CHAPTER III

MARKETING ASPECT

Each business in the industry does not only focus their attention on its
ability to maximize profit but also in satisfying their customers. The customers
satisfaction plays a vital role in the sustainability and growth of the business
undertakings and thus, it is considered to be an essential factor in the business.
Accordingly, the firm should conduct an evaluation of consumers needs and
wants which could incorporate diverse analysis that would result to the
development of various sales techniques.

Marketing is primarily responsible on building a strong relationship

between consumers and producers. It allows the business to introduce various
products in the market through an organized flow of goods and services from the
producer to the consumer. This business function also enables a firm to meet
societys economic responses with the help of the exchange of processes and
building long term associations among its customers.

To attain advantages from the continuous exchange in marketing, the firm

should be aware of consumers behavior and be able to generate and sustain a
competitive advantage in solidifying relationship with their consumers.

Hence, this chapter provides necessary details that could provide an

answer concerning the business demand and supply relationship which includes
the nature and growth of the total demand of the product. Furthermore, it is also

concerned with the nature of competition in the market and various strategies
needed to achieve organizations goals and objectives.

Target Market

One segment of the marketing aspect is the identification of the target

market. A target market is a group of potential customers in which a business
focuses its marketing plans because of the presence of its demands. In selecting
the target market, several factors must first be considered like the location of the
market from the business site, its capability to satisfy the income objective of the
business, etc. It is important to identify the existence of a market in which
products or services of the firm are directed to ascertain its viability as well as its
future success.

The target market of the proposed charcoal briquettes from peanut shells
is the grilling and barbeque restaurants in Cebu City. The proponents chose only
such business located in Cebu City because of the large numbers of barbeque
restaurants operating in the area showing high demands for charcoal, thus,
establishes high potential for sales development.

Types of Charcoal used by Respondents

The respondents were asked to choose among the given options that
pertain to the type of charcoal they are presently using. This information is
essential in determining the existing competitors of the proposed peanut
briquette and the size of the competitors market.

Table 1

Types of Charcoal used by Respondents

n= 50

Response

Number %

Coconut shells

6%

Wood

47

94%

Total

50

Table1 states that 94% of the respondents are using charcoal made out of
wood. Notwithstanding the existence of charcoal briquettes made up of materials
other than wood, businesses still prefer to use the more traditional wood
charcoal. This possibly means that penetrating the market will be difficult
because wood charcoal suppliers have firmly established themselves in the
market.

The Willingness of the respondents in Availing the Proposed Peanut

Briquette

The respondents were inquired whether they are willing to use a new type
of charcoal which is a peanut briquette if it will be available in the market. This
query is significant to determine the marketability of the proposed product.

Table 2
The Willingness of the respondents in Availing the Proposed Peanut
Briquette
n= 50
Response

Number

Willing to Try

34

68%

Not willing to Try

15

30%

Abstained

2%

Total

50

Based on Table 2, it can be seen that 68% of the respondents are willing
to avail of the peanut shell charcoal briquette. This gives the proponents a highly
positive outlook on the demand of the product. It means that once the product is
out, there is an eventual market willing to buy the product.

Whether Price of P200 per Rice Sack of Product is Affordable

The proponents have already set a specific price for the product based on
the costs incurred. However, it is vital to determine the reasonability of the price
from the market itself. Thus, the respondents were asked whether they thought
that P200 per rice sack of the product is appropriate and affordable. This
information is helpful in the determination of the price that the respondents are
capable to buy.

Table No. 3
Whether Price of P200 per Rice Sack of Product is Affordable
n =34
Response

Number

27

79%

15%

Abstained

6%

TOTAL

34

Those who consider the

Price to be affordable
Those who does not
consider price to be
affordable

Based on the table above, it can be observed that the percentage of

respondents who are willing to buy the peanut shell briquette and the percentage
who think that the P200 price is affordable are completely identical. This means
that, indeed, there is a high demand for the product and that the people are
willing to spend money for it.

Average Quantity of Rice Sacks Respondents Are Willing To Buy per Week

It is important to know the average demand of the product by the

respondents in a given time. Thus, the respondents were asked of how many rice
sacks they were willing to buy in a week.

Table No. 4
Average Quantity of Rice Sacks Respondents Are Willing To Buy per Week
n = 34
Number of

Number of Sacks To

Respondents

be Consumed

18

35

10.5

31.5

14

98

21

147

28

28

30

30

50

50

Weighted Quantity

TOTAL = 34

443.5
Weighted Average Consumption = 13

Based on Table 4, the weighted average consumption/ demand for the

product is 13 sacks per week. This further ascertains that there is a market for
the charcoal briquettes. This also means that the weekly production of the
charcoal briquette must be designed to produce enough sacks to exceed the 13
sacks in order to satisfy the customers demands.

Terms of Payment

The respondents were asked of what terms of sale they preferred,

whether cash or credit.

Table No. 5
Terms of Payment
n = 34
Response

Number

Rank

Cash

19

56%

Credit

11

32%

Cash and Credit

12%

TOTAL

34

Based on Table 5, an overwhelming 56% of the respondents prefer to

purchase the product on a cash-basis, 32% prefer on credit and 12% prefer a
combination of both. This means that majority of the market prefer to buy the
products on cash because they do not want to defer payments which prolongs
their liability.

Table No. 6
Average Increase of Grilling Establishments in Cebu City
Number of

Increase (Decrease) of

Establishments

Establishments

2011

92

(10)

2012

104

12

2013

120

16

2014

212

2015

203

YEAR

Average Annual Increase

(9)
2

Table No. 7
PROJECTED ESTABLISHMENTS FOR THE NEXT FIVE YEARS
PREVIOUS
NUMBER OF
YEAR

REGISTERED
GRILLING
ESTABLISHMENTS

AVERAGE
INCREASE PER
YEAR
(Table No. 6)

PROJECTED
NUMBER OF
ESTABLISHMENTS

2016

203

205

2017

205

207

2018

207

209

2019

209

211

2020

211

213

2021

213

215

Table No. 8
PROJECTED ANNUAL POPULATION
ESTABLISHMENTS

YEAR

PROJECTED NO.

INTERESTED IN

PROJECTED

OF

BUYING PEANUT

POPULATION

ESTABLISHMENTS

CHARCOAL

WILLING TO BUY

(TABLE 2)
2017

207

68%

141

2018

209

68%

142

2019

211

68%

143

2020

213

68%

145

2021

215

68%

146

PROJECTED ANNUAL DEMAND

PROJECTED

AVERAGE

POPULATION

PERCENTAGE

AVERAGE

WILLING TO

WILLING TO BUY

SACKS PER

BUY

AT PHP200

WEEK

(Table No. 8)

( Table No. 3)

(Table No. 4)

2017

141

79%

2018

142

2019

WEEKS IN

ANNUAL

A YEAR

DEMAND

13

52

75171

79%

13

52

75898

143

79%

13

52

76624

2020

145

79%

13

52

77350

2021

146

79%

13

52

78077

YEAR

Table 10
Length of Time Before the Charcoal Presently Used Gets Burn Out
n= 50
Length in minutes

Number of
Respondents

before charcoal gets

Weighted Quantity

burn out

2 minutes

11

3 minutes

33

4 minutes

12

14

5 minutes

70

10 minutes

60

20 minutes

40

12

Abstained

TOTAL= 50

219

Weighted Average length in minutes = 6

Table No. 11
Projected Competitors' Annual Supply

Year

Projected
Annual
Demand
(Table No. 9)

Competitors'
Supply

2017

75,171

90%

2018

75,898

80%

2019

76,624

70%

2020

77,350

60%

2021

78,077

50%

Projected
Competitors'
Supply
67,654
60,718
53,637
46,410
39,038

Table No. 12
Demand Supply Gap

Year

Projected
Annual
Demand
(Table No. 9)

Projected
Competitors'
Annual Supply
(Table No. 11)

2017

75,171

67,654

7,517

2018

75,898

60,718

15,180

2019

76,624

53,637

22,987

2020

77,350

46,410

30,940

2021

78,077

39,038

39,038

Demand Supply Gap

(in sacks)

Table No. 13
Potential Market Share

Projected
Year

Annual
Demand
(Table No. 9)

2017

2018

2019

2020

2021

Demand Supply Gap

(Table No. 12 )

Potential Market Share

Production
Capacity

Sacks

Percentage

75,171

7,517

3,900

3,900

5%

75,898

15,180

4,680

4,680

6%

76,624

22,987

5,616

5,616

7%

77,350

30,940

6,739

6,739

9%

78,077

39,038

8,087

8,087

10%

Population and Respondent

Population

Respondent

Lechon Manok

166

26

16%

Barbecue

37

24

65%

203

50

Restaurants
Total