Chapter 1 Marketing Aspect

Current Market Situation Biscuit products sustained to escalate as consumers contemplated reasonably priced indulgent snacks. With the health and wellness trend becoming an increasingly vital aspect, growing numbers of consumers are reaching for good-for-you features of biscuits, such as whole grain or varieties enriched with milk and fruit pieces. With that, the researchers came up with the idea of creating another strain of biscuit enhanced with health nutrition using vegetables as the core ingredient. The vegetable biscuit will go through the identical process as that of a home-made biscuit. Biscuit manufacturers are bringing new products to consumers as they crave for something distinctive from the plain-looking and ordinary tasting biscuits they have used to for many years. Recently, RITZ developed their product by introducing new product lines such as wafers and chocolate coated biscuits (such as choco sticks) to its already wide array of baked products while Rebisco now carries a wide variety of snack food ranging from nuts and seeds, cakes, wafers, breads, chips and curls, candies and gums, and chocolates through the creation of new partners over time such as JBC Food Corportion, Suncrest Food Inc., Multirich Food Corporation, Pinnacle Food Inc., and SPI Corporation. On the other hand, Monde Nissin Corporation concentrated on their product type, as the sources say that crackers (such as Sky Flakes, Blue Skies, Magic Flakes, etc.) are the best-selling variety followed by sweet biscuits (such as Eggnog, Marie, etc.) and wafers like TiniWini, through the help of its sister company Monde M.Y. San Corporation, they evolved into a premier food firm. Biscuit manufacturers introduced different packaging and product formats to cater to all consumption occasions. They also modified existing products via ingredient upgrades, to cater to changing consumer preferences and needs. Business companies are likely to focus more on reformulating biscuits recipes and on more unique flavours, as they seek to address the issues of health and obesity and also to promote
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sustainable development and local production. With regard to health-positioned products, more wholegrain and fortified/functional varieties are expected with low-calorie versions as well as single-portion variants. With rising globalization of lifestyles, supported by increasing affordability, biscuits saw rising acceptance as a snack not just amongst urban consumers, but also amongst rural consumers, who are increasingly seeing biscuits as a good snack option between meals that is why they choose impulse products to indulge themselves, so offering bolder flavours, unusual flavour combinations and fun textures will be important ways to keep consumers engaged and indulged.

SWOT Analysis Strengths There are no existing competitors that are directly involved in producing vegetable biscuit as that of Reviscuits. Reviscuit uses an advance technology for the products. The product is primed from vegetables that are available all year around. Reviscuit will produce biscuit with nutritious ingredient, vegetable, without sacrificing the taste. There will be a variety of exclusive flavours, such as malunggay, pumpkin, carrots and sweet corn.

Weaknesses There will be a tight competition with the other brands offering biscuits. Because Reviscuit uses advanced technology, maintaining its machineries and equipments will be costly. Since the product is based entirely on vegetables, natural calamities may create changes in the supply of vegetables.

Customers may be uncertain to taste the new product since people perceive that vegetables have unsavoury taste. Customers might be discourage to buy because the product is made from unpopular variety of vegetables

Opportunities The biscuit industry in the Philippines is emerging according to Euromonitor International, a statistics and strategy research website. People are becoming more conscious about the outcome of certain foods to their health. Reviscuits vegetable biscuits will be suitable for those who are concerned on the nutritional contents of foods. The health and wellness trend, coupled with the government initiative to eradicate the problem of malnutrition among children from low-income families, will influence new product developments. The Philippines has a rising population and biscuit is a stable snack for todays generation. Customers are changing their lifestyles, therefore, changing their preference.

Threats Because the demand for fortified biscuit product is expected to increase, this will give way to more competitors. The increase in the number of businesses engaged in selling and producing healthy snacks also increases both direct and indirect competitors. Change in the Administration (Government Officials) will also mean change in their plans toward health. Customers might choose other snacks like sandwiches or junk foods.
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New confectionary shop is a big threat to Reviscuit.

Product Objectives 1. To combine the health benefits of the diverse kinds of vegetables with the stable snack of todays generation 2. To supply those who are in a hurry a healthy yet filling snack for them 3. To present innovative flavours of biscuit that will capture the attention of all types of consumers 4. To produce a product that will be an equivalent to one meal

Market Segment Market segmentation is a technique that enables a business to target and divide the market into a distinct group of consumers who have common needs and wants. Segmenting a group of consumers will make it easier for REVISCUIT to better understand and analyze the needs of these consumers and to produce a product that meets the benefits they want and their ability to pay. REVISCUIT will apply mainly the Psychographic Segmentation; the basis of such segmentation is the lifestyle, personality and social class of the individuals. Since REVISCUITs main objective is to use vegetable as the main ingredient of its products, the business will be focusing on the healthy lifestyle of the consumers. The business aims to produce and distribute a healthier and more nutritious version of crackers at an affordable price that gives the business a marketing edge. Target Market

Buying biscuits is one of the frequent behaviour of Filipinos at any time they want to munch something especially when it comes their breakfast and
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merienda. It has developed into a custom that when people sense hunger of their tiring jobs, exhausting school works and strenuous daily activities, they buy some nibbles to fill up their starvation. From breads to cupcakes, Filipinos in this day and age have an increasing assortment of snacks to choose from. But, one by no means goes out of trend ever since it was initially launched to the market, and that is biscuit. Since urban areas comprise of many enterprises and considered as a core of trade and commerce, a business undertaking of a healthier biscuit product will possibly be exceptionally marketable. Biscuit is absolutely pleasing to students principally, those children in their early schooling age as their recess snacks since with its reasonable price and its nutritional contents will help them to carry on of their school tasks and needless to say, its hunger-filling characteristics. Notwithstanding using vegetables as its key ingredient, it will still be satisfying for their taste buds since we will be neutralizing the bitter taste of vegetables. It will also be marketable to adults who want quick snacks for their break time or at whatever time they get hungry. The vegetable biscuits will delight consumers principally those health aware ones since the product is deliberately devised to bring them the nutritional content that theyre insufficiently getting from existing biscuit products. In general, the product is fitting for all ages, but Reviscuits veggie biscuits, being a newly innovated product, converge more on the consumers who are eager to try something new specifically the people who have standard income since they can pay for new offerings in the market.

Market Positioning Reviscuit will create its name as a vegetable crackers producer in Caloocan City. The biscuit that the business will produce provides the health benefits of vegetables. As it provides nearly all of the vitamins and minerals required for good health, most of them contain complex carbohydrates which provide energy. They also contain no cholesterol, have little or no fat, and are low in calories. The vegetable biscuit product of Reviscuit ensures that their consumers will get proper nutrition from its ingredients. Unlike other plain
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crackers which are either salty or mild, Reviscuit is made just right to suit your taste and on top of your health and wellness. The business tagline, Masustansiya na, Masarap pa truly explains it all. Delicious and very affordable, you get more than your moneys worth with vegetable crackers. As a quick fix for meals, Reviscuit are satisfying but still light on your waist line. Its calorie content is just enough to keep their energy up but is not too much to be fattening.

Competitors Rebisco From its humble beginning as England Biscuit Factory in August 1963 in San Juan, Metro Manila, to what is now known as Republic Biscuit

Corporation; generations of Filipinos have been enjoying Rebiscos basic portfolio of biscuits and now its wide range of snack foods. Rebisco has a variety of products from Assorted Biscuits, Biscuits with filling, Cookies with filling, Gourmet Cookies such as Chunkee and Plain

Biscuits/Crackers such as Rebisco Crackers, Hansel Crackers, Buddy Crackers, Ace Crackers, King Flakes, Bravo Biscuits, Jungle Bites Cookies, Coco Honey and Marie Time. With its growing extensive distribution network, market research, and technology and product development, Rebisco soon positioned itself as one of the major players in the snack food industry.

Monde M.Y. San Corporation From its humble beginnings, originating from the Escolta Ice Cream Parlor in Manila in 1935, the founders, the Mar Family, have taken a tradition of creating

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delectably wholesome snack foods into a new age. Monde M.Y. San Corporation has been in the business of baking a wide assortment of superlative crackers and biscuits since 1935, which today are enjoyed the world over, by folks from all walks and nations. Leading brands SkyFlakes crackers and Fita crackers have been enjoyed by a great many generations of thoroughly satisfied consumers. As such, these heritage brands have held the number one spot in their respective categories on the Philippine market. The products were also initially sold abroad to Fil-Asian markets since the 1970's.

Universal Robina Universal Robina Corporation (URC) traces its beginnings all the way back to 1954. It is committed to bringing Filipino taste and culture worldwide, in line with JG Summits vision to make life better, not only for Filipinos, but for the rest of the world.

1966 saw the establishment ofUniversal Robina Corporation, which pioneered the salty snacks industry through Chiz Curls, Chippy, and Potato Chips, under the Jack n Jill brand. Other snack products would follow over the years, as the company successfully introduced market leaders like Pretzels, Piattos, and Maxx. URC is one of the leading biscuit producers in the country. As of this day, they own brands of cookies like Presto, Cream-O and Dewberry and crackers like Magic Flakes, Magic Creams and Magic Flavors.

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Marketing Mix Strategies Marketing mix is a concept that describes the different kinds of tools a business has to use to bring a product or service into the market and to attract and retain as many customers as possible. Reviscuit will start its business and will promote its products through the use of the four Ps (4Ps) of the marketing mix. The 4Ps consists of product, price, place, and promotion. Marketers need to use these in order to lead the business towards success. Product The country is in need of a nutritious and healthy food to keep pace with their daily life. This will serve as the competitive advantage of our business enable to penetrate to the market. The products of Reviscuit are as follows; Carrot biscuit (29%), Corn biscuit (28%), Squash Biscuit (18%) and Malunggay Biscuit (25%). Reviscuit tenders improved biscuits predominantly made of pulverized vegetables as an alternative for flour and specifically produced for the health-conscious people. This biscuits savour like their respective vegetable

ingredient but with neutralized bitter taste. It is different from any other vegetable themed products because the business venture uses vegetable as flour and not as flavouring. Price Pricing must constantly be weighed up because it will indeedaffect the quantity of customers. It must be affordable for the consumers. The price of Reviscuit products is barely the same than those of its competitors because the enterprise and the competitors target market is barely the same. We used cost plus strategy in order to set the price of our products. Place The manufacturing plant will be positioned in Sampalucan St., Barangay 21, Caloocan City. Caloocan City is a strategic place for a business because it is the gateway of different cities and provinces. Our scope is within South Caloocan
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only. The place is proximate to the sources of raw materials and supplies. The place is also nearby the main roads which are increasingly used when transporting the goods to distribution channels. The place is one ride away from major establishments such as Caloocan City Hall, Divisoria, Malabon City Square, SM North Edsa and others so conveyance of necessary materials is undemanding as to effort and time. And since, the location is close to schools, offices and other business establishments, the demand for biscuits is rationally guaranteed because the neighbouring communities are in need of a nourishing and heaving with health benefit-snacks. Promotion Advertising the business on its introductory stage requires an effort of attracting customers that are into eating biscuit and at the same time seeking for a healthier and more satisfying counterpart. Print advertising such as leaflets and flyers will be used for the opening of the business. Leaflets and flyers are good ways of communicating with the target audience as it presents the information about the business and what services are offered. The use of this tool does not need a large budget and yet the response rate can be relatively high. Normally, advertising on this kind of business goes to the DPC yellow pages and creating a free facebook page over the internet could add up to the publicity of the business. But as an introduction, a tarpaulin will be used for advertising the business, as well as leafleting and a website through page hosting. Businesses today are more on advertising through the web in order to attract customers who spend more time in front of their computers. Marketing Program DATE PROGRAM MECHANIC Flyers will be used as a promotional campaign to introduce Reviscuit to the people, especially to the patrons of Caloocan.
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BUDGET P 1,400

One week Flyers before operation

First of

day Free-sampling

Free-sampling or Free-tasting, is a common way of promoting a new product into the market. Sample biscuits will be by displayed the and food

P 6,000

operation

presented

crews/attendants to the people who will pass by the area. Start of Social Networking Since the generation today live on technologies, the use of computer will be an advantage. The business will have its own site. FREE

operation to

an Site (Facebook)

indefinite period time of

of Prints on the The packaging of the products Packaging operation bears the name and logo of the Start to an business and information such as the location of the business and the tagline. This also includes the paper bags.

P 1,000

indefinite period time of

Leaflets and flyers These will be handed to the people surrounding the section of the business and also to the people bypassing through the major street of Caloocan City. This will help the Reviscuit out of spreading the label of the biscuit and fostering awareness concerning the healthy advantages of the product. This type of advertisement is very effectual and is usually incurred at a minimal cost. Flavors of biscuit offered Price Business address and contact number

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Business hours Business Slogan

Masustansya na, Masarap pa Tarpaulin Business Name, Address, Contact No. Business Logo Business Hours Business Slogan Masustansya na, Masarap pa Flavors of biscuits offered

Free tasting Reviscuit will extend free-tasting, this is to invite potential customers. Those people near the business location will be given the oppurtunity to taste the vegetable biscuits made by Reviscuit without charge. Social Media Marketing Social media networks are the most common means of communication nowadays among people from different social networking sites such as Facebook and Twitter. It is so much easier now for people to connect with their family, friends and even strangers. Also, because of these SNS (social networking sites), it is less complicated to share stuff like photos, videos and reviews to everyone. Therefore, this is one of the more convenient ways to advertise Reviscuit. Through this marketing, everyone who has access to the internet will be easily informed with the introduction of a new product in the market. The flavors, the price range, and even the health benefits of Reviscuit products can be put in detail in any SNS for free. Social media marketing is also Reviscuits way to
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communicate with customers to get reactions, comments, suggestions and any type of feedback.

Website through facebook.com http://facebook.com/Reviscuit

Figure 1.4 Screenshot of the website Prints on the packaging The packaging of vegetable biscuit itself serves as an advertisement. The logo, business name, contact details for inquiries and the location of the business are printed on each packaging materials. Analysis of Demand and Supply Computation of Demand To compute for the estimated total demand for vegetable biscuits, the researchers consider the following based on the results of the accomplished survey questionnaires: a. According to the report released by www.caloocancity.gov.ph, there are

approximately 1,264,497 residents of Caloocan City based on the 2010

figures compounded for 3 years using 2.37% annual growth rate but considered only 609,695 residents as our total population because the point of distribution is only within South portion of Caloocan City. This number represents those whose age is 15 and above because they are the ones who have the buying capacity. b. From the total population, we get a sample size of 300 by using a

statistical tool called Sloven Formula with a margin of error of 6%. n= number of samples N= total population e=error margin n= N/ (1 + Ne^2) n= 609,695/ (1 + 609,695(.06^2)) n= 277 or 300 samples Based on the survey, we found out that there are about 41.36% of the population who prefer eating biscuits as their snack. This is equivalent to 252,170 persons which was derived from multiplying 609,695 by 41.36%. From Question#5, the researchers determined that 77.27% are willing to try different flavors of biscuits aside from those available in the market. That would be 77.27% of 252,170 or 194,852 persons. But based from Question#6, 75.67% of 194,852 persons or 147,445 are willing to eat vegetable based biscuits. The 147,445 figures serves as the total demand for the product. c. As a result, the estimated total demand for every vegetable biscuit flavor is as follows:

What vegetables do you think will be appetizing to you as a biscuit? Spinach Squash Malunggay Carrots Sweet Potato

No. of respondents 42 63 84 96 4 Percentage 8.84% 13.26% 17.68% 20.21% 0.84%

Green Peas Monggo Corn Jicama/Singkamas Ampalaya Ginger Total

37 29 97 18 4 1 475

7.79% 6.11% 20.42% 3.79% 0.84% 0.21% 100.00%

What vegetables do you think will be appetizing to you as a biscuit?

Green Peas
Monggo Corn Jicama/Singkamas

In the survey questionnaire, the respondents ranked which vegetables they wish to try as a flavor of ice cream. This will help the researchers to identify what vegetables are possible flavors of their biscuits

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Computation of Supply (a) (b) (c) Estimated Customers Sari-sari stores selling biscuits bought biscuits per hour customers who bought biscuits per 5 hours bx5 JOY DONOR'S STORE 4 3 20 15 35 Estimated customers per day (d)

C.L. VERGARA'S STORE

35 60

25

R.M. SALUD STORE

6 7

30 35

65

C.B.C. SARI SARI STORE

45 70

25

ALDAY SARI SARI STORE

30 45

15

4 EHRISSA SARI-SARI STORE 3

20 35 15

21

J. MERLAN STORE

4 6

20 30

50

AUNALD SARI-SARI STORE

10 45

7 Total Supply

35 405 Number of Sari-sari

Baranggay Brgy, 81 - Morning Breeze Subdivision Brgy, 93 - Grace Park, Caloocan Brgy, 11 Sangandaan Brgy, 147 - Bagong barrio Average

stores 17 11 15 19 15.5

Computation of Total Supply Average biscuit sold by Sari-sari stores/day Approximate no. of sari-sari stores within South Caloocan Total Supply 129,642 2,542 51

The researchers conducted an observation for two days, January 11 and 12, 2013. The total supply is computed by getting the average biscuit sold per day based on observed sari-sari stores which is 51 biscuits/day (405 divided by 8) and multiplying it to approximate no. of sari-sari stores within South Caloocan 2,542 (Acquired from multiplying the average number of sari-sari stores/baranggay by 164 baranggays in South Caloocan. Based on these data, the competitors can supply 129,642 biscuits per day.
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Market Share Analysis Every business must determine their market share that will serve as basis of marketing strategies of the establishment. It will define the extent of market that we need to satisfy. Out of the total available market which is 13.73%, we made our capacity to supply based on our resources. We have 2 baking oven and 2 dehydrators and 100 pieces of biscuits requires approximately 1 hour and 30 minutes of preparation. Our business hour is 10 days. And we got 1,780 packs of biscuits based on our capacity which is 10% of the available market as shown in the graph. Therefore market share is computed by dividing the capacity to supply to the available market. They all increase by 2.37% every year following the population growth rate of the city.
Year 2013 2014 2015 2016 2017 2018 2019 Projected Growth 2.37% 2.37% 2.37% 2.37% 2.37% 2.37% 2.37% Market Share 10.00% 10.24% 10.48% 10.73% 10.98% 11.24% 11.51%

Note: Capacity to produce annually: 469,999 packs Projected Demand and Supply Based on the completed demand and supply, the competitors have an unfilled demand of 17,803 per day. The researchers estimated their projected demand of (7,797 x 25%=1,949.25= 1,950) packs of biscuits a day based on their estimated production capacity. Based on an interview conducted with an owner of sari-sari store, their peak sales is on weekdays where students are going to schools.

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Year 2013 2014 2015 2016 2017 2018 2019

Demand 147,445 150,939 154,516 158,178 161,927 165,765 169,693

Supply 129,642 132,715 135,860 139,080 142,376 145,750 149,205

Demand Supply Gap 17,803 18,225 18,656 19,099 19,551 20,015 20,489

The demand and supply bases of 147,445 and 129,642, respectively for the computation of projections were based on the observation by the researchers conducted on January 11 and 12, 2013, 8:00 AM and 4:00 PM which is the time when biscuits are mostly bought for snacks.

The researchers were able to compute for the projected supply and demand for the next 7 years using the information gathered. According to the demographic data published by Caloocancity.gov.ph, the population of the city increased at a compound annual growth rate of 2.37% between 2005 and 2010. Following the 5-year projection, there will be a percent increase in sales for the next seven years following the 2.37% growth in the first seven years. Using the data, the researchers followed the trend. Projected supply and demand for 7 years was computed by increasing the first seven years by 2.37%.

Product Survey Survey Results No. of Respondents Below 13 Years Old 13-22 Years Old 23-32 Years Old 33-42 Years Old 25 71 61 39 Percentage 8.49% 23.70% 20.46% 13.08%

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43-52 Years Old 53-62 Years Old 63 years old and above TOTAL

47 39 17 300

15.52% 12.96% 5.80% 100.00%

Survey Results
5.80% 12.96% 23.70% 15.52% 13.08% 20.46% 8.49% Below 13 Years Old 13-22 Years Old 23-32 Years Old 33-42 Years Old 43-52 Years Old

The age bracket of the respondents is considered in determining the target market because peoples interest and lifestyle change as they age. According to the survey, out of 300 respondents, majority of them are the youth. In that case, the youth are the ones who are not afraid of trying new things or experimenting, like new food products. No. of When hungry, what snack do you prefer? Cupcake Chips Bread Biscuit TOTAL respondents 66 51 59 124 300 Percentage 22.03% 17.03% 19.57% 41.36% 100.00%

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When hungry, what snack do you prefer?

41.36%

22.03% 17.03% 19.57%

Cupcake Chips Bread Biscuit

The respondents were asked what snacks they prefer in order to estimate the potential buyers of the product. In accordance with the survey, out of 300 respondents, majority of them prefer biscuits. It proves that biscuits are driven by its growing appeal; therefore, it is treated as a wholesome snack option, and perhaps a healthier substitute to sweet treats such as sugar and chocolate confectionery. No. of Do you eat biscuit? Yes No TOTAL respondents 300 0 300 Percentage 100.00% 0.00% 100.00%

Do you eat biscuit?

Yes No 100%

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From this question, the researchers were able to narrow down the number of respondents who really biscuit although they prefer other types of snacks based on the preceding question. But the 100% result will not be used in the analysis of demand. No. of How often do you eat biscuit? Daily 2-5 times a week Occasionally/Rarely TOTAL respondents 105 184 11 300 Percentage 35.13% 61.22% 3.66% 100.00%

How often do you eat biscuit?

What factors do you consider in buying biscuits? Taste Brand or name Price Flavors Amount of servings Presentation/Packaging Nutritional content No. of respondents 1002 1488 1459 1340 1491 1768 1662 Weighted Average 3.34 4.96 4.86 4.47 4.97 5.89 5.54

Ranking

1st 4th 3rd 2nd 5th 7th 6th

The respondents were also asked how often they eat biscuit in order for the researchers to at least have an idea of the demand for the product. Determining how often the respondents, or the potential customers, buy biscuit will tell if the demand for biscuit is consistent.

What factors you consider in buying biscuits?

5.89

4.47

Total Ranking (Taste) Divided by: Number of respondents *Weighted Average

1002 300 3.34

**Ranked from lowest (first thing to consider) to highest (last thing to consider). Some factors are considered by the respondents in buying biscuits. The researchers will use this information to identify the points where they will have to improve their product.

Will you consider trying a different taste of biscuit aside from those already available in the market? Yes No TOTAL No. of respondents 232 68 300 Percentage 77.27% 22.73% 100.00%
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Will you consider trying a different taste of biscuit aside from those already available in the market?
22.73%

Yes 77.27%
No

To determine the potential customers are willing to experiment a variation of biscuits, the researchers inquired if the respondents can try different flavors of biscuits aside from those that are already available in the market. Will you try biscuits made from vegetable flour? Yes No TOTAL No. of respondents 176 56 232 Percentage 75.67% 24.33% 100.00%

Will you try biscuits made from vegetable flour?

24.33%
Yes 75.67% No

The researchers asked if the respondents will try biscuits made from vegetable flour to tell if they are that health conscious.
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How much are you willing to pay for a 25g pack of vegetable biscuit? Php 6 8 10 12 TOTAL

No. of respondents 96 87 30 18 232 Percentage 41.59% 37.71% 13.12% 7.57% 100.00%

How much are you willing to pay for a 25g pack of vegetable biscuit?
7.57% 13.12% 41.59% Php 6.00

Php 8.00 37.71%

How much are you willing to pay for a 200g pack of vegetable biscuit? Php 45 47 49 51 TOTAL

No. of respondents 101 94 30 6 232 Percentage 43.59% 40.73% 12.96% 2.73% 100.00%

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How much are you willing to pay for a 200g pack of vegetable biscuit?
12.96% 2.73% 43.59% 40.73% Php 45.00 Php 47.00 Php 49.00 Php 51.00

The costing of the product is also considered by the researchers by asking the respondents how much they are willing to pay for a particular serving of vegetable biscuits. This will serve as their basis on up to what price the researchers can sell their product that the customers are willing to buy.

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