In Partial Fulfillment of the Requirements

For the Degree of Bachelor of Science in Business Administration

Major in Financial management

Case Analysis
In
BA1_Basic Microeconomics

Price of Pinoy Tasty Seen to Go Up

Submitted By:

Group1

Names of members

Submitted to:

Mr. Dexter T. Villas, MBA

College Instructor
 I. CASE CONTEXT

This study is about the price of the Pinoy Tasty seem to go up due to the high tariff that the government
had given to its main ingredient which is the Turkish flour. It says that the Turkish flour will increase to 20
percent that imposed by Department of Agriculture to Department of Trade and Industry (DTI). Therefore, the
price of the Pinoy Tasty would increase by 10 to 15 percent according to the bakers. From currently price at
P37 to P40 per loaf addition statement by the bakers. On the other hand, the presidential spokesman Edwin
Lacierda did confirm that there is a pending hike in the price of Pinoy Pandesal and Pinoy Tasty and rest
assured that the prices in local will remain as it is before the tariff were being implemented. Then he added
that the other bread products are not covered by the proposed increase when the tariff of Turkish is enforce.
Nevertheless, the bakers told to the National Price Coordinating Council that they don’t have any alternative
to the Turkish flour and the Harinang Pinoy does not meet their standard so their petition is to let them also
increase their price because if it does not imposed, their business will fall due to the tariff that is being
implemented to their main ingredients.

II. VIEWPOINT

Mura, masarap, masustansiya" (Cheap, delicious, nutritious). This is the tagline behind the Pinoy Tasty, a
result of the local bakery industry's effort to provide a cheaper alternative to branded loaf breads sold in the
market today. Pinoy Tasty sells for P36 per 450 gram loaf, compared to regular brands that sell for P42 to P54.
Pinoy Tasty is cheaper because it contains only the basic ingredients and is subsidized by bakers and flour
millers. Makers of the Pinoy Tasty will make the bread available to consumers via 500 supermarkets and 800
convenience stores and drugstores. In terms of packaging, Pinoy Tasty will carry the names specific makers so
that consumers may choose their preferred baker. Unlike the regular brands, Pinoy Tasty is not enriched with
milk, eggs, margarine, cream and butter, and uses the cheaper non-VAT washed sugar. Pinoy Tasty is
nutritious because bakers use flour fortified with Iron and Vitamin A.

III. MAIN PROBLEM

The main problem in this case study is the price of Pinoy Tasty may go up by 10 to 15 percent due to the
sudden increase of tariff on Turkish flour mandated by the Department of Agriculture. The bakers of Pinoy
Tasty will experience difficulties in finding another alternative flour since the Turkish flour is cheaper than
locally milled flour which is “Harinang Pinoy” and it doesn’t meet the baker’s standard. This problem may
cause increase price of Pinoy Tasty because Turkish flour is their major ingredient and it can also affect the
demand of Pinoy Tasty.
 IV. AREAS OF CONSIDERATION

Do anything about the imposition of higher tariffs, then this would open opportunities for other flour
manufacturing companies or other alternatives that they may come up with. Increase small amount of tariffs
at the same time, continuing competition with local flours.
If the DTI could find a way to retract the imposition of higher tariff then the increase in price of the Pinoy
Tasty might also retract the imposition of higher tariff find another sources of flour that would meet the
baker's standard and also if the DTI would be able to minimize or prevent the pending hike in the prices of
Pinoy Tasty, then this would help the consumer of tasty to save money.
Retract the imposition of higher tariff. Find another sources of flour that would meet the baker's standard.

V. EXTERNAL ENVIRONMENT
A. THREATS
 A lot of competitor will come out within the market.
 Customers will opposed to buy the Pinoy Tasty due to its high price than the price before.
 Many alternative products will be in the market that the quality is the same as the Pinoy
tasty.
 Increase the competition inside and outside the market.
 Shifting consumer preferences and expectations.

 Competition: Some of the major competitors of Pinoy Tasty are the gardenia, marby and
many more that offers also the same product.
 Rivals begin to imitate menu offerings/or dining ambience

B. OPPORTUNITIES
 Business will know who the loyal customers are.
 The company will enhance their productivity and marketing skills.
 Opportunity to make an effort to introduce their business in the time of competition.
 Product innovation and new growth platforms
 Improvement of Pinoy Tasty quality standard will occur.
 A less well-known brand name than some rivals.
 Sales at franchised stores higher than company-owned stores.
 VI. INTERNAL ENVIRONMENT
A. STRENGHTS
•Good quality of the flour
•Accessible Location
•Variety of Breads
•Quality of Bread

The variety of brands gives the pandesal/tasty a strong ability to serves many different segments in the
market. There is a tendency amongst a lot of the producers fall into the trap of placing disproportionate focus
on promoting the rational elements of the industry. That is to say that they focus on the practical benefits of
alternating the flour from harinang Pinoy to Turkish flour is to impose standards .Which give the
pandesal/tasty more succulent and rich in interest. These details, although obviously important to
communicate, are nothing more than the cold, hard facts of the matter

B. WEAKNESSES
•Unaffordable Price
•Limited Bread
•Lower Demand
The pandesal/tasty seems to be Philippines National bread and popular with its affordable price. Rising the
price of the products have an immense effect on the decision making of producers and can be explained by
the law of supply. Increased prices typically result in lower demand, and demand increases generally lead to
increased supply.

VII. ALTERNATIVE COURSE OF ACTION

1. Retract the imposition of higher tariff
2. Find another sources of flour that would meet the bakers’ standard.

VIII. FINAL DECISIONS

First, let us know the answer to the two questions given by the book. This study don’t think that the
demand for Pinoy Pandesal and Pinoy tasty is elastic since the demand is about the willingness and ability to
consume a given good. Since pandesal is part of the Filipino breakfast and if the price of pandesal and tasty will increase
by 15%, the demand would be considered inelastic. They may still buy the product but they will lessen the quantity
and the demand would still be there. According to the law of demand, as the price of good decreases, the quantity demanded
of that good increases. While if its increase by 100%, the demand may become Elastic. Whereas it would really affect the demand
of consumer and it's such a big jump in its price from what its price before. Generally, demand will change depending
on how high the price is. If the price of goods decrease, the demand increases. And if the price increases, the demand
decreases. On the other hand, I think the situation that will occur to the supply of pandesal and tasty if the price of locally
milled flour increases by 15% and by 100% is if the locally milled flour by 15%, the supply would just become smaller or they will
just lessen the supply and it won't decrease that much. Unlike if its increases by100%, that's the time that supply would decrease
on what quantity supplied before and shortage possibly happen especially when the demand for pandesal is high.
Flour is the main ingredient of Pandesal and Tasty, once the price of Flours increase its price, Supply would be
lessen and or depends on how big the percentage is.

Furthermore, the main problem to this study is about the main ingredient of PInoy Tasty which is the Turkish flour seem
to go up because of the tariff that will be implemented and the price of Pinoy Tasty will rise. It says the tariff will rise from 7 percent
to 20 percent therefore the price of Pinoy Tasty and Pinoy pandesal would increase by 10 to 15 percent. Likewise, this study find a
way in order to cope this problem for the bakers. The final decision of this study is to retract the imposition of that tariff for the
Turkish Flour which is the main ingredient of the Pinoy Tasty because if that tariff were being imposed, the bakers will tend not to
get the quality of Pinoy Tasty before the tariff were being enforce. The bakers will involuntarily use an alternative flour even
though it is not like what is the taste of Pinoy Tasty when they used the Turkish flour as their main ingredient just to remain the
price of Pinoy Tasty and avoid negative demand shock. Therefore, the study have another alternative decision if the tariff were
irresistible to propose. This is to help the bakers to find the another alternative flour that is not that costly like the Turkish flour
when tariff were impose and that flour should meet the bakers standard to maintain the taste and preference of the customers.
Nevertheless, both of that two decision that this study presented, it will benefit the bakers who is suffering from miscarriage or
bankruptcy and it will help the bakers to continue to grow their business and avoid severe loss.