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Demand and SupplyGAP Analysis of

BrightestLEE(Scented Organic Repellant Candle)

A Demand & Supply Gap AnalysisPresented to theFaculty of the

College of Business Administration and AccountancyColegio de San Juan de Letran

Intramuros, Manila

In Partial Fulfillmentof the Requirements for

Econ102 Basic Microeconomics

LEE, MichaelMERCADO, Gilbert

October 2012


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Table of Contents

Page

1.1 Name of the Firm 10

1.2 Location 15


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LIST OF TABLES

Page

Table 1. Market Survey Results 10

Table 2. Distribution of Tasks and Responsibilities 15


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BrightestLee(Scented Organic Repellant Candle)

1.1Name of the Firm

BrightestLee is the name of the proposed business. It came into light as the proponents

brainstormed for a project enterprise as a requirement of their course. Bright and wild ideas

popped up but the name BrightestLee was chosen as suggested by Mr. Michael Lee, one of the

proponents. The name vocalizes inquisitiveness, versatility and uniqueness. The proposed

enterprise offers best scented candles that surely appeal to the interest of the prospective

consumers.

1.2 Location

BrightestLee is located at 72A K-5 Judge Jimenez, Kamuning, Quezon City. The proponents

find the right place to promote and sell the product as it intends to capture the household

market. The head office and the plant occupy the same place in the District 4 of Quezon City.

The plant size is 30 square meters which is considered sufficient to operate the business.


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Figure 3. Business Location

1.3Description of the Product

The product is organic mosquito repellant candle. It is an eco-friendly, natural candle made of

100% pure green vegetable palm wax and soy wax blended with neem extracts and essential

oils. These materials are all sustainable and kind to the environment and living organism aswell..

72A K-5th Kamuning, Q.C.


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Figure 1. BrightestLee Organic Scented Candles

BrightestLee Candle is a scented repellant candle that promises every household to prevent

insects that cause different types of diseases particularly mosquitoes and secure every member

of the familys health. It is an environmental friendly candle which organic because of its

components. This product can also be used for decoration and air freshener in any home.

1.4 Methodology

This study uses both primary and secondary data. In collecting the supply data, the proponents

conducted an interview to the two direct competitors identified of the proposed business. These

are Natures Garden Scented Citronella Candle and Domus Lucis Citronella Candle. A survey

was conducted on the intended target market who is the residents of Kamuning, Quezon City.

These respondents were determined using the sample size calculator at SurveySystem.com.

There were 100 respondents selected randomly using a 95% confidence level and 9.6

confidence interval. The questionnaire used in the survey was designed by the proponents to

determine the respondents opinion, attitude towards the product, and buying preferences. The

questionnaire has close-ended questions, wherein the respondents are asked to place a check

mark on the space provided for the answer they choose. Most of the close-ended questions are

in multiple choices, while others are answerable by yes or no. In determining the historical

demand and the projected supply, a straight-line method was employed.


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1.5 Demand

This establishes the prospective customers of BrightestLEE. These are residents of Kamuning,

Q.C who are willing to try an organic repellant candles and their frequency of buying.

1.5.1 Consumption for the Past Three Years

Table 1. Consumption of Scented Repellant Candlesfor the Past Three Years

Year PopulationHistorical Demand

(per piece)

2008 426,854 5,270,195

2009 434,973 5,372,377

2010 443,246 5,476,541

Table 1 shows the historical demand of scented repellant candles Kamuning, Q.C. for the past

three years. The historical demand was computed using the 2007 census population of NSO.

The population of District 4, Q.C for 2007 was 418,887 residents with a growth rate of 1.902

percent. Based on the survey conducted to the target market, the willingness of the

respondents to buy the product and their frequency of buying were multiply to the population

with the growth of the area used for the projection. (See Appendix A for the detailed

computation).

1.5.2 Target Market

The major consumers of BrightestLee are the residents of Kamuning area in District 4, Quezon

City. These are the households who wants to protect their family from insect related diseases

particularly mosquitoes.


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1.5.3 Projected Demand

Table 2. Projected Demand of Scented Repellant Candlesfor the Next Three Years

Year PopulationProjected Demand

(per piece)

2012 460,268 5,688,908

2013 469,022 5,797,111

2014 477,943 5,907,372

For the projected demand in Table 2, the proponents utilizes the straight-line method with the

population growth rate of 1.902 percent of District 4, Q.C for the next three years.

1.6 Supply

1.6.1 Supply for the Past YearsTable 3. Supply of Scented Repellant Candles

for the Past Three Years

YearNatures Garden

Citronella ScentedCandle

Domus LucisCitronella Candle

Historical Supply(per piece)

2008 217,634 142,518 360,152

2009 221,854 145,282 367,135

2010 226,155 148,099 374,254

Table 3 presents the supply of scented repellant candles at Kamuning, Q.C. for the past three

years. There are two direct competitors of the proposed business. These are the Natures

Garden and Domus Lucis which are both selling citronella scented candles. Using the July

2011 data of their sales and the interview conducted by the proponents to the respective

competitors, both competitors have annual increased in their sales of 10 percent over the past

years. (See Appendix A for the computation)


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1.6.2 Projected Supply

Table 4. Projected Supply of Scented Repellant Candlesfor the Next Three Years

Year

Natures Garden

Citronella ScentedCandle

Domus Lucis

Citronella Candle

Projected Supply

(per piece)

2012 253,594 166,067 419,661

2013 278,953 182,674 461,627

2014 306,849 200,941 507,790

With the 10 percent increased in sales of both competitors, the total projected supply is

presented in Table 4 for the next three years (See Appendix A for computation). The above

table reveals that Natures Garden is the market leader when it comes to scented repellant

candles.

1.7 Demand and Supply Analysis

Table 5. Demand and Supply Gap Analysis

YearProjected

Demand (perpiece)

ProjectedSupply (per

piece)

Demand &Supply GAP(per piece)

2012 5,688,908 419,661 5,269,247

2013 5,797,111 461,627 5,335,484

2014 5,907,372 507,790 5,399,582

Table 5 illustrates the demand and supply gap analysis of scented repellant candles at

Kamuning, Q.C. for the next three years. This shows that the present market is not fully

satisfied by the existing competitors around the area. This gap is accounted for 93 percent of

the projected demand. Realizing this opportunity, the proponents are proposing of scented

repellant candles made out of neem extracts and oil.


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1.8 Projected Sales

Table 6. Projected Sales of Scented Repellant Candlesfor the Next Three Years

Year

Demand & Supply

GAP(per piece)

Market Share

Projected Sales

(per piece)

2012 5,269,247 1% 52,692

2013 5,335,484 2% 106,710

2014 5,399,582 3% 161,987

Table 6 demonstrates the projected sales of BrightestLee in the next three years. Using the

past years sales data of the competitors, the proposed business has assumed a 1% market

share for 2012 to project the sales since it is a new entrant in the market. Employing the

proposed marketing strategies and program, the business is expected to increase its market

share by 2% and 3% for 2013 and 2014 respectively considering BrightestLee is a small scale

enterprise.

1.9The Brand

Figure 2. BrightestLee Logo

The partners came up with the idea of BrightestLee Candle. This epitomizes inquisitiveness,

versatility and uniqueness of the product. BrightestLee offers different types of designs,

shapes, and scents of candles. The three circles of the logo represents the three proponents

and the bond of their business friendship.


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.

1.9.1 Price

Table 7. Prices of Scented Repellant Candle

Company Price (in Php)

BrightestLee Candle 70

Natures Garden Citronella Scented Candle 150 250

Domus Lucis Citronella Candle 120 150

1.9.2 Place of Distribution


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Figure 3. Business Location

72A K-5th Kamuning, Q.C.

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