Chapter 3 MARKETING STUDY

3.1 Target Market

3.1.1 Catchment Area (MIKE)

Exhibit 1. Catchment Area

The exhibit shown above illustrates the different areas where the business

would offer its services to its target customer markets. The selected areas such

as Mantalongon Dalaguete city (farmers) and Colon st cebu (local Agri-store

retailers) that is often referred to as the oldest and the shortest national road in

the Philippines.
3.1.2 Segmentation Basis (FLORENCE)

In identifying the target market, segmentation bases were utilized to

separate the target customers into segmented groups that can be targeted with

specific marketing efforts. These are characteristics of the target customers that

allow for firms or marketers to gain a better understanding of customer base and

be able to cater or adapt their products/practices towards the preferences of the

determined customer segments [27] [28].

Segmenting customer bases encompasses a multitude of variables.

These variables may stem from four main categories namely: Demographic,

Geographic, Psychographic, and Behavioral. These four categories form a

segmentation strategy that would indicate how customers are similar yet also

different from one another [29]. In segmenting businesses however require a

different segmentation basis as it differs significantly from the customer-based

approach. For businesses, a Firmographic segmentation is utilized. This specific

segmentation allows for a general understanding of a business’ characteristics in

the industry that would provide insights on how to effectively market a

product/service to these businesses [30].

For this study, the following segmentation bases are utilized to effectively

segment the target customers and businesses: Demographic, Firmographic,

Geographic, and Behavioral. With these bases, the determined customer

segments will be essential in the succeeding parts of the study.

Demographic Segmentation

The demographic segmentation is one of the most commonly used

marketing segmentation. This segments the customer base in segments

based on their age, gender, income level, family size, marital status,

education, race, occupation, nationality, and/or religion [31]. For this study,

as the target customer base is made up farmers, whose age range may

vary greatly, the segmentation will focus on the customer’s monthly

income level as it will be gauged with who is capable of availing the

fertilizer product.

Firmographic Segmentation

The firmographic segmentation is used in business-to-business

(B2B) approaches that typically involves the characteristics of a business.

These characteristics may include industry type, company structure,

company/market size, location, company status, annual revenue, and/or

technologies [32]. In determining the target business segments for this

study, the business’ location and market size were taken into account as it

would determine which business would fit into the catchment area and be

cohesive with the other customer segments.

Geographic Segmentation

The geographic segmentation is used to segment customers

according to their physical location. This primarily revolves around the

reasoning that individual living in different areas may have different buying

behaviors and preferences, or that their decisions are determined by the

 proximity of specific resources to their location [33]. For this study, the

geographic segmentation is centered within Mantalongon, Dalaguete

further segmented into the top five sitios with the most population of

farmers.

Behavioral Segmentation

The behavioral segmentation involves segmenting the customer

according to their buying behavior, usage, loyalty, awareness, knowledge,

preferences, and/or purchasing patterns. This allows for a more in-depth

understanding of the why’s and how’s that are associated with the

customers’ behaviors [34]. For this study, the behaviors that were

considered to be segmented were the customer’s usage of the product,

their levels of interest, willingness to use and buy, and willingness to sell

the product. This ensures that those who are interested in the product are

considered and the reasoning as to why some customers aren’t, in the

succeeding parts of the study.

3.1.3 Buying Decision Behavior (KHARL AND NEIL)

To effectively reach the target market, the researchers have identified the

potential buying decision behavior of the target customers. By recognizing these

behaviors, the researchers can direct their focus towards them and potentially

enhance the business's marketing strategy. In doing so, there is a chance that

the business's revenue flow may increase. The following are the conceivable

buying decision behavior of the target customers:

 High Involvement Low Involvement
Significant differences Regular Buying, Elaborate Dissonance – Reducing
between competitors buying buying
Few differences Seeking Bargains, Time –
Brand Loyalty
between competitors Pressed buying

1. Regular Buying: This entails the acquisition of everyday, low-involvement

products. Customers have established preferences for specific brands or

items and make these purchases routinely with little contemplation.

2. Elaborate Buying: Elaborate purchasing behavior is typical for high-value

acquisitions, such as cars or homes. Consumers engage in thorough

research, assess alternatives, and carefully weigh their choices before

reaching a decision.

3. Seeking Bargains: Customers who prioritize finding the best deals,

discounts, or sales engage in a bargain-hunting approach. They may

compare prices, utilize coupons, and actively search for promotions.

4. Brand Loyalty: Some consumers exhibit strong brand loyalty and

consistently choose products from a particular brand or company. This

behavior often results from a positive experience with the brand or its

products.

5. Dissonance-Reducing Buying: In cases where consumers experience

post-purchase dissonance or regret, they may engage in dissonance-

reducing buying behavior. This involves seeking information to reaffirm

their purchase decision and reduce feelings of uncertainty.

 6. Time-Pressed Buying: Consumers with limited time may engage in quick

and efficient buying behavior. They prioritize convenience, such as

ordering online for home delivery or buying items on the way to work.

3.1.4 Buyer Decision Process / Operating Characteristics (KHARL AND NEIL)

Farmers:

Phase 1: Problem Recognition

The common problems of the farmers are the need of fertilizers for their weekly

routine for their crop to grow faster, the soil degradation that comes with chemical

fertilizers and its residues.

Phase 2: Information Search

The farmers would search for possible solutions for the problem through different

channels. The business goal is to be able to solve the problems of that customer

and let the customer know about the business.

Phase 3: Evaluation of Alternatives

 At this phase, the farmers would try to compare the information that they have

gathered for each competitor. That is why it is the business focus to emphasize

on what is the difference from the business to the other competitors, the business

should be able to display the benefits that it could give to the farmers.

Phase 4: Purchase Decision

At this stage, the farmers would have an idea of what are the possible benefits of

the business is. After making such a decision, they would be constantly updated

concerning the improvements that the business has made to the product that

they have bought.

Phase 5: Service Feedback

At this stage, the company seeks feedback to assess whether customers want to

continue buying their product and to understand any changes in customer

preferences. This feedback is invaluable for product improvement, maintaining a

customer-centric approach, and making data-driven decisions to stay competitive in the

market. It involves actively engaging with customers through various channels,

analyzing feedback, and taking continuous action to adapt to evolving customer

needs and preferences.

Local Agri-Store Owners:

Phase 1: Problem Recognition

The problem of the Local Agri-Store Owners is the ever-changing market for fertilizers.

Wherein the farmers have fair share of buying more organic fertilizers than the

chemical fertilizers. The major fertilizer that had been stocked in the store is still more

of chemical fertilizers.
Phase 2: Information Search

3.1.5 Positioning Map | Purchasing Process & Approaches (EJIE AND JOMARI)

TENTATIVE

Brief Description of Different Brands:

· Bokashi (GreenSpace) – GreenSpace is an online business that specializes in
the Bokashi Composting Method, which converts food waste into fertilizer.
Greenspace sells high-quality Bokashi bran, microbial inoculant, and other
bokashi sets on their website. The greenspace is only available in the NCR and
Greater Manila.

· Plantmate – The Most Advanced Bio-Organic Fertilizer on the Market Today.

Awarded as the “Best Organic Fertilizer in the Philippines” by the
Consumer’s Choice Awards and the Gold Seal of Quality. Plantmate is composed
of 25 Beneficial Microorganisms geared towards Plant Proliferation and Optimal
Yield.

· Rapid Growth (NEXTGEN) – NEXTGEN is a small business that sells Rapid

Growth fertilizer on the internet. The product is made of organic materials and
promotes good soil nutrients. It is safe, inexpensive, and legal to use.
· Foliar Fertilizer (GMP) – General Merchant Pro is one of the largest business
trading platforms in the Philippines for locating distributors, wholesalers,
suppliers, growers, and manufacturers in a variety of industries. Their product is
called VV plus Foliar Fertilizer, and it increases the growth potential of your crops
or house plants by using a natural fertilizer made entirely of indigenous materials.

· Chicken Manure Organic Fertilizer (GREENLAND) – Greenland's product

produces high-quality 100% chicken manure fertilizer. The chickens are raised in
San Jose, Batangas, the Philippines' Egg Capital, and one of their innovative,
eco-friendly solutions is to use manure as fertilizer.

· Nature Blend – Nature Blend is a company that specializes in repurposing food

waste into fertilizer through the Takakura composting method. Nature Blend, the
product they created, is intended to provide high yield, low farming input, and a
pleasant odor to its users. The company has a physical location in Cebu City.
3.2 Market Study Results

3.2.1 Qualitative Demand Analysis

Nature Blend offers a sole product which is an organic fertilizer alternative.

The product offering is designed to be completely organic in nature while being

processed through sustainable means. With organic fertilizer alternatives

experiencing a surge of demand driven by the global shift towards sustainable

and eco-friendly agricultural practices, an increase in environmental awareness

along with negative impacts brought on by inorganic fertilizers, has prompted

concerned consumers and farmers to seek these alternatives. As such, Nature

Blend seeks to provide an organic fertilizer alternative to farmers in Mantalongon,

Dalaguete and Agri-store owners in Cebu City.

With fertilizers being key resources in the agricultural sector, farmers who

utilize this resource face certain challenges given the rising prices of the different

fertilizer alternatives in the country. For that reason, Nature Blend intends to

develop the fertilizer with competitive prices through its determined pricing

strategies.

Another key resource in the agricultural sector is pesticides as these

protect the farmers’ crops from any unwanted insects and pests. This additional

resource in turn, translates to farmers having to spend more of their finances

towards acquiring these. Hence, the product offering also hosts an organic

pesticide variant. This feature allows farmers to be able to purchase, in essence,

two products for the price of one.

 In totality, Nature Blend offers an effective organic agricultural resource

alternative towards farmers who are seeking such, and to Agri-stores owners

who seek to sell these. The features hosted by the product offering is designed to

lessen the burden of resources of farmers in the agricultural sector.

3.2.2 Demand Analysis, Supply Analysis

To measure the market demand of Nature Blend towards farmers and

Agri-store owners, survey questionnaires were deployed to gather the customer’s

insights towards the product. This would establish the market demand in scale

with the market size, wherein the qualified customers and respective buying

behaviors are described. These qualified customers are those whose income

levels and market sizes fall under certain thresholds and have the frequent

behavior of purchasing the product. The market demand for both farmers and

Agri-store owners are outlined in the following segments of the paper, which is

based on their purchasing/restocking behavior of organic fertilizers.

The supply lines of the business are also determined by outlining the

necessary markets and sources in which Nature Blend utilizes.

Figure 1. Probability Tree Diagram of Farmers
3.2.2.1. Demand Analysis

Farmers

Figure n shows the probability tree diagram (PTD) of farmers in

Mantalongon, Dalaguete. Through utilizing the PTD, the data gathered from the

deployed survey questionnaires can be summarized and visualized, along with

the corresponding probabilities of each question segment. This tool would aid in

establishing the market demand for Nature Blend for farmers.

In establishing the market demand, the probability of farmers that use the

product and their frequency of buying are taken into account, excluding any

farmers whose income levels exceed PHP 15,000.00. A total of 68 farmer

respondents answered the survey, among these 68 farmers, all of these farmers

have income levels below PHP 15,000.00 wherein 65 of them use organic

fertilizer. As such, taking into account their purchasing behavior, and the

established date conversion factors, the market demand for farmers is as follows:

Table 1. Market Demand of Farmers

MARKET DEMAND OF FARMERS
Quantity per Purchase Annual
Buying Frequency (per 50-kg sack) Number of Demand
Behavior of Buying Respondents (in 50-kg
1 2 3 4 5 6 10 12
sacks)
Daily 312 0 0
Weekly 52 3 4 1 1 9 988
Monthly 12 9 10 10 7 12 3 51 2,124
Annually 1 1 2 2 5 39
1 1 1 1
Total 7 2 3 2 65 3,151
2 4 2 3
 In determining the annual demand for each buying behavior, the formula is

as follows:

Annual Demand=No . of Respondents x ¿

∑ (Quantity per Purc h ase x Respondents)¿

Sample Calculation (for weekly buyers)

Annual Demand Weekly =9 x [ 52 x ( 3+8+ 3+5 ) ]

Annual Demand Weekly =9 x [ 52 x 19 ]

Annual Demand Weekly =988 sacks

Following the same calculations, the total annual demand of Nature Blend

by farmers is 3,151 50-kg sacks. With this, the average annual demand can be

determined through the following formula:

Annual Demand
Average Annual Demand=
Total No . of Respondents

3,151 sacks
Average Annual Demand=
65 customers

sacks
Average Annual Demand=48.47 ≈ 49
customer

The market demand for Nature Blend for farmers is determined to be an

average of 49 sacks per farmer. This value will be utilized in determining the

sales projection of Nature Blend within a determined operating period.

Figure 2. Probability Tree Diagram of Agri-stores
 Agri-stores

Similar to the farmers, figure n shows the probability tree diagram (PTD)

of Agri-stores in Cebu. In establishing the market demand for Agri-stores, the

probability of store owners of selling organic fertilizers and their frequency of

restocking are considered, wherein stores that have market sizes that can be

classified outside Micro, Small, and Medium Enterprises (MSMEs) are excluded.

Similarly, a total of 68 Agri-store owner respondents answered the survey, among

these 68 store owners, all of these stores have market sizes that classify them as

MSMEs. 60 of these 68 stores responded that they sell organic fertilizers. As

such, their restocking behavior is considered wherein the market demand for

Agri-stores is as follows:

Table 2. Market Demand of Agri-stores

MARKET DEMAND OF AGRI-STORES
Quantity per Purchase Annual
Buying Frequency (per 50-kg sack) Number of Demand
Behavior of Buying Respondents (in 50-kg
10 15 20 25 30 40 50 75 100
sacks)
Daily 312 0 0
Weekly 52 5 9 8 4 2 28 26,260
Monthly 12 2 8 6 10 26 12,360
Annually 1 2 3 1 6 425
Total 4 9 8 6 10 6 12 3 1 60 39,095

Determining the annual demand follows the same formula in the previous

sections, as such as sample calculation is as follows:

Sample Calculation (for weekly buyers)

Annual Demand Weekly =28 x [ 52 x ( 50+135+160+100+ 60 ) ]

Annual Demand Weekly =28 x [ 52 x 505 ]

Annual Demand Weekly =26 , 620 sacks

 Following the same calculations, the total annual demand of Nature Blend

by Agri-stores is 39,095 50-kg sacks. With this, the average annual demand can

be determined through the following formula:

Annual Demand
Average Annual Demand=
Total No . of Respondents

39,095 sacks
Average Annual Demand=
60 customers

sacks
Average Annual Demand=650.75 ≈651
store

The market demand for Nature Blend for Agri-stores is determined to be

an average of 651 sacks per store. This value will be utilized in determining the

sales projection of Nature Blend within a determined operating period.

3.2.2.2. Supply Analysis

Prayers sa ni kay wa ko kahibaw unsaon pa sya

3.2.3 Market Share Estimation

In addition to the market demand of the product for both Farmers and Agri-

stores, an estimate of the market share is determined through the survey

questionnaire responses and the established probability tree diagrams. The

qualified customers established in the market demand calculations are further

segmented into the probability of those customers, farmers, who are interested in

product and are willing to buy and pay for the product. Alternatively, for Agri-

stores, those store owners who are interested in selling the product and are

willing to buy and collaborate with the business to sell the product are

considered.

Farmers

The probability of farmer respondents to be considered as part of Nature

Blend’s target market are summarized in the table below.

Table 3. Summary of PTD - Farmers

Demographic Profile Percentage of Qualified Respondents (%)
Potential Market 1,477 Farmers
Income Level 100.00%
Use of Organic Fertilizers 88.24%
Interested in Product 88.33%
Willingness to Buy Product 94.34%
Willing to Pay for Product 98.00%

The available market percentage for farmers in Mantalongon, Dalaguete

are calculated by multiplying the determined probabilities of each demographic

profile. As such the calculation is as follows:

Available Market Percentage=100.00 % x 95.59 % x 98.46 % x 100.00 % x 100.00 %

 Available Market Percentage=94.12 %

With the determined available market percentage, the available market share

for Nature Blend is calculated by multiplying the potential market and the available

market share percentage, as shown below:

Available Market =1,477 x 94.12 %

Available Market =1,390.12 ≈1,390 farmers

As such, the available market of farmers for Nature Blend is 1,390

farmers. This market would then be further segmented into the business’ market

share through multiplying the market with the desired market share percentage of

Nature Blend throughout its entire life cycle, which is outlined in the following:

Table 4. Desired Market Share Percentage

Market Share Percentage
Introduction Growth Maturity Decline
1.00% 4.00% 5.00% 3.00% 2.00%

With the desired market share percentages, the market share is calculated

using the following formula:

Market Share= Available Market x Market Share Percentage

Sample Calculation (for the introduction phase)

Market Share=1,390 x 1.00 %

Market Share=13.90 ≈ 14 farmers

 Following the same calculations, the projected market share of farmers

throughout its life cycle is summarized in the table below.

Table 5. Market Share Summary of Farmers

Market Share
Life Cycle Market Share
Percentage
Introduction 1.00% 14 farmers
Growth 4.00% 56 farmers
Maturity 5.00% 70 farmers
3.00% 42 farmers
Decline
2.00% 28 farmers

Agri-stores

The probability of Agri-store owner respondents to be considered as part

of Nature Blend’s target market are summarized in the table below.

Table 6. Summary of PTD – Agri-stores

Demographic Profile Percentage of Qualified Respondents (%)
Potential Market 727 Agri-stores
Market Size 100.00%
Selling of Organic Fertilizers 95.59%
Interested in Product 98.46%
Willingness to Sell Product 100.00%
Willing to Collaborate with Business 100.00%

The available market percentage for Agri-stores in Cebu City are

calculated by multiplying the determined probabilities of each demographic

profile. As such the calculation is as follows:

Available Market Percentage=100.00 % x 88.24 % x 88.33 % x 94.34 % x 98.00 %

Available Market Percentage=81.67 %

 With the determined available market percentage, the available market share

for Nature Blend is calculated by multiplying the potential market and the available

market share percentage, as shown below:

Available Market =727 x 81.67 %

Available Market =593.72 ≈594 Agri−stores

As such, the available market of Agri-stores for Nature Blend is 594

stores. Similar to the farmers’ market share, the available market for the stores is

further segmented by multiplying the population to the desired market share

percentages of Nature Blend’s life cycle as outlined in table n. Following the

same calculations utilized in the previous section, the sample calculation is as

follows:

Sample Calculation (for the introduction phase)

Market Share=594 x 1.00 %

Market Share=5.94 ≈ 6 stores

Following the same calculations, the projected market share of Agri-stores

throughout its life cycle is summarized in the table below.

Table 7. Market Share Summary of Agri-stores

Market Share
Life Cycle Stage Market Share
Percentage
Introduction 1.00% 6 Agri-stores
Growth 4.00% 24 Agri-stores
Maturity 5.00% 30 Agri-stores
3.00% 18 Agri-stores
Decline
2.00% 12 Agri-stores
3.2.4 Sales Projection

With the determined market demand and market share for both

customers, a five-year sales projection can be determined, from years 2023 to

2027. The yearly sales projected are calculated using the following formula:

Projected Sales=Price x Annual Demand

wherein:

Annual Demand= Average Annual Demand x Market Share

As such, the projected sales for both farmers and Agri-stores are shown in

the following tables.

Table 8. Sales Projection for Farmers

PROJECTED SALES FOR FARMERS

Annual
Average Yearly
Life Cyle Market Demand (in Projected
Year Demand Price
Stage Share 50-kg Sales
(in 50-kg sacks)
sacks)
Introduction 202
14 49 686 ₱999.00 ₱685,314.00
Stage 3
Growth 202
56 49 2,744 ₱999.00 ₱2,741,256.00
Stage 4
Maturity 202
70 49 3,430 ₱999.00 ₱3,426,570.00
Stage 5
202
42 49 2,058 ₱999.00 ₱2,055,942.00
Decline 6
Stage 202
28 49 1,372 ₱999.00 ₱1,370,628.00
7
TOTAL 210 49 10,290 ₱999.00 ₱10,279,710.00

For farmers, the total projected sales in a five-year projection is

₱10,279,710.00.
 Table 9. Sales Projection for Agri-stores

PROJECTED SALES FOR AGRI-STORES

Annual
Average Yearly
Life Cyle Market Demand (in Projected
Year Demand Price
Stage Share 50-kg Sales
(in 50-kg sacks)
sacks)
Introduction 202
6 651 3,906 999 ₱3,902,094.00
Stage 3
Growth 202
24 651 15,624 999 ₱15,608,376.00
Stage 4
Maturity 202
30 651 19,530 999 ₱19,510,470.00
Stage 5
202
18 651 11,718 999 ₱11,706,282.00
Decline 6
Stage 202
12 651 7,812 999 ₱7,804,188.00
7
TOTAL 90 651 58,590 ₱999.00 ₱58,531,410.00

For farmers, the total projected sales in a five-year projection is

₱58,531,410.00.

Add more of discussion for each lang siguro tas maybe I sum up tanan

3.2.5 Marketing Analytics

Here na mulugwa sila regression analysis and churvaness

3.3 Marketing Mix Decisions

3.3.1 Product (NEIL AND JOMARI)

Levels of Product

To actively investigate the nature of a product/service further, it is necessary to

consider the following level of the product - Core Product, Actual Product, Expected

Product, Augmented Product and Potential Product:

Core Product

Nature Blend products are made specifically from diverted food waste products

that are transformed into organic fertilizers for farmers to use. The product has

advantages and significance in use for both short- and long-term usage in the field as it

promotes green planting and sustainability for the soil. The product initially promotes

benefits for farmers financially while also achieving faster crop growth.

Actual Product

Nature Blend products are typically made using the Takakura Composting

process, which converts food waste into a fine-soil type product which is mix with soil on

the field, the product is made by combining rice bran and rice husk with dissolved food

waste and fermented liquid for moisture. The product is then packaged in custom-

designed containers by the company for product distribution.

Expected Product (Ikaw nalang neil hahahaha)..

Augmented Product (Ikaw nalang neil hahahaha)..

Potential Product (Ikaw nalang neil hahahaha)..

3.3.2 Price (MIKE AND KHARL)

The importance of pricing cannot be overstated in any business. It has the

potential to either propel or hinder a business when not thoroughly assessed.

Pricing not only influences a company's sales revenue but also plays a pivotal

role in defining the worth of the sales generated. Several research studies

suggest that price hinges on understanding how customers perceive the value of

the product being offered. Consequently, when determining product pricing, one

must take into account both the customer's ability to pay and the company's

sustainability.

Pricing Strategy

The pricing strategy that the company implements is the cost-plus pricing

method. Cost-Plus Pricing is a pricing method that company’s use to determine a sale

price for a product. It takes into account to a product's direct materials, labor, overhead

costs, and a markup percentage. To ascertain costs, it is imperative to delineate direct

costs, indirect costs, and fixed costs.

In alignment with the Business Model Canvas, the company's pricing

model is derived from the company's cost structure, characterized by two distinct

components: Fixed Costs and Variable Costs. Under Variable costs are manpower

salaries, marketing expenses, equipment costs, and labor costs, while Fixed costs

consist of facility expenses and maintenance costs. Through this, the company will

determine the price of the product.

3.3.3 Placement (EJIE)

The company's location in Colon, Cebu City provides an easily accessible

location option for surrounding customers with fertilizer needs. Proximity to their

business ensures convenience for local customers as they can easily access the

products they need without having to travel far, thereby improving customer

satisfaction and facilitate efficient business transactions.

3.3.4 Promotions (FLORENCE)

Promotions involve communicating to the target customers that they need

the product that is offered and that it is appropriately priced. This involves

advertising the product and marketing it so that it is favorable and enticing to the

target customers [35]. In promoting Nature Blend, the following promotion tactics

or plans are used:

Social Media Marketing

Promoting Nature Blend through different social media platforms

would increase the product’s reach towards the target customers

especially those customers who are active in the online platforms. These

platforms may include Facebook, Instagram, Twitter, and the like.

Traditional Media Marketing

In contrast to social media marketing, traditional media marketing

includes promoting the product through Television, Radio, Billboard and

Flyers, and Word-of-Mouth advertising. This would expand the reach of

the product especially to those target customers who reside in areas

where social media platforms don’t have much of an impact or reach.

 3.4 Product Life Cycle Strategies (MIKE AND NEIL)

SALES

INTRODUCTION GROWTH MATURITY DECLINE

Time

This product life cycle is divided into four stages: introduction, growth, maturity, and

decline. Each stage is related with changes in the application's marketing stand. Various

marketing tactics are employed in each stage to extend the application's life cycle.

3.4.1 Introduction Stage

3.4.2 Growth Stage

3.4.3 Maturity Stage

3.4.4 Decline Stage