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  1. 1. 19 CHAPTER 2 MARKETING PLAN This study will involve the process of gathering information about the potential market that can 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 current demand and supply for the proposed product and identify the unattended demands that will determine the company’s market share. Furthermore, this portion will also discuss the current market analysis and the anticipated future market potential, the existing competitors, consumers, opportunities and the competitive edge of the company. I. Target market Global Activated Carbon Market Volume Share 7% 42% 35% Water Treatment Food & Beverage Processing Pharmaceutical & Medical Automotive 4% 6% 6% Air Purification Others Fig. 2.1 Global Activated Carbon Market Volume Share
  2. 2. 20 Carbon Plus Corporation targets those businesses indicated in Fig. 2.1. These businesses need activated carbon as part of their operation to clean and detoxify their products before selling it out to the market. As a newly organized business, Carbon Plus Corporation would only be targeting 2 among those business listed above during its first years of operations. These are oil refineries and water treatment business. According to the World Health of Organization, about 3.4 million people die annually from water-related diseases. About a million Filipinos get sick with waterborne diseases yearly of which the cause is diarrhea alone. This does not yet include other water-borne disease like amoebiasis, cryptosporidiosis and cholera. This is where water refilling stations arise. They help prevent the contamination of water thus, prevent the increasing cases of death due from water-borne diseases. The researchers perceived that since our population is increasing, the market of water refilling station is progressive. And more and more refilling station would arouse in the next years to supply the demand of the population for purified water. Moreover, as we can see in the illustration above, water treatment is the top most user of activated carbon in the market and with that the corporation would yield greater profits. CALABARZON is regarded as the nucleus for industrialization and one of the most leading producer of oil in the Philippines. Carbon Plus Corporation saw the advantage of targeting these businesses since they are nearer the vicinity of the corporation’s site. This would give the target consumers the convenience in buying the product. Also, being the only manufacturer of powderized activated carbon in CALABARZON, this would give the corporation an edge and the competitive advantage among its competitors.
  3. 3. 21 Carbon Plus Corp. aim to reach those businesses especially those areas within and near the vicinity of Region 4-A.Since there is only one manufacturer of activated carbon in CALABARZON, we can help these enterprise in lowering their cost of purchase without sacrificing the quality of the product. Furthermore, since there are so many business that uses activated carbon, the corporation would expand its horizon and target as well these business to be able to realize its vision as an integrated manufacturing entity providing sufficient supply of high quality activated carbon and relevant services to respond to their growing demands while minimizing the cost of the product to make it more affordable to the users. II. Market Size Region IV-A (CALABARZON) Fig. 2.2 Geographical Area of Region IV-A (CALABARZON)
  4. 4. 22 Region IV-A or CALABARZON is one of the regions of the Philippines. It is located in the southwest of Luzon and is the second most densely populated region. This region is composed of Cavite, Laguna, Batangas, Rizal and Quezon Province. The region is known as the industrial powerhouse and is also identified as the nucleus of industrialization in the Philippines. It has a big supply base of semi-processed industrial raw materials and industrial components coming from its 31 world-class industrial estates and economic zones (ecozones). Moreover, the region has a vast pool of human resource base for the manufacturing and services industries and has reliable utilities and well-placed infrastructure enhancing faster turn-around times. It has business-friendly environment, first-class lifestyle, and booming tourism circuits. Cavite Cavite is a province of the Philippines located on the southern shores of Manila Bay in the CALABARZON region in Luzon. Its capital is the city of Trece Martires. Cavite is surrounded by the provinces of Laguna to the east and Batangas to the south. To the west lies the South China Sea. It is the smallest province in the CALABARZON region. It is one of the most industrialized and one of the fastest growing provinces in the country because of its close proximity to Metro Manila, located just 14 kilometers (8.7 mi) south of the capital.
  5. 5. 23 Laguna Laguna’s capital is Santa Cruz and the province is located southeast of Metro Manila, south of the province of Rizal, west of Quezon, north of Batangas and east of Cavite. Laguna almost completely surrounds Laguna de Bay, the largest lake in the country. The province got its name from the Spanish word lago, which means lake. Laguna shows a thriving economy. With a population of 2,669,847 (2010 Census),and a total area of 1,760 km2 (680 sq mi) of land, Laguna produces millions of pesos worth of coconuts, rice, sugar, citrus fruits, lanzones and other products. Batangas Batangas is a first class province of the Philippines located on the southwestern part of Luzon in the CALABARZON region. Its capital is Batangas City and it is bordered by the provinces of Cavite and Laguna to the north and Quezon to the east. Across the Verde Island Passages to the south is the island of Mindoro and to the west lies the South China Sea. Batangas is often referred to by its ancient name Kumintang. Batangas has the second largest international seaport in the Philippines after Metro Manila. The identification of the city as an industrial growth center in the region and being the focal point of the CALABARZON program resulted to the increasing
  6. 6. 24 number of business establishments in the city's Central Business District (CBD) as well as numerous industries operating at the province's industrial parks. Rizal Rizal province is bordered by Metro Manila to the west, the province of Bulacan to the north, Quezon to the east andLaguna province to the south. The province was named after the country's national hero, José Rizal. Rizal's capital is Antipolo City, although the provincial capitol is located in Pasig City in Metro Manila, which was the previous capital. Quezon Quezon is located southeast of Metro Manila and it is surrounded by the provinces of Aurora to the north, Bulacan, Rizal, Laguna and Batangas to the west and the Camarines provinces to the east. Quezon lies on an isthmus separating the Bicol Peninsula from the main part of Luzon. The province also covers the Polillo Islands in the Philippine Sea. The province was named after Manuel L. Quezon, the second President of the Philippines, and its capital is Lucena City.
  7. 7. 25 Quezon is the country's 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 province's economy. Population of CALABARZON by Age Group for 2010 Age Total Cavite Laguna Batangas Rizal Quezon Group Population 0-4 339,745 291,899 233,827 277,115 236,938 1,379,524 5-9 320,724 275,557 220,736 261,601 223,672 1,302,290 10-14 303,157 260,463 208,646 247,272 211,421 1,230,959 15-19 297,002 255,175 204,410 242,252 207,129 1,205,968 20-24 273,961 235,379 188,552 223,458 191,060 1,112,410 25-29 244,084 209,710 167,989 199,089 170,224 991,096 30-34 264,568 229,923 164,302 196,037 137,860 992,690 35-39 233,592 191,271 141,403 176,933 116,354 859,553 40-44 212,163 174,927 126,434 165,271 111,695 790,490 45-49 175,247 150,632 104,248 140,503 97,919 668,549 50-over 426,449 394,911 616,847 355,310 282,757 2,076,274 Total 3,090,692 2,669,847 2,377,394 2,484,841 1,987,029 12,609,803 Source: Table 2.1 Population of CALABARZON by Age Group for 2010
  8. 8. 26 Projected Number of Population Based on 2000 Census-based Population Projection Year Projected Population 2000 9,422,900 2005 10,655,500 2010 11,904,100 2015 13,144,400 2020 14,370,500 2025 15,555,400 Source: Table 2.2 Projected Number of Population Based on 2000 Census-based Population Projection Table 2.1 and 2.2 was taken from the National Statistics Office based from their latest records in 2000. Accordingly, by taking the projected number of population from table 2.2 in years 2010 and 2020 we would be able to project the population growth rate from 2010-2020. = 1.90%
  9. 9. 27 Projected Population of CALABARZON per Age Group for 2012 Age Cavite Laguna Batangas Rizal Quezon Total Group 0-4 352,778 303,097 242,797 287,745 246,027 1,432,444 5-9 333,027 286,128 229,204 271,636 232,252 1,352,247 10-14 314,786 270,455 216,650 256,758 219,531 1,278,180 15-19 308,395 264,964 212,251 251,545 215,075 1,252,230 20-24 284,470 244,408 195,785 232,030 198,389 1,155,083 25-29 253,447 217,755 174,433 206,726 176,754 1,029,115 30-34 274,717 238,743 170,605 203,557 143,148 1,030,771 35-39 242,553 198,608 146,827 183,720 120,817 892,526 40-44 220,302 181,637 131,284 171,611 115,980 820,814 45-49 181,970 156,410 108,247 145,893 101,675 694,195 50-over 442,808 410,060 640,510 368,940 293,604 2,155,922 3,209,254 2,772,265 2,468,593 2,580,162 2,063,253 13,093,528 Total Table 2.3 Projected Population of CALABARZON per Age Group for 2012 III. Demand Demand is the consumer’s willingness and capacity to buy goods or services at a certain price level. It refers to how much (quantity) product or service is desired by consumers. The demand 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
  10. 10. 28 company’s target market, there is a need to project the market demand. And with that, it would make the firm more effective to its market. The researchers gathered enough data through relevant questionnaires and interviews with different industries. These data would be used to identify the market demand for the company’s product. The data gathered are as follows: Data Gathered Respondents According to Industry 15% Water Treatment 85% Oil Refineries Fig. 2.3 Respondents According to Industry The researchers did a survey in 2 different industries which would be the company’s target market. The figure above shows that 85% of the respondents are water refilling businesses while the remaining 15% are oil refineries.
  11. 11. 29 Responses of Respondents According to Supplier of Activated Carbon 20% Local Supplers Foreign Suppliers 80% Fig. 2.4 Responses of Respondents According to Supplier of Activated Carbon The data above shows that 20% among the respondents buys activated carbon from foreign suppliers. Thus, the corporation could dominate this 20% since the corporation is very accesible by these industries and their cost of purchase would be lessen given the same quality of activated carbon offered. Type of Activated Carbon Used by Respondents 15% 85% Granular Activated Carbon Powderized Activated Carbon Fig. 2.5 Type of Activated Carbon Used by Respondents
  12. 12. 30 The figure shown indicates that 15% of the repondents uses powderized activated carbon and all of these are coming from oil refineries which means that the remaining 85% who use granular activated carbon are water refilling industries. This would only mean that the market of granular activated carbon is focused on water refilling stations while the market of powderized activated carbon is focused on oil refineries. Frequency of Activated Carbon Purchases 10% Monthly 30% 60% Quarterly Semi-Annual Fig. 2.6 Frequency of Activated Carbon Purchases The above figure shows how frequent the respondents buy activated carbon. The survey resulted that most of these industries choose to buy in a monthly basis which is 60%. The other 30% buys quarterly and the remaining 10% choose to buy semi- annually. This would be helpful in determining the consumption of activated carbon and also on how many activated carbon should be produced in a given period.
  13. 13. 31 Respondents Using Granular AC Purchase Price 18% 12% P80 - 90 29% P90 - 100 P100 - 110 41% P110-120 Fig. 2.7 Respondents Using Granular AC Purchase Price From the gathered data above, we can see that 41% of the respondents using granular AC buy AC from a range of P100 – 110 which covers almost half of the pie. The next is 90 – 100 with a 29% among the respondents, P110 - 120 with a 18% and P10 - 90 with the remaining 12%. This data would be a factor in determining the selling price of the company. Respondents Using Powderized AC Purchase Price 33% P60 - 70 67% P70 - 80 Fig. 2.8 Respondents Using Powderized AC Purchase Price
  14. 14. 32 The figure indicates that 67% of the respondents’ purchase price is from a range of P60 -70 while the remaining 33% purchases powderized AC from a price range of P50 – 60. Water Refilling Station Since water is a basic necessity, we can safely assume that as the population increases, the demand for water increases. Consequently, the higher the demand for water the more water refilling stations would arouse in the market. Thus, the population growth would be the basis for projecting the number of water refilling stations in the provinces of CALABARZON. To project, we would use the formula below. Projected Number of Water Refilling Stations in Other Provinces for 2012 Projected Number of Water Refilling Stations in CALABARZON for 2012-2017 2012 2013 2014 2015 2016 2017 Cavite 319 325 331 337 344 350 Laguna 275 281 286 291 297 303 Batangas 245 250 255 260 264 269 Rizal 256 261 266 271 276 282 Quezon 205 209 213 217 221 225 1,301 1,326 1,351 1,377 1,403 1,429 Total Table 2.4 Projected Number of Water Refilling Stations in CALABARZON for 2012-2017
  15. 15. 33 Annual Demand of Activated Carbonfor Water Refilling Stations 2013-2017 2013 Total Number of Water 2014 2015 2016 2017 1,326 1,351 1,377 1,403 1,429 185 185 185 185 185 Refilling Stations Average Daily Sales (in gallons) Total Average Daily Sales (in 245,247 249,907 254,655 259,493 264,424 gallons) Multiplied by Average Daily 0.00625 0.00625 0.00625 0.00625 0.00625 Consumption of AC (kg/gal) Daily Consumption of AC (kg) Multiplied by Monthly Consumption of AC Multiplied by Annual Demand of AC (in kilo) 1,533 1,562 1,592 1,622 1,653 30 30 30 30 30 45,984 46,858 47,748 48,655 49,579 12 12 12 12 12 551,806 562,290 572,974 583,860 594,954 Table 2.5 Annual Demand of Activated Carbon for Water Refilling Stations 2013-2017 According from our interviews with water refilling business, their average sales of water is 185 gallons per day. And according to another interview we had with Osmotech Inc., a water treatment business, a 50kilogram granular AC can purify 8000gallons of water. So, in order to get the average consumption of AC per gallon, we simply divide 50kilos to 8000gallons, we can get the proportion of AC used per gallon of 0.00625kilos.
  16. 16. 34 Thus, to arrive at the projected annual demand, the projected number of water refilling stations would be multiplied by the average yearly consumption. Oil Refineries List of Oil Refineries in CALABARZON as of 2012 Company Name Address Rated Milling Capacity (MT/day) JNJ Oil Industries Inc. Brgy. Isabang, Lucena City, 60 Quezon Tantuco Enterprises Brgy. Iyam, Lucena City, 200 Mt. Holly Coco Industrial Brgy. Domoit, Lucena City, 60 Quezon Inc. Quezon Tongsan Industrial Dev’t Brgy. Corporation Malabanban, 100 Candelaria, Quezon San Pablo Manufacturing 140 W.P. Schetelig Avenue, Corporation San Pablo City, Laguna Mt. Makiling Intl. Oil Inc. Brgy. 150 Mamatid, Cabuyao, Laguna Source: Philippine Coconut Authority Table 2.6 List of Oil Refineries in CALABARZON as of 2012 120
  17. 17. 35 Demand of Activated Carbon for Oil Refineries in 2013 2013 Daily Production of Oil - 2013 (in 518 2014 518 2015 2016 2017 518 518 518 10 20 30 518 527 537 548 10 10 10 10 527 537 548 558 metric tons) Increase in Prior Periods 518 Total Increase in Daily Production 1.90% Daily Production of Oil (in MT) Multiplied by Consumption of AC 518 4.78567 4.78567 4.78567 4.78567 4.78567 (kilograms/metric ton) Daily Consumption of AC (in kg) Multiplied by Monthly Consumption of AC Multiplied by Annual Demand of AC (in kg) 2,477 2,524 2,572 2,620 2,670 30 30 30 30 30 74,298 75,709 77,148 78,613 80,107 12 12 12 12 12 891,570 908,510 925,772 943,362 961,285 Table 2.7 Demand of Activated Carbon for Oil Refineries in 2013 From our surveys and research, oil refineries need powderized activated carbon in their daily operations. So in order to project the demand for powderized activated carbon by oil refineries, the data were gathered through relevant questionnaires and interviews. According from an experienced chemist, for oil refineries to produce 100 gallons of oil it uses approximately 50kilograms of powderized activated carbon. Oil refineries must
  18. 18. 36 maintain the quality of activated carbon thus, they frequently change the activated carbon in their machines. So, the consumption of activated carbon per metric tons is 4.78567. Consequently, the monthly consumption of powderized activated carbon is 74,298 and the annual demand of activated carbon in kilos is 891,570 during 2013. The growth rate of the population was used to project the demand of oil. This is due to the fact that the greater the population, the greater the consumption of food and thus, more activated carbon would be supplied by oil industries. IV. 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 supply it 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, technological advancements, prices of related goods, environmental factors, and producer’s expectations. With this, the company would use these factors to base its projected supply for the future years to come. Supply of Granular Activated Carbon in CALABARZON 2013 Total Number of Water Refilling 2014 2015 2016 2017 1,326 1,351 1,377 1,403 1,429 25 25 25 25 25 Stations Average Purchases of Activated
  19. 19. 37 Carbon per Month (in kilos) 33,141 33,771 34,413 35,067 35,733 12 Average Monthly Supply of AC 12 12 12 12 (in kilos) Multiplied by Annual Supply of Activated 397,698 405,254 412,954 420,800 428,795 Carbon (in kilos) Table 2.8 Supply of Granular Activated Carbon in CALABARZON A water refilling station’s average purchases of activated carbon per month is 25 kilograms, and thus the annual supply was determined to be 397,698 kilograms. This would be used to project the untapped market and the market share ratio of the corporation. Supply of Powderized Activated Carbon in Calabarzon MT/day Supply of AC – 2013 JNJ Oil Industries Inc. 60 130 Tantuco Enterprises 200 433 Mt. Holly Coco Industrial Inc. 60 130 Tongsan Industrial Dev’t Corporation 100 217 San Pablo Manufacturing Corporation 150 325 Mt. Makiling Intl. Oil Inc. 120 260 Monthly Supply of Activated Carbon - 2013 690 1,495 Multiplied by 360
  20. 20. 38 Annual Supply of Activated Carbon - 2013 538,200 Table 2.9 Supply of Powderized Activated Carbon in Calabarzon The figure above would be used to determine the untapped market of powderized activated carbon. The data were gathered from Philippine Coconut Authority. It shows that the annual supply of activated carbon in oil refineries during 2013 is 538,200. Listed below are the activated carbon manufacturers in the Philippines. These are local manufacturers’ that supplies the market with granular and powderized activated carbon. List of Activated Carbon Manufacturers in the Philippines Activated Carbon Manufacturers Address Cenapro Chemical Corporation Jagobiao, Mandaue City Davao Central Chemical Corp. Tibungco, Davao City Pacific Activated Carbon, Co. Cavite & Misamis Oriental Donau Carbon Philippines Corp. El Salvador, Misamis Oriental Phil-Japan Activated Carbon Panacan, Davao City Corp. Premium AC Corporation Ma-a Davao City Mindanao Activated Carbon Panacan, Davao City Green Carbon, Inc. Baybay, Leyte Mapecon Philippines, Inc. Laguna
  21. 21. 39 BF Industries, Inc. Toril, Davao City Source: Philippine Activated Carbon Manufacturers’ Association Table 2.10 List of Activated Carbon Manufacturers in the Philippines V. Untapped Market Now that we have determined the demand and supply of each type of activated carbon, we can now determine the untapped market. The untapped market is the portion which the supply do not meet the demand. This means that the amount of being supplied to the market is insufficient to meet the customers’ demands. This would result for consumers to adjust their means of using the product like minimizing the consumption of the product. The researchers identified the untapped market of activated carbon in each of its target industry. This would be used to identify the volume of the corporations’ production. Untapped Market in Water Refilling Stations AC (in kilos) Annual Demand of Powderized AC 551,806 Annual Supply of Activated Carbon 397,698 Untapped Market 154,108 Table 2.11 Untapped Market in Water Refilling Stations
  22. 22. 40 Untapped Market in Oil Refineies AC (in kilos) Annual Demand of Powderized AC 891,570 Annual Supply of Activated Carbon 548,426 Untapped Market 353,370 Table 2.12 Untapped Market in Oil Refineies As we can see in tables 2.11 and 2.12, there is a huge part of the demands of the market that is not met thus results to the untapped market. The reason for the large amount of untapped market is that mostly all of the activated carbon manufacturers in the Philippines’ target market is foreign companies or their main business is for exporting. To answer this problem, Carbon Plus Corporation would supply this untapped market. Thus, not only would this benefit the corporation by yielding profits but also this would greatly affect the target industries, water refilling stations and oil refineries in their daily production and operations. VI. Market Share The market share ratio will compute the market share of the company. This will determine the annual budgeted supply to meet the annual market demand of the product. Other factors to be considered in meeting the annual market demand are production capacity, demand of the market, competitors, product, etc.
  23. 23. 41 For the market share computation, the formula below will be used to determine the market share ratio: Market Share Ratio = Annual Supply of the Company Annual Supply of the Competitors + Annual Supply of the Company Market Share Ratio in Water = Refilling Stations Market Share Ratio in Water = Refilling Stations 154,108 397,698 + 154,108 27.93% Market Share Ratio in Oil = Refineries Market Share Ratio in Oil = Refineries 353,370 538,200 + 353,370 39.63% Market Share of Carbon Plus Corp. for Granular Activated Carbon 27.93% Carbon Plus Corp Competitors 72.07% Fig. 2.9 Market Share of Carbon Plus Corporation for Granular Activated Carbon
  24. 24. 42 Market Share of Carbon Plus Corporation for Powderized Activated Carbon 39.63% 60.37% Carbon Plus Corp. Competitors Fig. 2.10 Market Share of Carbon Plus Corporation for Powderized Activated Carbon VII. Marketing Objective As many industries are booming and growing throughout the world today, the industry of activated carbon is not enough to supply these industries that use activated carbon in their day-to-day operations. Specifically in the Philippines where there are only approximately 3 activated carbon manufacturers and among them only 1 is situated in CALABARZON. Thus, industries like oil milling, water treatment and other kinds of industries in CALABARZON tend to buy activated carbon from distant manufacturers or even in foreign manufacturers which would cost them a lot higher than buying from a local manufacturer which supplies the same quality and quantity. As a response, Carbon Plus Corporation aims to provide these industries with sufficient amount of high quality activated carbon without taking the cost and
  25. 25. 43 affordability of the product for granted. It also aims to maximize the full potential of the available opportunities not just for the company but more of the benefit of its customers. Provided that, the company started in a relatively small share in the market, we are consistently building our company with integrity, trust, and competence to be on the top of the local industry, then the global setup. VIII. Marketing Strategy Carbon Plus Corporation uses the four Ps in business: product, price, place and promotion 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 this type of carbon for it has the inherent characteristics which give it an edge among other materials. Inherent Quality Description High hardness levels Ensures superior material (> 97%): minimizes dust generation. High surface area handling and Gives high adsorption efficiency (up to 1500 m2/g): High microporosity Gives high adsorption and retention capacity. (< 20 Angstroms): This is important for the removal of lowmolecular weight organics and trace levels of contaminants.
  26. 26. 44 Low ash content: Gives high purity preventing contamination of adsorbates. High density Provides for economical containment for the same level of filtration. Source: Green Carbon Inc. Table 2.13 Inherent Characteristics of Coconut Shell as Raw Material for AC Bearing and Non-Bearing Trees as of 2010 Bearing NonBearing Cavite 1,055,691 249,771 Laguna 6,591,037 620,550 Batangas 3,898,097 567,588 94,713 62,957 Quezon 46,528,580 10,081,356 TOTAL 58,168,118 11,582,222 Rizal Source: Philippine Coconut Authority Table 2.14 Bearing and Non-Bearing Trees as of 2010 Given the data above from Philippine Coconut Authority, the supply of coconuts in CALABARZON is sufficient to meet the demands of the market. Thus, this gives the consumers the assurance that the production of activated carbon would be continuous.
  27. 27. 45 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 to connect the product with the company and for customers to easily remember it. Aside from the reasons of using “Carbon Plus” as the name of the corporation, it also connotes the idea of “something more” within the product. It gives the product an impression of having an edge or offers a something different from other similar products. Furthermore, it entails 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. It differentiates the product among other similar products. Product Name Type of Activated Carbon Product Details Company Details Weight Fig. 2.11 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
  28. 28. 46 product as to its type and weight to distinguish it among other types. Plus, it tells the consumers that it is made from 100% pure coconut shells, the best material to manufacture activated carbon. Product Label for Granular and Powderized AC Fig. 2.12 Product Label for Granular and Powderized AC 500 kilo Sack of Powderized Activated Carbon Fig. 2.13 500 kilo Sack of Powderized Activated Carbon
  29. 29. 47 50 kilo Sack of Granular Activated Carbon Fig. 2.14 50 kilo Sack of Granular 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-base strategy in pricing the product. Thus, the selling price would be determined through the formula below. Price per unit = Manufacturing Cost per unit x Mark-Up Rate From the formula above, the manufacturing cost include all cost directly related to the manufacture or production of the product. These are cost of raw materials used, direct labor costs and factory overhead costs. Carbon Plus Corporation’s mark-up rate is 40% on the total manufacturing cost. The company perceives that it is reasonable enough and it would yield a much lower price from that of its competitors.
  30. 30. 48 C. Distribution Channels The distribution channel is the path in which the product goes through untilit reaches the end users. A firm must monitor 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 meet the demand and sustain the 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 End-Users Fig. 2.15 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. Now, the distributors would be the one to sell the product to the endusers lessening the cost of selling and advertising for the company. Moreover, to establish the name of the company and be visible in the market it would also sell
  31. 31. 49 directly to end-users. The company would not compete with its distributors. The company would directly transact with end-users who are not covered by its distributors. Carbon Plus Corporation ensures the proper and safe distribution of the product and preserving the product’s quality upon its distribution. 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 and critical 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. Joining Industrial Exposition and Trade Fairs Through joining industrial expositions, the company would have the opportunity to introduce itself and promote its products to several industries and businesses. There are a lot of industrial expositions and trade fairs being held in the Philippines annually. Some are the following: a. International Water Expo Philippines b. Manufacturing Technology World Series c. Enviro-Tech Philippines 2. Demo Presentation to Industries Agents of the company would go to different companies and distributors to promote and demonstrate the company’s products. This is a
  32. 32. 50 way of letting the market test the product and see the quality and efficiency of the usage of the product. This would cause the company to manufacture samples and provide visuals and other aids to inform them the benefits and quality of buying the corporations product. 3. Having a Company Web Site The company’s web site would be used as a tool for making the company visible to the public and also, it may also serve for transactions with consumers to take place. Advertising and Promotion Expenses Advertising and Promotional Budgeted Activities Amount Industrial Expositions and Trade 160,000 Fairs Demo Presentation to Industries 100,000 Company Web Site 12,000 Total Advertising and Promotional 272,000 Expense Table 2.15 Advertising and Promotion Expense s IX. 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
  33. 33. 51 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. Moreover, the corporation offers powderized activated carbon which is used in oil refineries. There are no manufacturer of powderized AC in CALABARZON or any nearby towns. Thus, the accessibility of our company to the target market also adds up to the edge of our company. Once the consumer knew that there is a more accessible, affordable and more customer-oriented manufacturer, they would think practically. Instead of carrying the burden of availing the products from international companies, which of course would be more expensive, or even from remote local manufacturers, they would choose to patronize our company which would not only help us to achieve our goals, but also help them in terms of saving their costs without sacrificing the quality of the product.
  34. 34. 52 X. SWOT Analysis Internal Factors Strengths Weaknesses Low-cost products Likely to be costly Highly marketable products No strong relationship with consumers Access to resources No market presence or reputation Suitable economic location Vulnerable to vital staff being sick, leaving, etc Favorable access to distribution networks Market for the product increases High standards with regards to employment Strong leadership External Factors Opportunities Threats Large untapped market Competitors have strong relationship with consumers Wide range of market in different May have an environmental impact industries Marketable abroad One of the pioneering corporations in the industry Table 2.16 SWOT Analysis