Chapter 2

Marketing Aspect

Introduction

This chapter provides quantitative information that will reflect the status of the

market in the area of the projected business. This includes the products and services to be

offered, the market research analysis which explains the target market, the market size and

trends, the competition, estimated market share, and the marketing strategies which include the

sales and distribution, the pricing strategy and the promotion strategy.

Marketing is a very important aspect in business since it contributes greatly to the success

of the organization. Production and distribution depend largely on marketing. Itis the process of

introducing and promoting the product or service into the market and encourages sales from the

buying public. Since the goal of marketing is to make the product or service widely known and

recognized to the market, marketers must be creative in their marketing activities.

Marketing aspect is one of the most useful chapters in the feasibility study. Without

marketing, sales may crash and companies may have to close. The success of the business

depends on how the product is introduced to the potential market. The fact that if the proposed

product will be accepted by the target market is then a determining factor that this project can be

implementable

A. Product Description

M&R Lingas Charcoal’s product is paper charcoal. It is made of old newspapers,

cartolina, kraft papers, and other types of used paper except the glossy ones. The

materials are soaked in water overnight, shredded, and compacted with the use of a
 pressing machine. Paper charcoal serves as a good alternative fuel for cooking.

Encouraging the use of paper charcoal as cooking alternative is a good practice. Waste

papers that would otherwise end up in landfills are given new use as cooking medium.

Based on the survey conducted by the proponents 99% of the respondents or

equivalent to 394 household are willing to try the paper charcoal which means that there

is a very high marketability for the product.

B. Marketing Strategies

The success of the business would have a greater chance by developing a market

strategy. In developing a market strategy, the business should know on how to sell the

paper charcoal to its target customer and how to rise above the crowd of competitors

demanding for attention. To determine whether the proposed product will earn a

reasonable profit, the business must go through an extensive planning that involves

development and implementation of success strategies in order to meet the goals and

objectives of the business.

C. Market Segmentation

Market segmentation divides a market into plainly recognizable portion

of purchasers with comparative needs. When recognized, those segments can

be focused with a particular advertising blend customized to each segment’s

unique needs, wanted and inspiration.

c.1 Geographic

c.1.1: Location: Jose Yulo Sr Avenue, Canlubang

c.1.2: Climate: Wet & Dry

 c.1.3: Barangay: Canlubang

c.1.4: City: Calamba City

c.1.5: Region: CALABARZON

c.1.6: Area Density: Urban

c.2 Demographic

c.2.1. Gender: Male and Female

c.2.2 Age: 20- 50 years old

D. Market Positioning

For head of the families looking for a cheaper and safe alternative to LPG with an

exceptional quality, M&R Lingas is a producer of paper charcoal, with its quality product

and consistency. M&R Lingas Charcoal’s dedication to improving products and customer

satisfaction sets it apart from other charcoal manufacturer.

E. Target Market

This is a market segment at which a marketing campaign is focused. This is a

group of customers that the business has decided to aim its marketing efforts and

ultimately deliver its product. The target market of the proposed production of the paper

charcoal are the residents and household of Calamba City, Laguna. The proponents

decided to choose this target market because these households have the accessibility and

convenience to the location of the business.

F. Product Strategy
 Paper charcoals are made by soaking waste paper overnight and forming it into

fist size balls which are left to dry in the sun. Paper charcoal serves as a good alternative

fuel for cooking. Encouraging the use of paper charcoal as cooking alternative is a good

practice. The objective of the business proponents in establishing the company is to

provide an alternative solution to LPG due to the increasing prices of LPG tanks in the

market. The company wants to provide a safer cooking solution which is the paper

charcoal which does not emit any smoke unlike the ordinary charcoal being used. The

product will be packed per 3 kgs and will be sold accordingly. Paper charcoals will be on

a briquette type so that it can be easily used by the consumers.

G. Pricing Strategy

The price is one of the significant parts of the marketing mix and obviously to have

income. This will contribute a huge degree in the fulfilment of the

company's benefit objectives. To accomplish the fundamental goal of the business,

which is to acquire benefit, the pricing strategy must be scrutinized and well computed to

possibly come up with quantifiable and productive outcome for the operation of the

business.

The price is one of the significant parts of the marketing mix and obviously to have

income. This will contribute a huge degree in the fulfillment of the company's

benefit objectives. To accomplish the fundamental goal of the business, which is to

acquire benefit, the pricing strategy must be scrutinized and well computed to possibly

come up with quantifiable and productive outcome for the operation of the business.

H. Promotional Strategy
 Sales promotion is important as it does not only help to boost sales but it also

helps a business to draw new customers while at the same time retaining the older

ones. Customer retention will be a major goal of the proposed business to

be established in the marketplace through developing strategies and programs that

build a sustainable, loyal, regular customer. The researcher believes that in order for the

business to sustain the industry, it will need a team that supports its mission and vision, a

great team that will set apart the competition. The business will allocate enough money to

retain the quality people in the entity.

The business will use the following varieties of sales promotional strategies that

an entity can use to increase the sales:

 Introduce our charcoal production and distribution business by sending introductory

letters to residence, merchants and other stakeholders both in Calamba City and

nearby cities in Laguna

 Open our charcoal production and distribution business with a party so as to capture

the attention of residence who are our first targets

 Engage in road show in targeted communities all around Calamba City.

 List our business and products on yellow pages ads (local directories)

 Leverage on the internet to promote our charcoal production and distribution business

 Engage in direct marketing and sales

 Encourage the use of Word-of-mouth marketing (referrals)

I. Advertising Strategy
 Based on the responses on the survey, flyers (97.5%), transit media (1.3%) and

billboard (0.8%) are the top three advertising tools that our customers want us to use

enable to reach them.

I.1. Flyers

Flyers can convey wide range of possible buyers for it can be brought to other

places. The store will produce 100 flyers per day. These flyers will be distributed

twice a week or eight (8) times in a month. Flyers will be given in the first three (3)

months of the business until it will get its loyal customers.

Here are the other platforms we intend leveraging on to promote and advertise

M&R Lingas Charcoal;

 Place adverts on both print (community-based newspapers and magazines) and

electronic media platforms

 Sponsor relevant community programs

 Leverage on the internet and social media platforms like; Instagram, Facebook,

twitter, et al to promote our brand

 Install our Bill Boards on strategic locations all around major communities in

Calamba City

 Engage in road show from time to time in targeted communities

 Position our Flexi Banners at strategic positions in the location where we intend

getting customers to start patronizing our charcoal

 Ensure that all our staff members wear our customized clothes, and all our official

cars and distribution trucks are customized and well branded.

J. Competitive Advantage

First and foremost, the fact that anybody with a business cum retailing skills and

the required start – up capital can decide to start charcoal production and distribution

business means that the business is open to all and sundry hence it is expected that there

will be high – level competition in the industry. There is hardly any busy community or

even street that you won’t find one or more people retailing charcoal especially on a

small-scale level.

As a standard charcoal production and distribution company, we know that

gaining a competitive edge requires a detailed analysis of the demographics of the

surrounding area and the nature of existing competitors. And even if you are successful at

first, new competitors could enter your market at any time to steal your regular

customers. Hence, we will not hesitate to adopt successful and workable strategies from

our competitors.

Another competitive advantage that we have is the vast experience of our

management team, we have people on board who are highly experienced and understands

how to grow business from the scratch to becoming a national phenomenon. Our large

and robust distribution network and of course our excellent customer service culture will

definitely count as a strong strength for the business.

One thing is certain, we will ensure that in future, we open our outlets in various

cities not just in Laguna, but also all across CALABARZON. With that our brand will be

well communicated and accepted nationally.

 Lastly, our employees will be well taken care of, and their welfare package will

be among the best within our category (startups charcoal production and distribution

companies) in the industry, meaning that they will be more than willing to build the

business with us and help deliver our set goals and achieve all our aims and objectives.

We will also give good working conditions and commissions to freelance sales agents

that we will recruit from time to time.

K. Channel of Distribution

A channel of distribution or trade channel is defined as the path or route along which

goods move from producers or manufacturers to ultimate consumers or industrial users.

In other words, it is a distribution network through which producer puts his products in

the market and passes it to the actual user. It comprises all of the business and people

involve in the physical movement and transfer of the ownership of goods and services

from producer to consumers. The longer the distribution channel the less the profit a

product manufacturer might get from the sale.

As in the case of the proposed business, the paper charcoal, from the stalls, will then

be directly delivered to the customers upon ordering. The one who is in charge for the

selling is responsible for the distribution of the products to the customers. Based on the

survey conducted, mostly of the consumers want the stall to be situated near market that’s

why the proponents choose the location for the proposed business.

L. Demand Analysis

a. Past Demand Analysis

 Based on the research conducted by the proponents, no statistical data was

found in NSO and DTI regarding the demand of paper charcoals. Past demand is

computed by getting the household population in Calamba City from 2016-2021

multiplied by market acceptability which is 98.75% and multiplied by the

frequency of agreement or the times customers avail the product annually.

Market Household Frequency

Year Acceptabilit Populatio of Past Demand

y n Agreement

2021 98.75% 119797 85% 100555

2020 98.75% 116467 85% 97759

2019 98.75% 113113 85% 94944

2018 98.75% 109776 85% 92143

2017 98.75% 106494 85% 89388

2016 98.75% 103309 85% 86715

Table 1.0

Past Demand for Paper Charcoal

Past demand was shown above and increases as the population also increases.

Based on the increased in population from 2016-2021, there was an average of 2.93%

increased resulting to 2.93% increase in demand.

b. Projected Demand

This refers to the estimated quantity of a product which potentially would buy by

the consumers at a certain time for a given price. Projection of the demand is an
 important factor to determine the possible profit that the proposed business could obtain

upon implementing this project. Projected growth factor is computed through the use of

the five-year household population in Calamba City. A table below is being presented to

easily show the average increase of the population per year.

Market Household Frequency

Projected
Year Acceptabilit Populatio of
Demand
y n Agreement
2027 98.75% 138214 85% 116013
2026 98.75% 135252 85% 113527
2025 98.75% 132275 85% 111029
2024 98.75% 129264 85% 108501
2023 98.75% 126197 85% 105927
2022 98.75% 123071 85% 103303

Table 2.0
Projected Demand for Paper Charcoal
Using the 98.75% market acceptability and projected population, projected

demand was calculated. According to the 2.40% average increased in household

population, projected demand also increases an average of 2.40% yearly.

M. Supply Analysis

a. Past Supply

Past supply was determined using the population from 2016-2021 multiplied by

the percentage of purchases and multiplied by the frequency of agreement or the

times customers avail the product annually.

Household Frequency
Percentage
Year Populatio of Past Supply
of Purchases
n Agreement
2021 15.60% 119797 85% 15885
 2020 15.60% 116467 85% 15444
2019 15.60% 113113 85% 14999
2018 15.60% 109776 85% 14556
2017 15.60% 106494 85% 14121
2016 15.60% 103309 85% 13699
Table 3.0
Past Supply for Paper Charcoal
Past supply shown above increases as the population also increases. Based on the

increased in population from 2016-2021, there was an average of 2.93% increased

resulting to 2.93% increase in supply.

b. Projected Supply

The projected supply will help to determine the total satisfied market or the total

number of customers who availed paper charcoal for five years. It was obtained by

percentage of purchases to the target population with 2.40% growth rate to the frequency

of agreement and it was distributed per product to determine the total satisfied market for

every product.

Household Frequency
Percentage Projected
Year Populatio of
of Purchases Supply
n Agreement
2027 15.60% 138214 85% 18327
2026 15.60% 135252 85% 17934
2025 15.60% 132275 85% 17540
2024 15.60% 129264 85% 17140
2023 15.60% 126197 85% 16734
2022 15.60% 123071 85% 16319
Table 4.0
Projected Supply for Paper Charcoal
 Using the 15.60% percentage of purchase and projected population, projected

supply was calculated. According to the 2.40% average increased in household

population, projected supply also increases an average of 2.40% yearly.

N. Demand and Supply Analysis

This is necessary to determine M&R Lingas market share. The gap or the

unsatisfied market is obtained by subtracting the projected demand to the projected

supply which shows the available market for paper charcoal. It also shows the number of

persons whom we need to supply to answer their demand for paper charcoal. We now

show the gap for every product using the data from projected demand and projected

supply.

Projected Projected
Year Gap
Demand Supply
2027 116013 18327 97686
2026 113527 17934 95592
2025 111029 17540 93489
2024 108501 17140 91360
2023 105927 16734 89193
2022 103303 16319 86984
Table 5.0
Demand and Supply Gap Analysis for Paper Charcoal
Based on the shown above, there was a large gap in supply and demand that M&R Lingas

can fill in. The main reason of the large gap is that there still limited and very few company

that sell and produce paper charcoal. The large gap means that there is a very high

marketability of paper charcoal in Calamba City.

O. SWOT Analysis
 The SWOT analysis provides us with an opportunity to examine the internal strengths

and weaknesses the M&R Lingas Charcoal must address. It also allows us to examine the

opportunities presented to as well as potential threats.

Strengths

 Strong relationships with suppliers that offer credit arrangements, flexibility, and response

to special requirements.

 State of the art charcoal production facility and equipment that has positioned

us to meet the demand of charcoal in Calamba City even if the demand tripled

over night or if we have a massive order to meet and emergency need.

 The location of the business is accessible enough to meet our target market.

 Excellent and knowledgeable staff, offering personalized customer service.

 Great retail space with an attractive, inviting atmosphere.

 The owner keeps overhead low by purchasing directly from local suppliers.

Weaknesses

 Access to additional operating capital.

 Maintenance of special features of the store is quite costly.

 Owners are climbing the retail experience curve

Opportunities

 Increase in higher income of target market.

 Loads of people make use of coal stoves and purchase charcoal on a daily

basis and all what we are going to do to push our push our coal to them is

already perfected

 The business would be the first to offer paper charcoal in Calamba City
Threats

 Local and emerging competitors.

 Unfavorable government policies and economic downturn.

 Sales tied to economic growth.