MARKETING ASPECT

I. Industry Profile

Agriculture remains a significant industry in the Philippine economy. It employs 25.8% of

Filipinos while contributing 10% to the Gross Domestic Product. Most of this output comes
from agribusiness, which accounts for 70% of the total agricultural output.

Farming remains as a major industry in Gapan City with rice as its main agricultural produce. As
of October 31, 2021, Gapan City has a farming area of 10,489.49 ha which is broken down as
follows – Rice with 8,492.29 ha, Corn with 197.20 ha and other high value crops with 1,800 ha.
Suppliers of farming supplies in the city are usually in the form of cooperatives and large-scale
traders.

Similar to other commodity markets, the demand and supply for farming supplies is directly
affected by decisions by farmers, manufacturers and the government. It should also be noted
that the demand for farming supplies is indirectly affected by prices of inputs, transportation
costs, natural causes and technological advances.

II. Description and Uses of the Product

Kasaka Agri-Supply Enterprise is a merchandising business which will sell farming supplies to
ensure maximum harvest yield for farmers in Gapan City. It will offer the following products, as
can be gleaned in the following table.

Products Description
Vegetable Rice Seedlings
Seed/seedlings
There are two major types of seedlings to be offered, namely, hybrid
and inbred rice. Inbred rice is a cross between two or more different
varieties and subsequent selection through several cycles of self-
pollination or inbreeding. Hybrid rice is a cross between two
genetically distinct rice parents.

Corn Seeds

Yellow corn, the most common type of corn produced in Nueva Ecija,
will be offered for sale.

Other High-value Crops

Kasaka Agri-Supply Enterprise will also sell other high-value seeds,

such as tomatoes, calamansi, red peppers, papayas.
 Products Description
Fertilizers Kasaka Agri-Supply Enterprise will sell inorganic fertilizers subject to
the permit granted by the Fertilizer and Pesticide Authority.
Complete

Also called 14-14-14, this fertilizer has equal percentages of nitrogen,

phosphate, and potassium.

Urea

Urea Fertilizer, 46-0-0 is the most important nitrogenous fertilizer in

the market. The main function of Urea fertilizer is to provide the
plants with nitrogen to promote green leafy growth and make the
plants look lush.

Ammonium Phosphate

Usually labeled as 16-20-0 fertilizer, it helps encourage and maintain

leafy, bright green turf and grass.

Pesticides Herbicide

These are agents or killing or inhibiting the growth of unwanted

plants, such as weeds, invasive species, or agricultural pests.

Insecticide

Chemicals used to control insects by killing them or preventing them

from engaging in undesirable or destructive behaviors.

Molluscicide

Pesticides which kill destructive golden snail (kuhol) and other

mollusks.

Basic Farming Tools Basic farming tools such as cutlass, winnowing basket and others will
be sold.

III. Consumer Behavior

Consumer behavior on the use of farming supplies in Gapan City is considered cyclical and
predictable due to the nature of the produce. The farmer’s purchasing decision is based on the
farming supply needed at a given period during a cropping season. Gapan City’s farmlands have
extensive irrigation system, hence, two cropping seasons occur annually. However, the quantity
of farming supplies fluctuate depending on the supply price and on the weather condition in
the city.

Production peaks occur during December – April. The other season with lesser harvest yield
happens at June – October. Sometimes, farmers plant watermelon and upo (bottle gourd) on
farmlands during May, just before the start of the rainy season.

IV. Demand Analysis

Analyzing the demand for farming supplies in Gapan City can be determined through the
farmers’ purchasing behavior at different points on a cropping season. This is presented in the
next table.

Farming Agricultural supply

Phase Farming Activity
Period purchased and consumed

3 days Pesticide Pre-Planting Spraying molluscicide

before and other pesticides on
plantation cultivated land.
Seedling Seedlings Planting Plantation of seedling
plantation on cultivated land.
7 days after Insecticide Planting Spraying insecticide on
plantation newly-planted
seedlings.
Fertilizer Planting Application of fertilizer
on the newly-planted
seedlings.
15 days Fertilizer Planting Application of fertilizer
after on the newly-planted
plantation seedlings.
21 days Fertilizer Growing Application of fertilizer
after on the growing crop.
plantation
1 month Insecticide Growing Spraying insecticide on
after the growing crop.
plantation
2 ½ months Fertilizer Growing Application of fertilizer
after on the growing crop.
plantation
3 months Insecticide Reproduction Spraying insecticide
and herbicide on
yielding crops.
V. Historical Demand/Historical Data

Based from the available data on the study conducted by the Bureau of Agricultural Statistics
for year 2006, the historical demand for agricultural supplies in the province of Nueva Ecija and
in Central Luzon, itemized per agricultural supply, is as follows:

Quantity
Supply
Rice Corn
Seedling Across farm types in Nueva Ecija, use For yellow corn, the seed usage was
of hybrid seeds as planting material at 20.87 kilograms per hectare and. By
averaged 25.26 kilograms per ha. seed type, hybrid corn seeding rate is
at 20.45 kilograms per ha and modern
In irrigated farms, use of farmers’ OPV at 23.57 kilograms per ha.
seeds and certified seeds averaged
156.37 kilograms and 106.73 kilograms
per ha, respectively.

Fertilizer Farmers in Nueva Ecija reported
application of solid inorganic fertilizer
at 336.50 kilograms per ha. The most
common grade of fertilizer applied was
Complete (14-14-14) at 138.67
kilograms per ha and Urea (46-0-0) at
116.49 kilograms per ha.
Corn farmers in Central Luzon were
the heaviest users of organic
fertilizers averaging 55.48 kilograms
per ha. Use of inorganic fertilizers
averaged at 414.51 kilograms per ha.

By seed type in Nueva Ecija, hybrid

seeds required 365.56 kilograms per
ha of solid inorganic fertilizers while
certified seeds required 341.37
kilograms per ha. Farms planted to
farmers’ seeds utilized 299.75
kilograms per ha of solid inorganic
fertilizers.

Farmers in Nueva Ecija were heavy

users of nitrogen fertilizer than
phosphoric acid and water soluble
potash. In irrigated farms across seed
types, application of nitrogen averaged
87.87 kilograms per ha. Application of
phosphoric acid and water soluble
potash averaged 30.99 kilograms and
21.86 kilograms per ha, respectively.
 Quantity
Supply
Rice Corn

Pesticides In Nueva Ecija, irrigated palay farmers On the average, 0.03 kilogram of solid
across seed types applied an average pesticides and 1.56 liters of liquid
of 1.21 kilograms of solid pesticides pesticides per hectare were used by
and 1.60 liters of liquid type per ha. corn farmers.

VI. Estimation of Past and Present Demand

The estimation of past and present demand can be obtained from the average consumption by
farmers for farming supplies based on the 2006 study conducted by the Bureau of Agricultural
Statistics scaled on the farming area of Gapan City, as illustrated in the following table. Data is
presented per cropping season.

Rice
Supply Consumption per ha Farming Area Total Quantity Bags/Bottles
Seedling1
Hybrid 25.26 kgs 8,492.29 214,515.25 42,904
Certified 156.37 kgs 8,492.29 1,327,939.39 33,199
Inbred 106.73 kgs 8,492.29 906,382.11 22,660
Fertilizer2    
Complete 138.67 kgs 8,492.29 1,177,625.85 23,553
Urea 116.49 kgs 8,492.29 989,266.86 19,786
Nitrogen 87.87 kgs 8,492.29 746,217.52 14,925
Phosphoric 30.99 kgs 8,492.29 263,176.07 5,264
Soluble potash 21.86 kgs 8,492.29 185,641.46 3,713
Pesticide    
Solid 1.21 kgs 8,492.29 10,275.67 10,276
Liquid 1.60 ls 8,492.29 13,587.66 13,588
Farming Tools 1 pc 8,492.29 8,492.29 8,493
1
Based on 40-kilogram seedling per sack.
2
Based on 50-kilogram fertilizer per sack

Corn
Supply Consumption per ha Farming Area Quantity Bags/Bottles
Seedling1
Hybrid 20.45 197.20 4,032.74 101
Modern OPV 23.57 197.20 4,648.00 117
Fertilizer2  
Organic 55.48 197.20 10,940.66 219
 Inorganic 414.51 197.20 81,741.37 1,635
Pesticide    
Solid 0.03 197.20 5.92 6
Liquid 1.56 197.20 307.63 308
Farming Tools 1 pc 197.20 197.20 5
1
Based on 40-kilogram seedling per sack.
2
Based on 50-kilogram fertilizer per sack

VII. Projected Demand

Given the wide acceptance and brand variety of farming supplies use for farming, the product
life cycle is said to be in the maturity stage. Projected demand for farming supplies in Gapan
City is estimated based on the actual usage during a cropping season of rice and corn as per
interviews conducted by the researchers. Other high value crops are estimated to be at 10% of
demands for rice.

Rice
Bags/Bottles
Supply Consumption per ha Farming Area Total Quantity
(in pieces)
Seedling
Hybrid 20 8,492.29 152,861.22 30,573
Inbred 160 8,492.29 1,358,766.40 271,754
Fertilizer  
Complete 600 8,492.29 5,095,374.00 101,908
Urea 200 8,492.29 1,698,458.00 33,970
Soluble potash 1 8,492.29 8,492.29 170
Pesticide
Solid 1 8,492.29 8,492.29 8,493
Liquid 1.5 8,492.29 12,738.44 12,739
Farming Tools 1 8,492.29 8,492.29 8,493

Corn
Bags/Bottles
Supply Consumption per ha Farming Area Quantity
(in pieces)
Seedling
Hybrid 20 197.20 3,944.00 789
Fertilizer    
Organic 60 197.20 11,832.00 237
Inorganic 420 197.20 82,824.00 1,657
Pesticide    
Solid 0.05 197.20 9.86 10
Liquid 1.5 197.20 295.80 296
 Farming Tools 1 197.20 197.20 198
VIII. Supply Analysis

The supply for fertilizers and pesticides is regulated by the Fertilizer and Pesticide Authority.
Only accredited manufacturers, distributors and sellers by the organization are allowed to
engage in the sale of these products. Based on September 16, 2020 data from the FPA
Handbook, there are eight accredited dealers of fertilizers and pesticides, among other farming
supplies in Gapan City, Nueva Ecija. These are mostly agricultural cooperatives except those
that are involved with large scale trading.

Unsatisfied demand for farming supplies in Gapan is obtained from nearby towns (San
Leonardo, San Isidro, Peñaranda and San Miguel, Bulacan). Supply chain as regards to delivery
of fertilizer and other agro-chemicals is considered well-established and dealers often obtain
products to resell from distributors within Nueva Ecija.

IX. Projected Supply

Farmers are currently facing problems on rising fertilizer prices driven by the combination of
growing global demand and decreasing supply due to the COVID-19 pandemic. In response to
this, the Department of Agriculture is eyeing a suggested retail price on fertilizer costs, so as to
soften the impact to the farmers. Other supplies are expected to be enough in the absence of
natural calamity and additional externalities.

Given the location of the accredited dealers in Gapan City, the demands satisfied by the existing
supplies is around 95% of the projected demands.

X. Demand and Supply Consolidation

Comparison of the historical and projected demand shows that there is a rising need for
farming supplies in Gapan City. Meanwhile, it was noted that supply, while, facing increasing
input prices remains stable. Accredited dealers and distributors provide 95% of the existing
supply of farming goods while the remaining 5% are obtained from nearby towns.

That being said, it is established that there is still untapped demand Kasaka Agri-Supply
Enterprise can capture along with existing market currently catered by competitors in Gapan
City.

XI. Competitors

The following are considered competitors of Kasaka Agri-Supply Enterprise based on the list of
accredited dealers fertilizers and pesticides by the Fertilizer and Pesticide Authority. Moreover,
it should be noted that these establishments also sell seedlings and other farming supplies,
making these direct competitors of Kasaka Agri-Supply Enterprise.
 Competitor
Bagong Silang Primary
Multipurpose Cooperative
Divina Pastora MPC
JMO Multi-Purpose Cooperative
Parcutela, MPC
Tupad Pangarap Multi-Purpose
Cooperative
V. Del Fonso Trading
VM Agro Products
WalterMart, Handyman
Address
Bagong Silang, Kapalangan, Gapan
City
Mangino, Gapan City
Malimba, Gapan City
Parcutela, Gapan City
Mabuga, Gapan City
Maharlika Highway, Sto. Nino
San Roque, Gapan City
Bayanihan, Gapan City

XII. Market Share

Examining the product life cycle of farming supplies in Gapan City indicates that these are
currently in between the growth and maturity stage. Sales peak as these product reach market
saturation, and competition becomes increasingly fierce. Nueva Ecija, the Rice Granary of the
Philippines, has already many dealers and distributors that sell farming supply to the farmers.

Kasaka Agri-Supply Enterprise estimates to capture 3% of the total market for farming supplies.

XIII. Purchases

To obtain a stable supply chain on buying and reselling farming supplies, Kasaka Agri-Supply
Enterprise will establish networks among distributors of farming supplies in Nueva Ecija. It
intends to maximize the economies of scale by lowering the cost of storing and ordering
inventories. This is done by buying in bulk based on the estimated monthly sales and a safety
stock of 10% to buffer against sudden demands.

XIV. Projected Purchases

Projected purchases of Kasaka Agri-Supply Enterprise for the first year of its operations are
enumerated in the following table.

Estimated Purchase
Farming Supply Buffer Stock
Demand Requirement
Rice
Seedling      
Hybrid
Farmer's
 Estimated Purchase
Farming Supply Buffer Stock
Demand Requirement
Fertilizer
Complete
Urea
Soluble potash
Pesticide
Solid
Liquid
Farming Tools
Corn
Seedling      
Hybrid
Fertilizer
Organic
Inorganic
Pesticide
Solid
Liquid
Farming Tools

As discussed earlier, there are two cropping seasons in Gapan City annually. The maximum
projected purchase will occur on the months of December to April. Meanwhile the cropping
season for June to October may require less agricultural supplies due to lower yield and the
existence of natural calamities. Storage of high-risk goods such as fertilizers and pesticides are
also considered in the computation of the projected purchases.

XV. Marketing Strategy/Market planning/ Market Segmentation

Marketing Strategy

The market strategy of Kasaka Agri-Supply Enterprise will aim to capture customers of existing
dealers, and those who buy farming supplies outside Gapan City. For merchandising entities in
between growth and maturity stage of the product life-cycle, the marketing strategies will
center on the following:

 Offering farming supplies at a lower price with significant promotion

 Offering sales discounts and free delivery to buyers of large volumes
 Strengthening online presence
 Creation of customer-loyalty program
  Partnership with many suppliers to avoid disruptions and cope with growing demand
 Focusing on differentiation of delivery services as compared to existing dealers
 Winning over competitor’s customers
 Tapping unsatisfied demands

Market Planning

Kasaka Agri-Supply Enterprise aims to capture 10% of the total market for farming supplies in
Gapan City, Nueva Ecija on its initial year of operations. Since the city is primarily producing
rice, most of its products are rice farming supplies. However, Kasaka Agri-Supply Enterprise also
intends to cater to other high value crops.

As an accredited dealer, Kasaka Agri-Supply Enterprise aims to position itself as the go-to store
for farmers. Its marketing strategies will center on those applicable for growth and maturity
stage of the product life cycle. The target market of Kasaka Agri-Supply Enterprise are farm
owners and tenants currently located in Gapan City.

Market Segmentation

The market segmentation for the consumption of farming supplies in Gapan City can be done in
the following table:

Farm Size (hectare) % of Owners Classification

Under 0.500 38.83
0.500 to 0.999 18.06 Small
1.000 to 2.999 32.01
3.000 to 7.000 9.31
Medium
7.001 to 9.999 0.79
10.000 and over 1.00 Large

The data used in the market segmentation was based on the 2012 Census of Agriculture as
regards to farm ownership in the Philippines. With this, Kasaka Agri-Supply Enterprise will aim
its promotions mainly to small and medium farm owners in Gapan City.

XVI. Promotional Strategy/ Activity

The promotional strategy in the opening of Kasaka Agri-Supply Enterprise will be done in three
stages, namely, pre-operating stage, opening stage, and operating stage. The partners intend to
engage with aggressive marketing to introduce the enterprise in Gapan City.

Pre-Operating Stage

 Distribution of flyers and banners to conspicuous areas in Gapan City.

  Placing of banners to tricycles two weeks before opening.
 Creation of jingle to ensure brand recognition and retention among farmers.
 Coordination with local press especially with prominent social media pages in Gapan
City.
 Creation and boosting of social media page of Kasaka Agri-Supply Enterprise one month
before opening date.
 Having a soft-launch five days before the opening date. This is done to solve problems
that may arise on the opening.

Opening Stage

 Holding of ribbon-cutting ceremony with a prominent Gapan City citizen.

 Offering discounts, giveaways and other perks based on quantity purchased.

Operating Stage

 Maintenance of social media pages of Kasaka Agri-Supply Enterprise.

 Extension of special pricing after the opening date for one week.
 Creation of customer-loyalty program.
 Expansion of payment facilities (G-Cash, Fund Transfer, Installment, Etc)
 Slowly increasing price to catch up with market average.
 Offering free delivery services and sales discounts for large orders.

XVII. Pricing Strategy

Similarly, the pricing strategy of Kasaka Agri-Supply Enterprise will start with slightly lower price
than the average to capture market share and then slowly increase the price on a six month
period to catch up with market average. Nonetheless, it was already mentioned that sales
discounts will be offered to large orders.

Pricing will be maintained then unless changes due to supply chain and inflation occur. This is
because the market for farming supplies is already in between the growth and maturity stage.

XVIII. Cost per Unit

The cost of procuring farming supplies for sale is illustrated in the table below. Note that prices
are subject to change depending on the pricing of the distributors.

Product Product Cost

Hybrid Rice Seeds
1. SL-8H, 3kilos 700.00
2. SL-8H, 5 kilos 1,200.00
3. SL-20, 3 kilos 1,000.00
 Certified Rice Seeds
1. Pioneer, 15 kilos 1,500.00
Inbred Rice Seeds
1. 222 (Triple 2), 40 kilos 1,150.00
Fertilizers
1. 14-14-14, 50 kilos 750.00
2. Urea(46-0-0), 50 kilos 2,000.00
3. 16-20-0, 50 kilos 1,000.00
4. Liquid Urea, 1 Liter 500.00
Insecticides/Pesticides
1. Butcher, 1 Liter 400.00
2. Ranger, 1 Liter 300.00
3. Magnum, 1 Liter 250.00
4. Cymbush, 1 Liter 300.00
Molluscicide
1. GoldenKill, 30g 50.00
2. GoldenKill, 300g 500.00
3. Patton, 300g 500.00
4. Snailbait, 940g 180.00
5. Striker, 940g 170.00

XIX. Selling Price

The selling price for the offerings of Kasaka Agri-Supply Enterprise is presented in the following
table. Introductory rates aiming to capture the target market are beside the regular selling
price.

Product Regular Selling Price Discounted Selling Price

Hybrid Rice Seeds
1. SL-8H, 3kilos 1,000.00 950.00
2. SL-8H, 5 kilos 1,500.00 1,450.00
3. SL-20H, 3 kilos 1,300.00 1,250.00
Certified Rice Seeds
1. Pioneer, 15 kilos 1,800.00 1,750.00
Inbred Rice Seeds
1. 222 (Triple 2), 40 kilos 1,500.00 1,450.00
Fertilizers
1. 14-14-14, 50 kilos 1,000.00 980.00
2. Urea(46-0-0), 50 kilos 2,500.00 2,470.00
3. 16-20-0, 50 kilos 1,500.00 1,470.00
4. Liquid Urea, 1 Liter 850.00 820.00
Insecticides/Pesticides
1. Butcher, 1 Liter 600.00 580.00
 2. Ranger, 1 Liter 500.00 480.00
3. Magnum, 1 Liter 400.00 380.00
4. Cymbush, 1 Liter 450.00 420.00
Molluscicide
1. GoldenKill, 30g 75.00 70.00
2. GoldenKill, 300g 750.00 720.00
3. Patton, 300g 750.00 720.00
4. Snailbait, 940g 270.00 250.00
5. Striker, 940g 250.00 220.00

XX. Terms of Sales

Kasaka Agri-Supply Enterprise’s terms of sales aims to create uniform expectations with its
customers. In this way, terms of sale helps avoid disagreements which may result in sale
cancellation or cause legal liability. The firm hopes to leave farmers feeling satisfied with for
every transaction completed with Kasaka Agri-Supply Enterprises.

The Standard Terms and Condition for every sale made by the Kasaka Agri-Supply Enterprise are
as follows:

1. All orders placed by buyer are subject to acceptance by seller. Orders may not be
cancelled or rescheduled without Seller’s consent. All orders must identify the products,
unit quantities and requested delivery dates of the farming supplies being purchased.
2. The prices of the Products are those prices specified on store signages.
3. All prices are inclusive of taxes. Transportation costs are excluded except for large
orders.
4. Payments shall be made by cash or electronic transfers like G-Cash and fund transfers.
5. Deliveries shall be on shipping point. Delays or failures in delivery beyond the control of
seller shall not be the seller’s fault.
6. Returns and exchanges shall only be granted for unopened products and must be made
within seven days from the date of sale. Change of mind by the buyer is not a valid
ground for returns and exchange.
7. Refunds shall only be made upon inspection and advise of the representative of the
distributor.
8. Farming supplies will have no warranty except for large spraying agents.
9. Products shall only be used for its intended purpose.
10. Technical advice for product usage and application is free of charge.