CHAPTER 2- Market Study

CHAPTER 2 MARKET STUDY INTRODUCTION

The market study is the most essential part of this feasibility study. This study includes the demand, supply, demand and supply situation, pricing strategies, marketing program, promotions, and marketing budget. A careful analysis of the demand and supply of the product is needed for it dictates the feasibility and profitability of the entire project. GENERAL OBJECTIVE In order to achieve a certain goal, the objective must be ascertained. The general

objective of this study is to determine the marketability of the product or service. This includes the demand and supply situations, pricing strategies and marketing programs, and the survey results. SPECIFIC OBJECTIVE Also, this study seeks to determine the following specific objectives:

1. The size, the nature, and growth of total demand for the product; 2. The description and price of the service to be rendered; 3. The supply situation and the nature of competition; 4. The different factors affecting the market of the product; and 5. The appropriate marketing program for the product. BUSINESS DESCRIPTION The business, Imprints, intends to penetrate the markets of T-Shirt Printing within Quezon City. The effectivity of the strategies would take effect and align on the key success factors and different external influences within the internal and external body of the business. Facts are purely based on research methods utilized within the time duration of preparation.

For this business plan, t-shirt printing is then aligned to necessary criteria to find a certain target market. By finding compatible data, the plan seeks potential feasibility and success. Imprints acquired the presented target markets through these segmentation bases: Target M arket :

Imprints target markets compose of:

1) Adolescence – comprises of 13 – 19 year-old individuals 2) Young Adult/Adults – comprises of young income-generating professionals, 20 – 40 years of age Secondary Priorities for targeting include: 1) Group Markets – markets who buy in bulk or may contain individuals who can be induced to buy. Schools & Educational Institutions– Schools are also in need for bulk orders within purposes of events or attire requirements. Examples of this purpose are: Intramurals shirts which almost all the students are required to have (Grade school to High School, School Fair shirts, acquisition of school organization attires, School Varsity shirts for sports, and other alike. Schools & Educational Institutions can be a source of a large-base purchase but a disadvantage over revenue can occur when a discount for a bulk-order is requested. Settlement over such issue could be the solution such as agreements of “meeting halfway” to gain a win -win situation. Business/Offices – Businesses are in need of team building shirts, company shirts, company souvenirs and giveaways that we can most likely provide. The company’s trendy designs would be our main attraction them to acquire dealings with us. With our repertoire of designs and our creative designing team it would be easy to have customizations with varieties of prices. Organizations/Groups – Imprint can also provide group shirts (friends, family, teams, dance troops, etc.). In such market, requirements would be most likely within customized designs for their own to acquire a certain trademark to the people or uniqueness.. Couples – Couples could be a small market / may not be a trend anymore but provision of products over celebrations, anniversaries and especially during Valentines can be a source of revenue. Sports Teams – Examples such as: Neighbourhood League, Amateur Team, Professional Teams, Company Sports Teams would be potential sources of revenue. Specials Events – Catering in special events would be a potential source of revenue. Having a functional need for t-shirt print would result to large revenue (e.g. t-shirts prints for the purpose of theme attires, souvenirs, gifts, etc.). Examples of special events are: weddings, birthday party celebrations, debuts, gaming tournaments, fun runs, concerts, voluntary causes, etc.

Potential compatibility to traits:



Impulse buyers



Quality-seekers



Trend-following individuals



Yearns for sophistication

DEMAND SITUATION

To develop Imprints’ targeting strategies and marketing efforts necessary, demand analysis helps the business in order to measure the current demand as well as project the future demand. The location of our proposed business is at 302 Boy Scout Circle Tomas Morato Avenue, Diliman, Quezon City. The number of the respondents in the survey is computed through Slovin’s Formula:     Where: n

=

number of respondents

N

=

population

e

=

margin of error set at 5%

Survey Results:

A. Personal Background

1. Distribution of the Respondents According to Age

16%

5% 45%

13-21 years old 22-40 years old 41-64 years old

34%

64 years old and above

Table 1. Distribution of Respondents According to Age Age Bracket 13 to21 years old 22 to 40 years old 41 to 64 years old 64 years old and above Total

Frequency 182 137 63 18 400

Percentage 45% 34% 16% 5% 100%

The pie chart portrays the distribution of the respondents according to age. The result shows that 182 or 45% of the respondents are from the age of 13 to 21 years old, 137 or 34% of the respondents are from the age of 22 to 40 years old, 63 or 16% of the respondents are from the age of 41 to 64 years old, and 18 or 5% of the respondents are from the age of 64 years old and above. It shows that the majority of the respondents are from the age of 13 to 21 years old. 2. Distribution of the Respondents According to Sex

40% Male

60%

Female

Table 2. Distribution of Respondents According to Sex Sex Male Female Total

Frequency 159 241 400

Percentage 60% 40% 100%

The pie chart portrays the distribution of the respondents according to sex. The result shows that 159 or 40% of the respondents are male and 241 or 60% of the respondents are female. It shows that the majority of the respondents are female.

3. Distribution of the Respondents According to Social Status

16% 49% Student 35%

Employed Unemployed

Table 3. Distribution of Respondents According to Social Status Social Status Student Employed Unemployed Total

Frequency 198 140 62 400

Percentage 49% 35% 16% 100%

The pie chart portrays the distribution of the respondents according to social status. The result shows that 198 or 49% of the respondents are students, 140 or 56% of the respondents are employed, and 62 or 16% of the respondents are unemployed. It shows that the majority of the respondents are students. 4. Distribution of the Respondents According to Weekly Allowance for Students

12% 27% 61%

Less than P500 P501- P750 P751 and above

Table 4. Distribution of Respondents According to Weekly Allowance for Students Weekly Allowance Less than P500 P501 to P750 P751 and above Total

Frequency 23 54 121 400

Percentage 12% 27% 61% 100%

The pie chart portrays the distribution of the respondents according to their weekly allowance for students. The result shows that 23 or 12% of the respondents have weekly allowance of less than P500, 54 or 27% of the respondents have weekly allowance of P501 to P750, and 121 or 61% of the respondents have weekly allowance of P751 and above. It shows that the majority of the respondents have weekly allowance of P751 and above.

5. Distribution of the Respondents According to Monthly Income for Employees

25%

16% Less than 10 000 31%

10 001- 15000 15001- 20000

28%

20001 and above

Table 5. Distribution of Respondents According to Monthly Income for Employees Monthly Income Less than P10,000 P10,001 to P15,000 P15,001 to P20,000 P20,001 and above Total

Frequency 22 42 38 34 400

Percentage 16% 31% 28% 25% 100%

The pie chart portrays the distribution of the respondents according to their monthly income for employees. The result shows that 22 or 16% of the respondents have monthly income of less than P10,000, 42 or 31% of the respondents have monthly income of P10,001 to P15,000, 38 or 28% of the respondents have monthly income of P15,001 to P20,000, and 34 or 25% of the respondents have monthly income of P20,001 and above. it shows that the majority of the respondents have monthly income of P10,001 to P15,000.

6. Distribution of the Respondents According to Savings in a Month

5% 31%

17%

Less than 500 501- 1500 22%

1501- 2500 2501- 3500

25%

3501 and above

Table 6. Distribution of Respondents According to Savings in a Month Savings in a Month Less than P500 P501 to P1,500 P1,501 to P2,500 P2,501 to P3,500 P3,501 and above Total

Frequency 22 69 88 98 123 400

Percentage 5% 17% 22% 25% 31 100%

The pie chart portrays the distribution of the respondents according to their savings in a month. The result shows that 22 or 5% of the respondents have savings of less than P500, 69 or 17% of the respondents have savings of P501 to P1,500, 88 or 22% of the respondents have savings of P1,501 to P2,500, 98 or 25% of the respondents have savings of P2,501 to P3,500, and 123 or 31% of the respondents have savings of P3,501 and above.

.

B. T-Shirt Preferences

1. How many times are you willing to buy customized t-shirts in a year?

3%

4% 7% Never Once 33%

53%

2 to 5 6 to 10 above 10

Table 7. Distribution of Respondents According to Times they buy Customized Shirts. Number of Times They Buy Customized Shirts Never Once

2 to 5 6 to 10 Above 10 Total

Frequency

Percentage

30 15

7% 4%

130 213 12 400

33% 53% 3% 100%

Of the total number of respondents, 30 or 7% of the respondents answered that they never ordered customized shirts while 15 or 4% of the respondents answered that they ordered customized shirts once. 130 or 33% of the respondents answered that they ordered 2 to 5 times, 213 or 53% of the respondents answered 6 to 10 times, and 12 or 3% of the respondents answered for above 10 times.

2. If you were to order customized printed shirts, would you give your own design or choose within the store?

34%

Choose a Design 66%

Give a Design

Table 8. Distribution of Respondents According to Whether They Choose a Design or Give a Design Classification Choose a Design Give a Design Total

Frequency 137 263 400

Percentage 34% 66% 100%

263 or 66% of the respondents answered that they will give their own designs while 137 or 34% of the respondents answered that they will choose designs within the store. 3. Number of Designs

10%

Single Multiple 90%

Table 9. Distribution of Respondents According to Number of Designs They Want Number of Designs Single Multiple Total

Frequency 41 359 400

Percentage 10% 90% 100%

359 or 90% of the respondents answered that they want multiple number of designs while 41 or 10% answered they only want single design. 4. Category of Design you like?

0% 26%

16% Quotes 21%

Numbers Cartoons/animations Memes

37%

Others

Table 10. Distribution of the Respondents According to Category of Designs They Like Category of Designs Quotes Numbers Cartoons/Animations Memes Others Total

Frequency 65 86 146 103 0 400

Percentage 16% 21% 37% 26% 0 100%

Majority of the respondents answered cartoons/animations as the category of the design that they want for their shirts, with 146 answers or 37% of the respondents. 103 or 26% of the respondents answered that they want memes as the design while 76 or 20% of the respondents answered numbers. Only 86 or 21% of the respondents answered quotes as design.

5. If you are willing to buy a high-quality shirt, how much are you willing to pay?

14%

6%

22%

P250-P300 P301-P350

18%

P351-P400 23% 17%

P401-P450 P451-P500 P501 and above

Table 11. Distribution of Respondents According to How Much They’re Willing to Pay Price Range TheyWilling ’re to Pay P250 to P300 P301 to P350 P351 to P400 P401 to P450 P451 to P500

P501 and above Total

Frequency 89 93 69 72 55

22 400

Percentage 22% 23% 17% 18% 14%

6% 100%

Most of the respondents answered that they are willing to pay P301 to P350 to buy a high quality shirts, with 93 answers or 23% of the respondents followed by P250 to P300 with 89 answers or 22% of the respondents.

6. What buying method do you prefer?

3% 23%

Online Walk in 74%

Telephone

Table 12. Distributions of Respondents According to Buying Method They Prefer Buying Methods Online Walk in Telephone Total

Frequency 92 293 10 400

Percentage 23% 74% 3% 100%

Of the total number of respondents, 293 or 74% of them prefer walk in as a buying method while 92 or 22% of them prefer online. Only 10 or 1% of the respondents prefer to buy via telephone.

7. Would you like to avail high-quality shirts?

8%

Yes No 92%

Table 13. Distributions of Respondents According to Who Will Avail High Quality Shirts Classification Yes No Total

Frequency 369 31 400

Percentage 92% 8% 100%

369 or 92% of the respondents answered that they like to avail high quality shirts and only 31 or 8% of the respondents answered they don’t like to avail high quality shirts. 8. What kinds of shirts do you prefer?

13%

14%

17%

V-Neck Plain 20%

V-Neck Colored Round Neck Plain Round Neck Colored

15% 21%

Long Sleeves Raglan

Table 14. Distribution of Respondents According to Kind of Shirt They Prefer Kind of Shirts V-neck Plain V-neck Colored Round Neck Plain Round Neck Colored Long Sleeves Raglan Total

Frequency 57 80 83 59 69 52 400

Percentage 14% 20% 21% 15% 17% 13% 100%

57 or 12% of the respondents prefer V-neck Plain shirts and 80 or 14% of the respondents prefer V-neck colored shirts. 83 or 21% of the respondents prefer round neck plain shirts and 59 or 15% of the respondents round neck colored shirts. 69 or 17% of the respondents prefer long sleeves and 52 or 13% of the respondents prefer raglan.

Past Demand

There is no available data about the demand of T-shirt printing for the past years. Therefore, the proponents assumed that the demand determined from the survey is the same as what the demand was for last five years. To compute the annual demand, the total population will be multiplied by the market acceptability rate and frequency of availing. The computed frequency of availing per month is:       Where: FoA

=

frequency of availing

dpm

=

days per month (how often they avail of a karaoke room)

hpd

=

hours per day (number of hours they avail per session)

ppg

=

persons per group (number of persons per group)

The total annual demand for the past five years and the projected demand are presented below. Year

Population Market Acceptability Frequency of Availment Annual Demand

2010 2014 2015 2016 2017

35,697 38,368 38,997 39,637 40,287

94.00% 94.00% 94.00% 94.00% 94.00%

6 6 6 6 6

201,331 216,396 219,944 223,553 227,219

2018 2019

40,948 41,619

94.00% 94.00%

6 6

230,947 234,731

DEMAND-SUPPLY SITUATION

By using the demand-supply analysis, the proponents will come up with a difference which will be the unserved market, unserved demand or demand gap. Demand gap is computed by subtracting the projected annual supply from the projected annual demand as shown below: Year

Annual Demand

Annual Supply

Demand Gap

2010 2014

201,331 216,396

187200 187200

14,131 29,196

2015 2016 2017 2018 2019

219,944 223,553 227,219 230,947 234,731

187200 187200 187200 187200 187200

32,744 36,353 40,019 43,747 44,531

Market Share Analysis

Every business must determine its market share which will serve as a basis of marketing strategies of the establishment. It will define the extent of demand the business need to satisfy. Out of the demand gap, the proponents agreed to cover only 15% as a starting point. This rate will increase by 1.5% each year so as to expand the market share of the business.

Market Share (in hours) for Five Years Academic Year

Population

Annual Demand

Demand Gap

Target Percentage

Target Annual Market Share

2014

38,368

216,396

29,196

15.00%

10,871

2015

38,997

219,944

32,744

16.50%

12,305

2016

39,637

223,553

36,353

18.00%

13,815

2017

40,287

227,219

40,019

19.50%

15,403

2018

40,948

230,947

43,747

21.00%

17,073

T-Shi rt Pr inti ng Trends in th e Phil ippines : 

Equipment T-shirt printing equipments are developing since companies wanted to diversify product lines and product t-shirt printing equipment. Pioneer companies like Hewlett-Packard and Epson changed the “game” of t-shirt printing quality with their production of heat-press equipment to partner their quality inkjet/laser printers. Such equipments are available within the Philippines since 2009.



Designs Filipinos are trend followers. Following trends may be seen as a “sheep effect” where it can be seen commonly in this example: a celebrity-induced creation of a trend. Within designs, hypes and trends have a fast – very fast cycles/passage within population preferences. Within this fact, memes, icons, and quotations are mostly used in designs. Within the Philippines, most Filipinos tend to wear shirts that express themselves. On a psychological aspect, Filipinos tend to express on a subliminal way. Within this fact, trend within designs are mostly lined within an individual’s expressions and emotions.



Design Knowledge Availability of designs over the internet has given the community so much to innovate with. Also, the availability of image editing and enhancing software within torrent site has given many people the opportunity to own one without buying and owning a license. Within this unethical advantage, most people obtained knowledge using these available software.



The Economy Of T-shirt Printing & Its Customers T-Shirt Printing establishments have been rising within the nation since the growth of fashion within the Philippines within the year 2005. T-shirt printing businesses rose from sole proprietors who innovated and learned how to print shirts on their own with the assistance of the Internet.

Marketing M ix Strategy

Product

Imprints would be offering high quality shirts sourced from a researched supplier (See Appendices for more details) printed with quality designs by utilization of procedures with the absence of difficulty due to the equipment used characterized with the latest technology. Considerations of high quality which is available within Imprints: 1) Fabric 100% Pure Augmented Cotton – results to quality texture, weight, and fabric density for comfort. 2) Durability – 5 Years of comparable difference 3) Washing Convenience - Cotton is easy to clean; it can be laundered or dry-cleaned. It withstands high water temperatures, so it can be boiled and thus sterilized Design:

According to our survey, here are our proposed designs for our start-up Category Songs, Bands

Quotation

Strategy 

Filipinos are in hype with music. With the influence of media such as MYX within the Philippines, Imprints would dedicate designs that would support OPM (which can also be considered as a voluntary movement of the business towards community support) Within the Philippines, most Filipinos tend to wear shirts that express themselves. On a psychological aspect, Filipinos tend to express on a subliminal way. Within this fact, trend within designs are mostly lined within an individual’s expressions and emotions.



Memes



Icons



This would still instill decency over Imprints products for which quotation are maintained out of obscenity. Memes are internet trends. Sources like 9gag would be a great source of designs but would incorporate copyright by making parodies to avoid any violations. Icons are composed of all individuals who are trending like celebrities.

Imprints designs are not limited within the list. The list provides the foundation of designs Imprints would provide in its launch. The main objective of Imprints is to provide designs that are in trend or hype. Price Pricing strategies: Market Penetration – Since the business would have well-entrenched competitors on its location, penetrating the market with lower prices would be the business’s strategy. Psychological Pricing – The use of –P1 pricing together with the lower prices of Imprints products are utilized.

Impronts prices would give a rebuttal to the competitors present. The business would contradict the practice of having 100% - 300% mark-up within products offered by having 48% - 70% Markup within the products without jeopardizing generation of profit. PRODUCT ITEMS PRODUCT COSTING DirectMaterial DirectLabor Overhead TotalCost Add: Mark Up SellingPrice

P l a i n Ri n g

Ra g l a n

L ong S l e e ve

158.00 4.00 10.00 172.00 107.00 279.00 279.00 CONTRIBUTION MARGIN PER UNIT SellingPrice 279.00 Less:VariableCost 172.00

178.00 4.00 10.00 192.00 107.00 299.00 299.00

168.00 4.00 10.00 182.00 107.00 289.00 289.00

188.00 4.00 10.00 202.00 107.00 309.00 309.00

198.00 4.00 10.00 212.00 107.00 319.00 319.00

208.00 4.00 10.00 222.00 107.00 329.00 329.00

299.00 192.00

289.00 182.00

309.00 202.00

319.00 212.00

329.00 222.00

ContributionMargin

107.00

107.00

107.00

107.00

107.00

100% 64% 36%

100% 63% 37%

100% 65% 35%

100% 66% 34%

100% 67% 33%

107.00

CONTRIBUTION MARGIN RATIO SellingPrice 100% Variable Cost 62% Contribution Margin 38%

Co l o r e d

P l a i n V -N e c k

Co l o r e d V -Ne ck

Communication Channels

Social Networking Sites

Website Forums

Individuals Communication from Imprints (Inbound/Permission Marketing)

Word-Of Mouth Marketing Group Markets (Bulk-Orders)

E-mail

Phone Calls/ Mobile Messaging

Promotion Promotion Strategies:

Strategies Encouraging Impulse Buying: 1) Encouragement to Shop – Increase Brand Reputation Imprints would have Online Advertising & Print Media promoting the love for Imprints. Promotion towards the brand would potentially increase brand awareness and would eventually turn into recognition. 2) Loss Aversion Switch – Giving Limited Time Offers Giving limited time offers would provide customer the need to purchase. Normally this would affect the purchase decisions of customers by causing them to prevaricate over a purchase especially if it has high quality. 3) Twisted Heuristics Heuristics – unconsciously held rules of thumb

The business can take advantage of this by packaging up combinations of products as bulk buys. Customer would potentially get the impression that it must be good value would potentially purchase than researching any further. 4) Discounting Seasonal discounts especially in predicted times of low sales. Advertising:

1) Print Media – Traditional Print Media providing brochures, etc. 2) Online Advertising – Utilizing Social Networking Sites especially Facebook to provide online advertisements via organic advertising (within the first year of operation) 3) School “Celebrity” Advertising – To minimize advertising expenses, Imprints would use famous students within schools to bring the brand hype onto the group market (especially the target market) 4) Government-Aid Advertising – Community Assistance Imprints would take permission and assistance from the government of Quezon to place friendly reminders within the community (especially schools and businesses within). This would not only increase brand awareness but also shows Corporate Social Responsibility Others: 1) Attending to Cosplay Conventions - With the influence of Cosplay, the business would also provide t-shirt designs dedicated to such events and would cater goods within the event 2) Sponsoring School Merchandise Sponsoring school merchandise would be a unique way to provide a certain brand image over markets.

Advertisements

Competitor Analysis

Critical Success Factors

Competitors

A Amazing Playground 2

B Print To Shirts 1

C Tarpaulin & Shirt Prints 1

D Score

E Revinch

1

1

F Tees & Prints 2

Customer Service Compliance To Price-Sensitiveness

2

1

3

2

3

3

1

3

4

2

2

1

Expertise

3

2

3

3

3

4

Advertising

Product Quality Commerce E–

4 3

2 1

3 1

3 1

3 1

4 3

Customer Loyalty

4

2

3

2

2

4

Expansion

2

1

1

1

1

3

Market Share

4

1

3

2

2

4

Product Line Offerings

3

2

2

2

2

3

Total

28

16

24

19

20

31

*1-lowest, 4-highest

Competitor

Monthly Customers

Average Price

A B C D E F

1000 450 700 200 400 800

400 120 80 180 250 600

T-Shirts Produced Monthly 2000 4000 2800 1600 3200 2000

Monthly Sales 800,000 480,000 224,000 288,000 800,000 1,200,000

Competitors’ Map

SWOT ANALYSIS STRENGTHS

-

REPERTOIRE OF DESIGNS AND PATTERNS FOR SHIRTS HAS A COMMUNITY IMPACT

-

WEAKNESSES

-

UP TO DATE TECHNOLOGY IN DESIGNING AND

”EXPERIENCE” IN HANDLING SITUATIONS SUCH AS (RUSH ORDERS, FORTUITOUS EVENTS AND SUCH)

-

TRANSPORTATION FOR

MANUFACTURING – DELIVERY OF VALUE

-

-

DELIVERING SERVICES (CAN BE A POTENTIAL USP)

-

FLEXIBLE & VERSATILE

-

HIRING OF POTENTIAL EMPLOYEES (IF BUSINESS GROWS)

-

T-SHIRT TREND WILL

CUSTOMER ORIENTED & DRIVEN OPPORTUNITIES

REMAIN AS A BUSINESS OPPORTUNITY NOT ONLY FOR THIS YEAR BUT TO THE COMING YEARS AS WELL.

-

-

SUPPLIES DIFFICULTY IN ESTABLISHING BRAND TO THE PUBLIC

CONTINUOUS GROWTH FOR ONLINE COMMERCE IMPROVING INVESTMENT CLIMATE OF THE PHILIPPINES WITH 49.1%. RANKED 2ND IN ASIA NEXT TO MYANMAR IMPROVING BUSINESS CLIMATE, PHILIPPINES PART OF THE TOP 10 (FOR SMALL TO MEDIUM BUSINESSES).

THREATS

-

NECK TO NECK ONLINE COMMERCE COMPETITION DUE TO THE ALIENATION OF E-BUSINESSES IN THE ONLINE WORLD (FACEBOOK, TWITTER, INSTAGRAM ETC.)

-

COSTS FOR RAW MATERIALS IS RISING

-

UNDETERMINED PRICING CLIMATE FOR PETROLEUM

-

UNDETERMINED PHILIPPINE CLIMATE (COULD AFFECT OUR TRANSPORTATION AND LOCATION OF OUR BUSINESS)

Demand & Supply Analysis

Brgy. Laging Handa Brgy. Paligsahan Brgy. Santa Cruz Brgy. South Triangle

5,606 4,848 4,868 12,344

Brgy. Obrero

8,031

Source: http://web0.psa.gov.ph/content/quezon-city-population-peaked-28-million-results-2010-census-population-and-housing

Year

Population Market Acceptability Frequency of Availment Annual Demand

2010 2014 2015

35,697 38,368 38,997

94.00% 94.00% 94.00%

6 6 6

201,331 216,396 219,944

2016 2017 2018 2019

39,637 40,287 40,948 41,619

94.00% 94.00% 94.00% 94.00%

6 6 6 6

223,553 227,219 230,947 234,731

Competitor Monthly Customers Average Price A B C D E F

Year

1000 450 700 200 400 800 3550

T-Shirts Produced Monthly

400 120 80 180 250 600

Annual Demand

Annual Supply

Demand Gap

2010 2014

201,331 216,396

2015 2016 2017 2018

219,944 223,553 227,219 230,947

187200 187200 187200 187200 187200 187200

14,131 29,196 32,744 36,353 40,019 43,747

2019

234,731

187200

44,531

2000 4000 2800 1600 3200 2000 15600

Monthly Sales 800000 480000 224000 288000 800000 1200000 3792000