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HOLY ANGEL UNIVERSITY

SCHOOL OF ENGINEERING AND ARCHITECTURE

DEPARTMENT OF INDUSTRIAL ENGINEERING

REVISED MARKETING TERM PROJECT

Submitted by:

Yutuc, Angelo T.

Miranda, Jolyna Kae R.

Mutuc, Kathlyn B.

Submitted to:

Engr. Kim Serrano

03 - 21 – 2017
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COMPANY PROFILE: LA VADA CO.

I. COMPANY BACKGROUND

To accommodate the laundry services of the growing population of Angeles City, three

college students have decided to put up a laundry business that not only offers washing

of clothes, but also picking-up the unwashed articles from the client’s location or place of

residence, cleaning them in our laundry shop with the best mix of customized and

standard services, and delivering the freshly-cleaned articles back to the customer’s

place.

The idea sprouted as an answer to the proprietor’s own demands - a convenient way of

getting their clothes washed that is free from the hassles of commute and traffic qne from

carrying loads of clothing to and from any laundry shops.

In 2017, Jolyna Miranda, Angelo Yutuc and Kathlyn Mutuc established La Vada Co. - a

laundry service that let’s you take care of your lives while it takes care of your clothes.

II. MARKETING PLAN

1. Product Description:

La Vada Co. offers convenience by cleaning the customer’s clothing articles while also

taking care of the transport of said articles. Aside from the typical services that a cleaning

shop offers, the business introduces their customers to a new option of call -in, on-

demand service. La Vada Co. offers laundry, press and fold and dry clean.
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2. Uses Of The Product

The main purpose of the service is to offer cleaning, pressing and folding of clothing

articles and other fabric/garments including beddings.

3. Target Market

La Vada Co. intends to serve all people within Angeles City mainly those that are

occupying apartment spaces and dormitories. These customers usually do not have

sufficient time and enough space in their place to accomplish their laundry and to dry

them.

There is no specific age requirement due to the nature of the service which is a needs -

based catering all ages. The minimum requirement is capacity to pay and use the service

as well as accessibility of location applicable to pickup and delivery services.

Young professionals who are too active and busy typically have a filled schedule,

students of colleges and universities as well as residents are also part of the target

market. Angeles City is a metropolitan area of almost four hundred thousand residents

and where people from all over the region flock for work and studies, these same

individuals typically do not have the luxury of time and resources to get their laundry

doe by themselves, thus, La Vada Co. is here to serve them.

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a. Angeles City Population

The 2015 Census of population by the Philippine Statistics Authority [PSA] registered

the following values:

Table 3. Population by Province/Highly Urbanized City:

Region III - Central Luzon
(Based on the 2000, 2010, and 2015 Censuses)

Population (in thousands)

Province/Highly Urbanized City
2000 2010 2015

Aurora 174 201 214

Bataan 558 687 761
Bulacan 2,234 2,924 3,292
Nueva Ecija 1,660 1,955 2,151
Pampanga (excluding Angeles City) 1,615 2,014 2,198
Angeles City 268 326 408
Tarlac 1.069 1,273 1,366
Zambales (excluding Olongapo City) 434 534 591
Olongapo City 194 221 233

b. Projecting 2016 Population

Based on the 2% population growth rate, a 2016 population was computed as:

(2015 Population)*(Growth Rate)

(408,885)*(1.2) = 417,063

Therefore, the target market population (N) to be used for this marketing

research is the projected population for 2016 of 417,063

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c. Marketing Strategy:

No other laundry shop business within Angeles City yet offers delivery and pick-up

service. The idea is inspired by services that already offers this solution such a water

refilling stations and gas delivery services. One of the marketing strategy is to offer

pickup and delivery service. Not only does it offer convenience but it also allows greater

exposure for the business. Whenever a delivery personnel roam the streets and

highways of Angeles City bearing the company’s name and logo, marketing via

advertisement is established. Additional service feature includes offering customers the

choice of their own detergent soap and fabric conditioner instead of sticking with the

usual laundry soaps majority of the shops within the market area use.

4. Demand Modeling

Demand Modeling shows the factors of how we came up with our chosen target markets.

We chose Region 3 in the Province of Pampanga specifically in Angeles City as our

target market place because we are currently living here, therefore it won’t be hard for us

to travel from another place just to build the business that won’t be ideal for a starting

business like ours. But someday maybe, if we became successful we will consider

branching out of town.

Segmentation:

 People in the residential areas who earns greater than or equal to 300k annually, and

also the people in commercial areas who are currently living in dormitories or

apartments, can be employed, students or family as our target population because we

think these people are the ones who most likely to avail laundry services like the

service that our proposed business will offer.

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 Fluff and Fold is the main service that offered. In this service clothes are picked

directly from a customer’s home and delivered back to them after cleaning and drying

them then folded nicely. The three competitors that considered are those that offered

dry cleaning, in which clothes are cleaned with a chemical solvent rather than water,

next is the Laundromat which is a machine-system based on front-loading washer

instead of top-loader so that if you are about to dry your clothes less energy will be

consumed. Lastly those that offer in-house laundry where they will sent someone to

a client to offer laundry service or can also be a maid.

 StarbizHub (2014) reports that laundry care generated positive current value growth

in 2015, although at a slower pace than during 2014. The growth potential of laundry

business remains limited as increasing numbers of consumers have started to shift to

more effective ways. The rising sophistication of Philippine consumers and rising

education levels among the country’s population remained among the key

contributors to the increased willingness to try out new ways or products in laundry

service. Rising environmental concerns also saw Filipinos becoming more interested

in the various different types of laundry care products, with some moving towards

concentrated detergents as a more environmentally friendly option.

 Self-service facilities, wash-and-fold service and dry cleaning businesses are typically

family-owned and operated, though there are some bigger chains. There are

approximately 33,000 businesses in the segment with revenue of about $11 billion in

2015. Dry cleaning businesses have suffered in recent years as clothing has become

easier to care for but some innovative models and specialty offering such as green

cleaning are showing promising growth.

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Service Factors:

Laundry soap and fabric conditioner:

 We will assess what variety of laundry soaps and fabric conditioners are

customers up to. This is to set a particular range of choice that our customers can

choose from as a way of attracting brand-loyal customers.

 Included in the survey is the customer’s perception of quality attributes each

brand has for them. This will be in a form of ordinal ranking (e.g. first to fifth)

when it comes to fragrance, whitening, color care, etc. we noticed that different

client perceives quality differently, so knowing the majority of users inclined to a

certain product attribute will give us a better idea which brands to include.

How clothes are tendered:

 This is to know if customers prefer getting their unwashed clothes picked -up

from their location such as dormitories, apartments, household, office, etc. at a

certain fee as opposed to commuting them to shop. This also includes knowing

whether customers also prefer delivering the washed clothes or articles to their

dormitories, apartments, household, and office at a certain fee.

 Or whether they prefer walk-in place (if a convincing number of majority chooses

this, the choice of location for the business will be impacted to accommodate

shorter commute).

Options for Rushed Service

 Some people want their laundry done quickly, such as students who go home on

weekends and return on Monday and want their clothes ready right away. We

would like to assess via survey what fractions of the potential customer

population are willing to pay extra for an overnight or over-the weekend- laundry

at a certain fee.
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Promotion Factors:

 We will ask survey participants what media of information they are most likely to

utilize- social media, radio announcement/advertisements, regional or local TV

network, banners and billboards, pamphlets or leaflets, SMS messaging and others to

see how we can penetrate further in promotions.

 We will engage the participants in choosing the best catchphrase among a list of

choices to see what the majority prefers. This is important because the more people

appreciate the catchphrase then the better our business is remembered and

associated with their laundry needs.

Place Factors :

 The location aspect will be tied with how participants want tender and receive the

laundry. If a convincing majority prefers walking-in, then we will select a location

closest to the most universities and residence to be more accessible but will need to

invest more on other factors. We would like to ask participants if the settings

(cleanliness, aesthetics, etc.) affect their choice of laundry shop (for walk-in

customers).

Pricing Factors:

 We will include in the survey whether participants are willing to spend more on other

services such as delivery, pickup and customized laundry products such as soap and

fabric conditioner. Included in the survey is whether customers are interested in

package-deals and discount so they can save up money especially if they are

repeat/frequent customers. This includes a monthly or annual standard fee so that all

their pick-ups and/or delivery fees are waived (like a service plan). This way, they no

longer need to pay a certain fee every time they want their laundry picked up and

delivered.
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Survey Questions Explanations

With less time to do chores as a way of maximizing our time, effort and convenience, on-

demand are on the rise. With a few questions below, please let us know your thoughts

about services that are on-demand such as laundry shop:

1. Which do you prefer, washing your own clothes or taking them to a laundry

shop?

- We will attempt to discover if our service has a market in the area, and how big the

market will be.

- We aim to get as much laundry shop choices because it means we have a greater

chance to grab demands.

2. Do you find commuting around Angeles City convenient?

- This question aims to know what fraction of the population finds commuting

inconvenient and may opt a pickup and delivery service.

- If the answer is yes, we can position our pickup and delivery service as a solution to

inconveniences experienced during walk-ins.

3. If you are a laundry shop customer, do you plan in switching to another shop if

you are offered a pickup and delivery service?

- We want to establish an understanding of customer’s potential to direct their business

to us.

- Yes answers are anticipated because it means we have a chance to penetrate the

competition.

4. Do you frequently utilize online/SMS to make orders?

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- This question will help determine the mode of transactions our potential customer

prefer, and how we will receive their orders to pick-up and deliver their laundry.

- If the majority answer “yes”, it means we can utilize available online or SMS modes of

communication to interact with customers. This will allow faster response from us and

quicker feedback from them.

5. Do you prefer receiving notifications like SMS, when your laundry is about to be

delivered?

- To factor inconvenience, we want to know how to notify customer that we are on our

way or outside their door when making a delivery or pickup.

- If the answer is yes, we can make better time management plan to save wait time.

6. Which do you prefer: cash-on-delivery or pay-upfront?

- We wanted to know the payment method our potential customer prefer.

- Either result is acceptable but somehow will help us to decide what payment are to be

offered.
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SURVEY RESULTS

WILING TO AVAIL A LAUNDRY SHOP WITH DELIVERY AND PICK-UP SERVICE

Income/Allowance Range

Row Labels

No 27

375 to 1000 per day 2

greater than 1000 pesos per day 17

Minimum wage 375 pesos/day or less 8

Yes 455

(blank) 19

375 to 1000 pesos per day 100

greater than 1000 pesos per day 138

Minimum wage 375 pesos/day or less 198

Grand Total 482

Owns a personal vehicle or Family vehicle

Row Labels

No 27

Yes 455

Grand Total 482

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Place of Residence

No 27

(blank) 2

Amsic 5

Capaya 2

Clark 2

Cutud 2

HAU 4

L&S Subdivision 4

Pandan 2

Sapalibutad 2

Sto. Rosario 2

Yes 455

(blank) 19

Angeles city 2

Anunas 2

Bagong Silang 2

Balibago 8

Clark 23

Clark Field 1

Clarkview 2

Claro M Recto 2

Cuayan 2

Cutcut 10
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Cutud 32

DecaClark Residence & Resort 2

Essel Park 2

HAU 36

Holy Angel Village 1

L&S Subdivision 2

Lourdes sur 2

Mabalacat City 1

Malabanias 3

Maligaya 2

Mangga 2

Margot 9

Marisol 15

Mining 6

Near SM 2

Nouveau 4

Pampang 10

Pandan 8

Pulung Cacutud 44

Pulung Maragul 17

Pulungbulu 6

Punta Verde 8

Salapungan 4

Sameerah 8
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San jose 4

San nicolas 2

Santo Domingo 2

Sapalibutad 112

Sm Clark 2

Sta teresita 6

Sto rosario 3

Sto. Domingo 2

Sto. Rosario 16

sunset valley homes 2

Tabun 2

Villa Angela 2

Villa Gloria 1

Grand Total 482

Rating On Angeles City Traffic

No 27

Satisfactory 11

Unsatisfactory 16

Yes 455

Satisfactory 94

Unsatisfactory 359

Grand Total 482

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Status

No 27

Employed 13

other 2

Owns a business 6

Student 6

Yes 455

(blank) 2

Employed 183

other 30

Owns a business 64

Pensioner 2

Retired 1

Student 173

Grand Total 482

How Clothes are washed

No 27

I pay others to wash them for me 15

I wash them by myself 12

Yes 455

I pay others to wash them for me 120

I wash them by myself 335

Grand Total 482

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Payment Preferences

No 27

Pay after the service is rendered 17

Pay right upfront 10

Yes 455

Pay after the service is rendered 231

Pay right upfront 224

Grand Total 482

Willing to avail a laundry shop with delivery and pick-up service

Row Labels

No 27

Yes 455

Grand Total 482

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5. DEMAND ANALYSIS

a. Computation of Sample Size:

Target Population: Angeles City

2015 Census of Population retrieved from PSA.gov.ph

Angeles City = 408,885

Based on the 2% population growth rate, a 2016 population was computed as:

(408,885)*(1.2) = 417,063

b. Sample Population:

N = Population

n = sample

e = margin of error

Slovin’s Formula:

n = N / 1 + (N)(𝑒 2 )

n = 417,063 / 1 + (417,063)(𝟎. 𝟎𝟓)𝟐

n = 400

c. The sample size is computed to be 400 survey participants.

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d. Best Case Scenario Demand Analysis

Survey on willingness to avail a laundry shop with pickup and delivery service

 Willing 455

 Not Willing 27

 Total Respondents 482

Based on the survey, 94.39% expressed willingness to avail the service, while

5.6% did not show interest.

Best case scenario Willing to avail the service

Demand 94.39% of population or 393,667 persons

e. Worst Case Scenario Demand Analysis

Survey on how clothes are washed

 Pay others to wash 285

 Wash by themselves 197

 Total Respondents 482

Only 62.33% are willing to pay others to wash their clothes with pay, while 37.37% are

more into washing their clothes by themselves.

Demand - 62.63% of population or 246,554

f. Best Versus Worst Case Scenario:

Best 393,667

Worst 246,554

Difference 147,113
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6. SUPPLY ANALYSIS

Kilos per customer

Fabric Conditioner
Customers per day

Preferred Brand

Preferred Brand
Price Per Kilo

Press and Fold

Soap/Detergent
Laundry Shop

Dry Clean
Laundry
Soak and Relax 28 25 6 1 2 3 No - No -
Breeze Laundry Shop 28 20 8 1 2 3 No - Yes Downey
FB Cloth and Brakers 30 20 10 1 2 3 No - No -
Big Bubbles 27 30 20 1 2 3 No - No -
Biscuits 27 15 10 1 3 2 No - No -
Unfold 28 15 5 1 2 3 No - No -
Sto. Rosario 30 10 5 1 2 3 No - No -
French Self Service 34 10 7 1 2 3 Yes Surf Yes Surf
Laundry Sure 27 50 12 1 2 3 No - Yes Downey
Comfy and Warm 27 20 8 1 2 3 No - No -
AVERAGE 29 22 9 1 2 3 No Surf No Downey

Daily Sales Average = S (Price/Kilo * kilo/customer/day * customers/day)

= (29 * 9 * 22) = Php. 5,959.59

Annual Sales = Daily Sales * 52 weeks * 5.5

= (5,959.59 * 52 * 5.5) = Php. 1,600,338.74

7. DEMAND VERSUS SUPPLY ANALYSIS

TYPE DEMAND SUPPLY GAP (Unsatisfied Customers)

BCS 3,543,003 1,600,338.74 1,942,665

WCS 2,218,986 1,600,338.74 618,648

Difference 1,342,017
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PORTER’S FIVE FORCES MODEL

In any industry, five competitive forces dictate the

rules of competition. Together, these five forces

determine industry attractiveness and profitability,

which managers assess using these five factors:

1. THREAT OF NEW ENTRANTS. How likely it is that new competitors will come into the

industry?

 Money is essential in starting a business. In the laundry services, capital of about

Php. 500,000 and higher is often required to purchase equipment/machines

necessary for the laundry operation and in purchasing or leasing office and

operation space. This amount is relatively high for most start-up.

 Unlike other services or brands, there is no specific shop that dominates the

laundry services, especially in Angeles City.

 Per the Mayor’s Office - Business Permit Division, there are no restrictions on how

many laundry shops can be established in certain areas. Thus, a start -up can

sprout anywhere in the city. As with other business, only the necessary permits

are required and there are no other special permits or merits to apply for.

2. THREAT OF SUBSTITUTES. How likely is it that other industries’ products can be

substituted for our industry’s products?

 Customers typically go to the laundry shops nearest them and do not necessarily

consider a specific shop. Therefore, a shop that is more strategically located is on

the advantage.
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 Majority of laundry shops offer the same services and use non-commercial

detergent brands, which reduces variety in services offered. Most shops do not

have a specific identity which makes it likely for customers to try new shops

 There is no strong market leader in the laundry services in Angeles City that can

impose retaliation on small or start-up shops.

 Customers can switch with ease to start-ups because there are no special tie-up

or membership with Laundry shops

3. BARGAINING POWER OF BUYERS. How much bargaining power do buyers (customers)

have?

 Most customers are individuals, so there is no direct buyer influence in terms of

price. This means there are no “powerful” customers who can dictate the prices

of the services offered.

 Most students and employed individuals who rent space in Angeles City avail of

laundry services for convenience.

 Switching to other laundry shops is not complicated or costly.

 Customers can wash their clothes by themselves, or take it home so a family

member or relative can wash them up. Therefore, if the price is too high or is

considered unreasonable, they may as well not avail the service.

4. BARGAINING POWER OF SUPPLIERS. How much bargaining power do suppliers have?

 There is a wide array of supplier of materials necessary for the laundry business

operation. If the current supplier demands a higher charge in their materials, it is

easier to find a substitute or other supplier.

 It is possible to engage in tie-ups with providers to ensure stability in prices and

supply.
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 Angeles City has many supermarkets and specialty stores that sell laundry

products as well as laundry equipment. If there are issues or concerns, it is easy

to just go to these locations to purchase the needed supplies.

5. CURRENT RIVALRY. How intense is the rivalry among current industry competitors?

 Customers typically go to the laundry shops nearest them and do not necessarily

consider a specific shop. Therefore, a shop that is more strategically located is on

the advantage.

 Majority of laundry shops offer the same services and use non-commercial

detergent brands, which reduces variety in services offered. Most shops do not

have a specific identity which makes it likely for customers to try new shops

 There is no strong market leader in the laundry services in Angeles City that can

impose retaliation on small or start-up shops.

 Customers can switch with ease to start-ups because there are no special tie-up

or membership with Laundry shops

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8. QUALITATIVE FACTORS AFFECTING DEMAND AND SUPPLY

1. Demographic Environment

Demographic Environment relates to the human population with reference to its size,

education, sex ratio, age, occupation, income, status etc. Business deals with people so

they have to study in detail the various components of demographic environment.

Demographic environment differs from country to country. Demographic factors like

size of the population, age composition, density of population, rural -urban distribution,

family size, income level, status etc. have significant implications on business.

For example: If the population is large, then the demand for goods and services will be

more. It will have favorable effect on the business. In the same way educational level is

also an important factor affecting business.

2. Economic Environment

Economic factors can have both positive and negative impacts on the clothing industry.

During economic boom periods, people have more disposable income. Hence, they may

buy more clothing, increasing sales for clothing manufacturers, wholesalers and

retailers. However, recessions have the opposite effect. Sales for these various clothing

entities may be significantly lower. Consequently, retailers may be stuck with large

amounts of inventory. And they may have to sell the clothing at substantially reduced

prices. Clothing manufacturers and retailers may also need to sell lower-priced clothing

brands to compete with more generic brands. Consumers often shop for cheaper brands

when they have less disposable income.

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3. Natural Environment

Resource availability like land, water and mineral is the fundamental factor in the

development of business organization. It includes natural resources, weather, climatic

conditions, port facilities, topographical factors such as soil, sea, rivers, rainfal l etc.

Every business unit must look for these factors before choosing the location for their

business.

The natural environment largely determines the functioning of a business firm. Natural

environment has a great influence on the working of a business. The business

organization should consider the natural factors before starting their operations.

Natural calamities like flood, drought, cyclone, Tsunami etc. can also affect the business

environment.

4. Technological Environment

Technology has brought about far reaching changes in the methods of production,

quality of goods, productivity, and packaging. There is a constant technological

development-taking place.

The business firm must constantly monitor the changes in the technological

environment, which may have a considerable impact on the working of a business. It also

indicates the pace of research and development and progress made in introducing

modern technology in production.

Technology provides capital intensive but cost effective alternative to tradit ional labor-

intensive methods. In a competitive business environment technology is the key to

development. Technology helps to run the business better and faster

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5. Political Environment

A number of legal and political macro environmental factors affect small businesses in

the clothing industry. The industry has repeatedly been affected by issues such as

workers' rights and child labor laws. Union workers in clothing manufacturing plants

may picket their employers, especially if their wages or medical benefits are less

favorable than workers in comparable industries. Workers picketing their clothing

employers impacts production. This can cause delays for retailers in getting spring or fall

fashions on time. Activists who are not employed by the companies may also picket

retailers who purchase clothing from countries known for violating child labor laws. This

negative publicity may impact a small clothing retailers' sales and profits. Also, a trade

embargo against another company's imports would force clothing wholesalers to find

different suppliers.

6. Socio-Cultural Environment

Culture involves knowledge, values, belief, morals, laws, customs, traditions etc. Culture

passes from one generation to another through institutions like family, schools, and

colleges. Business is an integral part of the social system.

Society is largely influenced by the culture and in turn culture influence the business

firm. Culture shapes the attitude and behavior of the society. Any change in the cultural

factor affects the business in large. Business should be organized and governed, taking

into consideration various values and norms of the society.

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9. MARKETING PROGRAM

a. Product Decision
Product Mix

The product mix will include common services offered by most laundry shops –

wash, press, fold, dry clean. Various types of washable articles such as clothing,

bedding, jeans, curtains and other wearable will be catered.

Product Feature

The laundry service offers water-based wash, water-soluble detergent soaps and

fabric conditioner. Due to cost measures, the business will not utilize organic

materials instead commercially available products

Branding

The Company Logo is derived from the

initials of the proprietors – MYM for

Mutuc, Yutuc and Miranda.

The color choice is blue which

symbolizes our most important

resource – water. It is also premium

color typically associated with

cleanliness. The gold color is a symbol

of high standards and quality, just like gold metal that is valued pristinely.
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Product Logo – The product logo has symbols that can easily be associated with laundry

services – wash machine and bubbles. The wash machine in clip art form makes it appear

friendly and simple, the bubbles suggest cleanliness and fragrance. The font style is a

playful Footlight MT Light in pink to appeal to the caring side of the viewers.

Quality Level

The quality level will be assessed by imposing checklist and start of day inspection. Since

laundry business deals with cleanliness and our brand promise is to free our customer’s

clothes from dirt and stain, we want to ensure that the business itself adheres to quality

standards,

Auxiliary Services

Lost or damaged clothing article will be replaced or paid as long as they are declared upon

tender to the shop or to our pickup and delivery personnel. Clothes that are not

thoroughly cleansed will be washed at no extra cost to the customer.

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b. Pricing Decision

Pricing Objective

The pricing objective is to maximize profit, thus; the unsatisfied demand based

on the demand versus supply analysis will be used as the basis for the pricing

computation. The objective is to secure profit and achieve a reasonable payback

period. With a maximized profit, the company can secure expansion and future

investment.

Pricing Procedure

Demand Based on the demand versus supply analysis, the unsatisfied demand is

147, 113.

FIXED COSTS

PRODUCT DEPRECIATION
TYPE UNIT COST LIFE COST TOTAL
80
Commercial Space sq.m. 25,000 25000
Machines and Equipment 8 13958.34
15000
Industrial Wash Machine 3 0 8 years 1562.5 1562.5
Tumble Drier Cup 2 40000 8 years 416.67 416.67
Vacuum Press 2 30000 8 years 312.5 312.5
Steam Generator 1 10000 5 years 166.67 166.67
Installation Cost (5% of machine
price) 11500 11500
Personnel 50000
Manager 1 15000 15000
Skilled/Office Worker 1 9000 9000
Semi-skiled Worker 3 19500 19500
Driver 1 6500 6500
Utilities Expense 30000
Electricity 25000 25000
Maintenance (Facility,Equipment) 5000 5000
Office Supplies 5000 5000
74400
Vehicle and Transportation 1 0 4133 4133
Fuel 3000 3000
TOTAL FIXED COST Php. 128,091.34
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VARIABLE COST

Type Unit Price (Pesos) Cost (Pesos)

Powder Detergent 290.4 per kilo 50 14520
Fabric Conditioner 290.4 per liter 110 31944
Packaging 435.6 per piece 5 2178
Water 143.748 per cubic meter 48 6899.904
Total Variable Cost Php. 55,541.90

FIXED COST = 128,091.34

VARIABLE COST = 55,541.90/4356* = 12.75per kilo
*average kilo of laundry per month
UNIT SALES = 1,342,017/12 = 111,835 kilo

Unit Cost = VS + FC/US = 12.75 + 128,091.34/111,835

= 13.895 Pesos per kilo

Markup Price
10% = 13.895 / (1-0.10)
= 15.439 Pesos per kilo
20% = 13.895 / (1-0.2)
= 17.3692 Pesos per kilo
30% = 13.895 / (1-0.3)
=19.8505 Pesos per Kilo
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c. Projected Prices
The past 5 year time period price per kilo of laundry service is estimated
based from survey on laundry shops:

Year Price Per Kilo

2016 30
2015 29
2014 27
2013 25
2012 23

There is an upward trend in the prices per kilo of laundry, thus, linear
trend equation shall be used:

Time Period (T) Price (Y ) TY 𝑻𝟐

5 30 150 25
4 29 116 16
3 27 81 9
2 25 50 4
1 23 23 1
15 134 420 55

= 𝑛 𝑇𝑌 – (  𝑇)(  𝑇)
b= 𝑛( 𝑇2 )−( 𝑇)2

(5)(420) – (15)( 134)

b= 5(55)−(15)2

b = 1.8
=  𝑌 – 𝑏 𝑇
a= 𝑛
134−(1.8)(15)
a= 5
a = 21.4
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Forecast (Year6) = a +bT

Forecast (2017) = 32.2 Pesos per Kilo

Forecast (2018) = 34.0 Pesos per kilo
Forecast (2019) = 35.8 Pesos per kilo
Forecast (2020) = 37.6 Pesos per kilo
Forecast (2021) = 39.4 Pesos per kilo

d. Comparison of Prices

LAUNDRY SHOP PRICE PER KILO

Soak and Relax 28
Breeze Laundry Shop 28
FB Cloth and Brakers 30
Big Bubbles 27
Biscuits 27
Unfold 28
Sto. Rosario 30

French Self Service 34

Laundry Sure 27
Comfy and Warm 27
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10. DISTRIBUTION STRATEGIES

MARKETING CHANNELS

The four (4) steps in designing a Marketing Channel System include: (1) analysing customer

needs, (2.) establishing channel objectives, (3.) identifying major channel alternatives and (4.)

evaluating major channel alternatives.

1. Analyzing Customer Needs

Angeles City laundry services customers were assessed in various preferences:

price, product assortment, and convenience.

1.1. Price: Based on our survey (n=400), majority of the respondents are willing to pay

additional fees for better laundry services. This is specifically true among the surveyed

Income Segment-3 (300,000 Pesos or higher annually) who are typically employed

residents/renters. With this information, we can conclude most customers are not price

sensitive as long as they get the right quality for their money.

Competitive advantage of La Vada Co.: The average service price per kilo among

surveyed laundry shop competitors within Angeles City is Php. 29.00, while our offering

based on pricing computation ranges from Php. 25.58 to Php. 28.78.

1.2. Product Assortment: Laundry services customers prefer a one-stop shop for all their

laundry needs (dry clean, wash services for clothes and blankets, fluff and fold).

Therefore, offering a wide variety of laundry services allows more customers with better

option.
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1.3. Convenience: Based on the estimate of Angeles City Mayor’s Office – Local Business Unit,

unsuccessful laundry shops are those situated in areas not typically accessible by mass

public transportation. Thus, the more strategically-located and more accessible the shop

is, the more convenient it becomes for customers. Since laundry is done every certain

period such as weekly or monthly, customers would not want to carry with them kilos of

clothing in long walks. This explains why a laundry shop situated nearest the road where

public transportation passes is most likely to attract more customers.

1.4. Category Of Laundry Shop Buyers

Laundry shop customers are typically high value deal seekers based on our interview

with local shops. They would ask about discounts and other ways to make the most out

of the services they pay.

2. Establishing Channel Objectives

One unique feature of La Vada Co. is the utilization of shop-to-door, door-to-shop

delivery and pickup channel. The goal is to give a service offering that will improve

customer satisfaction by removing or reducing the need to carry their laundry to and from

the laundry shop, La Vada Co. will take care of it for them.

 Based on our survey (n=400), 77.8% rated Angeles City traffic as

unsatisfactory

 Thus, promoting a pick-up and delivery service is a major decision

breaker for customers in choosing which shop they should entrust their

laundries to.
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3. Identifying Major Channel Alternatives

La Vada Co. will utilize two types of consumer marketing channels:

3.1. 0 LEVEL – Customers take their laundries to the physical shop

Customers
La Vada Co.

3.2. 1 LEVEL – Customers schedule a pick-up for their laundry from home (door-to-shop).

Once the service is rendered, the laundry shop notifies the customer about the delivery

of the freshly cleaned laundry (shop-to-door)

Customers

La Vada Co.

4. Evaluating Major Channel Alternatives

4.1. Due to the nature of the business, La Vada Co. is limited to the choices of intermedi aries.

One possible solution is to tap establishments (e.g. dormitories) to cater their laundry

needs. Otherwise, the service is delivered straight to the customer.

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DEVELOPING EFFECTIVE COMMUNICATIONS

1. IDENTIFYING THE TARGET AUDIENCE

1.1. Target Segment Profile:

 Age & Gender. Although there is no age bracket for laundry shop customers, the

target audiences are likely 18 and older because this age range is when a person has

the financial capacity to purchase laundry services. Females, especially mothers, are

inclined to take care of the laundry. A study by the American Wash Society in 2010

revealed that 72% of laundry customers are female.

 Income Range – Audiences belonging to Income Segment 3 (>300,000/annually) of

the target population are more likely to avail the service due to stronger purchasing

power. These people are either business owners or regular employees who would

rather have their laundries done by someone else versus taking their own time in

their off days for laundry purposes.

 Residence – Customers residing in Angeles City, including students and employees

who rent spaces in Angeles City, are all audiences.

 Competitor’s Customers – Customers of other laundry shops are also part of the

audience. Since these people already avail laundry services, it is advantageous if they

decide to switch to La Vada Co. Based on our survey:

o 9 out of 10 laundry shops do not let the customer to decide the type of laundry

soap and fabric to be used in washing their articles.

o 10 of 10 shops do not offer delivery and pick-up services.

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2. DETERMINING THE COMMUNICATION OBJECTIVES

2.1. Category Need – Washing clothes is already considered a basic need. With the

proliferation of affordable and high-quality laundry products, practically anyone can

wash their own clothes. La Vada Co. will position its services as a need by:

 Highlighting that using our laundry service will give customers time for other

chores such as to attend an event, watch a nice movie or read a book rather than

tiring themselves in washing their clothes.

 The cost of washing their own clothes may be greater than purchasing La Vada Co.’s

services because they have to account water consumption, electricity (if using

washing machine and drier), detergent soaps, fabric conditioner.

To position the pickup and delivery services aka door-to-shop and shop-to-door b

service as a need, La Vada Co. will highlight that Angeles City’s traffic during peak hours

can make travelling very inconvenient. Also, instead of getting stuck in traffic, they may

instead avail of our delivery and pick-up service to save time, money and effort.

1.1. Purchase Intention - Delivery and pick-up services can be made free if a customer has

15 kilos and up worth of clothing articles. This can help encourage customers to take more

kilos to the shop.

1.2. Brand Awareness – To enhance brand awareness, the business will deviate away from

the typical shop designs of most laundry shops such as cozier waiting area for walk-in

customers, delivery and pick-up vehicle with the product logo and leaflets attached or

taped on the plastic packaging of washed clothes.

1.3. Brand Attitude – Positively oriented: assurance of clean water in washing their clothes

and helpful and friendly staff that will greet them upon entering the establishment as well

as when making pick-up and deliveries for door customers. Negatively oriented: traffic
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in Angeles city could be prevented by availing the delivery and pick-up service. Time spent

in washing their clothes can instead be devoted to other fruitful, productive tasks.

2. DESIGN THE COMMUNICATIONS

2.1. Message Strategy – Service performance will be highlighted. For example: offering a

variety of laundry detergents and fabric conditioners will enhance the results -in-use

experience impression of those who have specific product choices, which will eventually

lead them to try la Vada Co.’s service.

2.2. Message Source – Because La Vada Co. is still a start-up business and investing to a high-

profile celebrity or influencer may seem too costly, the representation of the brand will

be delivered via the image of a mother. Traditionally, mothers are the housekeepers and

the primary teachers of household tasks. Therefore, advertisements bearing a person will

have the character of a neat clothes-loving mother (mother-like) to build trust and

comfort.

2.3. Creative Strategy – The use of clothes hangers, wash machines and bubbles in

advertising and promotions will relate the business to the nature of services. Hanging

posters bearing the business name and contact information in hangers, for example, will

make a viewer think of his or her laundry.

3. SELECTING THE COMMUNICATION CHANNELS –

3.1. Personal Communication Channels – Staff of the laundry shop, especially the receiving

clerk and the delivery and pickup personnel will establish personal communication eve ry

time they interact with customers. They need to appear neat and fresh just as how the

business wants to be known for.

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3.2. Mass Communication Channels – Focusing more on print ads such as leaflets, pamphlets

and billboards that people can easily keep or look at. Call cards will a lso be distributed

bearing the business’ name and number. They may keep them in their wallets for future

use.

4. ESTABLISHING THE TOTAL MARKETING COMMUNICATIONS BUDGET

The ultimate goal of La Vada Co. is to serve the unsatisfied demand based on our supply versus

demand computation which means to maximize the profit. However in our Porter’s Five Forces

scale, we registered a moderate to high risk from the five categories. Therefore, to achieve the

goal, the marketing communications must be intensified.

4.1. Competitive Parity Method – The top competition based on our survey is Laundry Sure

that serves 50 customer per day at 12 kilos per customer, or 60 kilos of laundry per day.

Because of their location in Sto. Entierro Road, they have secured a spot to advertise their

brand where other business would typically pay extra for an ad space. By targeting side-

road advertising, we will reach more viewers and potential customers.

4.2. Percentage Of Sales – As a startup, it is important that the flow of funds must be

controlled while also the marketing budget should not be taken for granted. One way to

secure a better marketing budget is to allot 15% of sales to marketing on the first month,

12% on the second month and 10% fixed up to ROI.

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5. DECIDE MEDIA MIX

5.1. ADVERTISING

5.1.1.1. PARTNERSHIPS AND SPONSORSHIPS

5.1.1.1.1. Sponsorship

Community service and engagement is a prime factor in winning the community’s

hearts. Partnering with government and non-government organizations (NGO) in

their effort to help the community can be done while also promoting the brand:

 DSWD – The Department of Social Welfare and Development Angeles

City Division actively assists in the civic affairs in the city. Clothing

donations are typically distributed to homeless or those who evacuated

due to weather conditions. By offering to wash the clothing donations for

free, a sense of community service is extended to both the government

agency and to the recipients of the cause.

 Teen Information Center (TIP) – This unit helps teenage population by

educating them about sex education, guidance counseling, arts and

recreation and more. One of their costs is in keeping their laundry and

beddings clean. La Vada Co. can help out by sponsoring their laundry

services needs.

5.1.1.1.2. Promotional Partnership

Partnership with leading laundry detergent and fabric conditioner sellers including

supermarkets, grocery stores, and department stores will be established.

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In an interview with Johnny’s Supermarket located in Balibago, Angeles City, the

management is open to put signages and posters in their laundry supplies isle to

promote laundry shops in exchange with free laundry of their employee’s work

uniform and aprons. While other shopping outlets and stores have not been asked,

the feasibility is high because such stores and shops are go-to places for those within

our target market.

List of Identified supermarket and groceries for promotional partnership:

A-LINE SUPERMARKET FREEWAY COMMERCIAL

Mc Arthur Hwy Balibago Angeles Luna St., Angeles City, Pampanga,
City, Pampanga , Philippines Philippines

ANGELES FILIPINO ENTERPRISES JC SUPERMARKET

Rizal Street, San Nicolas, Angeles 1611 Jesus St., Angeles City,
City, Pampanga, Philippines Pampanga, Philippines

BALIBAGO SUPERMARKET JENRA SUPERMARKET

Balibago, Angeles City, Pampanga, 6014 Jesus St. Angeles City,
Philippines Pampanga, Philippines

ESSEL SUPERMARKET JUMBO JENRA SUPERMARKET

McArthur Hiway, Angeles City, Jesus St., Agapito del Rosario,
Pampanga, Philippines Angeles City, Pampanga, Philippines

EUNICIA GENERAL MCDSE. SOSES MARKETING ENTERPRISES

Apu Mart, Angeles City, Pampanga, Rizal Ext, Angeles City, Pampanga,
Philippines Philippines
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5.1.1.2. PRINT ADS – Various visual advertising method will be used to create

awareness among audiences within the target market.

TYPE PROVIDER UNIT COST AUDIENCE

Tarpaulin VCreative Prints 10 pcs. at 200 Pesos 2000 no data

Leaflets VCreative Prints 5000 pcs @ 0.50 Pesos 2500 5000

Business Card VCreative Prints 2000 pcs. @ 1 Peso 2000 2000

Calendar (single) Grapus Media 1000 pcs. @ 7.5 Pesos 7500 5000

Pen holder Grapus Media 1000 pcs. @ 7.5 Pesos 7500 7500

Printed Handkerchief VDesigns 1000 pcs @ 10 Pesos 10000 7500

Fabric Fan VCreative Prints 2000 pcs @ 5 Pesos 10000 2000

Total Php. 41,500 approx. 29,000

Therefore, the cost per person reached of print ads is estimated to be Php. 0.69875
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5.1.1.3. SOCIAL MEDIA – In a study, a typical Filipino spends 4 hours a day in

social media. Thus, this is an important communication channel to reach out

as many audience as possible.

5.1.1.3.1. Facebook Page – One of the most accessed social media site

5.1.1.3.2. Blogs – To enhance customer engagement and sharing of user

experience.

5.1.1.3.3. Instagram – To communicate in images with potential and

current customers.

5.1.1.3.4. Twitter – Offers minute-by-minute update to audience, as well

as to communicate easily with them.

5.1.1.4. SALES PROMOTION –This method includes membership where

customers can avail discounted rate (e.g. premium members). Contest to

entice excitement among customers include awarding the customer with the

most number of kilo of laundry in a month with free 10 kilos of free laundry.

Goodwill includes free press and dry clean for members who are on their way

to job interviews and students who will undergo oral defense. This intends to

foster a friendly brand impression.

5.1.1.5. WORD OF MOUTH MARKETING – Creation of a blogspot or a facebook

page will enhance the word of mouth advertising by directly engaging users

and would-be consumers in chats threads.

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PRINT ADS

POSTER/BANNER DESIGN:

CALL CARDS and LEAFLET DESIGNS

Variant 1
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Variant 2:

Variant 3:
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SOCIAL MEDIA CHANNELS:
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APPENDIX

Name (Optional)
Panggalan

In what part of Angeles City do currently reside?

Saang lugar ka sa Syudad ng Angeles kasalukuyang nakatira?

We are 4th Year Industrial Engineering Students from Holy Angel University and would like you to take part in our
survey. This is as part of our data collection for a start-up laundry business with pick-up and delivery services. Your
participation is important and will be kept confidential. Your preferences wil help us come up with the best service
offerings anchored on needs, convenience and affordability.Thank you ang Gob bless!

Kami ay Ikaapat na baitang na mag-aaral ng Industrial Engineering mula sa Holy Angel University na nagnanais na maging parte
ka ng aming pag-aaral. Ito ay isa sa aming pagkalap ng impormasyon para sa isang panimulang negosyo ng labada na mayroong
hatid at sundong serbisyo. Ang iyong paglahok ay mahalaga at mananatiling kompidensyal. Maraming Salamat, Pagpalain ka!

1. What is your current status? (Ano ang iyong kasalukuyang estado? )

Employed (may trabaho ) Student (Nag-aaral)
Owns a business (May negosyo ) Pensioner (pensyionado)
Not employed or attending school (hindi nagtatrabaho o nag-aaral)

2. What is your income/allowance range? (Ano ang saklaw ng iyong kita? )

Minimum Wage (Php. 357/Daily) or less. (357 Piso kada araw o mas kaunti)
Php.357/daily to 360,000 annually (357/araw - 360,000 piso/taon)
Greater that Php. 360,000 annually (Higit sa Php. 360,000 kada taon )

3. Do you have your own car/vehicle? (Mayroon kabang sariling sasakyan? )

Yes, I/my family does (Mayroon, ako o ang aking pamilya)
None, I use public transport (Wala, pampublikong transportasyon )

4. How do you find commuting/driving around Angeles City? (Ano ang tingin mo sa antas ng transportasyon sa siyudad ng
Angeles? )
Unsatisfactory (Kaiga-igaya)
Satisfactory (Hindi kaiga-igaya)

5. How are your clothes washed? (Paano nalalabhan ang iyong damit )
I Wash them myself (Ako mismo ang naglalaba)
I pay others to wash them (Nagbabayad ako upang magpalaba )

6. If you are a laundry shop customer, would you switch to a different shop if offered a delivery and pickup service?
(Kung ikaw ay nagpapalaba, lilipat ka ba ng ibang "shop" kapag inalok ng hatid at sundo ng iyong labahi?)
Yes (Oo) No (hindi)

7. If you answered NO in Question 6, may we know why? (Kung sumagot ka ng HINDI sa ikaanim na tanong, sa anong
dahilan?)

8. How do you prefer to pay for a service? (Paano mo gustong magbayad ng serbisyo )
Pay after the service is rendered (Magbayad matapos ang
Pay right away (Magbayad kaagad)
serbisyo )

THANK YOU! / Maraming Salamat!

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REFERENCES

Business Environment: The Elements of Business Environment (April 2015). Retrieved on

January 17, 2017, from: http://www.businessmanagementideas.com/business -

environment/business-environment-the-elements-of-business-environment-1968-

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start=1106812800000&tend=1264579200000& hl=en_US&dl= en&ind=false

Philippine Statistics Authority (2015). 2015 Census of Population. Retrieved from:

https://www.psa.gov.ph/content/population-region-iii-cent ral-luzon-based-2015-census-

population

The Macroenvironment Affecting the Clothing Business Retrieved from:

http://smallbusiness.chron.com/macroenvironmental-factors -affecting-clothing-industry-

37254.html

StartupBizHub, 2016 (2009, April 27). How to start a laundry pick -up and delivery service

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http://www.startupbizhub.com/how-to-start -laundry-pick-up-and-delivery-servic e-

business.htm
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How do I start a laundry business? (2016, May 13). Entrepreneur. Retrieved January 27, 2017,

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How to start a laundry business from home (dry cleaning). 2016. MyTopBusinessIdeas

(2013). Retrieved December 18, 2016, retrieved from

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http://www.theangelescitypages.com/index3.php?page=60&name=Super markets&number =1&n

ext=1