Chapter 3

MARKETING STUDY

Marketing is the process of planning and executing the concept, pricing,

promotion and distribution of ideas, goods and services to create exchanges that

satisfy individual and organizational objective.

Marketing background, target market, demand and supply analysis,

annual demand and supply, sales forecast, marketing strategies or the 4P’s of

marketing, key players or competitors, market share, SWOT analysis and IFE

and EFE matrix will be tackled in this chapter. It will serve as the basis in

establishing the proposed business. This study analyzed if the said business will

become feasible in the market.

Marketing Background

This study determined the viability in entering the market. It included

identification of target market, the possible competitors and the appropriate

strategies that will be used to promote the business. Marketing strategies served

as the basis in the success of the enterprise. Marketing study also carries the

importance of market segmentation because of the fact that customers have

different needs and wants. The proposed project is the result of the marketing

research done by the proponents.

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Market Segmentation

A) Demographic Segmentation

This segmentation attempts to target those establishments who engage in

selling the products to end user. The proponents’ target markets are the retailers

or re-sellers of Bayambang, Pangasinan where the final users purchase goods.

B) Geographic Segmentation

The proposed business will be located at Brgy. Telbang, Bayambang,

Pangasinan. The proponents chose Bayambang where the product will be

offered and distributed because Bayambang’s location is good for business since

there is no other business that offers the same product which is nutritious “puto”.

Target Market

It is important to identify the business target market. Target market is a set

of present and potential customers that an organization attempts to satisfy. This

study identifies the Geographic, Demographic needs of the segments. Putolitious

aims to offer health benefits and good quality product to the residents of the

Municipality of Bayambang, Pangasinan. The proponents specific target markets

are the retailers or resellers. The proponents will use business-to-business

marketing (business to business, also called B to B or B2B is a form of

transaction between business, such as one involving manufacturer and

wholesaler, or a wholesaler and retailer). Putolitious will be strategically located

along Telbang, Bayambang, Pangasinan.

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The business attempts to satisfy the following entities:

1. Restaurants, canteens, coffee shops and other retailers. It refers to the

business inside the municipality where the business is located which

sells the product to the consumers.

2. The business also wanted to satisfy customers who is willing to try the

new variant of “puto”.

Demand

Demand analysis is done to estimate or find out the customer’s demand

for a product or service in a particular market.

The Municipality of Bayambang has a total of 92 registered food retailers

which is composed of 30 Canteens, 19 Food Retailers, 16 Coffee Shops, 14

Restaurants and 13 Food Cart as of 2018 according to the DTI office in the

Municipal. The proponents gathered information by floating survey

questionnaires and interviews to these registered retailers.

Knowing the demand will help to determine the trends of the product,

analyzing the demand thoroughly will give the projection of the total number of

quantity of the product that will be produced daily, weekly, monthly and annually.
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Table 3.

Frequency of Respondents on Buying Nutritious “Puto” for Selling.

Category Frequency Percentage

Yes 89 97%
No 3 3%
TOTAL 92 100%

This table shows that 89 of registered retailer which composed of 27

canteens, 19 food retailers, 16 coffee shops, 14 restaurants and 13 food

courts has a total 97% said YES that they are willing to sell nutritious “puto” and

3% of them said NO that they are not willing to sell.

Table 4.

Sales Rate of nutritious “Puto”.

Category No. of Respodents Percentage

Everyday 25 28%
Once a week 53 59%
Twice a week 9 10%
Thrice a week 2 3%
TOTAL 89 100%

This table shows that the respondents we surveyed on how many times

they would order or buy nutritious puto and they answered “once a week” which

has the largest number of respondents with 59%, some of them answered

“everyday” is 28% and “twice a week” which has the percentage of 10%. The

remaining 3% answered “trice a week” which has the least of number of

respondents.
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Table 5.

Frequency of respondents on how many nutritious “Puto” do they sell per

day.

Category No. of Respondents Percentage

1-5 boxes 77 87%
6-10 boxes 12 13%
11-20 boxes 0 0%
TOTAL 89 100%

This table shows the respondents choice on how many boxes of nutritious

“puto” do they sell per day and the majority of their choice was 1-5 boxes with a

percentage of 83% and 6-10 boxes with 17% out of 72 registered retailers.

Demand and Supply Analysis

The first in project analysis is to estimate the potential size of the market

for the product proposed to be manufactured and get an idea about the market

share that is likely to be captured. The demand and supply analysis indicated

how much product is consumed and able to buy at particular period of time. It

also indicates how much a product will and able to offer for a period of sale.
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Demand and Supply

Total Respondents (Retailers) 92

Respondents who want to sell nutritious “puto” 89

Respondents who doesn’t want to sell

nutritious “puto”. 3

Demand 89
Fig. 4. Demand Analysis

Demand 89

Will go to Bella’s Puto 25

Will go to Public Market 15

Will go to Goldilocks 12

Supply 52
Fig. 5. Supply Analysis

Demand 89

Less: Supply (will go to Bella’s, Public Market and Goldilocks) 52

Demand and Supply Gap 37

Fig. 6. Demand and Supply Gap
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Sales Forecast

This is the process of estimating the volume of sales. This serves as the

mother of all the budgets that every subsequent operating and financial budget

will rely on.

The sales forecast of “PUTOLITIOUS” for their different flavored nutritious

“puto” which they produced 111 boxes a day is shown in the table below.

Table 6.

Sales Forecast

Category Selling Oty. Daily Monthly Annually

Price
Putolunggay ₱ 250 45 boxes ₱11,250.00 ₱ 292,500.00 ₱ 3,510,000.00
PutoCarrot 325 36 boxes 11,700.00 304,200.00 3,650,400.00
PutoBanana 300 30 boxes 9,000.00 234,000.00 2,808,000.00
TOTAL 111 boxes ₱31,950.00 ₱ 830,700.00 ₱ 9,968,400.00

Table 7.

Five Year Sales Forecast.

Category YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5

Putolunggay ₱3,510,000.00 ₱4,212,000.00 ₱5,054,400.00 ₱6,065,280.00 ₱7,278,336.00
PutoCarrot 3,650,400.00 4,380,480.00 5,256,576.00 6,307,891.20 7,569,469.44
PutoBanana 2,808,000.00 3,369,600.00 4,043,520.00 4,852,224.00 5,822,668.80
₱14,354,496.0
TOTAL ₱9,968,400.00 ₱11,962,080.00 ₱17,225,395.20 ₱20,670,474,24
0

The sales forecast of PUTOLITIOUS is estimated to increase by 20%

every year.
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Marketing Strategies

In every business, it is very important to have a plan for its success. It is

vital for the business to design a comparative marketing strategy. A number of

techniques will be employed to make sure that the marketing plan is effectively

delivered. The first step will start from spreading the flyers, the product itself in

order to capture the attention of target market; this also includes putting tarpaulin

in different strategic places near the location of the business and the use of the

social media.

PUTOLITIOUS is a new entrant in the business world, creating awareness

is what the proponents are focusing on. By doing so, the proponents need to

improve the promotion and advertising plan which in turn leads to feasible and

sound technical actions tactically applied in day to day basis.

The proponents use the 4P’s of marketing as the ground for

implementation and strategies of PUTOLITIOUS.

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Product

Nutritious “puto” is freshly made and also contains fresh vegetables and

fruits. It is a combination of different types of vegetables like moringa

(malunggay) leaves, carrots and a fruit like banana that mixed in our “puto” that

makes it very tasty better than the conventional taste of “puto”. The “puto”

product has a shelf life of 3 to 4 days.

Human being needs protein and full complement of vitamins and minerals

to keep them healthy. Nutritious “puto” is not only made to satisfy the taste and

craving of the customers but also to give them health benefits which is needed

for their body. These products bring nature at its best, it delivers delicious and

nourishing “puto” made with all real fresh vegetables and fruit.

The vegetables and fruits use to make our “puto” convey important source

of many nutrients. Moringa (malunggay) contains many healthful compounds

such as: vitamins A (good for the normal vision and immune system), vitamin B1

(thiamine-good for the brain nervous system, heart and etc.), B2 (riboflavin-

development and function of the skin and other vital organs), B3 (niacin-lower

cholesterol levels), B6 (brain development), folate (used in dietary supplements)

and ascorbic acid (vitamin C for extra energy in the body. Carrots is a high

source of anti-oxidants and decreases risk of heart decease and stroke. Lastly,

banana contain nutrients that moderate blood sugar levels, improve digestive

health and may help with weight loss and support heart problem.
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Price

Price covers the actual amount where the end user is expected to pay for

a product. How product is priced will directly affect how it sell.

PUTOLITIOUS used the cost-plus pricing strategy that refers to a cost-

based method for selling the prices of the goods and services. It is also called as

mark-up pricing or it is practice by a company of determining the cost of their

product and then adding a percentage on top of that price to determine the

selling price to the customers. So, PUTOLITIOUS add 50% to the cost of raw

materials

and packaging used to make “puto” as the profit margin or desired profit of the

business.

Projected Cost of each Nutritious Puto.

Table 8.

Manufacturing Cost of Banana Flavored Puto

Direct Materials ₱ 81,380.00

Direct Labor 20,670.00
Manufacturing Cost
Premium Expense 2,591.40
13th Month Pay 20,620.00
Depreciation Expense 1,571.94
Transportation Expense 7,800.00
Utility Expense 2,520.00
Miscellaneous Expense 4,249.00
Communication Expense 720.00
Promotional Expense 4,957.00
Repair and Maintenance Expense 17,072.00
Indirect Materials 15,860.00
Total ₱ 180,061.34
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Unit Cost (UC) = total cost of raw materials/ total quantity produced

Unit Cost (UC) = ₱ 180,061.34 / 46,800 piece

= ₱ 3.85 / piece

Selling Price (SP) = (UC * 50%)+UC

= (3.85 * 0.50) + 3.85

= 1.93 + 3.85

= ₱5.78 or ₱6.00 / piece

Table 9.

Manufacturing Cost of “Malunggay” Flavored Puto

Direct Materials ₱ 91,168.00

Direct Labor 20,670.00
Manufacturing Cost
Premium Expense 2,591.40
13th Month Pay 20,620.00
Depreciation Expense 1,571.94
Transportation Expense 7,800.00
Utility Expense 2,520.00
Miscellaneous Expense 4,249.00
Communication Expense 720.00
Promotional Expense 4,957.00
Repair and Maintenance Expense 17,072.00
Indirect Materials 19,110.00
Total ₱ 193,099.34
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Unit Cost (UC) = ₱ 193,099.34 / 58,500 pieces

= ₱ 3.30 / piece

Selling Price (SP) = (UC * 50%)+UC

= (3.30 * 50%)+ 3.30

= 1.65 + 3.30

= ₱ 4.95 or ₱ 5.00 / piece

Table 10.

Manufacturing Cost of Carrot Flavored Puto

Direct Materials ₱ 69,472.00

Direct Labor 20,670.00
Manufacturing Cost
Premium Expense 2,591.40
13th Month Pay 20,620.00
Depreciation Expense 1,571.94
Transportation Expense 7,800.00
Utility Expense 2,520.00
Miscellaneous Expense 4,249.00
Communication Expense 720.00
Promotional Expense 4,957.00
Repair and Maintenance Expense 17,072.00
Indirect Materials 15,860.00
Total ₱ 168,153.34

Unit Cost (UC) = ₱ 168,153.34 / 39,000 pieces

= ₱ 4.31 / piece

Selling Price (SP) = (UC * 50%)+UC

= (4.31 * 50%)+ 4.31

= 2.15 + 4.31

= ₱ 6.46 or ₱ 6.50 / piece

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Place

Place is often referred as the distribution channel, it is where a product or

service can be purchased.

PUTOLITIOUS will be located in Telbang, Bayambang, Pangasinan

considered to be a strategic location for a business because it lies along the

national highway. The proponents decided to establish a manufacturing plant to

become the factory of PUTOLITIOUS. The location of the business will be

accessible enough to meet the needs of our target market.

Channel of Distribution.

The PUTOLITIOUS will have its product reach its customers mainly

through stores, it will also be distributed in 16 coffee shops, 14 restaurants, 30

canteens, 19 food retailers and 13 food-cart around Bayambang. The channel of

distribution is the pathway of the business to sell the products to end consumers.

PUTOLITIOUS Retailers

Fig. 7. Distribution Channel

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Promotion

Promotion refers to any type of marketing communication used to inform

or persuade target audiences of the relative merits of a products, services, brand

or issue. The aim of promotion is to increase awareness, create interest and

create brand loyalty.

The proposed business will use promotional tools such as tarpaulin, flyers,

stickers, internet marketing and word of mouth.

 Signage of the building

The proponents will use signage that will be placed in front of the building

to display information to particular audiences.

Fig. 8. Signage
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 Tarpaulin (3ft. x 2ft.)

It will be posted in places where there is traffic of people. This will be

placed in different strategic places such BAMACADA Terminal, Balon

Bayambang Terminal, Zone V, Zone II.

Fig. 9. Sample Tarpaulin.

 Flyers (3R(9x13cm)

Proponents will give flyers to the people before the opening to inform them

about the business. The main reason the proponents opted to use the same
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design as per the tarpaulins and flyers so that it will be easily recognized by the

people.

Fig. 10. Sample Flyers

 Stickers (4R(10x15cm)

Will act as an advertising through transit. The stickers will be given to

tricycle drivers, jeepney drivers and bus drivers and will post it on their vehicles.

Fig. 11. Sample Stickers

 Social Networking Sites

The proponents will be using free social networking application in order to

reach wider range of possible customers. This will be a great help for them to

know about the new variety of puto. It will also provide good communication

relationship in ways that the proponents will be giving information and they will

give their comments and suggestions for product improvement and others.
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Fig. 12. Sample Twitter Page.

Fig. 13. Sample Facebook Page

 Word of Mouth

The business will make sure that the customers are satisfied so that they

will be a walking advertisement of our product and recommending it to other

people.

 Trade Fair

The proponents will avail a stall in the “Fiestahan Ed Bayambang” Food

Trade Fair, the stall will be provided by the said department and all we have to

bring is the product to be sell and be recognized by the customers.

 Free Taste
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The proponents will give a free taste of the nutritious “puto” to the public

on the day before the grand opening of the business to give an idea about the

product and an experience to taste it and also be of help in promoting the product

to them. The proponents will go in places where there is a massive crowd of

people like CSI and public market

Table 11.

Promotional Expense

Particulars Oty. Price Cost Monthly Annually

Signage 1 ₱32,500 ₱32,500 ₱32,500 ₱ 32,500
Trade fair 20,000 20,000 20,000 20,000
Tarpaulin 20 190 3,800 3,800 3,800
Free Taste 300 4 1,200 1,200 1,200
Stickers 100 10 1,000 1,000 1,000
Flyers 140 7 980 980 980
TOTAL AMOUNT ₱ 59,480.00

Table 12.

Promotional Expense for Five Years.

Particulars Oty Price Cost Year 1 Year 2 Year 3 Year 4 Year 5

Signage 1 ₱32,500 ₱32,500 ₱32,500 - - - -
Stickers 100 10 1,000 1,000 - - - -
Tarpaulin 20 190 3,800 3,800 - - - -
Flyers 140 7 980 980 ₱ 931 ₱884.45 ₱840 ₱798.00
Free 300 4 1,200 1,200 - - - -
Taste
Trade Fair 20,000 20,000 20,000 19,000 18,000 17,000 16,000
TOTAL ₱52,711 ₱59,480 ₱59,480 ₱19,931 ₱18,884.45 ₱17,840 ₱16,798.00
AMOUNT

This table shows the five-year projection of promotional expenses use in

the proposed business that is estimated to decrease by 5% every year. Year 1

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would be the highest expense spend in promotion because that is the time that

the business has to be introduce to the public, and the following years will

eventually decrease.

Key Players and Competitors

The PUTOLITIOUS is a new plater in the market which desired to gain

profit and to attract customers and potential buyers in the Municipality of

Bayambang, Pangasinan by making the community health wise. Almost in every

place there are a lot of business selling product such as Goldilocks, Bella’s and

public market they are competitors to be considered by the business. So, the

new player in the market worked hard in introducing the products in the market

and won the customers attention and let them personally tried the new nutritious

puto product.

Market Share

The market share is a company’s portion of sale within the entire market in

which it operates. This metric indicates a company’s size within its market.
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Bellas Puto
28%

PUTOLITIOUS
42%

Public Market
17%

Public Mraket
13%

Fig. 14. Market Share

Since the proposed business is first of its kind in Bayambang, the

proponents based its market share in the research they have conducted. The

Figure 11 shows the percentage of each competitors from the nearby stores of

business location and nearby Municipality. Majority of the respondents are

buying puto in Public market, Bella’s Puto and Goldilocks.

The researchers assumed that the proposed business can hold at least

42% of the market share that are willing to buy inside.

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SWOT Analysis

The SWOT analysis is an extremely useful tool for understanding and

decision making for all sorts of situation in business and organization.

Strengths Weaknesses

 Uniqueness of the product with  Puto is a perishable product.

its look and taste.  Not well known by the
 Offers a new and nutritious customers.
puto.  Not all people are fond of
 Production quality. eating vegetables and fruits.
 Knowledgeable workers.
 The product is freshly made.
 Serve satisfying, healthy and
delicious goods.
 The location of the business is
very accessible.

Opportunities Threats

 The new taste and flavor of the  Climate change.

puto will give the customers  Rising cost of raw materials.
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something new to crave for.  Artificial Flavors.

 Health conscious individuals  Strong and well-known
can enjoy this kind of puto. competitors across the
 Helps the production of province of Pangasinan.
vegetables and fruits industry  Others possible new
to increase. competitors that might be
 “Millennials” are considering for established within the area.
more various product choice.
 Continue discover other fruits
and vegetables that can be
used for “puto” flavor.

Fig. 15. SWOT Diagram

INTERNAL FACTOR EVALUATION (IFE) MATRIX

The proponents used IFE Matrix to determine if the business has a strong

internal position.

Table 13

IFE Matrix

Key Internal Factor Rating Weigh Weighted

t Score
STRENGTH
 Uniqueness of the product as its look 4 0.13 0.52
and taste.
 Offers a new and nutritious Puto. 4 0.12 0.48
 Production quality. 4 0.12 0.48
 Knowledgeable workers. 3 0.11 0.33
 The product is freshly made. 4 0.12 0.48
 Serve satisfying goods healthy and 4 0.12 0.48
delicious.
 The location of the business is very 3 0.11 0.33
accessible.
WEAKNESSES
 Puto is perishable product. 1 0.07 0.07
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 Not well known by the customers. 2 0.05 0.1

 Not all people are fun of eating 2 0.05 0.1
vegetables and fruits.
TOTAL WEIGHTED SCORE 1.00 3.37
Rate: 1 = Major Weakness 3 = Minor Strength
2 = Minor Weakness 4 = Major Strength

The Internal Factor Evaluation total weighted score is 3.37, which signifies

that the business has a Strong Internal Position.

EXTERNAL FACTOR EVALUATION (EFE) MATRIX

The proponents used EFE Matrix to determine if the business has a strong

external position in the market.

Table 14

EFE Matrix

Key External Factor Rating Weigh Weighted

t Score
Opportunities
 The new taste and flavor of the puto will 4 0.13 0.52
give the customers something new to
crave for.
 Health conscious individuals can enjoy 4 0.11 0.44
this kind of puto.
 Helps the production of vegetables and 3 0.10 0.3
fruits industry to increase.
 “Millennials” are considering for more 3 0.10 0.3
various product choice.
 Continue discover other fruits and 4 0.13 0.52
vegetables that can be used for “puto”
flavor.
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Threats
 Climate change. 4 0.10 0.4
 Rising cost of raw materials 4 0.09 0.36
 Artificial flavors 4 0.09 0.36
 Strong and well-known competitors 4 0.08 0.32
across the province
 Others possible new competitors that 3 0.07 0.21
might be established within the area.
TOTAL WEIGHTED SCORE 1.00 3.73
Rate: 1 = Response is Poor 3 = Response is Above Average
2 = Response is Average 4 = Response is Superior

The External Factor Evaluation total weighted score is 3.73, which

signifies that the business has a Strong External Position.