Marketing Plan_Lechon (1)

De La Salle University Ramon V. Del Rosario College of Business Management and Organization Department

MKT511M: MARKETING MANAGEMENT 2nd Term, S.Y. 2013-2014

CASE ANALYSIS and MARKETING PLAN for

CEBU LECHON BELLY

Submitted to: Dr. Antonio V. Concepcion

Submitted by Group 3 Aquino, Johanna Perez, Joycee Rebosura, Karla Amor November 4, 2013

CASE ANALYSIS I.

Case Background Every feast in the Philippines is not complete without the presence of the tasty roasted pig called “lechon”. Whether it is presented as the whole suckling pig with an apple in its mouth or a more modern way of bite-sized pieces wrapped in pita bread, lechon is definitely the main attraction of a Filipino feasts suchs as birthdays, fiestas, baptismal celebrations, graduations even wedding celebration. Lechon is considered as the “star” of the celebration because even if you spend so much money on decorations or venue the guests will always be drawn to the lechon, its taste and appearance. But have you ever asked yourself where did this popular dish originated? One of the speculations believe that our popular roasted pic came from a Spanish term „lechón’ which means suckling pig. Another assumption believes that the Filipinos adapted the lechon from the Chinese, which made use of an adult pig instead of a young piglet. (hubpages inc., 2013) Cebu is one of the oldest towns in the Philippines. With a rich historical past, Cebu‟s history goes way beyond 439 years ago when the island became a province at the start of the Spanish colonization. This claim is evident in its heritage sights such as old churches and ancestral houses, tourist attractions like the Magellan‟s cross and Lapu-lapu shrine, and the city proper itself. Cebu celebrates its annual Sinulog Festival with colorful parades and street parties in honor of the miraculous image of the Santo Niño. A not to be missed event in the Philippines every month of January.

Cebu is the home of the best lechon makers and purveyors of the Philippines. In every grand occasion, the star and the center piece of Filipino buffets is lechon. The word “lechon” came from the Spanish term that refers to a roasted suckling pig. Lechon is a skewered whole pig roasted over charcoal, a popular dish in the Philippines.

Lechon Cebu

Photo Courtesy of: (Choose Philippines, 2013)

Lechon is the Spanish word for suckling pig and in the Philippines, it connotes a whole roasted pig. The process of cooking the lechón involves the whole pig or piglet that has been impaled in a bamboo branch and being slowly roasted over charcoal. The roasted pig is often cooked during national festivities or fiestas, the holiday season, birthdays, weddings, baptisms, family reunions, and other special occasions.

The typical method of roasting lechon involves placing the pig on a spit and roasting it over charcoals while wiping the skin with a brush made out of leaves drenched in water and the pig‟s own fat. This makes the skin to become tender, crispy and crunchy that further adds to the delectable taste of the dish. The lechon is usually served with a liver-based sauce. But in some cases, it may be served Chinese style with steamed buns and a sweet plum sauce. In addition, the left-overs from lechón is easily recycled into another delicious dish called “litson paksiw”. It involves cooking the left-over lechón by boiling it in vinegar to make the meat moist and the skin very

soft. Some of the provinces in the Philippines have their own way of cooking and preparing their own version of the lechon. One of these versions is the Lechon Cebu from the province of Cebu.

The popularity of Lechon Cebu has made it one of the best tasting versions of lechon in the Philippines. The uniqueness of the lechon from Cebu comes from the stuffing for the lechon and the sauce dip used for it. The Lechon Cebu is stuffed with lemongrass, a local variety of banana known as “saba,” or taro plant, green onions, sliced onions, whole cloves of garlic, cracked black pepper, lots of salt, and some other condiments. That stuffing gives the Cebuano lechon its unique crispy and sweet taste that is loved by people from Filipinos and even foreigners. Among the popular restaurants serving lechon in Cebu are CnT Lechon and Zubuchon.

About Cebu’s Original Lechon Belly An ingenious Cebuano-innovated and Cebuano-made product in which you may be quite interested was introduced commercially in February 2012. It is called Cebu‟s Original Lechon Belly,

and the technique for

producing

it

was

actually

conceptualized back in August 2011, by Marlon Gochan, a proud Cebuano. The product was registered with the Philippines‟ Department of Trade and Industry early in 2012.

This new technique for preparing the pork takes lechon to a whole other level. The cooking technique is similar to the slow-roasting over an open charcoal fire for the traditional Cebu lechon, which is famous all over the Philippines and even in other parts of the world. The big difference is that Cebu‟s Original Lechon Belly is a boneless lechon because a whole pork belly or side of pork is deboned and spiced

up with special ingredients. When you stop and think about it, this all-meat lechon is highly cost-effective, and you get to eat the best part of the lechon straightaway. The all-meat lechon of course has the crispy skin that many people think of as an essential part of the lechon experience, along with its juicy meat. Cebu‟s Original Lechon Belly opened its initial food stalls already, in the North Bus Terminal and on P. del Rosario Street (fronting the USC main campus). Because the business owners themselves like to say “To taste is to believe,” some early birds were the lucky recipients of the product‟s free taste testing event that was conducted at the North Bus Terminal on February 25, 2012. The owners invited people in Cebu to have their own taste test of the product. For instance, Cebu‟s Original Lechon Belly gave a taste test for some staff members of Cebu‟s Sun.Star and SuperBalita. The food product also found some initial supporters from the staff of a couple of Mabolo and SM banks near its outlets.

This business is owned and operated by members of the Gochan family, which has been involved with a number of other businesses in Cebu. Two of these are the Gochan real estate corporation and the former Dairy King ice cream parlor on Mango Avenue, which was quite popular back in the 1970s and 1980s. Knowing about Dairy King was actually mentioned as one of the details that could identify a person as a Cebuano of the ‟80s.

II.

Statement of the Problem What marketing strategy can Cebu Lechon Belly use to expand its distribution and market reach in Metro Manila and other areas outside Cebu?

III.

Areas of Consideration Evaluation of Internal Resources Internal analysis provides a comparative look at a firm‟s capabilities in terms of its Strengths and Weaknesses compare to its competitors. This helps firms to determine if its resources and capabilities and what are the likely sources of

competitive advantage. By doing internal evaluation, a company or a brand can establish strategies that will maximize any sources of competitive advantage. Strengths 1.

The product is innovative, first of its kind

2.

Attraction for tourist and food lovers, being a delicacy

3.

The branding is leaning towards the masa market

Weaknesses 1.

Pricey compared to a regular pork meal

2.

Limited products offering

Evaluation of External Environment External evaluation is not aimed at developing an exhaustive list of possible factors that could influence the business; rather it is aimed at identifying key variables that offer actionable responses.

Opportunities 1.

Sell via other forms of distribution channels

2.

Gain market exposure via different advertising channels

3.

Expand in other areas

Threats

IV.

1.

Other brands offering similar products

2.

More known brands already existing in the market

3.

Issue on originality of the „boneless lechon‟ concept

Theoretical Frameworks

Marketing Mix (4 Ps)

Product

The main product of Cebu‟s Original Lechon Belly is its Boneless Lechon sold as a whole. Its net cooked weight starts at around three or four kilos. It can be great to serve at parties, with no more long waiting lines while the lechon is carved bit by bit at your buffet table. The product is also sold in the following portions: 1/4 kilo serves 2-3 pax, 1/2 kilo serves 4-6 pax, 3/4 kilo serves 7-9 pax, 1 kilo serves 10-12 pax. These portions as well as the Boneless Lechon sold as a whole are offered at introductory prices. A budget pack that consists of a serving of conveniently sliced lechon belly plus the necessary Pinoy staple food, rice, is also available.

1. Value/Budget Meal - 100 grams of Boneless Lechon Belly with 2 pcs. Puso(Hanging Rice) or a scoop of plain rice 2. Boneless Lechon Belly(Original-Regular) per kilo 3. Boneless Lechon Belly(Hot & Spicy Flavor) per kilo

Price Boneless Lechon sold as a whole are offered at introductory prices. A budget pack that consists of a serving of conveniently sliced lechon belly plus the necessary Pinoy staple food, rice, is also available.

Value/Budget Meal:

70 php per order for the Original(Regular) Flavor 80 php per order for the Spicy Flavor

Boneless Lechon Belly(Original-Regular) per kilo 480 php - 1 Kilo(Serves 10-12 pax) 360 php - 3/4 Kilo(Serves 7-9 pax) 240 php - 1/2 Kilo(Serves 4-6 pax) 120 php - 1/4 Kilo(Serves 2-3 pax)

Boneless Lechon Belly(Hot & Spicy Flavor) per kilo 520 php - 1 kilo(Serves 10-12 pax) 390 php - 3/4 kilo(Serves 7-9 pax) 260 php - 1/2 kilo(Serves 4-6 pax) 130 php - 1/4 kilo(Serves 2-3 pax)

Place/Distribution Cebu Lechon Belly is distributed in stalls and kiosks in supermarkets and groceries. There are also authorized dealers that sells Cebu Lechon Belly.

CEBU Outlets:

1. Parkmall, Mandaue City 2. SaveMore Supermarket Food Area in E-Mall 3. SaveMore Market in Maribago, Lapu-Lapu City 4. One Pavilion Mall Branch in Banawa, Cebu City 5. Maxwell Hotel Pasalubong & Dine-in Branch located along N Escario Street in Capitol 6. SM Hypermarket Food Area in J Centre Mall, A S Fortuna, Mandaue City 7. Rustan's Shopwise Supermarket Food Area 8. SM Hypermarket Cebu, Subangdaku, Mandaue City 9. Super Metro, Lapu-Lapu City

Manila Outlets 1. SaveMore Market in Festival Supermall in Alabang, Muntinlupa City, Manila 2. Taste Asia - SM Mall of Asia 3. Festival Mall Food Court, Alabang, Muntinlupa, Manila 4. SM HyperMarket Food Area - SM JAZZ residences Bel-Air, Makati

Authorized Dealer 1. Gene's Lechon, 2nd Floor Food Court Area of Robinson's Cybergate Cebu (Fuente Osmeña area)

International Outlet 1. Vancouver, Canada

Promo There are no existing tv, radio and print advertisements for Cebu Lechon Belly. It marketing mainly relies on word of mouth passed on from one satisfied customer to another.

One existing promotional initiative however is the Boneless Lechon Padala Service. It is an Airport to Airport kind of delivery where in the Consignee has to pick up the Boneless Lechon in the destination Airport at the requested estimated time of arrival of the consignee. Ordering is quite easy actually using an order form. Customers can provide details of the order contact details. Payment options are by way of Bank Transfer c/o Metrobank. Lead time for all orders is at least 3 days before actual delivery date. Some celebrity patrons – John Lloyd Cruz, LJ Moreno

Porter’s Five Forces

Threat of New Entrants The Original Cebu Lechon Belly is a new product only launched in 2011; with this potential competitors can modify the concept of Cebu Lechon Belly with lower prices and offering different versions like a healthier option etc.

Threat of Substitute Products

Bargaining Power of Customers Bargaining Power of Suppliers Intensity of competitive rivalry

Market Structure The concept of a market structure is understood as those characteristics of a market that influence the behaviour and results of the firms working in that market. A market is a set of buyers and sellers, commonly referred to as agents, who through their interaction, both real and potential, determine the price of a good, or a set of goods.

The main aspects that determine market structures are: the number of agents in the market, both sellers and buyers; their relative negotiation strength, in terms of ability to set prices; the degree of concentration among them; the degree of differentiation and uniqueness of products; and the ease, or not, of entering and exiting the market. The interaction and differences between these aspects allow for the existence of several market structures, from which we can highlight the following:

Perfect competition: the efficient market where goods are produced using the most efficient techniques and the least amount of factors. This market is considered to be unrealistic but it is nevertheless of special interest for hypothetical and theoretical reasons.

Imperfect competition, includes all situations that differ from perfect competition. Sellers and buyers can influence in the determination of the price of goods, leading to efficiency losses. Imperfect competition includes market structures such as: 

Monopoly: it represents the opposite of perfect competition. This market is composed of a sole seller who will therefore have full power to set prices.



Oligopoly: in this case, products are offered by a series of firms. However, the number of sellers is not large enough to guarantee perfect competition prices. These markets are usually studied by analysing duopolies, since these are easier to model and the main conclusions can be extrapolated to oligopolies.



Monopolistic competition: this market is formed by a high number of firms which produce a similar good that can be seen as unique due to differentiation, that will allow prices to be held up higher than marginal costs.



Monopsony: it‟s similar to a monopoly, but in this case there are many firms selling products, but only one buyer, the monopsonist, who will have full power when negotiating prices.



Oligopsony: similar to oligopolies, but with buyers. Sellers will have to deal with the increased negotiating power of the only few buyers in the market, the oligopsonists.

V.

Alternative Courses of Action 1.

Status Quo

This Alternative Course of Action seeks to maintain Original Lechon Belly’s niche market and business strategy of having no real concrete and formal advertising, marketing and promotional campaign. Since 2011, Original Lechon Belly maintained a strong brand positioning in Cebu by word of mouth strategy in making and keeping its brand and products known to Cebuanos and tourists.

2.

Differentiate product vs other competitors serving the same product

Practically the Orginal Cebu Lechon Belly is different in a way because it only serves the belly part of the pig. it is very convenient to eat and serve compared to serving an entire roasted pork which is not deboned. 3.

Expand distribution channels in Metro Manila and other areas outside Cebu This Alternative Course of Action is to expand operations of Original Cebu Lechon Belly in Manila and Luzon. Expanding operations in Manila and Luzon would increase the opportunity of Cebu Lechon Belly to increase profits and capture a different market. One of the possible constraints wherein expansion in new areas would be difficult for the suppliers and would need extensive planning and coordination.

4.

Offer the product at a lower price Offering the Original Cebu Lechon Belly at a lower price would definitely entice the consumers to try the product. But lowering the price of the product would only not only be a sustainable course of action to expand in to a new market.

5.

Gain popularity by using marketing initiatives (TV, Print, Radio, Social media) and get a celebrity endorser

II.

This Alternative Course of Action seeks to make use of all available media streams (abovethe-line and below-the-line) in order to fully maximize Original Cebu Lechon Belly as a brand and as a product. There are numerous media outlets and companies that the Original Cebu Lechon can approach a popular endorser in order to push through with its efforts in conceptualizing and realizing its full marketing campaign. they can monitor the market penetration effectivity for TV, Radio, Print Media, and Social Media.

I.

Recommendation The group recommends ACA 2 - Differentiate product vs other competitors serving the same

MARKETING PLAN I.

Goals and Objectives Statement of the Goals for the Product/Brand

To be able to offer excellent product and services to the consumers with a goal to maintain Lechon belly‟s highest level of quality, taste and authenticity that will retain loyal customers and attract new potential customers.

Short-Term Objectives and Medium Term Objectives To expand total market share by 50% within the next 2 years. To tap new customers for the product and increase market distribution. To introduce new varities of lechon belly and offer similar products

Long-Term Objectives To maintain market share and continuously increase business profit

II.

Current Market Situation Industry Situation The industry is a monopolistic competition.

Brand Situation http://www.marketmanila.com/archives/marketmanzubuchon-copied-your-product-do-you-knowwhat-the-term-libel-means

Competitive Situation Brand

Features

Rico‟s Lechon*

Rico‟s lechon is not your traditional roasted pig. The spicy lechon, their bestseller uses garlic, leeks and a secret ingredient that awakens all the nerve endings of your taste buds.

Positioning

the pioneer of spicy lechon!

Branches

Prices

Highway 77, Talamban, Cebu City, Cebu,

Prices vary from Php2,000 to Php7,000 depending on the size and availability of your order

CnT Lechon

Carcar Public Market

Cebu‟s Ayer Lechon

first lechon place to be recommended by the locals. It is meaty and less fatty

The skin is crispy while its meat is tender, juicy and flavorful which is consistent with any size of the lechon

favorite for both classic and spicy lechon

CnT Lechon has several branches all over Cebu. Its most visited branch is located at 1377 V. Rama Ave., Guadalupe, Cebu City, Cebu. It also has branches in Ayala Center Cebu.

The price of lechon ranges between Php2,800 to Php4,500 depending on the size of your whole roasted pig but you can order it per kilo at any day of the week for only Php320.

affordable, tasty and no frills lechon chopped in your face!

Carcar Public Market at the “Inasalan” section.

The price of lechon is about Php280 per kilo and is sold daily. Some stalls also accept orders for whole lechon, price is between Php3,000 to Php5,000.

Cebu‟s Ayer lechon is known for its crispy and tender juicy native roasted pig. It markets the taste of the true Cebuano lechon.

Its main office is located at Gate 777 across Cebu Country Club, Banilad Road, Apas, Cebu City, Cebu. There are already several branches of Ayer Lechon, 2 of the branches is at I2 Asiatown I.T. Park and at Mactan International Airport.

Prices vary from Php3,200 to Php6,000 depending on the size and availability of your order. They

crunchiest of Cebu lechons!

Tatang‟s Lechon Belly

take home some extra crispy boneless lechon

Zubuchon

Anthony Bourdain’s famous declaration after tasting: “Best pig ever!”

Tatang‟s also offers a Php70value meal where you‟ll have a 100 grams lechon, 2 Tatang‟s is pieces puso located at A.S. Regular lechon (hanging rice) Fortuna St., is sold per kilo at and soft drinks. Corner Hernan Php420 and They also have Cortes, spicy lechon is at lechon wrapped Mandaue City, Php430 per kilo. in a special kind Cebu, 6000. of bread with hoi sin sauce for only Php65 and lechon flakes for only Php80. There are already several Zubuchon all Zubuchon is over Cebu and coined from 2 its main words: “Zubu” branch is which is Cebu‟s located at name in old 2651 Villalon Spanish maps Drive, They and “lechon”. Its price starts at also have There‟s no MSG Php3,500 and branches in nor soysauce in goes as much as Banilad Town its ingredients, Php7,200 Center Gov the lechon is depending on Maxilom Ave stuffed with the size and Cebu CIty, herbs and where you want One Mango spices, skin is your order Mall Gen acupunctured delivered Maxilom Ave and sprayed Cebu City, with fresh Escario Bldg coconut water Cebu City, and roasted to a Lobby Stays crisp until brown Hotel Mactan skin. Cebu and they even have a branch at the Cebu Airport.

III.

Marketing Strategies Segmentation, Targeting, Positioning The Original Cebu Lechon Belly should veer away from the usual target customers of the othe Cebu Lechon brands which are Cebu locals and tourists visiting Cebu. The Original Cebu Lechon Belly would be able to increase potential customers by being accessible to customers in Luzon and other regions of the country.

Primary Target Market

Secondary Target Market

Tertiary Target Market

Foreign and local tourist visiting Cebu

Consumers from Metro Manila and other places in the Philippines

Foreign market (international outlet)

Positioning Statement: “The Original Cebu Lechon Belly, the best Cebu Lechon Experience”

Differentation Strategy Physical product differentiation

Marketing differentiation Human capital differentiation Differentiation through distribution The company must ensure to maintain the quality being distributed in different regions in the Philippines. The company must identify focal points of where to sell

the lechon belly and expand its business not only in the Visayas region but in NCR and Luzon as well.

Pricing Cebu lechon belly should maintain its price considering that it does not need to be shipped all the way from Cebu

Sales Strategy To further capture a huge market the Original Lechon Belly can collaborate with different food enthusiasts engaging in food fairs to increase brand awareness and maintain a strong following of loyal customers. The Original Lechon Belly can also put up a team to monitor and develop point of sales strategies for the brand.

Service Strategy Website of the Original Lechon Belly and Facebook page can be used to answer queries of customers. A hotline can also be used to locate the nearest brance to a customer or to book advance orders.

Promotion Marketing and Communications Strategy

The makers of the Original Cebu Lechon belly should be able to emphasize the difference in quality and taste of their product compared to other roasted pig available in Manila and Luzon. They can release press statements, do product samplings and guest on lifestyle and cooking shows to communicate to the market how the products is unique from other lechons.

Cebu Lechon belly could get a celebrity endorser. They can bank on the popularity of the Kathniel (Kathryn Bernardo and Daniel Padilla) to get the attention of customers about the product.

Billboard endorsement, tv, print and radio advertisements will be a good promotion tool to introduce the product. It would also help if Cebu Lechon Belly could partner with companies on corporate events, sponsorship on activities, food fair/ bazaars like banchetto, guestings on cooking show, etc.

IV.

Action Plan

V.

Conclusion The model of monopolistic competition describes a common market structure in which firms have many competitors, but each one sells a slightly different product. Monopolistic competition as a market structure was first identified in the 1930s by American economist Edward Chamberlin, and English economist Joan Robinson. Many small businesses operate under conditions of monopolistic competition, including independently owned and operated high-street stores and restaurants like Cebu Lechon Belly. In the case of restaurants, each one offers something different and possesses an element of uniqueness, but all are essentially competing for the same customers. A central feature of monopolistic competition is that products are differentiated. There are four main types of differentiation:



Physical product differentiation, where firms use size, design, colour, shape, performance, and features to make their products different.



Marketing differentiation, where firms try to differentiate their product by distinctive packaging and other promotional techniques.



Human capital differentiation, where the firm creates differences through the skill of its employees, the level of training received, distinctive uniforms, and so on.



Differentiation through distribution, including distribution via mail order or through internet shopping.

Monopolistic competitors resemble perfect competitors in some ways but can appear monopolistic if they succeed in differentiating their product from the competition. Differentiation creates diversity, choice and utility. Cebu Lechon Belly must find a way to differentiate their products, in a way that the target market would not see them as „one of those‟. Products should be those which will make the consumers return and repeatedly buy again. Current customers are trial customers, which just purchase products during trips. Cebu Lechon Belly should be able to develop a strong market base, other than the tourist to make the business more profitable. This can be achieved by having differentiated products, or that which the customers cannot obtain from other sellers offering the same product line. VI.

References Images from Google Cebu: The Lechon Capital of the World www.choosephilippines.com/specials/lists/425/cebu-pal/ Lechon Cebu http://www.everythingcebu.com/bits-and-pieces/lechon-cebu/ Cebu‟s Original LEchon Belly www.everythingcebu.com/food-dining/cebus-originallechon-belly/ Cebu Lechon Belly Official Website http://www.cebuslechonbelly.com/1_2_Products.html Cebu's Original Lechon Belly http://www.munchpunch.com/cebus-original-lechonbelly-sm-mall-of-asia/menu

Market structures: definition http://www.policonomics.com/lp-market-structuresmarket-structure/ Monopolistic Competition http://economicsonline.co.uk/Business_economics/