A Feasibility Study of Star Rice Miller and Dealer

A Feasibility Study presented to The College of Business Administration Lyceum of the Philippines University Intramuros, Manila

In partial fulfillment of the requirements for the degree of Bachelor of Science in Business Administration Major in Marketing Management

Submitted by: Babaan, Alpha Dianne N. Corona, Celina I. Francisco, Claire Anne G. Fulgencio, Christy Mae S. San Pedro, Royce Tapire, Jomar G.

Submitted to: Mrs. Elvira A. Andal Professor

October 2010

The proponents have chosen the term “star” to emphasize the exceptional quality of their business and products. Most importantly. The term also denotes the proponents urge to gain a “star” or a reputable position the country’s rice industry. Bulacan. the proponents are confident that the location can provide maximum efficiency which can be attained at the lowest possible cost. the terms “miller and dealer” pertain to the main activities performed by the business – rice milling and dealing.1.1 Name of the Firm The business name is Star Rice Miller and Dealer (SRMD). Delivery of finished products will be convenient as the easiest and fastest mode of transportation will be used (by land). the value of the building a rice factory is cheaper as compared with other places. On the other hand. Bocaue. 1. Labor through manpower is also possible as a large percentage of the residents work as farmers. The place is very suitable for the establishment of a rice milling and dealing business because of its abundance in rice fields which ensures continuous supply of raw materials necessary for production. Barangay Wawa.2 Location Star Rice Miller and Dealer will be located at Inter City. . In addition.

Star Rice Miller and Dealer will also engage itself on various socio-economic activities. Angelika. Workers will be hired to perform the basic activities to come up with finished rice products. see Appendices). Third. 1. salt tolerant and drought tolerant (varieties were selected from the survey conducted by the researchers.3 Brief Description of the Product Star Rice Miller and Dealer will offer a wide variety of rice products – Laon. . Jasmine and Sinandomeng. The proponents in general. will be responsible for the overall management of the business. SRMD will concentrate on advertising itself to gain customers and market recognition. It will also introduce three new rice varieties – flood tolerant. Rice quality will be emphasized as the strongest factor that affects consumer purchase (this is based from the survey conducted by the researchers.1. see Appendices Section). the utilization of the by-products of production – SRMD Management will see to it that 80-90% of the said materials will be used efficiently. the differentiation of the business from competitors – as a new entrant in the market. Second.4 Project Highlights The proponents of the business will concentrate on the following aspects of their business: first. the products to be offered – SRMD will produce and sell high quality rice of different varieties at competitive prices.

This is a concrete evidence of rice dependence exhibited by the target market.3. Technical Viability .5 Project Summary 1. FREQUENCY PERCENTAGE 0 0 0 0 28 93. How often do you eat rice? The illustration above indicates that 93.2 Management Availability The business will develop a strong relationship between the management and its workers. Market Acceptability SRMD will be easily accepted by the target market. Tasks and responsibilities will be properly designated. considering that rice is a staple food for most Filipinos. CHOICES Once a day Twice a day Thrice a day I.1.93% of consumers eat rice thrice a day.5. Employees will be empowered by encouraging them to participate on various managerial concerns and the proponents will impose a good management system.33 Four times & above 2 6.5. 1.5.67 * Survey Result for the question.1.

the venue for rice milling and storing of finished goods ready for delivery. 1. The fully-equipped factory of SRMD will serve as its main office and at the same time. Socio-Economic Impact SRMD will prioritize Bulaceños for their socio-economic activities.4.5. Financial Profitability High sales are expected due to the target markets’ high demand for rice. They will also conduct agricultural seminars to provide updated farming techniques to Bulaceños on a quarterly basis.The proponents will hire people to renovate an old business establishment located along the roads of Inter City Wawa Bocaue. Profits to be earned will then determine the possible stability of SRMD in the market. It will hire knowledgeable farmers as its primary workers.5. 1. the management will give incentives which may either be financial or non-financial. Bulacan. . In addition.5.

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It is made available and accessible to satisfy the market’s continuous demand for the product.2. It also contributes to the development of the country’s labor force. the group aims to build cooperation. Aside from the above listed objectives. • to apply the marketing management theories learned at school in actual practice. Brief Background of the Study Rice is a staple food for most Filipinos.2. In relation to the Philippines being an agricultural country. . Objectives of the Study The study aimed towards the attainment of the following objectives: • to acquire adequate knowledge about the rice milling and dealing sector in the country.1. unity and trust among its members. • to determine the various aspects of establishing a rice milling and dealing business. The proponents decided to conduct a study on one of the country’s largest business sector – agriculture 2. rice milling and dealing is a very effective way to earn profit.

technical. rice covering * milling – producing or grinding in a mill * rice – an annual cereal grass cultivated in warm climates.5 to 3.3.4. Moreover. financial and socioeconomic. management. Scope and Limitation The study covers all important aspects of establishing a rice milling and dealing business – marketing. business permits and other important documents are also presented in the study.5 tons of rice per hectare [others to follow] 2. Operational Definition of Terms * drought tolerant rice (IR4371-54-1-1) – a Philippine rice variety that can yield up to 10% more than standard varieties in season with good rainfall * flood-tolerant rice (IR64-Sub1) – a Philippine rice variety that can tolerate more than two weeks under water * ipa – a by-product of rice milling.2.high-yielding Philippine rice variety which can produce 2. It also provides brief information on the background of study which is clearly discussed on the Summary of the Project section. . a starchy food grain * salt tolerant rice (IR63307-4B-4-3) .

demand.year time frame for the projections (sales.) of the business. the study is limited to a five. . etc. In addition.On the other hand. supply. the proponents focused in Bulacan where the rice plant will be located.

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3. the researchers conducted a survey in Bulacan. Supply According to research. 3. They also had an interview with rice millers and dealers to gain information on the basics of operating the business. only 1. Filipinos will consume 12. about 71% of it has the potential to double its yield. At this point. a growth of 31.1.8 million hectares of rice lands and produce about 11. Demand According to studies. Irrigating the lands is all that is needed to wipe out the present shortage.3. They have distributed and collected questionnaires regarding the subject of their study.3 million from 1990. it produces only 90% of the rice demand and imports the remaining quantity from neighboring countries. Its rice eating population is estimated to reach 92 million. sufficient only for 90% of the population.2 million metric tons of milled rice.2.2 million are irrigated and therefore.4 million tons of rice this year. . Library materials and the internet also provided additional knowledge to the researchers. Out of the 4. the Philippines has approximately 4.2 million hectares.3. Data gathered were then summarized and carefully compiled so as to come up with a comprehensive feasibility study. Research Methodology To be able to learn about the consumers’ rice preferences.

4.3. Competitive Position The business will be able to compete with other rice millers and dealers not only by selling but moreover. the industry is expected to increase in terms of demand and supply for rice. 3. by engaging itself to socio-economic activities which will create a good relationship with the stakeholders. It will also implement strong and creative promotion and advertising. etc.5. price. There is a significant difference between rice demand and supply. Demand and Supply Analysis Based from the information on rice demand and supply. SRMD will produce [ ] sacks of rice per variety on a monthly basis to satisfy the market needs. The increasing demand for rice is brought about by many factors such as eating preference. . quality. Thus. while the supply depends mainly on the demand exhibited by consumers.. This amount represents the unsatisfied demand for rice.

Method of Transportation .600.00 Drought tolerant Php 1.00 Jasmine Php 1.00 * Note: A 5% discount will be given for bulk purchases. 3.1.6.2.400.00 Sinandomeng Php 1. 3.3. SRMD will introduce three new rice varieties of high quality and competitive prices.00 per kilo. Selling Price The prices listed below vary for every type of rice being sold.350. SRMD will also sell ipa at Php 2. This will enable the business to be at par with what the competitors offer.350.6.6. 3.00 Salt tolerant Php 1.00 Angelika Php1.6.140.350.3.450.00 Flood tolerant Php 1. Competitiveness of the Product SRMD will have an advantage over its identified competitors (results are gathered from the survey conducted by the researchers. RICE VARIETY PRICE PER SACK Laon Php 1. They are quoted per sack. see Appendices) in terms of product line – aside from the traditional rice products.

the following projected sales are expected to be met: YEAR 1 RICE VARIETY SELLING PRICE / SACK Php1.140.00 Php1. The proponents will purchase trucks for transport.350. OF SACKS TO BE PRODUCED TOTAL SALES (x 12 months) Laon Angelika Jasmine Sinandomeng Flood tolerant Salt tolerant Drought tolerant TOTAL Php Php Php Php Php Php Php Php .450.350.600. Projected Sales Assuming that SRMD will be producing [ ] sacks of rice per variety.350.00 Php1.Land transportation will be used to deliver products to retail stores.00 NO. This will make their products available and accessible to customers.400. 3.00 Php1.00 Php1.00 Php1.00 Php1.7.

YEAR 2 RICE VARIETY SELLING PRICE / SACK Php1.00 Php1.600.* Note: Discounts given will be deducted from total sales.350.140 Php1.400.350.350.00 Php1.00 NO.450. OF SACKS TO BE PRODUCED TOTAL SALES (x 12 months) Laon Angelika Jasmine Sinandomeng Flood tolerant Salt tolerant Drought tolerant TOTAL Php Php Php Php Php Php Php Php .00 Php1.00 Php 1.00 Php1.

00 Php1.00 Php1. OF SACKS TO BE PRODUCED TOTAL SALES (x 12 months) Laon Angelika Jasmine Sinandomeng Flood tolerant Salt tolerant Drought tolerant TOTAL Php Php Php Php Php Php Php Php .350.450.00 NO.350. YEAR 3 RICE VARIETY SELLING PRICE / SACK Php1.600.00 Php 1.* Note: Discounts given will be deducted from total sales.00 Php1.140 Php1.00 Php1.350.400.

.* Note: Discounts given will be deducted from total sales.

00 Php 1.YEAR 4 RICE VARIETY SELLING PRICE / SACK Php1.350.00 Php1.00 Php1.00 Php1.350.400.350. OF SACKS TO BE PRODUCED TOTAL SALES (x 12 months) Laon Angelika Jasmine Sinandomeng Flood tolerant Salt tolerant Drought tolerant TOTAL Php Php Php Php Php Php Php Php .00 NO.00 Php1.450.600.140 Php1.

450.600.400.350.00 Php1. OF SACKS TO BE PRODUCED TOTAL SALES (x 12 months) Laon Angelika Jasmine Sinandomeng Flood tolerant Salt tolerant Drought tolerant TOTAL Php Php Php Php Php Php Php Php . YEAR 5 RICE VARIETY SELLING PRICE / SACK Php1.350.00 Php1.00 Php1.00 Php1.350.* Note: Discounts given will be deducted from total sales.140 Php1.00 NO.00 Php 1.

3. Market Strategics Program 3.8. The packaging comes in a very attractive plastic bag that is strong enough to accommodate kilos of rice per sack. 3. .1.2 Place of Distribution Star Rice products will be sold to selected retail stores within Bulacan. They will also accept and deliver orders from/to places near Bulacan. This will make the products accessible to every consumer.8. Brand The brand will be known as Star Rice.8.* Note: Discounts given will be deducted from total sales. Varieties to be produced will be of high quality which is in line with what the customers need and will be priced competitively.

contact person(s) and contact number(s) for direct or indirect purchase and inquiries will be included on both the leaflets and billboards. Passing along information about the business will contribute in increasing its popularity in Bulacan. Another effective promotion to be used is word-of-mouth.8.3. Pricing The costings of rice per sack are as follows: AMOUNT Rice grains Packaging Labor Mark-up Others TOTAL 3. This will contain the name of the store and SRMD logo on one portion.4. Billboards will also be given for free to selected retail stores within Bulacan. Business address. . Promotion/Advertising As a new entrant in the industry. SRMD will distribute leaflets to the members of its target market. They will contain brief information about the products being offered and the business itself.8.3.

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I. SURVEY QUESTIONNAIRE .

67 2.13 0 3. RESULTS OF THE SURVEY 1. How often do you eat rice? CHOICES Once a day Twice a day Thrice a day Four times & above FREQUENCY 0 0 28 2 PERCENTAGE 0 0 93.600 1.33 5.601 & above FREQUENCY 1 6 10 13 PERCENTAGE 3.33 0 26. How much money do you allot for rice within a month? CHOICES 499 and below 500-1.67 30 3.000 1.67 23.001-1. What rice milling and dealing business are familiar to you? .33 43.33 4. What factor do you consider in buying rice? CHOICES Price Quality Brand name Accessibility FREQUENCY 3 28 1 0 PERCENTAGE 9.II. What rice varieties do you consume? CHOICES Sinandomeng Jasmine NFA Angelika Laon Others FREQUENCY 5 7 0 8 9 1 PERCENTAGE 16.33 6.50 3.38 87.33 20 33.

salt tolerant) CHOICES Yes No FREQUENCY 22 7 PERCENTAGE 75. Are you willing to try a new variety of rice? (e. drought tolerant.86 24.g.14 .CHOICES Primavera Ron Fidels Bles ASP T&L Maunlad N3M MCY CIE Michael Andrei Dynasty Mutya EE&E Others FREQUENCY 2 0 0 0 0 0 2 0 0 1 1 0 2 17 PERCENTAGE 8 0 0 0 0 0 8 0 0 4 4 0 8 68 6. flood tolerant.

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