Market Feasibility (Puregold Supermarket)

MARKET FEASIBILITY INTRODUCTION The heart of your business lies in its marketing. It involves getting the right product at the right price, promoted using the right messages/media and sold in the place (the 4p’s). At the core of affective marketing is the requirements to satisfy customers needs precisely, the closer the marketing mix of product, price, place, and promotion are to customers requirements, the more likely is that a business will be successful. Marketing has to determine what customers need now and anticipate future needs in order to design appropriate products to meet these needs. The topic covers the following aspects; demands, supplies, demand and supply gap analysis, marketing programs and the projected sales. Every business is practically aspiring for productivity but practicality. In order to last in the business world, the first thing to take into consideration is the target market. The customers will be the key factor to achieve the objectives of the organization. Finding opportunities and spotting the right target market are both important in establishing a business. Knowing customer’s demand and supplying them with the right product at reasonable prices.

GENERAL OBJECTIVES   

To determine the feasibility of the business. To analyze the market demand and supply of the business. To define the target customer of the business through market

 

segmentation. To determine the marketing strategy to be applied in the business. To determine the market potential of the business.

SPECIFIC OBJECTIVES:

INDUSTRY ANALYSIS Grocery stores are traditional destination for consumers looking to stock up on many of the items they use on a day-to-day basis. The need for shoppers to replenish their pantries and refrigerator typically results in frequent trips to the supermarket. Consumers typically have a variety of options to choose from when deciding where to purchase items. Not only do they often have a choice between competing neighborhood supermarkets, but they can also shop at alternative retailers. Because of this, individuals, parents or mostly sari-sari store owner find supermarket or grocery stores at

great convenience. The rise of merchandise industries as often been linked with urban development, this kind of notion can be typically seen in Filipinos. 

A growing wholesale retail industry Over the past decade, the county’s retail industry has grown significantly,

benefiting

from

the

steady

economic

and

population growth, higher disposable incomes, and increasing urbanization. This trend is expected to continue growing forward.

KEY SUCCESS FACTORS IN THE INDUSTRY In a company such as Puregold Supermarket, innovation is important because competition in the merchandising industry is very tight. Product innovation is a must as it add value to the company since products are being offered to the market for attention, acquisition or consumption that may satisfy the need and want (e.g. packaging, promotional tools). In this case products innovation is done to get the attention of customers and most especially the non-customers market share of their competitors. It is imperative for Puregold Supermarket, being in the merchandising industry, to offer its customers with good quality products. They grow accustomed, should be maintained and standardized, to keep the customers hooked and coming back for more. Pricing also is an important to consider given that the largest target market of Puregold Supermarket is considered to be price sensitive. Any

sudden and drastic changes in price might push the customers to find other grocery stores. And in the industry that Puregold Supermarket is in, there are many others that can provide Puregold customers with other alternatives. It must then be ensured that products of Puregold are priced in a way that highlights value at the same time, still affordable to its customers.

RESEARCH METHODOLOGY The researchers used different techniques in gathering information to support the study. A. SURVEY The proponents conducted survey among 400 respondents to get their opinion

regarding the establishment of PUREGOLD here in Talavera.

These respondents came

from the total number of population of different

barangays in Talavera, Nueva Ecija. The

survey

was

distributed

among

individual household and Sari-Sari store owners. B. SAMPLING TECHNIQUES The researchers used Random Sampling Technique to gather information from the target market. Through the use of Sloven Formula, proponents came up with the Sloven’s formula:

n=

N 1+ Ne ²

number of respondents which is 400.

where: n=sample size N =sampling population e=margin of error Computation for the sample size The population of Talavera last 2013(latest) is 117,752 as total. To compute for

the sample size of this population we used a

±5 margin of error. Using Sloven’s

n=

N 1+ Ne ²

n=

117572 1+(117572)± 5 ²

formula:

=398.64 By using the Sloven’s formula we came up to the sample size of 399 respondents which is rounded up but to increase our level of confidence we made it 400 respondents to be exact. C. SURVEY QUESTIONNAIRE In order to have an accurate information data, the researchers agreed to used questionnaire.

The researchers used the check-list format. Questions are made for the respondents in order to get their personal opinions and willingness regarding the proposed project. The group provided 400 copies of survey questionnaire written in English language. D. INTERVIEW The researchers interviewed relevant people who is relatively fitted to the study in addition to the information gathered in survey questionnaires. It includes individual household and Sari-Sari store owners. E. RESEARCH In conducting the study, the proponents used libraries, internet and websites as an additional source of information for the project.

MARKET SEGMENTATION SEGMENTATION

DEMOGRAP

LIFE STAGE

HIC

GEOGRAPHI

PSYCHOGRA

BEHAVIORAL

C

PHIC

CHARACTERI

Age:

STICS

Gender:

15 – 55 years Individual

Social Class:

Male, Female

old

Middle

Household and

Education: All

types

Status: of Single,

Sari

Sari

– (C-Class) and Quantity

Store Lower

owner

educational

Married,

operating

attainment

Separated,

Talavera

Widowed

Class Price

Class Quality

(D-Class)

Convenience

in Lifestyle: These

are

individuals whose purchasing decision made its

is upon

personal

and

family

needs

and

consumer preferences

in terms of a Sari

–

Sari

Store Buiness.

Personality: Housewife Students Employed Unemployed

MARKETING STRATEGY The most critical element of Puregold’s success will be its marketing and advertising. Supermarkets or grocery stores serve the entire purchasing population of its geographical area but focusing on customers who need to purchase items with lower cost and a wide variety of commodities. In order to capture customers. Many of the initial customers will be drawn to the unique nature of the store and will then have the opportunity to realize the cost savings of Puregold. Puregold will also use Tarpaulin in its introductory stage as well as transit advertising, which means the use of vehicles to carry the advertising materials for the customers to be aware of the existence of

the proposed business. Puregold will also reach out to different charitable institutions such as orphanage, churches and organizations. Help will be extended to those chosen charity by means of goods and financial help.

MARKETING MIX STRATEGY PRODUCT STRATEGY Puregold Talavera engages in retail of sale of food and non-food products. It offers food products such as dairy products, meat and sea food products, vegetables and fruits, beverages such as wines and liquir, and other products used for personal consumption; and non-food products including clothing, shoes, household chemicals, appliances, toys and sports items.

These

food

and

non-food

products

are

arranged

in

shelves

corresponding to its uses and consumption. PRICING STRATEGY PLACE/DISTRIBUTION STRATEGY Location is one of the major factors to be considered in starting up a business. It must be assured that it is accessible to the target market. If location is later found to be incompatible to the situation as to give consideration to its target market, it may lead the company to failure. Right choice of location means reaching your target customers and you respond correctly to their market needs. Puregold Talavera will be located in an open

area at blank street, Matias, Talavera, Nueva Ecija in front of the Basketball Court and beside Friendship Supermarket. (Kulang pa)

PROMOTION STRATEGY



TV ADVERTISEMENT

Puregold will use TV Advertisement that could attract and encourage consumers to patronize their products. One way to increase brand popularity is to use an effective endorsers. Eat Bulaga host Vic Sotto and Joey De Leon are the endorsers of Puregold because they are well-known comediennes and has the ability to portray different roles and characters effectively.



BILLBOARDS/POSTERS/TRANSIT MEDIA/FLYERS

As a franchisee of Puregold, outdoor advertisement like billboards, posters, transit media and flyers are taking considerations to grab attention of consumers and potential customers; it can also be cost effective for it reaches thousands of people of Talavera on their daily basis, and message is delivered continuously and frequently.



SALES PROMOTION

Sales promotion is another tool used by Puregold in capturing the attention of their customers such as giving up to 50% off products, promo packs and bonuses.



RAFFLE PROMO

Raffle ticket is another way to urge thecustomers to buy products. Customer will purchase an additional product until they avail a raffle ticket. This strategy has a great impact on the company whereas it create an increase in demand of a product.

COMPETITORS PROFILE MAIN COMPETITORS ›DIRECT COMPETITORS I. CVC-

An air-conditioned supermarket which has TV monitors endorsing

their products inside the store. They are offering different variety of products such as groceries, meats, fruits and vegetables and some appliances. CVC have DFL (Definite Fun Lifestyle) inside the store in which they are offering garments, accessories and other personal uses. One of their weakness is that the most of their products are quite expensive. II. Savemore Supermarket-

An air-conditioned Supermarket with a wide

and convenient to shop commodities. They play quite music for their

customers. It is also like one stop shop because they are not offering grocery products but also vegetables, fruits, meats, fishes, appliances, garments, cosmetics and they also have Watsons inside. They have a comfort room inside the building for their customers, they are also offering different cards for discount. The said supermarket has many customers because they offered variety of products. The groceries they offering is more expensive than other grocery/supermarket near them. III. Friendship Supermarket – Friendship are offering school supplies/ office supplies, toys/stuff toys, furniture, accessories, garments, kitchen utensils, gadgets, and a little car toy where a kid can ride it to the corner of the building. Friendship Supermarket is a second floor and have elevator when you can go up and down. The size of it is wide but don’t have air condition. They have many customers, because the price of their products is cheap. Some of the retailers bought their commodities here to resale. IV. Myra Grocery Store – Myra is not a supermarket but only a grocery store. The grocery store is not too large in terms of space inside. Not too convenient to shop because they only have two (2) counters and they only have few electric fans. They offered grocery products. Even thought they have a little problem to their equipments or the satisfaction of the customers, they also have many customers. It is compatible to those retailers who buy commodities or their business because the price of their products is cheap.

V. 7MM Grocery Store – Some of the time, when we say grocery stores the customers are one who get the products they buy. But in this kind of grocery store, they are the one who gives you the products you want to buy because the customers are not allowed to go inside. The products they sell is limited not like the others. They have only few customers. The price of their products is cheap you would see this grocery store at the front of Friendship and beside 7MM Drugstore.

COMPETITIVE EDGE Puregold

is

currently

one

of

the

largest

and

fastest

growing

hypermarket and supermarket chains in the country. With the success of Puregold, competitors might decide to replicate the company’s business model. Puregold’s current scale, extensive experience and established brand name are some of the advantage over other players. Puregold focuses on resellers; targeting the lower income segments.

BARRIERS TO ENTRY 

BARGAINING POWER OF CONSUMERS The prices of the products and services have become the standard of how consumers would want to spend on groceries. Anything above the price range would be considered expensive,

while anything lower would mean it’s cheap. Most consumers think that the prices by the grocery stores are reasonable and affordable because they offer value products and other pricing strategies. This just goes to show that the consumers in this industry really do not have much bargaining as they think they do. 

BARGAINING POWER OF SUPPLIERS This force represents the power of suppliers that can be influenced by major grocery chains and that fear of losing (influenced by major) their business to the large Supermarket. Therefore, this consolidates further leading positions of stores like Puregold in negotiating better promotional prices from suppliers that small individual chains are unable. In return, Philippine based suppliers are also threatened by the growing ability of large retailers’ source their products from abroad at cheaper deals. The forces of competitive rivalry have reduced the profit margins for Supermarket chain and suppliers.



THREAT OF SUBSTITUTE PRODUCTS Great substitution is able to reduce demand for a particular product, as there is a threat of customers switching to the alternatives. In the grocery industry this can be seen in the form of product for product or the substitute of needand is further weakend by new trends.

EXTERNAL ASSESSMENT PESTEL ANALYSIS Political Factors For employment legislations, the government encourages wholesalers and retailers to provide or mix of job opportunities from flexible, lower-paid and locally-based jobs to highly skilled, higher paid and centrally-located jobs. Puregold Supermarket understands that wholesaling and retailing has a great impact on jobs and standard living of people within the community being on inherently local and labor-intensive sector. Puregold employs High School Graduate that could be in qualified for the position such as cashier, bagger, clerk and others. Political factors include possible difficulties in obtaining regulatory or local government approvals and distributing or transporting inventories. Puregold also experienced difficulty in building its brand and location. While the risk maybe substantial, PUREGOLD believes that the risk are worth taking given its growth potential. Economic Factors Economic factors are of concern of PUREGOLD because they are likely to influence demand, cost, prices and profits. Increase in unemployed people create decrease demand for many goods, adversely affecting the demand required to produced such goods. These economic factors are largely outside

the control of the company, it affects food market, and are exposed to market concentration risk. PUREGOLD overcome this economic factors by improving standing living of people through employment. Social/Cultural Factors Filipino customers considered “one-stop” and “bulk” shopping, which is due to a variety of social changes. Therefore, PUREGOLD increase the amount of non-food items available for sale such as kitchen utensils, household appliances, and apparels. Also, the types of goods and services demanded by consumers is a function of their social conditioning and they’re attitudes and beliefs. These are the reasons why PUREGOLD focuses towards the own-label share of marketing strategy which can drive costs of the business. Technological Factors Another major macro-environmental variable to consider is the development of new technologies which have great benefit both in customers and the company: customer satisfaction rises because goods are readily adapted new technologies such as Electronic Point of Sale (EPOS), Electric Funds Transfer Systems (EFTPOS) and Electronic Scanners. Environmental Factors As a manager of a company, various responsibilities will occur, such as responsibility to its employees, suppliers, and the company responsibility to

its society. The major societal issue threatening food industry has been environmental issues, a key for company to act in a socially responsive way. PUREGOLD sets various regulation and corporate governance in order to accompany this corporate social responsibility.

TECHNICAL STUDY INTRODUCTION

OBJECTIVES

A. PRODUCT DESCRIPTION PRODUCT NUMBER 1A 1B 2A 2B

TITLE Appliances Furnitures Linen Soft and Hard Candies Local Chocolates

3A

Mallows/Jellies Imported Cookies

and

Biscuit Local 3B

Cookies

Biscuit Native Biscuit

and

DESCRIPTION

Wafers 4A

Pretzels Local Snacks

4B

Imported Snacks Popcorn Dried mangos

5A

Raisins Local Snack

5B

Nuts Canned Vegetables Canned Fruits

6A 6B 7A 7B

Native Preserves Canned Meat Canned Fish Instant Noodles Cup Noodles Soup

8A

Pansit Catsup Sauces

8B 9A

Pasta Seasonings Toys Ladies Wear

9B

Men’s Wear Bags

10A 10B

Footwear Baby Diaper Adult Diaper Alcohol

Feminine Care Cotton 11A 11B 12A 12B 13A 13B 14A

Baby Toiletries Dental Care Health Care Bath Soap Laundry Household Maintenance Tissue Disposables Doy and Tetra Packed

14B

Juices Canned Juices Powdered Iced Tea

15A

Powdered Juice Creamer

15B

Coffee Choco Drink

16A

Regular Milk All-purpose cream Culinary Milk Cereals

16B

A.1 PRODUCT PRICING

Oats Bread fill

A.2 PRODUCTION/OPERATIONAL PROCESS

MANUFACTURER

DISTRIBUTOR

RETAILER

SARI-SARI STORE

INDIVIDUAL

A.3 FLOW CHART OF SERVICE

GREETINGS

ACCOMODATION AND PRODUCT

FALLING IN LINE PUNCHING RECEIVING PAYMENT THE

PROCESS FLOW DIAGRAM STEP 1: Anyone who walks in by the store is considered as a customer and will be treated special

and welcomed by the employees with a

smile and respect STEP 2: Salesperson will accommodate the customer and will guide her to her destination and

tell her where she can get the

product STEP 3: After the selection of the products, the customer will fall in line to the counter STEP 4: The cashier will punch the product

STEP 5: The customer will pay the price STEP 6: After accepting the payment, the bagger will place the products according to the

customer wants, either a box or a

paper bag

B. BUSINESS PROCESS The start of the store’s operation will be 8:00 am in the morning to 6:00 pm in the afternoon, Monday to Sunday. The personnel and assigned salesperson must be on time, at least thirty (30) minutes before the opening of the store.

C. BUSINESS LOCATION C.1 Vicinity Map C.2 Floor Plan

D. MACHINERIES AND EQUIPMENT

E. OFFICE SUPPLIES F. STORE UNIFORM

G. UTILITIES REQUIREMENTS