AVIRETH ICE CREAM
____________________________ A Marketing Plan Presented to
PROF. PAMELA F. RESURRECCION Master of Business Management Department School of Graduate Studies Mindanao State University –Iligan Institute of Technology
_______________________________________
In Partial Fulfillment of the Course BA 206 - Marketing Management
by
Richard S. Celeste Vanessa J. Rico Maria Theresa C. Alarde
March 2011 ACKNOWLEDGMENT
We would like to acknowledge the following people who have helped make this project a success. Mrs. Theresa Alarde, the proprietor of the homemade ice cream, for allowing us to perform the study of her business as well as for accommodating us and granting the use of data da ta pertinent to this project; The College of Business Administration and Accountancy faculty and students for taking time time to be our Product Blind Taste Test respondents and providing the needed feedback for the study; Our Marketing Management Class, Second Semester of Academic Year 2010-2011 for taking time to answer in our online survey and participating in our our comp compara arati tive ve ice cream cream
ques questi tion onnai naire re as well well as for the the inpu inputt and and
inspiration; and Prof. Pamela F. Resurreccion from the Marketing Department of the College of Business Administration and Accountancy in MSU - Iligan Institute of Technology for the valuable comments and suggestions.
Introduction
We would like to acknowledge the following people who have helped make this project a success. Mrs. Theresa Alarde, the proprietor of the homemade ice cream, for allowing us to perform the study of her business as well as for accommodating us and granting the use of data da ta pertinent to this project; The College of Business Administration and Accountancy faculty and students for taking time time to be our Product Blind Taste Test respondents and providing the needed feedback for the study; Our Marketing Management Class, Second Semester of Academic Year 2010-2011 for taking time to answer in our online survey and participating in our our comp compara arati tive ve ice cream cream
ques questi tion onnai naire re as well well as for the the inpu inputt and and
inspiration; and Prof. Pamela F. Resurreccion from the Marketing Department of the College of Business Administration and Accountancy in MSU - Iligan Institute of Technology for the valuable comments and suggestions.
Introduction
Ice cream is one of the desserts that people love to eat. It elicits feelings feelings of happiness happiness and excitemen excitementt that makes each person smiles smiles at the thought of it. On December 2009, Ms. Theresa Alarde produced homemade ice cream to celebrate yuletide season. Her relatives were amazed at the taste of it and commented it tasted like a branded ice cream in the market. Heeding their comments, she started to venture into it by selling ice cream in a limit limited ed scale. scale. Durian, Durian, mango mango and cocoa cocoa ingred ingredien ients ts were were the main main flavors. With its smooth texture, creamy and natural flavored ice cream, she gradually attracted a group of loyal customers including friends, neighbors, working working staff at Mindanao Mindanao Sanitarium Sanitarium Hospital and some professors professors of MSUIIT. Production depended mainly on orders especially during birthdays and some other occasions. The loyal customers then, served as her motivating factor to produce ice cream. AVIR AV IRET ETH H Ice Ice Crea Cream m came came into into bein being g in resp respon onse se to the the acade academi mic c requirement in BA 206 – Marketing Management. AVIRETH encompasses the group members namely Vanessa J. Rico, Richard S. Celeste and Theresa C. Alarde Alarde.. This This market marketing ing plan plan entail entails s identi identific ficatio ation n of custom customer er demand, demand, setting up of the organization’s mission, goals and objectives as well as the financial forecast. The proponents of this endeavor think of implementing this in the hope of satisfying customers and enjoy profit. Marketing research tools were used such as survey questionnaire, blind taste test, observation and interview to determine firsthand customers’ reaction to the product. They will act as business partners and would love to invite investors from the MBM students and other interested parties to make the business grow bigger and bigger.
I. EXECUTIVE SUMMARY AVIRETH Ice Cream was conceptualized in response to the academic
requirement in BA 206 – Marketing Management. It will be guided by its mission of providing premium quality homemade ice cream at a fair and reasonable price that represents value to the consumers. It will strive for excellence and aim for customer satisfaction by providing outstanding customer service and fruit flavored specialty. Avireth Ice Cream is made from coconut milk, milk solids-non-fat
(skim-milk powder), sugar; all purpose cream, and natural fruits or premium cocoa powder. The proponents will position the product as a nutritious, delicious and affordable ice cream. The MSU-IIT College of Business Administration and Accountancy faculty, staff and students is the chosen target market of the business. As a new entrant, Market Penetration will be used as a strategy to reach the said segment by offering ice cream at a relatively low price. Avireth Ice Cream will implement various marketing strategies to
inform, persuade the market of the company’s products. For instance, it will facilitate word of mouth communication by ensuring customers are satisfied so that they will serve as promotional channel by telling their friends, relatives and loved ones about the product. Moreover, psychological pricing will be applied to attract more customers. A trivia will be posted on information bulletins to expose consumers to information about the company. It will also make use of direct distribution strategy in reaching the target market. They will seek permission from Prof. Julita W. Bokingo, Dean of CBAA through Prof. Pamela Resurreccion, their instructor to place a stall at the college lobby to serve the customers. They will also accept orders.
Avireth Ice Cream is committed to continuous marketing research to
gain more ideas in improving the product and the business as a whole. The proponents are hopeful to gain sufficient profit considering the output of this comprehensive plan. They will strive to creatively coordinate the marketing mix elements to satisfy customers better and achieve organizational objectives.
TABLE OF CONTENTS Title Page Acknowledgment Introduction CHAPTER I. Executive Summary II. Company’s Mission Statement III. Situation Analyses
A. SWOT Analysis B. Porter`s Five Forces C. Target Market Demographics
5 6 7 7 8 10
IV. Marketing Program
A. Mission B. Marketing Objectives C. Marketing Strategies 1. Market Penetration 2. Market Development 3. Product Development 4. Diversification D. Marketing Tactics 1. Product 2. Price 3. Promotion 4. Place of Distribution V. Evaluation Criteria and Metrics
15 15 15 15 15 16 16 16 17 17 19 19 21 22
VI. Forecast and Financial Analysis
25 VII. Marketing Research
A. B. C. D.
Competitive Intelligence Survey Questionnaire Blind Taste Test Test Marketing
VIII. Appendices II. COMPANY’S MISSION STATEMENT
Marketing is a total system of business activities designed to plan, price, promote and distribute want-satisfying goods and services to present and potential customers to reach organizational objectives (William J. Stanton, Fundamentals of Marketing). This is consistent with the marketing concept in which customers’ needs are satisfied at a profit. This can be realized by doing the following processes to make a sound marketing decision in the important aspects of the marketing program. The hallmark of a successful business is the importance given to the mission statement of an organization and the various action steps to make it achievable and realistic. Hence, the group’s mission is stated as follows: To give customers extraordinary happiness with our quality homemade ice cream at an affordable price
This mission statement articulates its: Purpose: To provide superior quality homemade ice cream in
Iligan City specifically the constituents of the College of Business
Administration and Accountancy, Mindanao State University, Iligan Institute of Technology with fruit flavored specialty. Business: Homemade ice cream. Core Values/Ethical Standards:
Honesty, integrity and
cleanliness in providing and developing our products
III. SITUATION ANALYSES
With the predetermined mission of the organization, analysis of the environment plays a significant part in knowing the relevant marketing tools to develop an effective value proposition to the target market. This analysis details the company’s strengths, weaknesses, opportunities and threats. Moreover, it tackles the competitive environment as well as the behavior of customers to come up with need-responsive and tailored suit marketing strategies. A. SWOT ANALYSIS
Knowledge of the company’s strengths and weaknesses is a requisite to determine how to capitalize its capacity as well as improve on the weak points. Moreover, awareness of the opportunities and threats offers avenue for business owners to exploit and prepare appropriate responses to these. Strengths: •
Excellent ice cream taste
•
Price is set lower than the competitors.
•
Offers a variety of flavors
•
Guarantees freshness since products are made to order
•
It contains natural fruit flavors
Weaknesses: •
New in the market
•
Brand name identity is not yet established
•
Lack of production and storage facilities
•
Less manpower
Opportunities: •
A growing of student population
•
Favorable response of customers to ice cream
•
There is no ice cream parlor in the CBAA premise
Threats: •
National brands of ice cream are more popular.
•
Commercial products have a broader price range allowing it to tap all income groups
•
Famous ice cream brands have an extensive promotional campaigns
•
Because of technology, quality of homemade ice cream can never surpass commercial ones
B. PORTER`S FIVE FORCES Rivalry among Competing Sellers
High •
The major competitors in the premium ice cream industry are large, diversified companies with significantly greater resources than AVERITH.
•
There are existing producers of homemade ice cream.
•
Rivalry can be characterized as intense given that the numerous competitors existing, the cost of switching to rival brands is low, and the sales promotion tactics of Selecta and Nestle and other rivals pose a threat
Buyer Power
High •
It is relatively high because buyers are numerous consisting of individual customers, grocery stores and restaurants locally and nationwide.
•
Since
retailers
purchase ice cream products
in large
quantities, this gives buyers substantial leverage over price. There are many
•
ice cream products
to
choose from
homemade and national brand ice cream, so the buyers’ cost of switching to competing brands is relatively low. •
In order to defend against this competitive force, a company’s strategy must include strong product differentiation so that buyers are less able to switch over without incurring large costs.
Supplier Power
Moderate •
The suppliers to the ice cream industry include dairy farmers, paper and plastic manufacturers and suppliers of various flavorings.
•
Such suppliers are a moderate competitive force, given that the ice cream industry they are supplying is a major customer, there are multiple suppliers throughout the nation to choose from, and many of the suppliers’ viability is tied to the well-being of large, established companies.
Substitute Products
High •
Many substitute products are available in the dessert and frozen food industry.
•
The ease with which buyers can switch to substitute products is an indicator of the strength of this competitive force. Since substitute products are readily available and attractively priced compared to the relatively higher priced premium ice cream
products,
the
competitive
pressures
posed
by
substitute products are intense. Potential New Entrants
Moderate •
The barriers to entry within the ice cream industry are moderate due to the brand preferences and customer loyalty toward the larger and more established rival companies.
•
Other obstacles to new entrants include strong brand loyalty to established firms and economic factors, such as the requirement for large sources of capital, specialized mixing facilities and manufacturing plants.
•
The accessibility of distribution channels can be difficult for an unknown company with little or no brand recognition.
C. TARGET MARKET DEMOGRAPHICS
The target market is a group of customers at which the firm’s marketing program is targeted to them (Stanton, Fundamentals of Marketing). Determining it is crucial to the firm’s success in the long run. A basic criterion for identifying target market includes: a) A market segment should be measurable; b) it should be large enough to
be profitable; and c) it is accessible in terms of the firms’ marketing mix elements. 1. Geographic
The City of Iligan is an urbanized city, north of the province of Lanao del Norte. Known as the City of Majestic Waterfalls, there are around 23 waterfalls in and around Iligan. Among them is the Maria Cristina Falls, home of Mindanao's primary hydroelectric power station, and Limunsudan Falls. Iligan falls within the third type of climate wherein the seasons are not very pronounced. Rain is more or less evenly distributed throughout the year. Because of its tropical location the city does not experience cold weather. Neither does it experience strong weather disturbances due to its geographical location (being outside the typhoon belt) and also because of the mountains that are surrounding the city. 2. Demographics
According to the 2007 census, it has a population of 399,061 people. The City of Iligan has one state university and 7 private colleges. Among these educational institutions is the Mindanao State University - Iligan Institute of Technology, one of the few autonomous external campuses of the Mindanao State University and "the lightbearer of the several campuses of the MSU System." It is not only one of the best universities in the Visayas and Mindanao regions but considered as well as one of the best universities in Philippines with a standing of being within the top ten (10) best universities in the country with excellence in Science and Technology, Engineering, Accountancy, Mathematics, Information Technology, and Natural Sciences. The target market chosen is the students, faculty and staff of the College of Business Administration and Accountancy, MSU-IIT. We computed the average student population and we expect that it will be
approximately 813 this coming first semester. The other market would be the existing consumers of homemade ice cream here in Iligan. Please see table and graph below. Semestral period
1st
Number of
Number of
College
MBM
Students
Students
Enrolled
Enrolled
semester,
A.Y.
832
45
2008-2009 2nd semester,
A.Y.
779
30
2008-2009 1st semester,
A.Y.
781
25
2009-2010 2nd semester,
A.Y.
720
30
2009-2010 1st semester,
A.Y.
910
25
2010-2011 2nd semester,
A.Y.
857
35
2010-2011 1st semester,
A.Y.
813
31
2010-2011 Table 1. Student Count for 6 semesters
The proponents made use of survey questionnaire, blind taste test, free taste and observation as tools to study the behavior of the target market. 3. Customer’s Wants and Needs Averith Ice Cream will be giving its customers premium quality
homemade ice cream at a fair and reasonable price, striving for excellence and aiming customer satisfaction by providing outstanding customer service and fruit flavored specialty. It seeks to fulfill the
following benefits that are important to their customers with the aid of the information by the survey conducted. Majority of the respondents are between 20-24 years old, single and are still in school. Selection: Customer demand of ice cream brands ranges
from Selecta, Nestle, Magnolia and the homemade or dirty ice cream. Flavors ran from conventional to localized having mango as the favorite and jackfruit the least. Preference: Consumers prefer their ice cream served in a
cup with price ranging from P20-25 per scoop. Eating and purchasing ice cream is done once a week. They usually buy the products at convenience or grocery stores. Quality: For them, quality is good taste, texture, delicious,
clean, rich flavor, luscious, sweet and creamy in an affordable price. Benefits:
relieved,
Consumers
refreshed,
feel
euphoric,
happy, nostalgic
satisfied, and
relaxed,
even
“self-
actualized” according to some after eating ice cream. Discounts and sales: Buy 1 get 1 free is the type of
promotion they would prefer than discount vouchers and tie-in promotions with other products. Improvements: More new flavors and healthier ice cream
tops the list for improvements to be made in the said industry. 4. Market Trends
Manufacturers are expected to broaden their target market to improve per capita consumption over the forecast period. These
companies are anticipated to push their premium line to middleincome consumers as an affordable gourmet treat, and at the same time continue to promote their value-for-money products as special occasion indulgence to capture the lower-income stratum. Polarization in ice cream sales became more evident in 2010. Manufacturers are introducing more premium and limited edition products and at the same time pushing their value-for-money lines. For instance, Unilever-RFM Ice Cream Corp introduced a new flavor to its Selecta Gold, a premium ice cream created by top local chefs, while heavily promoting its Selecta 3-in-1 plus 1, which contains four classic flavours – cheese, ube (purple yam), vanilla, and chocolate – in one pack. Unilever-RFM Ice Cream Corp maintained leadership with a value share of nearly 43% in 2009. This was mainly due to the strong performance of Selecta, which offered both impulse and bulk ice cream. Continuous improvement of its value share can also be attributed to the wide price range of its products, allowing it to tap all income groups, and the company’s extensive distribution network, which permits Selecta to be available across the Philippines.
IV. MARKETING PROGRAM
A firm’s marketing program is a set of elements including product, price, promotion and place of distribution. It defines the strategies the firm has to make in order to attract prospects, retain loyal customers, obtain a larger market share and remain relevant in the dynamic world of business. This will be based on the company’s mission and objectives for proper coordination and successful implementation. A. Mission We provide premium quality homemade ice cream at a fair and reasonable price that represents value to the consumers. We strive for excellence and aim for customer satisfaction by providing
outstanding
customer
service
and
fruit
flavored
specialty. B. Marketing Objectives
Objective is a desired outcome that the company aims to achieve. It defines what the company would love to accomplish in a certain period of time. Avireth Ice Cream has the following marketing objectives: 1. To provide CBAA constituents with affordable, nutritious and delicious homemade ice cream. 2. To inform, persuade and remind target market of the health
benefits of ice cream 3. To increase sales monthly by 20 %
4. To earn profit and increase it by 20% monthly. C. Marketing Strategies
A strategy is a broad course of action by which an organization intends to reach its objectives (Stanton, Fundamentals of Marketing). It describes what should be done and how to do it to realize the predetermined goals. 1. Market Penetration Strategy
Market Penetration aims to enter the market at a relatively low price and hopes to increase sales for present products. As a new entrant to the CBAA of MSU-IIT market, Avireth Ice Cream will offer affordable homemade ice cream. For instance, the price of 1 gallon with durian flavor is Php 300.00 compared to Php 400.00 and up with brands such as Nestle and Selecta. This is an important strategy to penetrate the market quite easily because people have this innate desire to try lower-priced products and eventually, they will be able to appreciate the product because of its excellent taste. 2. Market Development Strategy
Market Development is a process of identifying a new group of customers to serve. This is evidenced by the company’s desire to provide want-satisfying products to a new group of customers. Avireth Ice Cream does this by accommodating buyers from
neighboring colleges of CBAA. Another set of promotional tools will be employed to better satisfy this new group of customers. The proponents of the business venture anticipates this direction by penetrating first the present target market and expand through catering other a new market segment 3 months after the commercialization or launching of the said business. 3. Product Development Strategy
Product Development incorporates production of new related products. It could actually be an expansion of product mix or extension of the product line. Averith Ice Cream will also explore this strategy by introducing new flavors of homemade
ice cream. Doing this will make the customers more excited and fortunate because their preferences are considered. This also justifies the notion that every individual has a distinct need to satisfy, hence the relevance of offering a new flavor or even size variants as examples. 4. Diversification
Diversification is the process of venturing into a new undertaking which maybe related or not to the existing business. This poses a challenge to businesses for deliberation. Avireth Ice Cream likes the idea of offering bread, cakes and pastries
after some months of selling homemade ice cream. The proponents believe that these are complementary products for overall satisfaction. They will consider this as an exciting opportunity with the hope of gaining profit. D. Marketing Tactics
A tactic is a more specific activity that details the marketing strategy. Proper planning and implementation will make the activities more effective and successful. It delves on the 4 P’s of marketing namely product, price, promotion and place of distribution. It requires creativity to become unique and influential among customers. 1. Product
Product is the tangible output that a company offers to customers. It is the forefront indicator of a company’s extensive efforts to make it a want-satisfying good. Customers consider this as the focal point to decide patronage and preferences. Avireth Ice Cream is made from coconut milk, milk solids-non-
fat (skim-milk powder), sugar; all purpose cream, and natural fruits or premium cocoa powder.
Coconut milk is known to be an
antioxidant. It can prevent cancer and other digestion-related diseases. It cures constipation and will make your skin smooth.
Moreover, skim milk is a good source of calcium that increases the solid content of the ice cream and gives it more body. It is also an important source of protein which will improve the ice cream because of the nutrients. Fresh fruit is also used as a flavor which is a good source of vitamins and minerals. Having these ingredients, Avireth Ice Cream will employ the following techniques: a. Product Positioning Avireth Ice Cream will strive to make an image as a
nutritious, delicious and affordable ice cream. Unlike existing national brands, Avireth Ice Cream uses fresh fruits as the flavoring component that makes it more nutritious with the following health benefits: o
It lowers cholesterol level.
o
It is rich in fiber which could solve your digestion problems.
o
It reduces the risk of heart attack.
o
It has a higher content of vitamins and minerals considering that it is fresh.
Moreover, it is very delicious. We conducted free taste among the students and they commented that it is very delicious. They even noted that it can rival national brands of ice cream because of its delightful taste. Furthermore, it is highly affordable relative to competitors. Consumers can now enjoy eating ice cream at a low price. We provide this satisfaction to attract more customers and retain the loyal ones. Hence, our competitive edge delves into offering affordable, nutritious and delicious ice cream. b. Product Quality
It has been said that quality is like beauty, in that; it is in the eyes of the beholder. While there is a standard definition to it because of the efforts done by companies in their Total
Quality Management or TQM, a person’s unique definition is cathartic. It is evidenced in the survey we conducted. We asked what does quality mean to them and answers varied from the texture to taste and cheap price to availability. Please see Appendix for your reference. 32% commented that it should be tasty and delicious. As such, Avireth Ice Cream will capitalize in its delicious taste. If customers will be satisfied with its taste, then repeat purchases is expected. c. Packaging
The proponents will consider re-using disposed containers of Nestle and Selecta sold by Chowking and ice cream outlets in Gaisano Mall. Customers who will repurchase ice cream will be given Php 10 discount by presenting back the emptied container. This is to foster reuse of plastic containers than just throw it anywhere, hence awareness about the role one has to perform amidst climate change. (See appendices) 2. Price
One of the major reasons why consumers buy products is price. In fact, others make it the sole basis before buying something. Avireth Ice Cream will use market penetration pricing in which price is set lower than competitors to reach the
market quite easily. This will be another competitive advantage which is favorable to the proponents. During the blind taste test, respondents were also asked to voice out their comments about the product and it was so amazing that they like the taste very much. They even stressed that the product can be highly saleable because of great taste. In relation to price, the proponents are confident for the success of this technique to earn bigger sales.
Cost-plus pricing will also be incorporated in which a mark-
up is added to the total cost to earn profit. Also, psychological pricing will be employed in which price will be set at seemingly
odd prices like Php 299 instead of Php 300 for 1 gallon of ice cream. This will further attract more customers to buy. 3. Promotion
Promotion is the element in the marketing program that serves to inform, persuade, and remind the market of the company
and/or
its
products
(Stanton,
Fundamentals
of
Marketing). It is the communication tool to convince more customers. In fact, it is called as marketing communications because every single element of the marketing mix should be communicated to the target audience. Avireth Ice Cream will be doing a lot of promotional activities including: a. Word of mouth Communication. Avireth
Ice
Cream
will
facilitate
word
of
mouth
communication by ensuring customers are satisfied because they will serve as promotional channel in which they will tell their friends, relatives and loved ones about the product. This exposure is very much influential because of the third party impact in promoting the product. b. Advertising Avireth Ice Cream will make use of the following as
advertising tools: o
Tarpaulin
o
Leaflets
o
Calling Card
o
Trivia. The proponents will be posting Trivia about Ice Cream on the bulletin boards every other day with contact details of our business. This is to facilitate
accidental exposure to information among passersby or bystanders near the information bulletins. c. Sales Promotion
The proponents will be using sales promotional techniques to increase sales. Below is a list of methods: o
Free taste. Allowing customers to at least try the product opens a doorway for more sales. Implementing this will make prospects to buy the product. The proponents are confident with its delightful taste, hence the relevance of this technique.
o
Discount.
We
will
give
concessions
to
birthday
celebrants such as 5% discounts for 1 gallon and 15% for 1 tube of ice cream purchased. o
Point of Sale Promotion
d. Public Relations
The group will sponsor events such as simultaneous eating of ice cream in cone by hundreds of college students in the campus. This will be realized a year after the grand launching of the business on June 2011. We will also coordinate with organizations that will be organizing medical mission and extend financial assistance. Sometime later, the proponents will really spearhead free dental and health check up here in Iligan City and some other places. Doing all these will eventually result to positive publicity and will create a positive impact e. Internet Marketing
With an outgrowing number of users in facebook and other networking sites, promoting our product through it is a good idea. We will create a group page in facebook with members exclusive for the constituents of Iligan City. This is to elicit orders during important occasions such birthdays and family
reunions. The group plans to maximize its advantages three months after the opening of the business. 4. Place of Distribution
Place of Distribution is the location or the channels of distribution that a company selects in serving the target market. It is another crucial element because it the end point of making a sale. The proponents will make use of direct distribution strategy
in reaching the target market. They will seek
permission from Prof. Julita W. Bokingo, Dean of CBAA through Prof. Pamela Resurreccion, their instructor to place a stall at the college lobby to serve the customers. They will also accept orders. Promotional Expenses June
Discount for Packaging Pricing Strategy
July
100.00
Public relations
100.00 96.00 1,000. 00 500.00 500.00 100.00 600.00 1,000. 00 1,000. 00
Total Promotional Expenses
4,896. 00
Tarpaulin Leaflets Calling card Trivia Free Taste Birthday celebrants
120.00 114.00
Aug
144.00 132.00
Sept
173.00 150.00
Oct
207.00 168.00
Nov
Dec
250.00 186.00
374.00 276.00
500.00 100.00
500.00 100.00
100.00
100.00
100.00
1,000.0 0 1,000.0 0
1,000.0 0 1,000.0 0
1,000.0 0 1,000.0 0
1,000.0 0 1,000.0 0
1,000.0 0 1,000.0 0
1,000.0 0 1,000.0 0
2,334. 00
2,376. 00
2,923. 00
2,975. 00
2,536. 00
2,750. 00
V. EVALUATION CRITERIA AND METRICS
Business operations will be evaluated based on the following: • • • • •
Sales volume and revenue; Expenses; Return on marketing investment; Customer satisfaction; and, Market position.
Below is a detailed questionnaire to determine implementation success based on the plan. AVIRETH Ice Cream Marketing Plan Audit
As of today, how much is our net income? _________________ As of today, how much have we spent for marketing activities or expenses? ____________ Ye s
N o
Internal Management Is the mission statement clearly understood by the employees? Are the members of the organization supportive of the ice cream business? Do we have a professionally designed logo? Do we have a niche market as a part of our product/service mix? Did the number of our customers increase during the past 6 months? Customer Evaluation Do we ask our customers how well they are satisfied with the product? Do we think that value is more important than price to our customers? Do our clients view us as highly reliable and trustworthy? Did most clients leave with a smile, a "Thank You", or a gesture of happiness after buying and/or eating ice cream? Have we received or heard of any complaints from customers
regarding our product? Have any customer sent us a “thank you” note for our product this year? Do we have testimonials from at least five customers? Price Mix. Have we achieved our financial profit goal for the past 6 months? Has there been any increase in costs pertinent to our operations (i.e., labor, materials, etc.)? Do we think that customers feel our price is too high ____, or too low ____? Marketing Mix. Have we devoted at least 75% of our marketing activities from the marketing plan? Are we satisfied with the results the marketing plan has produced? Do we work off our marketing mix from a written marketing calendar? Do we spend at least one hour each week reviewing marketing? Have we taken a varied and creative approach to marketing? Have we kept our expenses for marketing within our budget? Do we conduct periodic reviews of our own marketing materials? Marketing Update. Have we participated in any business networking groups? Do we get updates from marketing articles and advice at least once a week? Communication Mix. Advertising: Have we advertised in print or otherwise during the past 6 months? Is our visual branding clearly & consistently appearing on all collateral? Promotion:
Do we have a written Word of Mouth marketing program? Have we distributed any press release about our business this year? Have we written any articles about car care this year?
Public Relations.
Have we spoken in front of a group about ice cream this year? Have we participated in any volunteer activity? Do we have an ongoing Public Relations program? Internet Marketing.
Have we participated in any social media efforts? Do we have a blog or a website? Do we participate in our community locally or online? Do we have a professional email address with our own domain? Fostering Customer Relationship.
Are customers updated of our promos and services? Have we written each of our repeat customers a Thank You note or given a token this year? Have we asked at least 40% of our customers for referrals this year? Do we have customer profiles on at least 70% of our customers? Is it easy for our customers to reach us by telephone or mobile phone? Do we know our customer’s birthdays, anniversaries, or other special days? Do we feel that we are the one in charge of our customer relationships? Have we surveyed our customers to determine if they are happy with us? Competition.
Have we done a written survey of our competition? Has an owner of a carwash shop in Iligan City visit us during the past 6 months? Has anyone conduct an inquiry, or a study about our business? The higher the score, the better positioned we are in the marketplace.
VI. Forecast and Financial Analysis
A. HISTORICAL DATA NUMBER OF TUBES SOLD PER MONTH AS OF 2010 JUNE # of tubes produced Sold in tube Selling Price
Sold in gallon Multiply by 6 gallons per tube
10
JULY
AUGUS T
SEPTEM BER
OCTOB ER
NOVEM BER
10
10
16
16
10
DECEM BER
22
2 2 2 4 5 2 8 1,300.0 1,300.0 1,300.0 1,300.0 0 0 0 1,300.00 0 1,300.00 1,300.00 2, 2, 2, 5,2 6, 2,6 10, 600.00 600.00 600.00 00.00 500.00 00.00 400.00 8
8
8
12
11
8
14
6 6 6 6 6 6 6 48 48 48 72 66 48 84 300.00 300.00 300.00 300.00 300.00 300.00 300.00 Selling Price 14, 14, 14, 21,6 19, 14,4 25, 400.00 400.00 00.00 800.00 00.00 200.00 Php 400.00 Total Sales per Month
17 ,000.00
17 17 26, ,000.00 ,000.00 800.00
17 17, ,000.00 000.00
35, 600.00
B. SALES
FORECASTING
Formula
Historical data + (total number of people in target market x annual # of purchases/ person)
ASSUMPTIONS: BA student average population Expected Number of Customers Buying frequency Variant Price sales per month
MBM student average population Expected Number of Customers Buying frequency Variant Price sales per month
MBM student average population Expected Number of Customers Buying frequency Variant Price sales per month
Total Sales per month
813 from target population per week oz cup per cup cups
10% 1 3.5 Php14.00 324 Php4,53 6.00 sales 31
from target 20% population per 1 month half 0.50 gallon Php159.0 0 per half gallon half 6 gallon Php954. 00 sales 31 from target 20% population per 1 month 1 gallon Php299.0 0 per gallon 6 gallon Php1,79 4.00 Php7,28 4.00
AFTER IMPLEMENTING PROMOTION, AN INCREASE OF 20% WILL BE REALIZED MONTHLY
PROJECTIO N JULY
AUGUS T
SEPTEM BER
OCTOB ER
NOVEM BER
DECEM BER
17,0 17,0 00.00 00.00 7,824.0 9,3 0 88.80 24,8 26,3 24.00 88.80
17,0 00.00 11,2 66.56 28,2 66.56
26,80 0.00 13,51 9.87 40,31 9.87
17,0 00.00 16,2 23.84 33,2 23.84
17,00 0.00 19,46 8.60 36,46 8.60
35,60 0.00 29,20 2.90 64,80 2.90
JUNE SALES
Regular Customers Target Market Total
C. Cost of Goods Sold
Number of tubes Price of raw materials
Packaging Total Direct Materials
Direct labor Overhead
Total Cost of Goods Sold
June 16
July 19
Aug 22
Sept 25
Oct 28
Nov 31
Dec 46
585.00 9,360.0 0 1,410.0 0 10,770. 00
585.00 11,115. 00 1,692.0 0 12,807. 00
585.00 12,870. 00 2,030.4 0 14,900. 40
585.00 14,625. 00 2,436.4 8 17,061. 48
585.00 16,380. 00 2,932.7 8 19,312. 78
585.00 18,135. 00 4,399.1 7 22,534. 17
585.00 26,910. 00 6,598.7 6 33,508. 76
2,400.0 0 600.00 3,000.0 0
2,850.0 0 600.00 3,450.0 0
3,300.0 0 600.00 3,900.0 0
3,750.0 0 600.00 4,350.0 0
4,200.0 0 600.00 4,800.0 0
4,650.0 0 600.00 5,250.0 0
6,900.0 0 600.00 7,500.0 0
13,770 .00
16,257 .00
18,800 .40
21,411 .48
24,112 .78
27,784 .17
41,008 .76
Direct Materials
Cream Cocomilk White sugar Flour Fruit Others Total
40.00 120.00 75.00 17.00 100.00 105.00 585.00
VII. MARKETING RESEARCH A. Competitive Intelligence
Marketing Intelligence is the process of monitoring the activities of competitors. It is an ongoing activity that necessitates determination of the strengths and weaknesses of the direct and indirect riva ls. Moreover, it identifies what are the strategies used by the competitors. 1. Direct Competitors Name of Proprietor
JOSEPH BAGONDOL KRISTO
Date Starte d 20042005
2010-
Address
Upper Hinaplanon, I.C. Upper
Distributi on Area
Tambo, I.C. Santa
Price
Size
P1,000.00/t ube big 9.00/cone 5.00/cone small
ALIBYO KOPIZ TAPING
to present 19961997
Hinaplanon, I.C. Hinaplanon, I.C.
Filomena, I.C. Cabarro, I.C.
PABLO TUMBOK
20042005
Hinaplanon, I.C.
2010-to present
Hinaplanon, I.C.
Brgy. Santiago, I.C. Tambo Bus terminal, I.C.
ARNOLD CORTES TONY ABREJANO
1986-to Purok6-B, present Tambo I.C.
FREDDIE PASTALLAN O ALFREDO PADILLA ARNOLD TEMPERO
2010-to present 19751976 19931994
Purok 16 Canaway, I.C. Tambacan, I.C Zone 1 Upper Hinaplanon, I.C.
10.00/cone big 800.00/tube 6.00/cone small 1,000.00/tu be
Tambo Elem. School
1,000.00/tu be small 5.00/cone 3.00/cone 1,000.00/tu be small 5.00/cone
Pala-o Market
800.00/tube 5.00/cone small
Tambacan, I.C. City Proper
4.00/cone small 900.00/tube 5.00/cone small
2. Indirect Competitors Name of Store POPROCK
Brand of Ice Cream Nestle
Strengths
-use generator whenever brownout occurs. -the owner of the bread shop attracts the buyers of breads and cakes as buyers of ice cream too. -the location of the store is in the area
Weaknesses
-there are many ice cream sellers around the corner. -during rainy days, less consumer buys icecream for it is wet and cold outside. - no tables and
BOYET & SOBIE
Nestle Selecta
VICTORIA BAKERY
Nestle Selecta
CHOWKING
Nestle
near to school, pathway of employees from offices and commercial center. -Location is near in the area of school, church and commercial center.
chairs where customers can take it inside as part of customer service -it has a competitor in front of its building selling the same brands of ice cream -it has no table and chairs where customers can take it inside as part of customer service
-Has a company`s price set to the products -products are displayed inside in line with breads and cakes in a way to attract the buyers of their own baked products -sells two kinds of products so buyer has choices -sell sizes in gallons,half gallons, cone and cups. -have their own generator when brownout occurs. - Food chain with known brand name in the food industry. Halo-halo is one of their most sellable served is topped with Nestle ice cream. Nestle is associated in
FK MART
Nestle Selecta
EMILIA SUPERMART
Selecta Nestle
GAISANO GROCERY
Selecta Nestle Magnolia
Chowking with strong brand name located in every malls in the Phils. -use generator during brownouts -one of the biggest grocery stores in the city -located in one of the busiest streets of the city -near Palao wet market -use generator during brownouts - one of the biggest grocery stores in the city -located in one of the busiest streets of the city -closer proximity to Palao wet market than FK Mart -has a wider packaging sizes from Selecta products -located inside GMALL which commands a higher number of people entering the building -is in a one stop shop -has 3 brands of ice cream to offer to its customers -largest variety of packaging sizes available - use generator during brownouts
-direct selling competition with Emilia Supermart which is located on the same street -majority of its icecream package size is a pint to a gallon -early closing time -direct selling competition with FK Mart -early closing time
-longer open time with no lunchbreaks -late closing time
3. Survey Questionnaire
The proponents conducted a survey to the target market. The purpose delves on knowing the usage, attitude and image of the potential customers about the product. Below is the result of the survey conducted. (See appendices) 4. Blind Taste Test
Blind taste test is the process of knowing directly from the respondents their preferences and personal judgment about the product. The proponent made use of a single blind taste test in which respondents are not aware of brand names. This is to avoid bias in rating the various attributes of the product. (Please refer to appendices) 5. Test Marketing
Test Marketing is a research tool implemented on a limited scale before the final launching of the product. The proponents will conduct this a month before the grand opening to know the performance of the product in the market. Customers’ reaction will then be recorded and will be used for refinements. This is found to be helpful because of the primary data that the researchers could use of in improving the product and the business in general.