Case Study 1: Malabon Marketing, Inc.

I. Point of View
Luis Tiongson, 24-year-old production manager of Malabon Marketing, Inc. He felt that each of
his two brothers had compelling arguments on his side.

II. Statement of the Problem (or Objective)

Debating from which product should they make a prior decision on which they expand their candle-
making business or expand their selling and distribution of food product lines

III. Areas of Consideration

In May 1981, the surviving heirs of the founder of Malabon Marketing, Inc. should make a
decision for the company’s future and their individual fortunes. Arturo Tiongson, 38, the eldest of the
three and company president, was arguing for expansion of the candle-making business, via
development of decorative candles, which were premium-priced, high-profit items. Rodolfo Tiongson,
35, vice president and treasurer, was in favor of expanding their selling and distribution of food product
lines and wanted to keep its candle-making business to its current level. The youngest brother, Luis, 24,
production manager was uncertain because he felt that each of his two brothers had compelling
arguments on his side. Malabon Marketing, Inc. was founded fifteen years ago by Mr. Lee S. Tiongson, a
salesman working for a Chinese-Filipino manufacturer of soy sauce. Mr. Tiongson bought a second-hand
pitch shot display board and made arrangements to be appointed as a separate soy sauce dealer in his
locality. Upon his retirement, he formed Malabon Marketing, Inc. and continued selling soy sauce.
Gradually, the company added other product lines and expanded its territory. Over a span of seven
years, it added patis and bagoong, laundry soap, sugar, detergents, canned meat, sardine s, biscuits,
candies, coffee, and cocoa to its line of products by applying as electrical distributor/wholesaler for
various manufacturers. Soon it had twelve delivery panels and a corresponding team of salesmen and
merchandisers; it was covering part of Metro Manila, Bulacan, Pampanga and Tarlac, as well as Laguna
and Batangas in Central and southern Luzon. In its seventh year, Mr. Tiongson started experimenting
with the manufacture of candles. By 1978, the candle business was outselling the grocery product line.

IV. Alternative Courses of Action

 Pursue the expansion of the candle-making business
Strengths Weaknesses Opportunities Threats
-The company has been - possibility of high - opportunities to -Other companies
manufacturing candles debt make a high profit that have mastered
since 1973 the art of decorative
- lack of knowledge to - chances to increase
candle-making and
-Gradual increase in sales produce and sell about the company’s profit
have been selling
profit annually their product margin by 30-40
percent them for years
 - potential
competitor for candle
products

 Undertake the expansion of grocery products distribution business

Strengths Weaknesses Opportunities Threats
-Long term experience in - limited funds -The company could -potential competitor
business industry gain more profit in the for product lines
expansion of grocery
-Expertise of the member product lines.

-Continuous increase in - can last long in long

sales profit term business

 The top management should analyze the situation carefully of what product line should
undertake expansion
Strengths Weaknesses Opportunities Threats
-The top management -Conflict in decision -If the company - wrong decision
have knowledge of the making expands the right making
whole situation and product line, they
would carefully analyze it could gain more profit
since it is their own
corporation and their - secure the company’s
decision would affect the future and their own
company and their individual fortunes
individual fortunes

 Hiring a consultant to give an expert opinion

Strengths Weaknesses Opportunities Threats
- can provide significant Focusing too much on -if the company -wrong decision
value to the business and details and not enough expands the right making
offer tips for choosing the on the big picture product line using the - cost overruns
right one. opinion of the
Slow decision-making consultant, they could
- professionals at their when it comes to gain more profit
work handling important or
big problems brings benefits of
Creative thinking learning valuable
Inability to fully insights from
Problem solving consider other consultants who know
people’s thoughts and exactly what you need
Collaboration of all job feelings when making to know.
 levels decisions

Credibility Trouble persuading

and convincing others

V. Recommendation
After considering all the alternatives, We recommend the decision of the action that we
believe that must do for the future of their company is to pursue their grocery product line expansion
rather than expanding on their candle-making business. Based on the guideline for market-oriented
management, salesperson should manage for profitability, not the sales volume. High sales volume does
not always imply high earnings or high income.

Although their candle business gives more sales volume than their grocery lines, as Rodolfo
Tiongson the vice president of the company opposed for pursuing in expanding the candle-making
business he also said that they only succeeded in candle business mainly because it fitted in very nicely
with their product lines however, they don't know anything about it. They don’t know on how to
produce, sell and they don’t even know if this business could give them a profit or not. At least if they
stick to their first business which is the grocery product line they can ensure that there is a continuous
profit because their business provide basic commodities which is main necessities of every consumer.
Slowly but definitely.