CHAPTER III

MARKETING ASPECT

Marketing is a very important aspect in business since it contributes greatly to the

success of the organization. Production and distribution depend largely on marketing. It

is the process of introducing and promoting the product or service into the market and

encourages sales from the buying public. Since the goal of marketing is to make the

product or service widely known and recognized to the market, marketers must be

creative in their marketing activities.

Marketing aspect is one of the most useful chapters in the feasibility study.

Without marketing, sales may crash and companies may have to close. The success of

the business depends on how the product is introduced to the potential market. The

fact that if the proposed product will be accepted by the target market is then a

determining factor that this project can be implementable.

TARGET MARKET

This is a market segment at which a marketing campaign is focused. This is a

group of customers that the business has decided to aim its marketing efforts and

ultimately deliver its product.

The target market of the proposed production of the gumamela shake is the total

students of all universities located in downtown of Cebu City. The proponents decided

to choose this target market because these students have the accessibility and

convenience to the location of the business.

POPULATION OF TARGET MARKET AND RESPONDENTS

One factor that is used in order to know the market feasibility of the proposed

product is the population of the target market. Since the proponents decided that the

students in the universities located in downtown of Cebu as its target market, the 2013-

2014 total enrollees of randomly picked universities which are University of San Jose-

Recoletos, University of San Carlos and University of Visayas were obtained. The table

below shows the population of the randomly picked universities and its respective

sample.

Table 1

Population of Respondents per University

N = 62, 514

University Population (N) Sample (n) Percentage

USJ-R 18,316 165 42%

USC- Main 18,275 116 29%

UV 25,923 117 29%

Total 62, 514 398 100%

Considering the size of the population, the proponents had obtained a sample size of

398 using the Slovin Formula as illustrated below.

Where:

n = sample size

N= total population

e = margin of error at 5%

To apply this formula to the above data, the variables were substituted with, thus:

n=398

The respective sample size of each barangay is obtained by dividing each of the

university’s population to the total population of the three universities. The quotient is

then multiplied to the total sample size of 398. Take for example as to University of San

Jose- Recoletos.

124796 x 39862514n= 165

AGE OF THE RESPONDENTS

       This information is necessary in order to categorize those age brackets of the target

market that would possibly accept the proposed product.

Table 2

Age of the respondents

n=398

Age Range Frequency %

15-18 196 49%

19-22 181 45%

23-26 15 4%

27 and above 6 2%

Total 398 100%

The above table shows that most of the respondents are ages 15 to 18. This can

easily be seen since it got the highest percentage which is 49. The age bracket yields

the highest percentage since it is believed that it is in this ages where a college student

starts to try new things.

Gender of the Respondents

        To be able to acquire knowledge on the ratio of the male over the female

respondents on the project, a respondent was asked on his/her gender.

Table 3

Gender of the respondents

n= 398

Gender Frequency %

Female 252 63%

Male 146 37%

Total 398 100%

The above table shows that there is a more number of female respondents,

representing 63% of the sample size compared to the male respondents which only

represents 37%.

RESPONDENTS WHO DRINK SHAKE

This is an important question to be asked in order to reasonably estimate the

total scope of those who consumes shake.

Table 4

Respondents who drink shake

n=398

Response No. %

Those who drink shake 393 99%

Those who do not drink

shake

5 1%

Total 398 100%

The above table shows that most of the respondents drink shake which is

represented by 99% of the population.

HOW OFTEN THE RESPONDENTS DRINK SHAKE

This is a follow- up to the question above. This information is significant as to

how frequent the respondents consume shake.

Table 5

How often the respondents drink shake

n=391

Response No. %

Everyday 14 3%

Once a week 155 38%

Once a month 143 35%

Other 79 19%

Total 391 100%

The data above noticeably reveals that the majority of the respondents consume

on a weekly basis. It can be seen that the respondents drink shake depending on their

own discretion due to personal reasons.

KIND OF SHAKE THAT RESPONDENTS HAVE TRIED

This will give hint to the proponents in knowing their existing competitor as to

what kind of shake most people consume.

Table 6

Kinds of shake that respondents have tried

n=398

Kind No. %

Fruit 348 89%

Vegetable 33 8%

Other 12 3%

Total 393 100%

The above table shows that most respondents have tried fruit shake which is

represented by 89%. This data shows that most of the respondents think and feel that

fruit shakes taste better than the rest choices above.

WHERE THE RESPONDENTS MOSTLY BUY SHAKE

In determining the possible areas where the product will be distributed and made

accessible to the buyers were asked. The table below presents the locations where the

respondents prefer to buy the product.

Table 7

Where the respondents mostly buy shakes

n=398

Location No. %

Mall 226 58%

Canteen 81 21%

Carenderia/sidewalk 75 19%

Other 11 2%

Total 393 100%

The table presents the responses identifying the mall as the location where the

respondents mostly buy the product. The mall ranked first among the others because it

is where most of the business enterprises are situated. Also, there are many malls

situated nearby schools of the respondents.

RESPONDENTS WHO ARE AWARE THAT GUMAMELA IS EDIBLE

The responses of the respondents as to their awareness of this fact are a useful

data in determining whether this information is already a common fact or a justly

discovered knowledge.

Table 8

Respondents who are aware that gumamela is edible

n=398

Response No. %

Yes 143 36%

No 255 64%

Total 398 100%

The table above reflects that most of the respondents do not know that

gumamela flower is edible.

RESPONDENTS WHO ARE AWARE THAT GUMAMELA FLOWER HAS BENEFITS

This will give an indication to the proponents whether the benefits of a gumamela

flower is a common fact or not.

Table 9

Respondents who are aware of the benefits of gumamela flower

n=398

Response No. %

Those who are aware of the

benefits

140 35%

Those who are not aware of

the benefits

258 65%

Total 398 100%

The above data indicates that most of the respondents are not aware of the

benefits of a gumamela flower due to fact that they also do not know that it is edible.

RESPONDENTS WHO HAVE TRIED EATING A GUMEMELA FLOWER

This is a follow-up to the above question that would help the proponents

determine as to how the respondents would accept the product stating that gumamela

flower is edible.

Table 10

Respondents who have tried eating a gumamela flower

n=398

Response No. %

Yes 38 10%

No 360 90%

Total 398 100%

Based on the projected data above, only few of the respondents have tried eating

a gumamela flower for the reason that few of them know that gumamela can be eaten.

RESPONDENTS WHO ARE WILLING TO BUY THE GUMAMELA SHAKE

This will help the proponents to have an idea whether the respondents will

patronize the product and can be saleable to the market once made available.

Table 11

Respondents who are willing to buy the gumamela shake

n=398

Response No. %

Yes 291 73%

No 107 27%

Total 398 100%

Based on the gathered data, most of the respondents are willing to buy the

product if made available. This information indicates that the proposed product will

reasonably have a share in the market because 73% are willing to buy it.

PREFERRED PRICEs FOR 250ML

In order to help the proponents determine the prices that the buyers are willing to

buy for the proposed product, preferred prices were asked. The table below presents

the favoured prices of the respondents based on the volume of the product which is in

ML.

Table 11

Preferred Prices for 250 ML

n=395

Response No. %

P 25 – 30 368 93%

P 31 – 35 27 7%

Total 395 100%

PREFERRED PRICES FOR 350 ML

Table 12

PREFERRED PRICES FOR 350 ML

n=387

Response No. %

P 36 – 45 338 87%

P 46 – 55 49 13%

Total 387 100%

PREFERRED PRICE FOR 500 ML

Table 13

Preferred price for 500 ML

n=387

Response No. %

P 56 – 60 350 90%

P 61 - 65 37 10%

Total 387 100%

The data above noticeably reveals that most of the respondents are willing to buy

the product at different volume. In table 1 , it shows that the respondents prefer

to buy a 250 mL gumamela shake at a price ranging from P25-P30 representing

the 93% of the respondents. In table 2, it clearly presents that a 350 ml

gumamela shake is preffered to buy at the prices ranging from P36-P45

representing the 87% of the respondents. In table 3, it can be seen that most of

the respondents desire to buy a 500 ml gumamela shake at price ranging from

P36-P45 representing the 90% respondents.

Although largely of the respondents opt to buy a gumamela shake on a

bracket price which is lower, the proponents believe that the proposed product

can still be sold at a price higher from the chosen bracket because some of the

target markets has chosen the bracket which has higher price.

PROJECTED DEMAND

This refers to the estimated quantity of a product which potentially would

be bought by the consumers at a certain time for a given price. Projection of the

demand is an important factor to determine the possible profit that the proposed

business could obtain upon implementing this project. Projected growth factor is

computed through the use of the past five-year population of students enrolled in

universities located at downtown Cebu. A table below is being presented to

easily show the average increase of the population per year.

PROJECTED ANNUAL DEMAND

To determine the potential market of the gumamela shake for the years 2-

14-2015, the study of demand projections for a proposed business is essential.

(other paragraph based on the computed result)

(table)

MARKET SHARE

Market share is said to be a key indicator of market competitiveness—that is,

how well a firm is doing against its competitors. It shows a part of the population that

will avail the proposed product. It is also the percentage of the market’s total sales of a

product during a specified time period. This measure can be use to in order to judge

the effectiveness of the marketing campaigns and also gives a general idea of the

standing of the proposed product to its market and to its competitors. Thus,

conservative market share of the proposed project is presented in the table below.

Table No.

Market Share

YEAR

Projected

Demand

Glass

Desired Market ShareProduction

CapacityMarket Share

% Glass Glass %

2014

2015

2016

2017

2018

Table No. shows that for the next five years the market shares percentage of the

proposed product is __________. The formula to arrived at the prospective share

percentage is:

Where:

MS = Market SharePC = Production CapacityPD = Projected Demand

Example:

(Findings)

TERMS OF PAYMENT

The determination of the terms of payment for the proposed business is

necessary to plan the cash outflows and inflows. Determining the expected outflows

and inflows helps the management to effectively and efficiently use its cash resources.

Accordingly, the proposed product would be paid through cash bases. As to the

case of the production of gumamela shake, the moment the product is transferred to the

customer, sales is already recognized.

MODE OF DELIVERY

A mode of delivery is defined as the way how the product is physically

transferred from the seller to the buyer. The finished product is transferred to the

customers by the time they purchase the gumamela shake.

DISTRIBUTION CHANNEL

A channel of distribution or trade channel is defined as the path or route along

which goods move from producers or manufacturers to ultimate consumers or industrial

users. In other words, it is a distribution network through which producer puts his

products in the market and passes it to the actual user. It comprises all of the business

and people involve in the physical movement and transfer of the ownership of goods

and services from producer to consumers. The longer the distribution channel the less

the profit a product manufacturer might get from the sale.

As in the case of the proposed business, the gumamela shake, from the stall or

cart , will then be directly delivered to the customers upon ordering. The one who is in

charge for the selling is responsible for the distribution of the products to the customers.

Based from the survey questionnaire answers, the respondents’ response as to where

they mostly buy shakes is in the mall so the proponents decided to situate their product

in malls.

PRICING POLICY

Pricing is a critical factor in the marketing aspect since it will determine the

expected turnover that the proponents will generate from the distribution of the

proposed product. Moreover, the loss or decline of sales can be directly attriibuted to

pricing the product too high or too low. In order to prevent such from happening, a

pricing policy is regulated. This policy will serve as guide in setting the right price of the

proposed product.

One of the considerations in pricing policy is the consumer’s willingness to pay.

Based on the results gathered from the instrument, majority of the respondents are

willing to pay Php 25.00 to Php 30.00, Php 36.00 to Php 45.00 , Php 56.00 to Php 60.00

for a 250 ml, 350 ml, 500 ml glass og the gumamela shake , respectively.

MARKETING STRATEGIES

The success of the business would have a greater chance by developing a

market strategy. In developing a market strategy, the business should know on how to

sell the gumamela shake to its target customer and how to rise above the crowd of

competitors demanding for attention. To determine whether the proposed product will

earn a reasonable profit, the business must go through an extensive planning that

involves development and implementation of success strategies in order to meet the

goals and objectives of the business.

PROMOTION AND ADVERTISING

Promotion is a business activity which communicates the product or service to

the consumers. This provides information to the people that will attract their attention to

buy the product or service in preference over others. One of the benefits of promotion

advertising is that it gives the business an opportunity to communicate a message to a

large audience at one time reducing the cost per contact. However, advertising can also

be performed at a smaller and more specialized scale to target a specific market.

Successful promotion increases sales which will spread over a larger output the

advertising and other costs.

The proponents of the study decided to promote the product through activities

which costs less. They planned to have tarpaulins that will be placed near its production

factory and to places which will be easily be seen by the public. A distribution 300 flyers

containing the benefits of the product will also be done. Sample products of 50 bottles

will also be distributed to the malls in downtown area of Cebu City.

LABELING

Labeling is an essential part when there is a new product that is being

introduced. It is used to guarantee that costumers have access to complete information

on the content and the composition of the product, in order to protect their health and

their interests. Also, in order for the costumers to know the information about the

product, it is in the label where we put the product’s name.

The proponents suggested that the product will carry a name of “Gumamela

Shake”, which is an elaborate name that can simply be identified by the consumers that

the product is made up of Gumamela.

PACKAGING AND ITS DESIGN

Packaging is the technology of enclosing or protecting products for distribution,

storage, sale, and use. Packaging improves handling and protection. When it comes to

food packaging, convenience is one of the key factors. Packaging serves as a primary

identification of the product against existing competitors. It also ultimately improves the

product’s marketability. The external packaging design of the proposed product is

presented in the next figure.

Figure 1:

Secondary packaging of Gumamela Shake