produce zero profit for that certain
volume.
Table 5.20. Break-even volume
Year Total FC Total VC SP/unit VC/unit BEP in units

2020 10,390,793.86 539.97 576.80 36.83 19,243
2021 12,113,652.24 559.52 597.39 37.87 21,650
2022 12,276,957.46 581.18 620.03 38.85 21,124
2023 12,446,869.48 601.50 641.42 39.92 20,693
2024 12,630,721.60 623.49 664.52 41.03 20,258
2025 12,789,961.40 646.35 688.50 42.15 19,788
2026 12,973,618.43 669.53 712.88 43.35 19,377
2027 13,160,939.71 693.87 738.47 44.60 18,967
2028 13,353,745.44 719.03 764.91 45.88 18,572
2029 13,554,026.33 744.99 792.21 47.22 18,194
5.10.2 Break-even cost analysis
The break-even cost analysis implies that the company’s maximum
allowable expense per unit before profit is Php 162.58 respectively. The
assumption for the break-even cost analysis is that the company will produce
zero profit for that certain unit cost.
Table 5.21. Break-even cost
Year Sales price Total FC Annual Demand BEP Cost (PhP)

2020 576.80 10,390,793.86 25,085 162.58
2021 597.39 12,113,652.24 25,517 122.65
2022 620.03 12,276,957.46 25,955 147.03
2023 641.42 12,446,869.48 26,402 169.98
2024 664.52 12,630,721.60 26,856 194.21
2025 688.50 12,789,961.40 27,318 220.31
2026 712.88 12,973,618.43 27,788 246.00
2027 738.47 13,160,939.71 28,266 272.86
2028 764.91 13,353,745.44 28,752 300.46
2029 792.21 13,554,026.33 29,246 328.77
5.10.3 Break-even selling price analysis
The break-even selling price analysis implies that the lowest selling
price that the company may sell its products. Given a certain amount of units
sold, this is the price where the company will earn a zero profit. Thus, selling
the product for Php 438.99 will make the company profitable.
Table 5.21. Break-even selling price
BREAKEVEN
VARIABLE VOLUME OF
YEAR FIXED COST SELLING
COST PRODUCTION
PRICE
2020 10,390,793.86 36.83 25,838 438.99
2021 12,113,652.24 37.87 26,282 498.78
2022 12,276,957.46 38.85 26,734 498.07
2023 12,446,869.48 39.92 27,194 497.62
2024 12,630,721.60 41.03 27,662 497.64
2025 12,789,961.40 42.15 28,137 496.70
2026 12,973,618.43 43.35 28,621 496.63
2027 13,160,939.71 44.60 29,114 496.65
2028 13,353,745.44 45.88 29,614 496.80
2029 13,554,026.33 47.22 30,124 497.17
5.11 Decision Criteria
5.11.1 Net Present Value
Net present value (NPV) is used in the study to analyze the profitability
of the project. It accounts the time value of money through discounted cash
inflows. NPV is the summation of cash flows divided by the one plus the
discounted rate raise the number of years. The company’s net present value
for the next 10 year project period is Php 25,536,102.27.

5.11.2 Internal Rate of Return
Internal rate of return is used to measure how well the capital
expenditure or investment performs in over time. It is also used to evaluate
the attractiveness of a project or investment. The internal rate of return of the
company is 42.17% which is greater than the 8.5% MARR. Concludes that
the company has the potential to grow and be profitable.
5.11.3 Profitability Index
Profitability index is used to identify the relationship between the costs
and benefits of the project proposed. Profitability index is calculated by
dividing the present value of the future cash flows of the project by the initial
required investment. The company’s computed profitability index is 3.83. If
the profitability index is greater than one and as long as it is not negative, the
project is accepted. Moreover, with profitability index of 3.83 which means
the project is feasible and acceptable.

5.11.4 Return on Investment
Return of investment is a kind of metric used to measure and evaluate
the investment. It is a ratio and sometimes percentage where comparing net
gains to net costs. The company’s Return on Investment is 26.20%.
Table 5.22. Return on Investment
Year ROI
2020 26.20%
2021 13.25%
2022 12.26%
2023 11.78%
2024 10.93%
2025 11.09%
2026 10.74%
2027 10.43%
2028 10.15%
2029 9.88%
5.11.5 Payback Period
Payback period is a time required for the amount invested asset to be
repaid by the net cash flow generated by the investment. Thus, the
company’s payback period is 3 years. This means that the company will
regain its investment in 2020 through its operation. Payback period analysis
is shown below.
Table 5.23. Payback Period
YEAR CASH FLOW CUMULATIVE

2019 (6,663,601.22) (6,663,601.22)
2020 3,199,924.34 (3,463,676.88)
2021 1,409,753.41 (2,053,923.47)
2022 2,824,154.34 770,230.87
2023 2,607,259.70 3,377,490.58
2024 4,232,504.14 7,609,994.72
2025 2,601,427.48 10,211,422.20
2026 4,180,198.95 14,391,621.16
2027 4,771,715.15 19,163,336.30
2028 5,398,483.84 24,561,820.14
2029 6,119,000.76 30,680,820.90
VI.
Appendices/
Annexes
•
Cash Flow
KDT Corporation
Statement of Cash Flows
As of December 31, 2020 to 2029
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
OPERATING ACTIVITIES
net income before tax (1,023,563.78) 3,154,351.15 2,163,426.16 2,807,960.24 3,434,000.67 4,113,797.39 4,866,927.77 5,631,173.02 6,451,859.63 7,319,742.71 8,234,168.39
depreciation - 23,828.69 24,098.64 24,368.60 24,638.55 35,813.32 17,773.36 17,773.36 17,773.36 17,773.36 18,758.81
bad debts expense 48,616.19 2,601.51 2,855.38 2,827.59 3,063.14 3,232.45 3,363.27 3,575.18 3,760.59 3,953.74
(increase)/decrease in accounts receivable - (1,620,539.53) (86,716.97) (95,179.23) (94,252.85) (102,104.75) (107,748.43) (112,108.93) (119,172.71) (125,353.00) (131,791.24)
(increase)/decrease in inventories - - - - - - - - - - -
increase/(decrease) in current liabilities - 1,772,574.60 (872,562.67) 925,037.68 268,746.20 1,333,459.52 (720,329.07) 327,700.41 351,587.85 371,811.08 391,999.21
income taxes paid (842,388.07) (1,030,200.20) (1,234,139.22) (1,460,078.33) (1,689,351.91) (1,935,557.89) (2,195,922.81) (2,470,250.52)
NET CASH GENERATED FROM OPERATING ACTIVITIES (1,023,563.78) 3,378,831.09 1,230,846.66 2,822,654.59 2,605,759.95 4,149,889.42 2,599,777.76 4,178,549.23 4,770,065.42 5,391,811.93 6,046,838.38
INVESTING ACTIVITIES
purchase of property, plant, and equipment - (178,906.75) 178,906.75 1,499.75 1,499.75 72,442.55 1,499.75 1,499.75 1,499.75 1,499.75 69,053.50
sale of property, plant, and equipment 10,172.18 149.98 149.98 149.98 5,172.16 3,108.88
NET CASH USED FOR INVESTING ACTIVITIES - (178,906.75) 178,906.75 1,499.75 1,499.75 82,614.73 1,649.73 1,649.73 1,649.73 6,671.91 72,162.38
FINANCING ACTIVITIES
UNIVERSITY OF SANTO TOMAS
increase in capital 5,466,926.44 - - - - - - - - - -

NET CASH GENERATED FROM FINANCING ACTIVITIES 5,466,926.44 - - - - - - - - - -
total increase/(decrease) in cash 4,443,362.66 3,199,924.34 1,409,753.41 2,824,154.34 2,607,259.70 4,232,504.14 2,601,427.48 4,180,198.95 4,771,715.15 5,398,483.84 6,119,000.76
cash balance, beginning - 4,443,362.66 6,700,307.65 9,640,114.56 14,171,729.40 18,486,449.61 24,284,378.67 28,593,266.65 34,480,926.11 40,960,101.75 48,065,896.11
cash balance, ending 4,443,362.66 6,700,307.65 9,640,114.56 14,171,729.40 18,486,449.61 24,284,378.67 28,593,266.65 34,480,926.11 40,960,101.75 48,065,896.11 55,756,716.90
PAGE
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•
Income Statement
INCOME STATEMENT
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
AMOUNT AMOUNT % AMOUNT % AMOUNT % AMOUNT % AMOUNT % AMOUNT % AMOUNT % AMOUNT % AMOUNT % AMOUNT %
Sales 14,469,102.98 100.00% 15,243,361.67 100.00% 16,093,176.26 100.00% 16,934,719.53 100.00% 17,846,369.06 100.00% 18,808,408.58 100.00% 19,809,381.12 100.00% 20,873,423.17 100.00% 21,992,646.43 100.00% 23,169,353.92 100.00%
Cost of Goods Sold 8,425,981.72 58.23% 8,585,718.15 56.32% 8,746,785.99 54.35% 8,913,878.66 52.64% 9,085,258.15 50.91% 9,260,465.02 49.24% 9,441,213.93 47.66% 9,627,073.80 46.12% 9,817,579.11 44.64% 10,013,690.75 43.22%
GROSS PROFIT - 6,043,121.27 41.77% 6,657,643.52 43.68% 7,346,390.28 45.65% 8,020,840.86 47.36% 8,761,110.90 49.09% 9,547,943.56 50.76% 10,368,167.19 52.34% 11,246,349.37 53.88% 12,175,067.31 55.36% 13,155,663.17 56.78%
Pre-Operating Expense 1,023,563.78

Depreciation Expense 23,828.69 0.39% 24,098.64 0.36% 24,368.60 0.33% 24,638.55 0.31% 35,813.32 0.41% 17,773.36 0.19% 17,773.36 0.17% 17,773.36 0.16% 17,773.36 0.15% 18,758.81 0.14%
Bad Debts Expense 48,616.19 0.80% 2,601.51 0.04% 2,855.38 0.04% 2,827.59 0.04% 3,063.14 0.03% 3,232.45 0.03% 3,363.27 0.03% 3,575.18 0.03% 3,760.59 0.03% 3,953.74 0.03%
Salaries and Employer Contributions Expense 853,866.00 14.13% 2,561,000.00 38.47% 2,561,000.00 34.86% 2,561,000.00 31.93% 2,561,000.00 29.23% 2,561,000.00 26.82% 2,561,000.00 24.70% 2,561,000.00 22.77% 2,561,000.00 21.03% 2,561,000.00 19.47%
Packaging Costs 749,292.83 12.40% 791,014.60 11.88% 832,392.24 11.33% 877,335.80 10.94% 924,653.11 10.55% 973,611.74 10.20% 1,025,926.31 9.89% 1,081,165.70 9.61% 1,138,864.34 9.35% 1,199,983.07 9.12%
Transportation and Delivery 10,825.28 0.18% 11,428.81 0.17% 12,026.46 0.16% 12,673.72 0.16% 13,357.09 0.15% 14,067.81 0.15% 14,823.50 0.14% 15,618.27 0.14% 16,454.07 0.14% 17,336.26 0.13%
Advertising and Promotion 1,155,097.56 19.11% 1,054,211.90 15.83% 1,054,328.20 14.35% 1,054,446.51 13.15% 1,054,566.85 12.04% 1,054,689.26 11.05% 1,054,813.77 10.17% 1,054,940.43 9.38% 1,055,069.26 8.67% 1,055,200.32 8.02%
Research and Development 12,360.00 0.20% 12,801.25 0.19% 13,286.42 0.18% 13,744.80 0.17% 14,239.61 0.16% 14,753.66 0.15% 15,275.94 0.15% 15,824.35 0.14% 16,390.86 0.13% 16,976.02 0.13%
Marketing 31,057.57 0.51% 32,234.65 0.48% 33,346.74 0.45% 34,547.23 0.43% 35,794.38 0.41% 37,061.50 0.39% 38,392.01 0.37% 39,766.44 0.35% 41,186.11 0.34% 42,660.57 0.32%
Supplies Expense 3,326.00 0.06% 3,326.00 0.05% 3,326.00 0.05% 3,326.00 0.04% 3,326.00 0.04% 3,326.00 0.03% 3,326.00 0.03% 3,326.00 0.03% 3,326.00 0.03% 3,326.00 0.03%
Taxes and Licenses 500.00 0.01% 1,500.00 0.02% 1,500.00 0.02% 2,300.00 0.03% 1,500.00 0.02% 1,500.00 0.02% 2,300.00 0.02% 1,500.00 0.01% 1,500.00 0.01% 2,300.00 0.02%
Total Operating Expenses 2,888,770.11 47.80% 4,494,217.36 67.50% 4,538,430.04 61.78% 4,586,840.20 57.19% 4,647,313.51 53.04% 4,681,015.79 49.03% 4,736,994.17 45.69% 4,794,489.74 42.63% 4,855,324.60 39.88% 4,921,494.78 37.41%
NET INCOME before tax (1,023,563.78) 3,154,351.15 52.20% 2,163,426.16 32.50% 2,807,960.24 38.22% 3,434,000.67 42.81% 4,113,797.39 46.96% 4,866,927.77 50.97% 5,631,173.02 54.31% 6,451,859.63 57.37% 7,319,742.71 60.12% 8,234,168.39 62.59%
Income Tax Expense - 946,305.35 15.66% 649,027.85 9.75% 842,388.07 11.47% 1,030,200.20 12.84% 1,234,139.22 14.09% 1,460,078.33 15.29% 1,689,351.91 16.29% 1,935,557.89 17.21% 2,195,922.81 18.04% 2,470,250.52 18.78%
NET INCOME after tax (1,023,563.78) 2,208,045.81 36.54% 1,514,398.31 22.75% 1,965,572.17 26.76% 2,403,800.47 29.97% 2,879,658.17 32.87% 3,406,849.44 35.68% 3,941,821.11 38.02% 4,516,301.74 40.16% 5,123,819.90 42.08% 5,763,917.87 43.81%
PAGE
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•
STATEMENT OF FINANCIAL POSITION
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
AMOUNT % AMOUNT % AMOUNT % AMOUNT % AMOUNT % AMOUNT % AMOUNT % AMOUNT % AMOUNT % AMOUNT %
CURRENT ASSETS 98.16% 98.84% 99.32% 99.58% 99.57% 99.69% 99.78% 99.85% 99.92% 99.85%
Cash 4,443,362.66 6,700,307.65 79.51% 9,640,114.56 84.35% 14,171,729.40 88.41% 18,486,449.61 90.56% 24,284,378.67 92.21% 28,593,266.65 93.04% 34,480,926.11 93.92% 40,960,101.75 94.61% 48,065,896.11 95.18% 55,756,716.90 95.53%
Accounts Receivable - 1,620,539.53 19.23% 1,707,256.51 14.94% 1,802,435.74 11.24% 1,896,688.59 9.29% 1,998,793.33 7.59% 2,106,541.76 6.85% 2,218,650.69 6.04% 2,337,823.40 5.40% 2,463,176.40 4.88% 2,594,967.64 4.45%
Allowance for Bad Debts - (48,616.19) -0.58% (51,217.70) -0.45% (54,073.07) -0.34% (56,900.66) -0.28% (59,963.80) -0.23% (63,196.25) -0.21% (66,559.52) -0.18% (70,134.70) -0.16% (73,895.29) -0.15% (77,849.03) -0.13%
Inventory - - - - - - - - - - -
Input VAT - - - - - - - - - - -
Statement of Financial Position
NON-CURRENT ASSETS 1.84% 1.16% 0.68% 0.42% 0.43% 0.31% 0.22% 0.15% 0.08% 0.15%
Property, Plant, and Equipment - 178,906.75 2.12% 180,406.50 1.58% 181,906.25 1.13% 183,406.00 0.90% 155,626.55 0.59% 155,626.55 0.51% 155,626.55 0.42% 155,626.55 0.36% 106,904.46 0.21% 150,198.97 0.26%
Accumulated Depreciation - (23,828.69) -0.28% (47,927.33) -0.42% (72,295.92) -0.45% (96,934.47) -0.47% (42,547.99) -0.16% (58,971.58) -0.19% (75,395.17) -0.21% (91,818.76) -0.21% (64,392.46) -0.13% (59,968.17) -0.10%
TOTAL ASSETS 4,443,362.66 8,427,309.06 100.00% 11,428,632.55 100.00% 16,029,702.40 100.00% 20,412,709.07 100.00% 26,336,286.77 100.00% 30,733,267.13 100.00% 36,713,248.66 100.00% 43,291,598.24 100.00% 50,497,689.22 100.00% 58,364,066.30 100.00%
CURRENT LIABILITIES 21.03% 7.88% 11.39% 10.26% 13.01% 8.81% 8.27% 7.82% 7.44% 7.11%
SSS, PHIC, and HDMF Premiums Payable - 10,300.63 0.12% 10,300.63 0.09% 10,300.63 0.06% 10,300.63 0.05% 10,300.63 0.04% 10,300.63 0.03% 10,300.63 0.03% 10,300.63 0.02% 10,300.63 0.02% 10,300.63 0.02%
Withholding Tax Payable - compensation - 12,606.87 0.15% 12,606.87 0.11% 12,606.87 0.08% 12,606.87 0.06% 12,606.87 0.05% 12,606.87 0.04% 12,606.87 0.03% 12,606.87 0.03% 12,606.87 0.02% 12,606.87 0.02%
Output VAT - - 0.00% - 0.00% - 0.00% - 0.00% - 0.00% - 0.00% - 0.00% - 0.00% - 0.00% - 0.00%
VAT Payable - 803,361.75 9.53% 877,104.42 7.67% 959,754.03 5.99% 1,040,688.10 5.10% 2,170,208.61 8.24% 1,223,940.43 3.98% 1,322,367.26 3.60% 1,427,749.12 3.30% 1,539,195.28 3.05% 1,656,866.78 2.84%
Income Tax Payable - 946,305.35 11.23% - 0.00% 842,388.07 5.26% 1,030,200.20 5.05% 1,234,139.22 4.69% 1,460,078.33 4.75% 1,689,351.91 4.60% 1,935,557.89 4.47% 2,195,922.81 4.35% 2,470,250.52 4.23%
0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
OWNER'S EQUITY 78.97% 92.12% 88.61% 89.74% 86.99% 91.19% 91.73% 92.18% 92.56% 92.89%
Capital 5,466,926.44 5,466,926.44 64.87% 5,466,926.44 47.84% 5,466,926.44 34.10% 5,466,926.44 26.78% 5,466,926.44 20.76% 5,466,926.44 17.79% 5,466,926.44 14.89% 5,466,926.44 12.63% 5,466,926.44 10.83% 5,466,926.44 9.37%
Retained Earnings (1,023,563.78) 1,187,808.03 14.09% 5,061,694.19 44.29% 8,737,726.36 54.51% 12,851,986.82 62.96% 17,442,105.00 66.23% 22,559,414.43 73.40% 28,211,695.55 76.84% 34,438,457.29 79.55% 41,272,737.19 81.73% 48,747,115.06 83.52%
TOTAL LIABILITIES AND EQUITY 4,443,362.66 8,427,309.06 100.00% 11,428,632.55 100.00% 16,029,702.40 100.00% 20,412,709.07 100.00% 26,336,286.77 100.00% 30,733,267.13 100.00% 36,713,248.66 100.00% 43,291,598.24 100.00% 50,497,689.22 100.00% 58,364,066.30 100.00%
- - - - - - - - - - -
PAGE
178
Table 1.3 NBO Company Shares of Colour Cosmetics: % Valued of 2013-2017
%Retail Value (RSP) Company 2013 2014 2015 2016 2017

Avon Cosmetics Inc 28.6 27.1 24.6 21.2 20.9
L'Oreal Philippines Inc 12.9 13 14.6 15.3 14.7
Ever Bilena Cosmetics Inc 16.3 16.8 16.4 15.4 14.4
HBC Inc 6.9 6.7 6.4 6.3 6.1
Mary Kay Philippines Inc 2.6 2.8 3 3.4 4.1
Estee Lauder Cos Inc 2.9 2 3.2 3.7 3.8
Jemica Cosmetics Mfg Inc 3 3 2.9 2.8 2.7
Primeline Products Philippines Inc - 2.4 2.4 2.4 2.4
Iface Inc 0.1 0.8 1.3 2.2 2.2
Procter & Gamble Philippines 2.5 2.4 2.3 2.2 2.2
Rosa Fiore House Corp 0.9 1.7 1.7 1.9 2
Revlon Inc 2.2 2.1 2.1 2 2
L Beauty Luxury Asia Inc 0.7 1.2 1.3 1.5 1.7
LG Household & Health Care 1.6 1.5 1.5 1.6 1.5
Shawill Corp - - 1.1 1.2 1.3
Tupperware Brands Philippines Inc 1.5 1.4 1.3 1.2 1.1
VMV Group 1.2 1.2 1.1 1.1 1
Chic Centre Corp 0.9 0.9 0.8 0.8 0.7
Vibelle Mf Corp 0.7 0.7 0.7 0.7 0.7
Allure Asia Inc 0.1 0.4 0.5 0.5 0.6
Unilever Philippines Inc 0.6 0.7 0.6 0.6 0.6
Del Pharmaceuticals Inc 0.5 0.5 0.5 0.5 0.5
American International Industries 0.5 0.5 0.5 0.4 0.4
Tony Moly Philippines 0.1 0.3 0.3 0.3 0.3
Shiseido Co Ltd 0.3 0.3 0.3 0.3 0.3
Natura & Co - - - - 0.3
Johnson & Johnson (Philippiness) Inc 0.3 0.3 0.2 0.2 0.2
Consnova GmbH 0.2 0.4 0.3 0.2 0.2
Kateensosn Industries 0.1 0.1 0.1 0.1 0.1
JVS Worldwide Inc 1 0.9 0.4 0.3 -
Others 9.9 7.1 6.7 8.9 10.4
Total 100 100 100 100 100
Source: Euromonitor International from official statistics, trade associations, trade
press, company research, store checks, trade interviews, trade sources

4.1.2 Job Analysis
Production & Quality Assurance Manager
Position: Production & Quality Assurance Manager
Position Code: 001
Department: Manufacturing & Quality Assurance Department
Location: Main Factory
Basic Function:
The production manager is responsible in leading the whole
production team including the quality assurance team to produce a
product in compliance to with all regulatory requirements to meet
existing and future demands.
Principal Functions And Responsibilities:
a. Accomplishes manufacturing staff results by communicating job
expectations; planning, monitoring, and appraising job results;
coaching, counseling, and disciplining employees; initiating,
coordinating, and enforcing systems, policies, and procedures.
b. Maintains staff by recruiting, selecting, orienting, and training
employees; developing personal growth opportunities.
c. Maintains work flow by monitoring steps of the process; setting
processing variables; observing control points and equipment;
monitoring personnel and resources; studying methods; implementing
cost reductions; developing reporting procedures and systems;
facilitating corrections to malfunctions within process control points;

initiating and fostering a spirit of cooperation within and between
departments.
d. Completes production plan by scheduling and assigning
personnel; accomplishing work results; establishing priorities;
monitoring progress; revising schedules; resolving problems; reporting
results of the processing flow on shift production summaries.
e. Maintains quality service by establishing and enforcing
organization standards.
f. Ensures operation of equipment by calling for repairs;
evaluating new equipment and techniques.
g. Provides manufacturing information by compiling, initiating,
sorting, and analyzing production performance records and data;
answering questions and responding to requests.
h. Creates and revises systems and procedures by analyzing
operating practices, record-keeping systems, forms of control, and
budgetary and personnel requirements; implementing change.
i. Maintains safe and clean work environment by educating and
directing personnel on the use of all control points, equipment, and
resources; maintaining compliance with established policies and
procedures.
j. Maintains working relationship with the union by following the
terms of the collective bargaining agreement.

k. Resolves personnel problems by analyzing data; investigating
issues; identifying solutions; recommending action.
l. Maintains professional and technical knowledge by attending
educational workshops; reviewing professional publications;
establishing personal networks; benchmarking state-of-the-art
practices; participating in professional societies.
m. Contributes to team effort by accomplishing related results as
needed.
Key Organizational Relationship:
Supervises: Plant Workers
Skills and Traits:
a. Ability to work independently and meet quota-level goals.
b. Excellent communication skills, with the ability to speak and
listen, as well as clearly expenses their ideas and they will display
professionalism at all times.
c. Must possess strong leadership skills, be self-motivating,
driven, enthusiastic and customer focused.
d. Must be knowledgeable in production and capacity tools
Accounting and Budgeting Officer
Position: Accounting and Budgeting Officer
Position Code: 002
Department: Finance Department

Location: Head Office
Basic Function
The accounting and budgeting officer is responsible in maintaining all
accounting records and preparing financial reports of the company and
assist the bookkeeper.
Principal Functions and Responsibilities
a. Interpret budget directives and establish policies for carrying out
directives.
b. Compile and analyze accounting records and other data to
determine the financial resources required to implement a program.
c. Testify before examining and fund-granting authorities,
clarifying and promoting the proposed budgets.
d. Analyze monthly department budgeting and accounting reports
to maintain expenditure controls.
e. Direct the preparation of regular and special budget reports.
f. Consult with managers to ensure that budget adjustments are
made in accordance with program changes.
Key Organization Relationships
Supervises: N/A
E. Qualification Guide
Education: Any business related course
Experience: at least 2 years of experience in Finance

Skills And Traits:
a. Ability to work independently and meet quota-level goals.
listen, as well as clearly express their ideas and they will display
c. Must possess strong leadership skills, be self-motivating, driven
and, enthusiastic.
d. Knowledge of computer-based accounting systems.
e. Basic understanding of finance and financial reporting.
f. Knowledge of the conceptual foundations and driving force of
the Society.
g. Demonstrated ability to organize and plan effectively.
h. Demonstrated ability to produce results through others while
generating positive support
Sales and Marketing Manager
Position: Marketing and Sales Department Manager
Position Code: 003
Department: Sales and Marketing Department
Location: Head Office/Main Factory
Basic Function:
Supervises the procedures as a whole and is responsible for the
coordination of the Sales and Marketing decisions.

Principal Functions and Responsibilities:
A. Responsible in the overall performance of Sales and Marketing
Department
B. Responsible in the coordination of every person in the
department
C. Develops and executes overall strategic plan for the Sales and
Marketing Department
D. Prepares annual budget for the department
E. Reviews and analyses sales and marketing performance
F. Controls the performance of the department
G. Reports department’s sales and marketing performance to the
owners.
Key Organizational Relationship:
Supervises: Sales Representative
Qualification Guidelines:
Education: Bachelor’s Degree in Marketing or any business
related course
Experience: at least 2 years’ experience in sales and marketing
Skills and Traits:
a. Financial Planning and Strategy, Marketing Concepts,
Positioning, People Management, Territory Management, Sales

Planning, Competitive Analysis, Understanding the Customer, Product
Development, Client Relationships, & Creative Services
listen as well as clearly express their ideas
c. Ability to make swift decisions, work through stressful situations
and solves problems quickly.
d. Effective management and supervising skills
Sales Representative
Position: Sales Representative
Position Code: 004
Department: Marketing and Sales Department
Basic Function:
Responsible for showing customers what the company is
offering and for selling the product.
Principal Functions And Responsibilities:
A. Identify business opportunities by identifying prospects and
their position in the industry
B. Identifies business opportunities by identifying prospects and
evaluating their position in the industry; researching and analyzing
sales options.
C. Sells products by establishing contact and developing
relationships with prospects; recommending solutions.

D. Maintains relationships with clients by providing support,
information, and guidance; researching and recommending new
opportunities; recommending profit and service improvements.
E. Identifies product improvements or new products by remaining
current on industry trends, market activities, and competitors.
F. Prepares reports by collecting, analyzing, and summarizing
information.
G. Maintains quality service by establishing and enforcing
organization standards.
H. Maintains professional and technical knowledge by attending
educational workshops; reviewing professional publications;
establishing personal networks; benchmarking state-of-the-art
practices; participating in professional societies.
I. Contributes to team effort by accomplishing related results as
needed.
Key Organizational Relationship
Reports to: Sales & Marketing Manager
Supervises: N/A
Qualification Guidelines
Education: College Graduate
Experience: Has sales experience of at least 1 year
Skills and Traits:
a. Ability to work independently and meet quota-level goals

listen, as well as clearly express their ideas and they will display
c. Excellent negotiating skills
Plant Workers
A. Job Identification
Position: Plant Worker
Position Code: 005
Department: Production
Location: Main Factory
B. Basic Function
A production worker cleans and operates factory equipment, works on
an assembly line, puts together and inspects products, and adheres to
all factory safety guidelines and standards
C. Principal Functions and Responsibilities
a. Starts assembly and production machinery at beginning of shift.
b. Monitors equipment to ensure that products are being
assembled properly.
c. Makes sure that workstation is clean and free of hazardous
materials.
d. Addresses problems with production equipment and machinery
and fixes them as needed.

e. Cleans equipment.
f. Assembles product parts by hand.
g. Uses power tools to solder, weld, drill, and attach parts.
h. Observes and removes faulty product parts from assembly line.
i. Inspects assembled products to ensure they are up to quality
standards.
j. Affixes labels, company logos, and other exterior details to
products.
k. Packs up completed products and prepares them for shipment.
l. Keeps factory floor clean.
m. Unloads, organizes, and stocks shipments.
n. Adheres to all safety guidelines dictation the production and
handling of materials in the factory.
o. Ensures that all production deadlines are met.
p. Reports issues or problems with production to immediate
supervisor.
D. Key Organization Relationships
Reports to: Production Manager
E. Qualification Guide
Education: At least high school graduate
Experience: At least 1 year experience in factory or warehouse
setting
Skills and Traits:
a. Demonstrates ability to interpret equipment gauges and
monitors on factory equipment.
b. Possesses knowledge of the structure and function of
production equipment.
c. Is able to identify problems or malfunctions with machinery and
equipment.
d. Demonstrates analytical thinking and problem-solving skills
necessary to troubleshoot production issues.
e. Pays close attention to detail.
f. Exhibits ability to work cautiously but efficiently in potentially
hazardous conditions.
g. Is familiar with all factory safety procedures and guidelines.
h. Demonstrates ability to use power tools safely and effectively.
i. Works efficiently and manages time effectively.
j. Possesses physical strength and stamina required to stand,
walk, and lift for long periods of time.
k. Possesses physical dexterity necessary to assemble small and
delicate product parts.
Janitor
Position: Janitor
Position Code: 006

Department: Human Resource And Development Department
Location: Head Office/ Main Factory
Basic Function:
The Janitor is responsible for cleaning the factory and the
office. Also, serves as the messenger of the company.
a. Gathers and disposes of rubbish and waste materials by hand
or with the use of powered equipment
b. Observes appearances and conditions of premises and
equipment, reports needed repairs, safety hazards, or conditions
requiring outside vendor services.
c. Dusts such items as blinds, furnitures, file cabinets, and
windowsills.
d. Scrubs, strips, sanitizes, waxes and buffs floors
e. Polishes furniture, metal work and chrome
f. Maintains inventory of all cleaning and toiletry supplies as
needed
g. Loads and unloads supplies,and moves heavy furniture and
equipment.
h. Washes walls, ceilings. Woodwork, windows, mirrors, and
fixtures
i. Replaces light bulbs and fuses
j. Serves as messenger
k. Performs related work as assigned
Reports: Owner
Coordinates: Security Guard
Education: At least Elementary Graduate
Experience: No experience needed
Skills and Traits:
a. Knowledge of the qualities and uses of various cleaning,
sanitizing, stripping, and waxing compounds.
b. Knowledge of occupational hazards and safety rules and
regulations.
Security Guard
Position: Security Guard
Position Code: 007
Department: Human Resource And Development Department
Location: Head Office/ Main Factory
Basic Function:
The Security Guard is responsible for ensuring the security of
the company.

a. Secures premises and personnel by patrolling property;
monitoring surveillance equipment; inspecting buildings, equipment,
and access points; permitting entry.
b. Obtains help by sounding alarms.
c. Prevents losses and damage by reporting irregularities;
informing violators of policy and procedures; restraining trespassers.
d. Completes reports by recording observations, information,
occurrences, and surveillance activities; interviewing witnesses;
obtaining signatures.
e. Locks and unlocks buildings
f. Receives visitors and clients
Reports to: Owner
Coordinates: Janitor
Education: At least Elementary Graduate
Experience: At least 2 years of experience
Skills and Traits:
a. Knowledge of building and property security
procedures
b. Ability to work flexible hours
c. Keen observer
d. Ability to assess emergency situations and
respond to it quickly
VII.
References
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https://www.avon.ph/avon-ph/about-us.html
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Medication Association.
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Pilipinas: http://www.bsp.gov.ph/statistics/spei_new/tab34_inf.htm
Bangko Sentral ng Pilipinas. (2018). Bangko Sentral ng Pilipinas. Retrieved
from Reference Exchange Rate Bulletin:
http://www.bsp.gov.ph/statistics/statistics_exchrate.asp
Chaudhri, S. K., & Jain, N. K. (2009). History of Cosmetics. Asian Journal of
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Coffee, P. (2014, June 19). Ogilvy Cannes Study: Behold the Power of Word of
Mouth. Retrieved from Adweek: https://www.adweek.com/digital/ogilvy-
cannes-study-behold-the-power-of-word-of-mouth/
Euromonitor International. (2018). Colour Cosmetics in the
Philippines.
Ever Bilena Philippines. (2018). About Ever Bilena Philippines. Retrieved from
Ever Bilena Philippines: http://everbilena.com.ph/about/
Gray, A. (2014, March 27). The Age When British Girls Start Wearing Makeup
Will Surprise You. Retrieved from Marie Claire:
https://www.marieclaire.co.uk/news/beauty-news/the-age-when-british-
girls-start-wearing-makeup-will-surprise-you-1-86138
Harter, S. (1999). The Construction of the Self: A developmental perspective.
New York, US: Guilford Press.
Jarry, J., & Ip, K. (2005). The effectiveness of stand-alone cognitive-behavioural
therapy for body image: A meta-analysis. Elsevier.
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strategy-61428.html
Lambert, T. (2018). Local Histories. Retrieved from A Brief History of Cosmetics
and Makeup: http://www.localhistories.org/cosmetics.html
Lee, H., & Oh, H. (2018). The Effects of Self-Esteem on Makeup Involvement
and Makeup Satisfaction among Elementary Students. Archives of
Design Research, p. Vol. 31 No. 2.
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from L'Oréal Philippines: http://www.loreal.com.ph/group/company-
overview/key-figures.htm
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cosmetics on the self confidence level among young college women.
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Self-Esteem. Retrieved from https://www.miuc.org/importance-of-
positive-self-esteem/
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Principles and Applications. Yokohama, Japan: Kishi Kasei Co.,LTD.

Nielsen. (2012, August). Consumer trust in online and mobile advertising grows.
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https://www.reuters.com/brandfeatures/venture-capital/article?id=30351
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https://psa.gov.ph/content/population-national-capital-region-based-
2015-census-population-0
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grows-60-percent-second-quarter-2018
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UNIVERSITY OF SANTO TOMAS PAGE 1

beautiful (Nakamura, 2017).

The growth of the cosmetics industry has significantly increased in the

forecasted to grow more for the next 5 years.

Figure 1.1 Sales of Colour Cosmetics in Philippines

Makeup consists of several products - foundation, powder, eye makeup,

makeup products, people use makeup brushes.

There is a wide range of makeup products, therefore corresponds a

wide range of makeup brushes. This leads to inconvenience of having to fit

place to another, especially for people on-the-go.

The researchers proposed a 3-in-1 stackable makeup brush which is

convenient, portable and lightweight. According to the study from Euromonitor

Table 1.1 Sales of Colour Cosmetics by Category

as it is no longer exposed unlike the design of standard brushes.

This study shall benefit users of cosmetic products, as it aims to provide

convenience to them through the proposed product’s space saving features

and functionalities. In addition, this study aimed to prove the marketability,

be used as basis in pursuing the project for implementation or future business.

1.1.2 Name of the Firm

Figure 1.2 Logo of the Company

The KDT Corporation is created to determine the feasibility of

the National Capital Region.

1.1.3 Brief Description of the Project

Makeup brushes and applicators play a key role in the success of

cosmetic industry. It is increasingly important to have a serviceable collection

of makeup brushes to anyone who uses makeup on a regular basis. The

proposed product by the proponents is a compact & retractable 3-in-1 makeup

is needed for perfectly blended face makeup results: a foundation brush,

powder brush, and blush brush.

1.2 Project Background and History

1.2.1 Project Proponents

Five proponents constitute the KDT Corporation and shall function as

and a professor from the Industrial Engineering Department of the University

of Santo Tomas, namely: Korina Sofia S. Elamparo, Kate Ingrid T. Ferrer,

Trisha Lyn S. Jalandoni, Danica P. Liclican, and Engr. Charmina Lou C.

1.2.2 Type of Business Organization

The KDT Corporation have decided to run a corporation to be able to

aims to contribute greatly to the cosmetics industry through makeup brushes

and possible cosmetic products in the future.

1.2.3 Location of the Business

In manufacturing the product, the proponents decided to buy its own

property where the company’s manufacturing plant may be built. The

manufacturing plant would be located at San Miguel, Bulacan. This location

which is ideal for a manufacturing plant.

1.3 Industry Analysis

time of the Homo sapiens when cavewomen discovered natural resources

of science of perfumery in Egypt. From the use of a cleansing cream made of

and prevention of eye infections.

brushes are used by maidservants to apply makeup to women of a certain

rank. Makeup brushes were said to be invented by Egyptians, as a bronze

As the price of mirrors declined, so did makeup brushes. The Japanese,

moved to other areas of Asia, mainly Korea, Taiwan, and China.

married brides named Ubtan, to achieve a fair and glowing skin.

The rise of global cosmetics evolved, Japanese used crushed safflower

higher classes which has the lightest-looking skin. As a result, European

made easy. Several people continued inventing cosmetic products at home.

Multinational corporations invested on advertising and started using women’s