III

In analyzing the market need, the following questions should be asked:

- Who will get interested in my product?
- What does the market need or want?
- Who is buying the product? What and how much? Or how, where and why are they buying those
goods or services?
MARKET ANALYSIS is a quantitative and qualitative assessment of a market ability to respond positively.

How to do a market analysis

• SEGMENTATION
- Is the process of dividing into segments with similar characteristics
• TARGET MARKET
- This is the type of customers that are focused within the market.
• MARKET NEED
- The desires of the target market.
- Investors must determine the needs of the market through analysis based from research conducted
focusing on their needs.
• COMPETITION
- Knowing about your COMPETITION will help you define your target market.
How to identify your competitors?
Determine your direct and indirect competitors.
Analyze the strengths and weaknesses of competitors.
Establish strategies for maintaining customer loyalty.

TYPE OF COMPETITORS

DIRECT COMPETITORS

- Are businesses that make most of its money selling the same or similar products or services.

INDIRECT COMPETITORS

- Are businesses that offer substitute products or services

Marketing Mix - set of actions or tactics, that a company uses to promote its brand or product
- Also known as the Four P’s broad levels of Marketing decision namely
• Product - refers to what the business offers for sale and may include goods or services.
-anything that can be offered for satisfaction
-a bundle of satisfaction received after a lease or purchase.
• Price - refers to decisions surrounding “ list pricing, discount pricing, credit payment or credit terms”
-Refers to the total cost for customer to acquire product.
FACTORS TO CONSIDER IN PRICING YOUR
PRODUCTS

✓ Positioning
✓ Willingness and ability topayof your
target market
✓ Goals of the business
✓ Profit!
 EXAMPLES OF PRICING STRATEGIES

COST – ORIENTED
1. List all the ingredients with the corresponding unit of measure and the quantity needed
2. List the prices of each ingredient.
3. Determine the quantity per pack.
4. Determine the cost per unit of each pack.
Example: Salt P10/20 tablespoon per pack = P 0.50 per tbs.
5. Determine the per batch cost of each ingredient.
Example: Sale P 0.50 per tbs * 1 ½ tbs = P 0.75 in a batch
6. Add all cost of the ingredients per batch to get the total cost.

To compute for the per unit cost:

(total cost / units produce per batch)

₱ 202.25/6 servings
= ₱33.71
To compute for the selling price:
( cost * desired profit)

₱33.71 + ₱16
= ₱49.71 / serving

To compute for the selling price:

(cost * desired profit)

₱33.71 + ₱16
= ₱49.71 / serving

What if the owner would like to have a profit margin of 30% from the total cost,
How much will be the selling price of each serving of tocino? Total Cost ₱202.25
1 batch = 6 servings of tocino
₱ 202.25/6 servings = ₱33.71

Selling Price = Total Cost per Serving / (1 - % of the desire profit)

Selling Price = ₱33.71 / (1 - 0.30) Selling Price = ₱33.71 / .70
₱ 48.16 / serving of tocino

COMPETITOR – ORIENTED
DEMAND – ORIENTED

• Place - direct or indirect channels

-Refers either to physical location where a business carries out business or the distribution
channels used to reach markets
-May refer to a retail outlet
-Virtual stores
• Promotion - The art of communicating a product’s benefits to customers and convincing
them to acquire the product once, or, ideally, a repeated number of times.
Overview of Principles of Management
Who are managers and where do they
work?
 Manager - Someone who coordinates and oversees the work of other people so that organizational goals
can be accomplished
First-line Managers - Managers at the lowest level of management who manage the work of nonmanagerial
employees
Middle Managers - Managers between the lowest level and top levels of the organization who manage the
work of first-line managers
Top Managers - Managers between the lowest level and top levels of the organization who manage the work
of first-line managers
Organization - A deliberate arrangement of people to accomplish some specific purpose

What Do Managers Do?

Management - Coordinating and overseeing the work activities of others so that their activities are completed
efficiently and effectively.
 Efficiency - Doing things right, or getting the most output from the least amount of inputs.
Effectiveness - Doing the right things, or completing activities so that organizational goals are attained.

Planning - Management function that involves setting goals, establishing strategies for achieving those goals,
and developing plans to integrate and coordinate activities
Organizing - Management function that involves arranging and structuring work to accomplish the
organization’s goals .

Leading - Management function that involves working with and through people to accomplish organizational
goals.
Controlling - Management function that involves monitoring, comparing, and correcting work performance.
 Leadership Styles
Autocratic Style - A leader who dictates work methods, makes unilateral decisions, and limits employee
participation
Democratic Style - A leader who involves employees in decision making, delegates authority, and uses
feedback as an opportunity for coaching employees
Laissez-faire Style - A leader who lets the group make decisions and complete the work in whatever way it
sees fit
Communication Networks - The variety of patterns of vertical and horizontal flows of organizational
communication.
Management Skills
 Technical Skills - Job-specific knowledge and techniques needed to proficiently perform work
tasks
 Human Skills - The ability to work well with other people individually and in a group
 Conceptual Skills - The ability to think and to conceptualize about abstract and complex
situations
Why Study Mana gement?
Overview of Production Management
PRODUCTION - is the creation of goods and services.
OPERATION MANAGEMENT - is the set of activities that create value in the form of goods and
services by transforming inputs into outputs.
PROCESS DESIGN

Flow Charts show the movement of materials/activities in a given process.

FACTORS AFFECTING LOCATION
1. Labor Productivity
2. Exchange Rates and Currency Risk
3. Costs
4. Political Risks, Values, and Cultures
5. Proximity to Markets
6. Proximity to Suppliers
7. Proximity to Competitors
Labor Productivity refers to wage rates are not the only cost. Lower productivity may increase
total cost.

Strategic Management Overview

Strategy Formulation:
Three Stages

Input

Matching

Decision

Input summarizes the basic input information needed to formulate strategies

INTERNAL FACTOR ANALYSIS
Strength
1. High Brand Recognition
2. Technology Driven Institution
3. Strong Marketing Strategies
4. Standardized Courseware and Curriculum
5. Competent Faculties
6. ISO Certified School
7. Good Facilities
 Weakness
1. High Tuition Fee
2. High Faculty Turnover
3. Strict Licensing Agreement
4. Location
5. Declining Enrollees
EXTERNAL FACTOR ANALYSIS
Opportunities
1. Online Learning has replaced the physical classroom
2. Tax relief
3. Increase of Enrollment
4. Free Education Through TES-Unifast Scholarship’
Threats/ Challenges
1. Unfamiliarity to online learning
2. Deferment of Tuition fess increase
3. Slow internet connectivity
4. Pandemic
5. Free education Through TES-Unifast scholarship
Matching focuses on generating feasible alternative strategies by aligning key external and
internal factors STRENGTHS WEAKNESSES
1. High Brand Recognition 1. High Tuition Fee

Matching 2. Technology Driven Instituton

3. Strong Marketing Strategies
2. High Faculty Turnover
3. Strict Licensing Agreement
4. Standardized Courseware and Curriculum 4. Location
Stage 5. Competent Faculties
6. ISO Certified School
5. Declining no. of Enrollees

7. Good Facilities
OPPORTUNITIES W2 x O3 = STRATEGY 2: Establish HR
1. Online Learning Has replaced Department that will supervise the
the physical classroom S1,S3 x O3,O4 = STRATEGY 1: Strenghtening
employee retention through increasing the
the promotion on scholarship specifically on
2. Tax Relief salary and benefits of faculty members
UNIFAST
3. Increase of Enrollment W1 x O4 = STRATEGY 4: Lower Other Fees and
4. Free Education through TES- Help assisting students in acquiring
THREATS / CHALLENGES
W5 x T1 = STRATEGY 5: Offer modular
1. Unfamiliarity to Online Learning
S5 x T1 = STRATEGY 3: Provide Trainings to learning
2. Deferment of Tuition fees increase
Facuties in relation to facilitating classes on
3. Slow Internet Connectivity
online learning and conduct dry-run with
4. Pandemic W1 x T3 = STRATEGY 6: upgrade internet
students before the start of classes.
5. Free Education through TES- subscription to 100mpbs
Unifast Scholarship availed in

Decision participants could individually rate strategies on a 1-to-4 scale as to desirability, and
then sum the ratings from all participants
Alternative 1 Alternative 2 Alternative 3 Alternative 4 Alternative 5 Alternative 6
Training for Online
Promote UNIFAST Establish HR Education for
Lower Other Fees Modular Learning Upgrade Internet
Scholarship Department Faculties and
Students

RESEARCH IN BUSINESS
- A process of determining, acquiring, analyzing, synthesizing, and disseminating relevant
business data, information, and insights to decision makers in ways that mobilize the
organization to take appropriate business actions that, in turn, maximize business
performance
Why study business research? Business research provides information to guide business
decisions.
Computer Devices
 Data warehousing - Storing vast amounts of data in electronic storehouses
 Data Mining - Applying mathematical models to extract meaningful knowledge from data
in internal databases
Business Planning Drives Business Research

Organizational Business

Mission Goals

Business Business

Strategies Strategies
 Exhibit 1-1 Sources of Business Intelligence

Government/

Regulatory

Demographic Business
Economic
Intelligence

Cultural/
Technological
Social

Exhibit 1-8 Characteristics of Good Research

Clearly defined purpose

Detailed research process

Thoroughly planned design

High ethical standards

Limitations addressed

Adequate analysis

Unambiguous presentation

Chapter 1: Marketing Plan Conclusions justified

1.1 Description of the Product Credentials

1.2 Comparison of the Product with Its Competitors'

1.3 Location

1.4 Market Area

1.5 Main Customers

1.6 Total Demand

1.7 Market Share

Prepare a questionnaire
1.8 Selling Price

1.9 Sales Forecast
1.10 Promotional Measures
1.11 Marketing Strategy
1.12 Marketing Budget
 Conduct a market analysis if there is a demand for your proposed product.
1. Know your total population.
2. Identify your target market.
3. Establish your sampling design.
• Random Sampling
• Cluster Sampling
• Convenience Sampling
• Stratified Sampling
• others
4. Compute for the sampling size using Slovin’s Formula
5. Prepare a survey questionnaire.

RESPONDENTS/ SAMPLING SIZE
-SLOVIN FORMULA
-COCHRAN
WHO ARE THE RESPONDENTS?
The respondents are the ones who answer, respond or reply to the questions being asked by the researcher
thru questionnaires
WHAT IS SAMPLE SIZE?
A sample is a selection of respondents from a population. Once you have determined your sample, the total
number of individuals in that particular sample is the sample size.
TYPES OF SAMPLE DESIGN
NONPROBABILITY SAMPLING - It is arbitrary and subjective. It is a sampling technique where the samples
are gathered in a process that does not give all the individuals in the population equal chances of being
selected
-Convenience Sampling - is probably the most common of all sampling techniques. With convenience
sampling, the samples are selected because they are accessible to the researcher. Subjects are chosen
simply because they are easy to recruit. This technique is considered easiest, cheapest and least time
consuming.
-Judgment Sampling - is more commonly known as purposive sampling. In this type of sampling, subjects are
chosen to be part of the sample with a specific purpose in mind. With judgmental sampling, the researcher
believes that some subjects are more fit for the research compared to other individuals. This is the reason why
they are purposively chosen as subjects.
-Quota Sampling - is a non-probability sampling technique wherein the researcher ensures equal or
proportionate representation of subjects depending on which trait is considered as basis of the quota
-Snowball Sampling - is usually done when there is a very small population size. In this type of sampling, the
researcher asks the initial subject to identify another potential subject who also meets the criteria of the
research.
PROBABILITY SAMPLING - is a sampling technique wherein the samples are gathered in a process that
gives all the individuals in the population equal chances of being selected.
-Simple Random Sampling - is the easiest form of probability sampling. All the researcher needs to do is
assure that all the members of the population are included in the list and then randomly select the desired
number of subjects.
-Systematic Sampling - beginning with a random start of an element in the range of 1 to k. The k the element,
or skip interval, is determined by dividing the sample size into the population size to obtain the skip pattern
applied to the sampling frame

-Cluster Sampling - is done when simple random sampling is almost impossible because of the size of the
population. Just imagine doing a simple random sampling when the population in question is the entire
population of Asia.
1. In cluster sampling, the research first identifies boundaries, in case of our example; it can be countries within
Asia.
2. The researcher randomly selects a number of identified areas. It is important that all areas (countries) within
the population be given equal chances of being selected.
3. The researcher can either include all the individuals within the selected areas or he can randomly select
subjects from the identified areas.
-Stratified Sampling - is also known as proportional random sampling. This is a probability sampling technique
wherein the subjects are initially grouped into different classifications such as age, socioeconomic status or
gender. Researchers usually use stratified random sampling if they want to study a particular subgroup within
the population.
-Double Sampling - It may be more convenient or economical to collect some information by sample and then
use this information as the basis for selecting a subsample for further study. This procedure is called double
sampling, sequential sampling, or multiphase sampling. It is usually found with stratified and/or cluster
designs. The calculation procedures are described in more advanced texts.

WHAT IS SLOVIN’S
FORMULA?
Slovin’s formula is used to calculate an appropriate sample size from a population. Statistics is a way
of looking at a population’s behavior by taking a sample. It’s usually impossible to survey every
member of a population because of money or time.
use Slovin’s formula to find the sample size. The was formulated by Slovin in 1960.
Slovin’s formula is written as:
n=N÷(1+Ne2)
where n = Number of samples
N = Total population
e = Error tolerance.

The error tolerance, e, can be given to you (for example, in a question). If you’re a researcher you might want
to figure out your own error tolerance; Just subtract your confidence level from 1. For example, if you wanted to
be 98 percent confident that your data was going to be reflective of the entire population then:
1 – 0.98 = 0.02.
e = 0.02.
To use the formula, first figure out the error of tolerance. For example, a confidence level of 95 percent (giving
a margin error of 0.05) may be accurate enough, or a tighter accuracy of a 98 percent confidence level (a
margin of error of 0.02) may be required. Plug the population size and required margin of error into the formula.
The result equals the number of samples required to evaluate the population.
For example, suppose that a group of 1,000 city government employees needs to be surveyed to find out
which tools are best suited to their jobs. For this survey a margin of error of 0.05 is considered sufficiently
accurate. Using Slovin’s formula, the required sample survey size
equals n=N÷(1+Ne2) people:
n=1,000÷(1+1,000x0.05x0.05)=286
The survey therefore needs to include 286 employees.

WHAT IS COCHRAN SAMPLING TECHNIQUE ?

The Cochran formula allows you to calculate an ideal sample size given a desired level of precision,
desired confidence level, and the estimated proportion of the attribute present in the population
Cochran’s formula is considered especially appropriate in situations with large populations
Cochan’s formula is written as:
Where:
e = the desired level of precision (i.e. the margin of error),
p = the (estimated) proportion of the population which has the attribute in question,
q = 1 – p.
Z = is found in a Z table

SELLING PRICE COMPUTATION EXAMPLE

Mellon Co. produces a single product with the following information available:
Number of units produced annually 25,000
Variable costs per unit:
Direct materials, direct labor
and variable mfg. overhead $ 10
Selling & administrative
expenses $ 3
Fixed costs per year:
Mfg. overhead $ 150,000
Selling & administrative
expenses $ 100,000
OM PLAN:

FORM OF BUSINESS OWNERSHIP

Sole Proprietor - A sole proprietorship is the most common form of business organization. The business
owner is also personally liable for all financial obligations and debts of the business.

Partnership - A partnership is the relationship existing between two or more persons who join to carry on a
trade or business.

Corporation - A corporate structure is more complex than other business structures. It requires complying
with more regulations and tax requirements.
COMPENSATIONS AND BENEFITS

refers to the compensation/salary and other monetary and non-monetary benefits passed on by a firm to its
employees.

 Salary

 Overtime Pay

 Social Security System (SSS)

 Home Development Mutual Fund (HDMF)

 Phil Health Insurance Compensation (PhilHealth)

 13th Month Pay

Administrative Expenses

 Administrative expenses are expenses an organization incurs that are not directly tied to a specific function such as
manufacturing, production or sales

 Administrative expenses include salaries of senior executives and costs associated with general services, for example,
accounting and information technology.

PRODUCTION PLAN

Production Process

 The production process is concerned with transforming a range of inputs into those outputs that are required by the
market

Process Flow Chart - It's used as a means of getting a top-down understanding of how a process works, what steps it
consists of, what events change outcomes, and so on

Fixed Capital  includes the assets and capital investments— such as property, plant, and equipment (PP&E)—that are
needed to start up and conduct business, even at a minimal stage.

Life of Fixed Capital

Repairs and Maintenance

Sources of Fixed Capital

Life of Fixed Capital

 Indicate the number of useful life of the fixed capital.

 Present in a table format with a corresponding description.

Sources of Fixed Capital

 Indicate the source of your fixed capital (where will you purchase? Or how will you acquire the fixed capital).

 Present in a table format with a corresponding description.

 Repairs and Maintenance

 You can allocate an allowance if for the maintenance if fixed amount cannot be determined.

 Example: The business will allot 5% repairs and maintenance expenses annually from the total fixed assets. It will be
used for the maintenance of the store and it will cover emergency expenses related to unexpected repairs of the
vehicles.

Planned Capacity

 the production capacity needed by an organization to meet changing demands for its products.

 involves estimating the storage, computer hardware, software and connection infrastructure resources required over
some future period of time.

 Use your sales forecast as basis how many units do you plan to produce.

Future Capacity

 Future capacity increases are usually achieved by:

Using Existing Equipment More Effectively (Improving)

Purchasing New Equipment (Spending)

Production Facility Location

 the right location for the manufacturing facility, it will have sufficient access to the suppliers, workers, transportation,
etc

Production Facility Layout

 is an arrangement of different aspects of manufacturing in an appropriate manner as to achieve desired production

results.

Terms and Conditions of Purchase of Equipment

 Include only if there is any.

 Some production equipment are consigned, borrowed or under contract

Factory Location and Layout

 Indicate where do you plan to put up your factory. Use the lesson on factors affecting location topic as considerations.

Raw Materials and Supplies

 Raw Materials - the basic material from which a product is made.

Examples : Bamboo, ply board, light bulb, gmelina wood, rags, cotton, textile