Republic of the Philippines

EASTERN VISAYAS STATE UNIVERSITY

Tacloban City

College of Engineering
INDUSTRIAL ENGINEERING DEPARTMENT

Customer
Segmentation and
Product Innovation
for TQM
Submitted to:
ENGR. ROQUE A. COSTINIANO
Instructor

Submitted by:

AIRA OÑATE
ROAN MACAPUGAS
CHARLINE SALVEDIA
MARY JOY SUPERADA
JEAN IVY FRANCISCO
DONNABELLE CINCO

BSIE-5A
 TABLE OF CONTENTS

Page

I. INTRODUCTION

Background of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Scope and Delimitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Customer Segment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

II. SITUATIONAL ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

III. PRODUCT INNOVATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

IV. RESULTS AND DISCUSSIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

V. CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

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I. INTRODUCTION

The implementation of total quality management (TQM) tools and practices has
enabled organizations to reduce costs, increase the productivity of human and physical
assets, and improve the quality of their products (Sila, 2007; Hendricks and Singhal, 1997;
Flynn et al, 1994). However, as organizations gradually implemented TQM systems,
including Six Sigma methodology, the basis of competitive advantage swiftly shifted from
quality to innovation. Successful product innovation and the ability of companies to
improve their innovation processes rapidly became essential requirements for competitive
advantage and long-term growth. In particular, the launching of new products is critical to
survival in dynamic environment and a significant determinant of firm performance. There
is an ongoing debate on whether TQM systems support organizational initiatives to
improve innovativeness, or on the contrary, may hinder on how to provide organizational
structure that facilitates innovation/knowledge creation process. This study contributes to
that debate by investigating the core assets and capabilities that TQM creates in
organizations and the extent to which these resources leverage or hamper strategic product
innovation.

Background of the Study

Customer segmentation is one technique of knowing what the products can be

potentially introduced to the market. It as a wiser move rather than creating a product and
finding your potential customers in the market. It is the process of dividing customers into
groups based on common characteristics so companies can market to each group
effectively and appropriately.

Customer segmentation is imperative when trying to send messages to a target

market. Segmenting consumers enables marketing teams to stretch budgets and make the
most of marketing dollars by reaching the most ideal visitors who are likely to become
leads, without wasting money on impressions that will never turn into conversions.

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 Additionally, by reaching niche groups of people, marketers can craft messages
specifically for them. This communication will enable marketers to connect with the target
audience, develop relationships, and communicate messages that resonate.

There is an excess of ways to segment the market in order to reach the most ideal
consumers for certain products or services. Some of these include geographic
segmentation, demographic segmentation, psychographic segmentation, and behavioral
segmentation.

Geographic segmentation is the practice of segmenting a campaign’s target

audience based on where they are located. Segments can be as broad as a country or a
region, or as narrow as one street of homes in a town.

Demographic segmentation is segmenting the market based on certain

characteristics of the audience. Characteristics often include, but are certainly not limited
to: race, ethnicity, age, gender, religious, education, income, marital status, and occupation.

Psychographic segmentation is far less concrete than both geographic and

demographic customer segmentation, as the characteristics used to segment are less
“tangible” than the latter two. Psychographic segmentation divides the market on principles
such as lifestyle, values, social class, and personality.

Behavioral segmentation is similar to psychographic segmentation on the basis that

it is less concrete than demographic or geographic segmentation. Behavioral segmentation
is the practice of dividing consumers into groups according to any of the following
attributes: usage, loyalties, awareness, occasions, knowledge, liking, and purchase patterns.

With this, the researchers conducted a survey to establish factual data from the
answers given by the students of the College of Arts and Science in Eastern Visayas State
University. As this also helps the researcher in fully understanding the importance of
customer segmentation before developing a product. This could also be used as a reference
for future feasibility study studies which is deemed beneficial.

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Objectives

 To gather relevant data needed for product innovation analysis.

 To create product innovation through the Kano Model method.
 To present the product innovation established based on the data gathered.
 To satisfy the specific needs of the particular customer segmentation.

Scope and Delimitation

The paper focuses on the segmentation of College of Arts and Sciences

students, knowing them by demographically and psychographics, etc. Also, the
measure of product innovation is based on the degree of product newness from the
given set of information from the respondents.

Customer Segment (Demographics, Geographics, Psychographics Etc.)

Figure 1: Statistics of the Respondents’ Age

Age

15 and below years old 16 to 20 years old 21 and above

Table 1: Statistics of Respondents’ Age

AGE
15 and below 2 0.50%

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 16 to 20 years old 252 63%
21 and above 146 36.5%
Total 400 100%

This research survey had categorized the respondents into different age groups. In

refer to Table 1 and Figure 1 as shown above, 2 or 0.50% out of the total of 400 are 15

years old and below, 252 or 63% of the total respondents belong to the age group within

16 to 20 years old, and 146 or 36.5% of the total respondents are 21 years old and above.

Table 2: Statistics of Respondents Sex

Sex

Male Female

Table 2: Statistics of Respondents’ Sex

SEX
Male 178 44.5%
Female 222 55.50%
Total 400 100%

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 Based on Table 2 and Figure 2, 178 or 44.5% out of the total respondents of 400

are male, whereas 222 or 55.50% of the total respondents of 400 are female.

Table 3: Statistics of Respondents’ Year Level

Year Level

First Year Second Year Third Year Fourth Year

Table 3: Statistics of Respondents’ Year Level

YEAR LEVEL
First Year 163 40.75%
Second Year 52 13%
Third Year 65 16.25%
Fourth Year 120 30%
Total 400 100%

By referring to Table 3 and Figure 3, 163 or 40.75% out of the total 400 respondents

are First Year Students, 52 or 13 % out of the total 400 respondents are Second Year

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Students, 65 or 16.25% out of the total 400 respondents are Third Year Students and 120

or 30% out of the total 400 respondents are Fourth Year Students.

Figure 4: Statistics of Respondents’ Student Status

Status

Free Tuition Beneficiary Working Student University Scholar Others

Table 4: Statistics of Student Status

STATUS
Free Tuition Beneficiary 372 93%
Working Student 17 4.25%
University Scholar 4 1%
Others 7 1.75%
Total 400 100%

This research has categorized respondents’ into four groups. By referring to Table

4 and Figure 4, 372 or 93% out of the total 400 respondents are Free Tuition

Beneficiary, 17 or 4.25% out of the total 400 respondents are Working Students, 4 or

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1% out of the 400 total respondents are University Scholars, and 7 or 1.75% out of the

total 400 respondents are either TES, 4PS Beneficiaries, etc.

Figure 5: Statistics of Student’s Monthly Allowance

Allowance

500-1000 1001-2000 2001-3000 3001 and above

Table 5: Statistics of Student’s Monthly Allowance

ALLOWANCE
500-1000 268 67%
1001-2000 61 15.25%
2001-3000 34 8.50%
3001 and above 37 9.25%
Total 400 100%

This research has categorized respondents’ monthly allowance into four

groups. By referring to Table 5 and Figure 5, 268 or 67% out of the total 400 are

within the 500 to 1000 monthly allowance, 61 or 15.25% out of the total 400

respondents are within 1001 to 2000 monthly allowance. Meanwhile, there are 34

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 or 8.50% out of the 400 total respondents who are within the 3001 and above

monthly allowance.

Figure 6: Statistics of Student’s Monthly Savings

Savings

None 50-100 101-200 201-300 301 and above

Table 6: Statistics of Student’s Monthly Savings

SAVINGS
None 186 46.50%
50-100 141 35.25%
101-200 29 7.25%
201-300 19 4.75%
301 and above 25 6.25%
Total 400 100%

This researchers have categorized respondents’ monthly savings into five groups.

By referring to Table 6 and Figure 6, 186 or 46.50% out of the total 400 respondents are

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not able to save, 141 or 35.25% out of total 400 respondents can save an amount of 50 to

100 pesos, 29 or 7.25% out of the total 400 respondents can save an amount of 101 to 200

pesos and 19 or 4.75% out of the 400 total respondents can save an amount within 201 to

300 pesos. Meanwhile, 25 or 6.25% out of the 400 total respondents can save an amount

within 301 pesos and above.

Table 7: Overall Tally of Students’ Hobbies

HOBBIES SCORE RANK

(From Highest-Lowest)
Listening to music 248 1
Singing 154 2
Being active on social 129 3
media
Sports 121 4
Reading books 120 5
Dancing 103 6
Travelling 91 7
Sketching/Drawing 63 8
Biking 61 9
Photography 60 10
Hiking 40 11
Gardening 40 11
Painting 38 12
Shopping 35 13
Others 34 14
Swimming 32 15
Acting 19 16
Modeling 19 16

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 The table shows the result of the overall tally of the hobbies of the respondents.
Listening to music got the highest rank with the score of 248 and it seems that half of the
respondents answered on it. Followed by singing with the score of 154 being the in the 2nd
rank, being active and social media got the score of 129, sports in the 4 th rank with the
score of 121, reading books with 120 scores and it is in the 5th rank. Followed by, dancing
got the score of 103 in the 6th rank, travelling with 91 scores and it is in the 7 th rank, the
sketching/drawing got the score of 63, biking has 61 scores and photography got 60 scores
in its 10th rank. Hiking and gardening got the same score of 40 in the 11 th rank, followed
by painting got 38 scores, shopping 35 scores, others with 34 scores and swimming got 32
scores. Acting and modeling got the same score also with 19 scores and it is in the lowest
rank.

Table 8: Overall Tally of Items/Products Frequently Used

ITEMS RANK
(From Highest-Lowest)
Toothpaste 147 1
Cellphone 142 2
Shampoo 106 3
Toothbrush 106 3
Ballpen 84 4
Bag 74 5
Soap 58 6
Calculator 52 7
Umbrella 45 8
Netbook 42 9
Perfume 36 10
Bondpaper 28 11
Comb 28 11
Pentel Pen 25 12
Pencil 25 12

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 Yellow Paper 25 12
Lunch Box 23 13
Tumbler 22 14
Manila Paper 22 14
Powder 18 15
Make-Up Kit 14 16
Printer 12 17
Stapler 10 18
Ruler 8 19
Others 8 19
Ink 7 20
Scotch Tapes 6 21
Tissue 5 22

The table shows the result of the overall tally of the items of the respondents
frequently used.

Toothpaste got the highest rank of 147 scores it seems that partly of the respondents
answered on it as the items they most frequently used, followed by cellphone with the
scores of 142 on its 2nd rank. Shampoo and toothbrush got the same scores of 106. Next is
the ballpen with 84 scores, bag with 74 scores, and soap with 58 scores and calculator with
52 scores. In the 9th rank, the umbrella got the score of 45 followed by netbook/laptop with
42 score and perfume with 36 scores. Bond paper and comb got the same scores of 28 on
its 12th and 13th rank. Pentel pen, pencil and yellow paper got 25 scores followed by lunch
box with the scores of 23. Tumbler and Manila paper got the same scores of 22 on its 14th
rank, powder with 18 scores. Make up kit with 14 scores, printer 12 scores and stapler 10
scores. In the 19th rank, ruler and others got the score of 8 followed by ink with the score
of 7, scotch tape got 6 scores and lastly tissue got the scores of 5 and it seems that it is in
the lowest rank.

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II. SITUATIONAL ANALYSIS

Analyzing all the inputs by the respondent, there were many problems and
situations encountered that made way to demands of improvement. These were also the
loopholes that served as the opportunity to innovate the areas needed for innovation.
The table below presents the topmost 5 items used by the respondents, the daily activities
used for this item, unmet needs, desires, and problems, satisfiers and dissatisfiers, and
what would they feel upon innovating the product.

Table 9: Situational Analysis

Daily Activities Items used Unmet needs, Satisfiers Dissatisfiers What they
desires, feel on an

problems innovation
(site
innovation)
1. Supplement in Toothpaste  No  Fresh  Feeling Extremely
cleaning the bubbles. feeling of mouth Satisfied
teeth. and is not
clean cleaned
mouth well.
after
use.
2. Communication Cellphone  Fast heating  Able  Too much Loyalty to
and social and draining to need of brand.
media of battery. comm recharging
 Lagging unicate .
and  Loss of
fast some file
connec works.
tion.
3. Tool in Toothbrush  Hard and  Some  Hard Extremely
cleaning and easy have bristles satisfied

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 brushing the distangling smoot would
teeth. of bristles. h sometimes
bristles hit and
. hurt gums.
4. Washing and Shampoo  Makes the  Some  Difficultie Confidence
making the hair hair dry brand is s in
smooth and after using. effectiv brushing
shiny. e in the hair.
keeping
the hair
smooth
and
shiny
all day.
5. Writing Ballpen  Doesn’t  Has a  Need of Happy and
especially in work when specifi changing loyalty to
school. accidentally c size and brand
falls. of nib. purchasing
 Thick nib. another
ballpen.
 Thick nib
makes
penmanshi
p appear
thick and
dirty.
On this table, the researchers selected the five (5) most products frequently used
by the students.

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III. PRODUCT INNOVATION
 The MIDCAR (Most Innovative Designs and Creative Ambition for
Renewability) decided to make a toothpaste product innovation that has new
look on it, container must be reusable and avoid using plastic containers for
less expense and be more ecofriendly and can remove plaque in just a short
span of time. More volume and must have fruity flavors or new flavor/ more
colorful for tastier mouth, fresher breath, teeth protection, smells good and
can last up to 10 hrs. and whitens teeth. Adds on more crystals, long lasting
mint flavor, chewable and more fluoride percentage. And in the other way,
this toothpaste serve as a lotion, organic, can be used to clean shoes, take
away pimples and can be used as soothing gel. The new toothpaste product
brand will be “The Most Toothpaste”.

 The MIDCAR (Most Innovative Designs and Creative Ambition for

Renewability) decided to make a cellphone product innovation that has a
longer battery life, bigger storage, low radiation and does not heat up easily.
Also it has an exhaust fan, projector feature, solar powered cellphone, Siri
like system for android, durable, high performance and efficient. Adds on
voice recognition of the owner so that it will only work when the real owner
are the one using, easily accessed to any device so no time consumption,
more apps can be used without the internet even in the provinces with low
signal, can detect natural calamities, easily detected when lost, has apps like
laptop and computer, more pixels and easy access for educational benefits
that does not need payment. The new cellphone product brand will be “The
Innov Phone”
 The MIDCAR (Most Innovative Designs and Creative Ambition for
Renewability) decided to make a toothbrush product innovation it rotating
toothbrush with toothpaste one side that is longer usability for long term
used, flexible, foldable and smooth. The new toothbrush product innovation
will be “Multi Vita Brush”.

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  The MIDCAR (Most Innovative Designs and Creative Ambition for
Renewability) decided to make a shampoo product innovation it has a sweet
long-lasting scent, smoothen and shine hair and anti-dandruff at the same
time straightens hair. Add more brand for men to remove dead hair and stop
using plastic cover. The shampoo can be used as shampoo and body wash.
The new shampoo product innovation will be “AmbiCare Shampoo and
Body Wash”.
 The MIDCAR (Most Innovative Designs and Creative Ambition for
Renewability) decided to make a shampoo product innovation it has a
different colors in one pen. It has also an added feature of a pentel pen attach
to it. It is refillable and thicker ink. The new ballpen product innovation will
be “Renew Pen”.

IV. RESULTS AND DISCUSSION

1. It was found out that the highest percentage of age bracket belongs to the 16 to
20 years old category. This is so because, the population mostly consist of
Freshmen Students in the College of Arts and Science who fall in the
aforementioned age bracket.
2. Based on the results, it was found out that there is a higher percentage of Female
CAS Students with a 55.50% over a 44.50% Male CAS Students. It is because,
more female students are inclined into taking Arts and Science Courses and
other Allied Discipline more than the males.
3. Based on the results, there are more Freshmen or First Year Level Students
because their total population is still not decreased due to an entry level
undertaking in the College of Arts and Science.
4. It is evident that the government has implemented a Free Tuition policy to all
public state universities and college. This is the reason why most of the answers
in the survey questionnaire is “Free Tuition Beneficiary” where most students
could benefit from.

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 5. Based on the results, listening to music garnered the highest score as most
frequent hobby done by CAS Students, while the lowest is Modelling.
6. Based on the results, the item with the highest garnered score for most
frequently used is the Toothpaste, while the item with the lowest score gained
is the Tissue.

V. CONCLUSION
1. Therefore, the researchers could potentially introduce to the market their
product innovation by first having a further study in order to fully have a
detailed specification of the products’ innovations.
2. Therefore, for the students in the College of Arts and Science, the most frequent
item they use is the toothpaste for brushing their teeth. This item is where our
central innovation focuses such that it garnered the highest score.

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