CHAPTER III

3.1 MARKETING FEASIBILITY

MARKET STUDY

In Olongapo City, some of the barangays are prone to flood, like Sta. Rita. The
need to evacuate and to safeguard household appliances and furniture easily and faster
can be observed. With this, the proponents came up with the need of foldable furniture
that can facilitate transfer or movement easily and faster for the convenience of the
people.
Every household wants to save space from the appliances and furniture that they
have. No one wants to have a house occupied by appliances and furniture, and
appeared to be unmanaged and disorganized. With this, the proponents also came up
with the idea that having foldable furniture can also help in minimizing the space needed
by particular furniture and therefore can maximize the available space of a household.
The foldability of the furniture that the proposed business offers facilitates
portability and mobility, wherein people may bring it anywhere and experience the
convenience that they desire. Having furniture that can be used not only inside but also
outside of the house is a smart choice and a wise decision for spending money, the
edge that the proposed business holds against other furniture shop offering typical
furniture.

MARKET DESCRIPTION
The market of the proposed business is the city of Olongapo. Based on the
gathered data from the City Planning Development Office (CPDO) of Olongapo City, as
of 2016, the total number of households in barangay Asinan is 1,049, in barangay
Banicain is 1,888, in barangay Barretto is 5,141, in barangay East Bajac Bajac is 5,289,
in barangay East Tapinac is 2,758, in barangay Gordon Heights is 7,201, in barangay
Kalaklan is 3,290, in barangay New Kalalake is 2,506, in barangay Mabayuan is 3,089,
in barangay New Cabalan is 6,153, in barangay New Ilalim is 425, in barangay New
Kababae is 654, in barangay Pag-asa is 1,664, in barangay Sta. Rita is 10,809, in
barangay West Bajac Bajac is 2,220, in barangay West Tapinac is 1,811, and in
barangay Old Cabalan is 5,431 for a total of 61,377 households.

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 Name of Barangay Number of Household
Asinan 1,049
Banicain 1,888
Barretto 5,141
East Bajac Bajac 5,289
East Tapinac 2,758
Gordon Heights 7,201
Kalaklan 3,290
New Kalalake 2,506
Mabayuan 3,089
New Cabalan 6,153
New Ilalim 425
New Kababae 654
Pag-asa 1,664
Sta. Rita 10,809
West Bajac Bajac 2,220
West Tapinac 1,811
Old Cabalan 5,431
TOTAL 61,377
(Table 3.1 The total number of households in each Barangay of Olongapo City.)

TARGET MARKET
The target market of the proposed business will be the households and their
potential market will be the financially capable households in Olongapo City;
demographic segmentation, which is based on income, is what the proponents used in
order to determine their potential market.
According to the survey, out of 258 respondents, 86.05% or 222, which
represents the total population of 52,815, have the capability to buy foldable furniture.
They are the majority who have Php 15,000.00 and above when it comes to family
income.

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 Out of 258 respondents, 13.95% or 36, which represents the total population of
8,562, have limited capability to buy foldable furniture. They are the one who have Php
15,000.00 below when it comes to family income.

SAMPLE SIZE
The proponents have distributed a total of 258 questionaires in Olongapo City.
The sample size computed and determined by this formula:
Ss = NV + (Se * Se) (1 – P)
NSe + (V * V) P (1 – P)
Where:
Ss = Sample size
N = Total number of population of households
V= Standard value (2.58) at 1 per centum level of probability with 0.99 reliability
Se = Sampling error (0.01)
P = Largest possible proportion (0.50)

The solution would be if the total number of the target market in 2016 is 61,377:
Ss = 61,377(2.58) + (0.01 * 0.01) (1 – 0.50)
61,377 (0.01) + (2.58 * 2.58) * 0.50 (1 – 0.50)

Ss = 158,352.6601
615.4341
Ss = 257.3023823 or 258

DEMAND ANALYSIS
Year Target Market *Potential Market **Demand
(86.05%) (51.35%)
2016 61,377 52,815 27,121
(Table 3.2 The demand for foldable furniture.)
*Potential Market = Year’s Target Market x Potential Market Rate (%)
**Demand = Year’s Potential Market x Demand Rate (%)

The total population of the households in Olongapo City is 61,377. Based on the
survey, out of 222 respondents that are capable, 114 or 51.35%, which represents the

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total population of 27,121, are willing to buy foldable furniture from the business. They
answered yes to question number thirty seven (37): “If there will be a new furniture shop
offering foldable furniture, are you willing to buy from them?”
For the computation of the potential market, multiply the target market to the
potential market rate. To get the demand, multiply the potential market to the demand
rate.

PROJECTED DEMAND
Year Target Market *Potential Market **Projected Demand
(86.05%) (51.35%)
2016 61,377 52,815 27,121
2017 62,721 53,971 27,714
2018 64,095 55,154 28,322
2019 65,498 56,361 28,941
2020 66,932 57,595 29,575
(Table 3.3 The projected demand for the following years for foldable furniture.)
*Potential Market = Year’s Target Market x Potential Market Rate (%)
**Demand = Year’s Potential Market x Demand Rate (%)

For the computation of the projected demand, the growth rate must be computed
first. To get the growth rate, subtract the past year from the present year then divide the
answer to the past year then multiply by 100%.
To get the target market for the following year, multiply the target market of the
present year (61,377) to 2.19% which is the growth rate, and then add it back. Same
process follows for the following years.

SUPPLY ANALYSIS
*Percentage **Number of
Number of Supply from
Name of Competitors of Supply Supply from
Sample Size (258)
on Demand Demand (27,121)
SM Olongapo City 76 29.46% 7,990
Savers 61 23.64% 6,411
City Home Furniture 26 10.08% 2,734
Ayala Harbor Point 19 7.36% 1,996

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 Lifestyle Interior 18 6.98% 1,893
Design Fusion 14 5.43% 1,473
TOTAL 214 82.95% 22,497
(Table 3.4 The number of supply and percentage on target market for furniture.)
* Percentage of Supply on Demand = Number of Supply from Sample Size
258 (Sample Size)
** Number of Supply from Demand = Year’s Demand x Percentage of Supply on
Demand

Based on the survey, out of 258 respondents, 214 or 82.95%, buy furniture, 76 of
them buy to SM Olongapo City which is 29.46% of the target market, 61 to Savers which
is 23.64%, 26 to City Home Furniture which is 10.08%, 19 to Ayala Harbor Point which is
7.36%, 18 to Lifestyle Interior which is 6.98% and 14 to Design Fusion which is 5.43%.
They answered yes to the question number four (4): “Do you buy furniture?”
Among the competitors of the proposed business, the most patronized is SM
Olongapo City. For the computation of the percentage of supply on demand, divide the
number of supply from sample size to the total number of respondents (258), and
multiply it by 100%. To get the number of supply from demand, multiply the percentage
of supply on demand to the demand.

PROJECTED SUPPLY
Year *Projected Demand *Projected Supply
(82.95%)
2016 27,121 22,497
2017 27,714 22,989
2018 28,322 23,493
2019 28,941 24,007
2020 29,575 24,532
(Table 3.5 The projected supply for furniture.)

* Projected Supply = Year’s Demand x Supply Rate

The figure above shows the projected supply for the following years. To get the
projected supply for the following year, multiply the supply rate to the demand.

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 DEMAND AND SUPPLY ANALYSIS
Year Demand Supply *Gap
2016 27,121 22,497 4,624
2017 27,714 22,989 4,725
2018 28,322 23,493 4,829
2019 28,941 24,007 4,934
2020 29,575 24,532 5,043
(Table 3.6 The demand and supply analysis of the proposed business for furniture.)

* Gap = Year’s Demand – Year’s Supply

The figure above shows the projected demand and supply for the following years.
To get the gap, subtract the supply figure to the demand figure.

MARKET SHARE
Year *Gap **Share on ***Share on ****Available
Percentage Gap Market
2016 4,624 51.35% 2,374 2,250
2017 4,725 51.35% 2,426 2,299
2018 4,829 51.35% 2,480 2,349
2019 4,934 51.35% 2,534 2,400
2020 5,043 51.35% 2,590 2,453
(Table 3.7 The share on gap of the proposed business for furniture.)

* Gap = Year’s Demand – Year’s Supply

** Share on Percentage – Willing and Capable Rate (%)
*** Share on Gap = Year’s Gap x Share on Percentage (%)
****Available Market = Gap – Share on Gap

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 The figure above shows the market share of the proposed business for the
following years. To get the share on gap, multiply the share on percentage, which is the
willing and capable rate, to the gap and for the available market, subtract the share on
gap to the gap.

COMPETITORS’ MARKET SHARE

Name of Competitors *Percentage on Target Market (61,377)
SM Olongapo City 29.46%
Savers 23.64%
City Home Furniture 10.08%
Lifestyle Interior 7.36%
Ayala Harbor Point 6.98%
Design Fusion 5.43%
TOTAL 82.95%
(Table 3.8 The market share of the proposed business’ competitors for furniture.)
Competitors’ Market Share: = 82.95%
FOLD-IT and GO Market Share: = Share on Gap / Demand
= 2,374 / 27,121
= 8.75%
Available Market: = 8.30%

The market share of the competitors is 82.95%, while the market share of the
proposed business is 8.75% and what remains is the available market, which is 8.30%.

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 MARKET SHARE ON SALES
6.54%
SALES
8.41%

35.51% SM Olongapo City

8.88%
Savers
City Home Furniture
12.15% Lifestyle Interior
Ayala Harbor Point
Design Fusion

28.50%

(Figure 3.1 The market share on sales graph.)

MARKET SHARE ON SUPPLY

8.30%
SUPPLY
8.75%

Competitors' Market Share

FOLD-IT and GO's Market Share
Available Market Share

82.95%

(Figure 3.2 The market share on supplies graph.)

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 PROJECTED SALES

FOR THE YEAR 2016:

PROJECTED SALES
Sales
Yea Chair Table Sofa Bed
Chair Table Sofa Bed (Php)
r

Quantity 1,680.00 3,640.00 6,720.00 10,080.00

1
1,045 380 95 48 1,755,600.00 1,383,200.00 638,400.00 483,840.00 4,261,040.00

Quantity 1,748.00 3,786.00 6,989.00 10,484.00

2
1,067 388 97 49 1,865,116.00 1,468,968.00 677,933.00 513,716.00 4,525,733.00

Quantity 1,818.00 3,938.00 7,269.00 10,904.00

3
1,091 397 99 50 1,983,438.00 1,563,386.00 719,631.00 545,200.00 4,811,655.00

Quantity 1,891.00 4,096.00 7,560.00 11,341.00

4
1,115 406 101 51 2,108,465.00 1,662,976.00 763,560.00 578,391.00 5,113,392.00

Quantity 1,967.00 4,260.00 7,863.00 11,795.00

5
1,140 415 104 52 2,242,380.00 1,767,900.00 817,752.00 613,340.00 5,441,372.00
(Table 3.9 The projected sales for 2016.)

Total Sales = Sales x Price

The figure above shows the projected sales computed.

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 COMPETITORS
NAME OF THE OWNER/S NAME OF THE BUSINESS
Chua, Sherly Mae Y. Craft Idea’s Furniture
De Guzman, Ruben Carillo R.CG. City Home Appliance &
Furniture Center
Chua, Sau Pok Co Mr. Sunshine Furnishing
Ocampo’s Olongapo, Ocampo’s Olongapo
Incorporated
Chua, Gloria Yu JC Furniture Store
Dimacale, Evelyn De Unizentro Appliance And
Guzman Furniture Store
De Guzman, Teresa Tan Today Total Appliance &
Furniture
K Servico Trade, INC. K Servico Trade – Olongapo
Branch
Sandel, Ara Monique Lifestyle Interiors
Yap, Camille
RRL Marikina Marketing Emilio S. Lim Appliance
Center INC.
Benicta, Rhonalyn Quiocho Rhonalyn Surplus Appliances
SmartShop HomePlus SmartShop HomePlus Trading
Trading Corp. Corp.
Star Appliance Center, INC. Star Appliance Center, INC.
Exponent Motor Corporation Exponent Motor Corporation
Chua, Sharmaine Jane Yu Design Fusion Furniture
K Servico Trade, INC. K Servico Trade, INC.
Savers Electronic World INC. Savers Appliances
Savers Electronic World INC. Savers Appliances
Sison, Conchita Mejia Jhenie’s Bamboo Furniture
SM City Olongapo SM Home
Ayala Harbor Point Millers Furniture Collection
(Table 3.10 Business’ competitors.)
ADDRESS OF THE
BUSINESS
1415,Rizal Ave,
West Tapinac
1365, Rizal Ave,
West Tapinac
1619, Rizal Ave,
West Tapinac
3, Arthur St.
West Bajac-Bajac
1155, Rizal Ave,
West Tapinac
44, 12th St. New Kalalake
1340, Rizal Ave,
East Tapinac
766, Rizal Ave,
West Tapinac
1290, Rizal Ave,
East Tapinac
1070, Rizal Ave,
East Tapinac
1995, Rizal Ave,
West Bajac-Bajac
1950, Rizal Ave.
East Bajac-Bajac
SM Appliance Center 2/F,
SM City Olongapo,
Gordon Ave, Pag-asa
1557, Rizal Ave,
West Tapinac
1529, Rizal Ave,
West Tapinac
2701, Rizal Ave,
West Bajac-Bajac
1, National Highway, Barretto
1200, Rizal Ave, East Tapinac
2663, Rizal Ave, West Bajac-
Bajac
Magsaysay Dr, Olongapo,
2200 Zambales
Rizal Hwy, Olongapo, 2222
Zambales
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 MARKETING OBJECTIVES
The marketing objectives of the FOLD-IT and GO are the following:
 To be able to increase sales every year.
 To be able to grow market share every year.
 To be able to build a strong brand name into the market.
 To be able to produce new products and new product innovations.
 To be able to target new customers.
 To be able to enhance strong customer relationship.
 To be able to increase profit.
MARKETING MIX
Place

The location of the business is an attractive place where most of the furniture
businesses in Olongapo City are located. It is accessible because of its landmark for the
customers who do not usually go to the said location.

Price

The price will vary to the design of the product where the prices of such products
are lower than other furniture shops’ prices. This would encourage the business’ target
market, to gain more profit and avoid such delays of return of income.

Product

The product of the business will not only give the same function as with other
furniture. Its products give comfortability and the assurance of having the experience of
convenience. The offered products are furniture such as chair, table, sofa and bed that
can be folded, to maximize the available space, and can be transported from one place
to another, to experience hassle-free.

Promotion

The business will promote their offered products through different kinds of
advertisement:

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  Calling Cards
 Flyers
 Brochures
 Signage
 Tarpaulins
 Social Media Announcements

MARKETING STRATEGY
First Year Strategy
The FOLD-IT and GO will use the social networking sites to spread information
about the business and about its products. Nowadays, many people use internet and so
this kind of strategy is flexible, for it can reach many people and can attract customers.
Aside from using the social networking sites, the said business will also use
paraphernalias such as calling cards, flyers, and brochures and will also post printed
advertisements such as signage and tarpaulins. Through these, the said business can
easily reach out to their target market.

Second Year Strategy

As part of the marketing plan of the FOLD-IT and GO, the business will
strengthen more its advertisement through social networking sites along with using
paraphernalias.

Third Year Strategy

As part also of the marketing plan of the FOLD-IT and GO, product innovation is
next in line in terms of their strategies in order to increase sales and be competitive
enough in the industry of manufacturing and selling furniture.

Fourth Year Strategy

The FOLD-IT and GO will then make customization of the products according to
the demand of the customers and will still focus on improving and innovating the
products that they will offer.

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Fifth Year Strategy
As part of the marketing plan of the FOLD-IT and GO, they will be having a
branch at SM Olongapo City or Ayala Harbor Point to be able to reach more people.
DISTRIBUTION CHANNEL

FOLD-IT and GO
Manufacturing Company

Households

(Figure 3.3 Distribution channel of the business.)

FOLD-IT and GO directly sells their products to the customers which are
households. The business does all the work needed to attract customers and to increase
its market share in the market of its location.

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