Chapter 2


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activated carbon - proposal defense chapter 2: Marketing Plan

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Chapter 2

  1. 1. CHAPTER 2 MARKETING PLAN This study will involve the process of gathering information about a potential market thatcan be used in deciding what strategies would help the company yield maximum profitability,and how the product is designed, delivered, priced and marketed. This will determine the currentdemand and supply for the proposed product and identify the unattended demands that willdetermine the company’s market share. Furthermore, this portion will also discuss the currentmarket analysis and the anticipated future market potential, the existing competitors, consumers,opportunities and the competitive edge of the company. I. Target market Target market is a group of customers that Carbon Plus Corporation has decided to aimits marketing efforts and its merchandise. They are customers who are likely to buy the product,meaning, they are interested in the product, have all the resources to purchase it, and is allowedby the law and other regulations to acquire the product. Carbon Pus Corporation’s target marketare businesses who manufacture and/or need activated carbon in their operation, environmentaladvocates who adheres to a greener environment, medical institutions who aim to innovate theirproducts, legal and forensic institutions who in the course of their work, plans to operateefficiently and all other sectors, be it public or private, that has the objective to decontaminatepolluted matters. Carbon Plus Corp. targets those businesses or organizations that need activated carbon asa part of their operation to clean and detoxify their products before selling it out to the market.
  2. 2. Since Activated carbon is more likely to be used by those who manufacturers, Carbon Plus Corp.aim to reach those manufacturers especially those areas within and near the vicinity of Quezon.However as the product popularity increases, the company will consider further expansion of themarket and the business operation. Gradual expansions in region 4, nationwide and even ininternational market are considered by the company. Specifically, the corporation will cater to both big manufacturers and small or mediumenterprises. Big manufacturers such as those in the field of food and beverage manufacture,automobile manufacture, mining and agricultural industries use a humungous amount ofactivated carbon. Small or medium enterprises on the other hand such as water refilling stations,hospitals, chemists and medical enthusiasts, and the like needs activated carbon in their day today operation. Since there are still no manufacturer of activated carbon in Quezon, we can helpthese enterprise in lowering their cost, thus, a direct market is built. Generally, activated carbon caters to businesses such as, but not limited to the following: 1. Gasoline/fuel recovery 8. Sugar refinement 2. Automobile 9. Water refilling stations 3. Whisky distilment 10. Drinking water treatments 4. Tobacco industry 11. Factory waste disposers 5. Hospitals 12. Perfume industry 6. Pharmaceutical use 13. Gold Recovery 7. Makers of refrigerators 14. Personal household use
  3. 3. II. Market SizeQuezon Quezon is a province of the Philippines in the CALABARZON region. It is the 8th largest province in the Philippines. Quezon Province is bounded on the north by the province of Aurora, on the west by the provinces of Laguna and Rizal, on the southwest by the province of Batangas and on the southeast by Camarines Norte and Camarines Sur. Agriculture, Fishing, Eco-tourism and Food processing are the major industries in Quezon. Thus, Fig.2.1 Province of Quezon there are 2896 kinds of industries in Quezon. Quezon is the countrys leading producer of coconut products such as coconut oil and copra. A large part of the province is covered in coconut plantations. Other major crops are rice, corn, banana, and coffee. Fishing is also a large part of the provinces economy.1 Moreover, the Quezon has a vast industrial growth and the corporation sees a large need for a manufacturing site of activated carbon in Quezon so as to help various industries in it. Carbon Plus Corp. believes that Quezon is a significant province that will suit the business operations well and will help the business grow its integrity as globally competitive through the course of having a business in Quezon.
  4. 4. Quezon is subdivided into 39 municipalities divided into four districts as follows:First District Third District No. of Populat No. of PopulatiCity/Municipal Area City/Municipal Area Baranga ion Baranga on ity (km²) ity (km²) ys (2007) ys (2007)Burdeos 14 199.8 23,568 Agdangan 12 31.5 11,164General Nakar 19 1344.8 24,895 Buenavista 37 161.4 24,798Infanta 36 342.8 60,346 Catanauan 46 253.1 65,705Jomalig 5 56.7 6,111 General Luna 27 101 23,379Lucban 32 130.5 45,616 Mulanay 28 420 48,538Mauban 40 416 55,866 Padre Burgos 22 69.1 19,877Pagbilao 27 171 62,561 Pitogo 39 73.4 21,095Panukulan 12 226.6 11,968 San Andres 7 61 29,216Patnanungan 6 139.2 12,825 San Francisco 16 304 53,286Polillo 20 253 27,912 San Narciso 24 263.6 39,828Real 17 563.9 33,073 Unisan 36 124.2 23,600Sampaloc 14 104.8 13,534 120.4 Macalelon 30 25,986Tayabas City 66 231 87,252 5Table 2.1 First District of Quezon Table 2.3 Third District of QuezonSecond District No. of PopulatCity/Municipal Area Baranga ion ity (km²) ys (2007)Candelaria 25 129.1 105,997Dolores 16 62.6 26,312Lucena City 33 80.2 236,390San Antonio 20 172.9 30,023Sariaya 43 212.2 128,248Tiaong 31 168.4 87,707Table 2.2 Second District of Quezon
  5. 5. Fourth District Guinayangan 55 214.1 39,074 Gumaca 59 189.7 63,778 No. of PopulatCity/Municipal Area Baranga ion Lopez 95 355.4 86,660 ity (km²) ys (2007) Perez 14 57.5 11,022Alabat 19 57.6 14,789 Plaridel 9 35.1 10,069Atimonan 42 239.7 59,157 Quezon 24 71.2 15,011Calauag 90 324.7 69,475 Tagkawayan 45 534.4 46,878 Table 2.4 Fourth District of QuezonIII. Market Share The market share ratio will compute the market share of the company. This willdetermine the annual budgeted supply to meet the annual market demand of the product. Otherfactors to be considered in meeting the annual market demand are production capacity, demandof the market, competitors, product, etc. For the market share computation, the formula below will be used to determine themarket share ratio: Annual Supply of the Company Market Share Ratio = Annual Supply of the Competitors + Annual Supply of the Company Carbon Plus Corp. do not have any direct competitor when it comes to Quezon for nomanufacturer of activated carbon is planted in Quezon. But we do have indirect competitors likeMAPECON headquartered in Laguna. MAPECON in Laguna is one of the toughest competitorswhen Carbon Plus Corp. venture to CALABARZON for they already have the loyalty comingfrom their customers. But as soon as businesses are informed of a manufacturer in Quezon, theywill shift to Quezon’s Carbon Plus Corp. to cut off cost.
  6. 6. But still, it is not safe to assume a100% market share in Quezon. Factors such ascompany loyalty and incentives are given a great deal making our market share a bit lower than100% but higher than 75%. In the course of the business operation, as the business mature and the integrity andreliability of products are built, we expect a higher demand on the market in Quezon and nearbyareas.1 Market Share Ratio Carbon Plus Corp Competitors Fig. 2.2 Market Share of Carbon Plus Corporation
  7. 7. IV. Demand Demand is the consumer’s willingness and capacity to buy goods or services at a certainprice level. It refers to how much (quantity) product or service is desired by consumers. Thedemand would tell the company the consumer’s taste and preferences for a given type of product.Thus, to be able to meet the needs and wants of the company’s target market, there is a need toproject the market demand. And with that, it would make the firm more effective to its market. Number of Water Refilling Stations in Quezon Province 2010-2012 Year Number of Increase % of Increase Refilling Stations 2010 75 - - 2011 143 68 91% 2012 205 62 43% Table 2.5 Number of Water Refilling Stations in Quezon Province 2010-2012 Table 2.1 shows the number of water refilling stations in Quezon Province from year2010 to 2012. This data gathered by the researchers would be the basis to project the number ofwater refilling stations in Quezon Province for the next five (5) years. Projected Number of Refilling Stations in Quezon Province 2013-2017 Year Number of Increase % of Increase Refilling Stations 2013 252 47 23% 2014 228 23 11% 2015 267 15 6% 2016 260 8 3% 2017 270 3 1% Table 2.6 Projected Number of Refilling Stations in Quezon Province 2013-2017
  8. 8. Annual Consumption of Activated Carbon by Water Refilling Stations Activated Carbon used within 4 months 25 kilograms Multiplied by 3 Annual Consumption 75 kilograms Table 2.7 Annual Consumption of Activated Carbon by Water Refilling Stations 25 kilograms of activated carbon is used by water refilling stations in purifying water andis replaced every 4 months. Thus, to compute the annual consumption 25 kilos of activatedcarbon would be multiplied by 3 resulting to a consumption of 75 kilos a year. Projected Annual Demand of Activated Carbon by Refilling Stations (kg) 2013-2017 Year Projected Number Annual Total Projected of Refilling Stations Consumption Demand (kg) 2013 252 75 18900 2014 228 75 17100 2015 267 75 20025 2016 260 75 19500 2017 270 75 20250 Table 2.8 Projected Annual Demand of Activated Carbon by Refilling Stations (kg) 2013-2017 From the table above, the total projected demand where determined by multiplying theprojected number of refilling station by the annual consumption. Thus, it results to the abovefigures.
  9. 9. V. Supply Supply is the quantity available in the market ready for consumption by the consumers.It is the volume of the product or service in which a firm is able and willing to offer the market.The supply of a company must meet the demands of the consumers. Thus, to project the supplyit must consider the demand and also, there are many factors affecting the supply of a firm.Some of these are prices of inputs, number of firms offering the same product, technologicaladvancements, prices of related goods, environmental factors, and producer’s expectations. Withthis, the company would use these factors to base its projected supply for the future years tocome. List of Activated Carbon Manufacturers in the Philippines Activated Carbon Manufacturers Address MAPECON Green Charcoal Factory Alaminos, Laguna, Philippines BF Industries, Inc. Crossing Bayabas, Toril, Davao, Philippines Premium A.C. Corp. Davao City, Philippines Table 2.9 List of Activated Carbon Manufacturers in the PhilippinesVI. Marketing Objective Every year, there are approximately 19 storms entering the Philippine area, bringingheavy rains and massive flash floods during land fall. It results to enormous reported cases ofcontamination of water, whether for drinking or not, penetration of our households and vehiclesleaving stains and bad odor, pollution and clogging of some bodies of water and certain casesabout food poisoning, either due to contaminated foods or lack of foods leading victims to eatwhatever they thought was edible. This scenario has been witnessed by the Filipinos every nowand then, which leads to an unending demand for a purifying and deodorizing agent, giving wayto the role of the activated carbon.
  10. 10. The role of activated carbon doesn’t end in the absence of typhoons, and calamities. Dueto the increasing population here in the Philippines, demands for basic necessities increase aswell, some of such are water and medicines. In order to sustain the needs of drinking water,there is a rapid growth of people venturing to water treatment and refilling businesses here in thePhilippines, which of course requires the use of activated carbon to remove the impurities, tasteand odor of the water. The need for the product never stops together with the need for purifiedwater to ensure the safety of mankind, which leads to a continuous opportunity for our companyto manufacture. Carbon Plus Corporation aims to provide the market with sufficient amount of highquality activated carbon as a response to the growing needs of the product such as to purifysubstances that we consume, reduce pollution and maintenance of bodies of water and more, andto maximize the full potential of the available opportunities, edge of the company, and theprofitability of the product without taking the environment, costs and the affordability of theproduct for granted. Provided that, the company started in a relatively small share in the market, we areconsistently building our company with integrity, trust, and competence to be on the top of thelocal industry, then the global setup.
  11. 11. VII. Marketing Strategy Carbon Plus Corporation uses the four Ps in business: product, price, place andpromotion as a tool in marketing its product. A. Product Carbon Plus Corporation will make use of coconut shells in manufacturing its product, activated carbon. Coconut shell is the best material to be used in manufacturing activated carbon for it has the inherent characteristics which give it an edge among other materials. The company ensures the product’s high surface area for high adsorption efficiency and high micro porosity which gives high retention capacity. Also, the company manufactures activated carbon with low ash content preventing contamination of adsorbates and with high density for economical containment for the same level of filtration. Thus, trapping high levels of impurities and resulting into a much purified and cleaner adsorbate. 1. Product Brand The product would be named as “Carbon Plus” which is also the company name. The name of the product and the company is the same for easy remembrance and to link the two. Carbon Plus was derived from the process of making activated carbon for there is a need to add other chemical properties unto the carbon for it to become activated but it still remain as a carbon. Also, “plus” connotes the idea of “something more” which implies that the product has an edge among other similar products.
  12. 12. Thus, entails the impression that Carbon Plus has more adsorbing and purifying capacity. 2. Packaging Packaging is not just a design but it also serves as an advertisement of the product. It gives a distinct identity of the product regarding its brand, size and type. Company Details Product Description Fig. 2.3 Package Label of Carbon Plus Corporation’s Activated Carbon The label provides the company details such as the company name, address, contact numbers and company site. Also, the label describes the product as to its type and weight to distinguish it among other types. Plus, it tells the consumers that it is made from coconut shells, the best material to manufacture activated carbon.B. Price Carbon Plus Corporation offers activated carbon at affordable and meaningful prices but still provides the quality the customers deserve. The company will make use of the Cost-Plus Strategy in pricing the product. The Cost-Plus Strategy follows the formula: Price per unit = Manufacturing Cost per unit + Mark-up With this, the total cost of manufacturing the product plus the desired mark-up would be the product’s selling price. Prices vary depending on the type and weight of the product.
  13. 13. C. Distribution Channels The distribution channel is the path in which the product goes through for it to reach the end users. A firm must supervise their product’s distribution and necessarily determine if it reaches its consumers. Furthermore, each individual channel must maintain a good communication to all other channels to be able to sustain the demand and supply of the product in the market. Carbon Plus Corporation established the channel of distribution below in order to achieve the target market of the firm. Manufacturer End-Users Distributors Fig. 2.4 Distribution Channel of Carbon Plus Corporation As shown above, there are only three parties within the distribution channel: the manufacturer, the distributor and the end-users. Unlike any other businesses, there is no need for the use of retailers and wholesalers since our company engages within business to business transaction. Thus, the product manufactured from the manufacturer, the company, would be disseminated to the distributors and at the same time can sell its product directly to end-users. When the products reached the distributors they would now sell the product to the end-users. Carbon Plus Corporation ensures the proper and safe distribution of the product and preserving the product’s quality upon its distribution.
  14. 14. D. Promotion In order to help the product make its way into the market, there is a need for advertisements and promotions. Advertisements and promotions are a huge part in marketing the product especially in the first years of the company’s operations. Thus, Carbon Plus Corporation would use the following techniques in promoting and advertising its product: 1. Newspaper advertisement. Newspaper advertisement is one of the most common ways of advertising. Most business ventures use newspapers as reference to the latest news and also to identify new opportunities. Thus, using this type of advertisement is a good way in communicating and promoting the company’s product not only is it less costly but also there is no need for a certain time to deliver the message. It is readily available at any time. Carbon Plus Corporation would come up with an eye-catching advertisement and include with it the business offerings and other necessary information about it. 2. Radio advertisement Wherever we go, whether at school, offices or streets, we would hear radios playing. Most people are fond of listening to the radio whether they are busy or doing nothing at all. Thus, radio advertising would be of great help in promoting the company’s product. The company would create a catchy theme song and tag line to attract listeners and would be aired on Amplitude Modulation (AM) and Frequency Modulation (PM).
  15. 15. 3. Create a Facebook Fan Page Almost every person in the world uses social media sites such as twitter, tumblr, multiply and most especially, facebook. Considering this huge opportunity, the company would make use of this site for the people not only within Quezon nor CALABARZON but also for the whole world to know the company and its offerings. It’s greatly efficient and it does not even cost a centavo.VIII. Competitive Position Quezon Province is well known for its abundance in coconut supply which only takes less than two months to harvest, ensuring Carbon Plus Corporation, being the first manufacturer of activated carbon in the province, a bounty supply and to fully utilize the accessibility of coconut shells, our raw materials the whole year round. Furthermore, it has been proven in our study that activated carbon from coconut shells provides better adsorption capabilities compared to other sources. The company offers the product at an affordable price and made it available in small quantities compared to other manufacturers who only provide the public with bulk amounts, in order to suffice the need of the small entities requiring relatively small quantity of the product. We have carefully taken into consideration these small entities since they mainly comprise the unattended markets; our potential share. In addition to that, we are allowing them to achieve the utmost effect they desired, while using a small amount to avoid wastage and excessive expenditures. Furthermore, accessibility of our company to the target market also adds up to the edge of our company among other manufacturers. Once the consumer knew that there is a more accessible, affordable and more customer-oriented manufacturer, they would think practically.
  16. 16. Instead of carrying the burden of availing the products from international companies, which ofcourse would be more expensive, or even from local companies located far from their places,they would choose to patronize our company which would not only help us to achieve our goals,but also help them in terms of cost saving.1.