Kai-Vegan-Pandesal-April 14 PDF

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“A FEASIBILITY STUDY OF KAI-VEGAN PANDESAL IN SAN JOSE, BATANGAS”

A Feasibility Study Presented to the Faculty of College of Engineering Architecture and Fine Arts Industrial Engineering Department BATANGAS STATE UNIVERSITY Batangas City

In Partial Fulfillment of the Requirements for the Degree Bachelor of Science in Industrial Engineering

Balbin, Kathrine May B. Cancilao, Rhea B. Gonzales, Jessa R.

May 2020

CHAPTER II MARKET STUDY The market feasibility will be the basis in determining the feasibility of a business enterprise. This chapter presents the collection of information about its potential market that can be used in analyzing how a product should be designed, delivered, priced, and marketed. A. Nature of Business 1. Name of the product The name of the product, “Kai-Vegan Pandesal” as “Kai”, short term for “kaibigan”, friend in English and “Vegan” from the founder of vegan society, Donald Watson as a statement against vegetarians who ate dairy products. KaiVegan “Pandesal” is a type of food they would love to eat because of its flavor. This was inspired by the idea of malunggay “pandesal” but Kai-vegan “pandesal” will have a twist as its own, it will have a combination of four organic vegetable flavors. “Pandesal” is the most popular local bread in the Philippines. This staple food has become part of the typical Filipino breakfast as a substitute for rice. It can also be served with a variety of spreads or fillings such as butter, cheese or jam. Nowadays, some bakeries sell “pandesal” not only for breakfast but also as a snack at any time of the day. The trend toward innovation plays a vital role in enabling bakeries to offer more value-added “pandesal” varieties and compete in the market.

Because of this, the classic “pandesal” is being reinvented by the bakers so that they can offer healthier and better tasting options.

2. Properties of the Product Kai-Vegan “Pandesal” is a healthy staple food as part of the Filipino breakfast and also a snack at any time of the day. This product consists of the following raw materials: flour, yeast, sugar, salt, milk, squash, sweet potato leaves, string beans and bitter melon. These “pandesal” is slightly sweet taste and a fluffy texture. Figure 1 Nutritional Facts of Kai-Vegan Pandesal

Source: Mrs. Diana T. Manalo, RND (certified and verified), see appendix for reference

This is a low Caloric product, is an excellent source of Iron and Beta- Carotene. It is low in Carbohydrates, Fat and Protein and Dietary

Fiber. It is not a source of vitamin A and vitamin C and Calcium. In addition, this product has low sodium and regulated amount of sugar. *No animal product/source was included in the ingredients upon computation. Figure 1 shows the nutrition facts of Kai-Vegan Pandesal that provides information about the food’s nutrient content, such as amount of fat, cholesterol, sodium, protein and other vitamins and minerals.

3. Uses of the Product “Pandesal” is a classic Filipino bread roll that is particularly eaten for breakfast. It is soft and airy and slightly sweet. Normally eaten as a sandwich with one’s favorite filling. This Kai-Vegan Pandesal will provide a product that contain a nutritious food for the consumer who doesn't eat vegetables most likely for kids who doesn’t even want to taste vegetables in any meal. Through its form, “pandesal” it is the best way to eat vegetables in the simplest way without noticing what it is made of. By simply eating this “pandesal”, the consumer will attain the nutrients that our body needed. 4. Major Users of the Product The major users of this product will be the consumer, in San Jose, Batangas, specifically ages 10 to 64 who likes to eat “pandesal”. Providing a vegan “pandesal” will contribute a nutritional factor, by its simplest form, it can be easily eaten considering its appearance and the vegetables can't be easily seen either the taste will not be far different from the ordinary “pandesal”. Since the age of 10 and above is more like a teenager's stage where kids have become a picky eater, they can eat it easily and comfortably

through this form of “pandesal”. And it's a habit for adults to eat bread or "pandesal" along with their daily morning breakfast routine. It will serve as a healthy food for the customer by providing the benefits for every vegetable contain in the “pandesal”. 5. Geographical Areas of Dispersion Kai-Vegan “Pandesal” will be established in San Jose, Batangas near to San Jose Police Station and beside of San Jose Public Market where the product can be easily noticed by the consumer. Since Kai-Vegan “Pandesal” Store will be near at the market where most of the people buy their groceries it will be easily noticed.

Figure 2. Geographical Area of Kai-Vegan Pandesal in San Jose, Batangas

B. Analysis of Market In order to determine the market demand used for the product and to fully understand the condition of the general market, the proponents conducted various techniques in gathering the information to supply the study. The proponents gathered information about the number of retailers and end users who sell “pandesal” and the number of end users specifically, the population of San Jose, Batangas ages from 1064. The data came from Philippine Statistics Authority then conducted an interview and surveys from these stores. Based on the data gathered from the Municipal government of San Jose, Batangas, the total number of retailers of the target municipal were asserted.

The sample size was then computed using the Slovin formula as shown and of the five percent (5%) margin of error.

Where

n = sample size N = total number of retailers and end

user

E = margin of error

n=

53,618

1 + 53,618 (0.05)^2 n = 397.038 ~ 398 respondents

As a result, the proponents got 398 respondents for their survey. Surveys and interviews were conducted around San Jose, Batangas for further understanding market demand regarding Kai-Vegan “Pandesal”. The proponents also reached the different stores who sells “pandesal” in San Jose, Batangas. The number of wholesalers according to Business Permit and Licensing Office of San Jose, Batangas are 19 bakeries and bakery with sari-sari store . Surveys and information were also gathered by the proponents.

Table 1 Perception of the End user Respondents

Frequency

Percentage (%)

375

94.2

Not willing to purchase the product

23

5.8

TOTAL

398

100

Willing to purchase the product

Source: survey questionnaires Table 1 indicates the percentage of end users who are willing and not willing to purchase Kai-Vegan Pandesal. Those possible end users will be those people roaming around San Jose Public Market . The data came from the survey questionnaires disseminated in San Jose, Batangas. Based on the results of the survey conducted by the proponents, a total of 375 respondents are willing to avail the product and a total of 23 people are not willing to avail the product. It gives the proof that this product is capable to compete. 1. Demand Demand is the consumer’s need or desire to own the product or experience the service. It is the willingness and ability of the customer to pay for the good or service at the price offered.

The current and future development of the business is crucial to verify if there is a demand for the product that the business wants to release. Since the customers are the one who decide whether the product gives them the same value as their money, a company must be able to assess their behavior of buying, their satisfaction, willingness and ability to buy, determine the condition of the product and if overall view of the new product will be acceptable. 1.1 Historical Demand The consumption for the past years was considered in forecasting the production capacity. Through interviews and market research in San Jose, Batangas the data and information gathered were analyzed and interpreted. The proponents used the data from the office of the City Planning and Development Coordinator that focus on the population from ages 10 to 64 multiplied by the percentage of those who are willing and the average consumption of “pandesal” through survey questionnaires, which arrived at the following figures: Table 2 Historical Demand of Kai-Vegan “Pandesal” in San Jose, Batangas Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

No. of Pandesal (in pcs) 6,307,554 6,514,743 6,721,493 6,928,097 7,134,847 7,340,866 7,548,054 7,754,804 7,946,797 8,168,304

Source: batangascity.gov.ph, survey questionnaire results Table 2 shows the historical demand for “pandesal” from 2010-2019. It shows that there is a continuous increase in consumption of “pandesal” products since 2010. The amount of demand is expressed in pieces (pcs).

9,000 8,000 7,000

Pieces

6,000 5,000 4,000 3,000 2,000 1,000 0 2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

Year

Figure 3. Historical Demand of Pandesal in San Jose, Batangas Figure 3 shows the graphical representation of the demand for “pandesal” in the past ten (10) years (2010-2019). This shows that the graph is generally upward in trend which means that there is an increasing number of potential market demand for “pandesal”.

1.2 Projected Demand Projected demand refers to the prediction of demand in the future for a product or service on the basis of the past events and prevailing trends in the present. With the aid of mathematical methods of projection, the projected demand was computed to project the future. The proponents computed the

projected demand using the four methods: arithmetic straight line, arithmetic geometric curve, statistical straight line and statistical parabolic. After computing using the four methods, projected demand’s standard deviation was compared. The lowest among all were the statistical parabolic.

Table 3 Projected Demand of Kai-Vegan Pandesal in San Jose, Batangas Year

No. of Pandesal (in pcs)

2021

8,078,678

2022

8,272,807

2023

8,466,936

2024

8,661,065

2025

8,855,196

2026

9,049,325

2027

9,243,454

2028

9,437,583

2029

9,631,714

2030

9,825,843

See Appendix for computation Table 3 shows the projected demand for “pandesal” in the next ten (10) years from 2021-2030, an increasing demand of “pandesal” for San Jose, Batangas can be shown. It is calculated through the results of the survey and the population.

12,000

Pieces

10,000 8,000 6,000 4,000 2,000 0 2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

Year

Figure 4. Projected Demand of Kai-Vegan Pandesal in San Jose, Batangas

Figure 4 shows the graphical representation of the projected demand of siopao for the next ten (10) years from 2021-2030 in San Jose, Batangas. It illustrates the continuous increase of the demand of “pandesal”. Projected demand is a significant factor in the study to be able to predict the consumption of the product. The value for the product demand of “pandesal” was obtained through Statistical Straight Line which has the ideal demand considering the standard deviation and graph among the other three methods such as arithmetic straight line, arithmetic geometric curve and statistical straight line. 2. Supply Supply is a fundamental economic concept that describes the total amount of a specific good or service that is available to consumers. Every company has a source of supply in line with the needs of their company’s product. Table below is the list of the Kai-Vegan competitors.

Table 4 List of Competitors Names of Competitors

Address

Lorezah’s Grocery and Bakery Madlang Bayan’s Bakery Maning’s Bakery and Sari-Sari Store

Makalintal Avenue, San Jose, Batangas Makalintal Avenue, Taysan, San Jose, Batangas Makalintal Avenue, San Jose, Batangas

Source: Municipality of San Jose

2.1 Historical Supply Table 5 Historical Supply of “Pandesal” Year

No. of Pandesal (in pcs)

2010

1,500,000

2011

1,535,000

2012

1,530,000

2013

1,545,280

2014

1,510,870

2015

1,535,100

2016

1,410,500

2017

1,420,500

2018

1,894,375

2019

1,776,128

See appendix for computation Table 5 shows the historical supply of “pandesal” from year 2010-2019. Projected supply is based on the historical supply which is based on the informal survey which increases as the years goes by.

2,000,000 1,800,000 1,600,000 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0 2010

2011

2012

2013

2014 2015 Year

2016

2017

2018

2019

Figure 5. Historical Supply of “Pandesal”

Figure 5 shows the graphical representation of the supply of “pandesal” in the past ten years 2010-2019. The graph shows that it’s generally upward in trend which means that there is an increasing number of supplies of “pandesal”.

2.2 Projected Supply

Table 6 Projected Supply of “Pandesal” Year

No. of “Pandesal” (in pcs)

2021

1,726,233

2022

1,750,919

2023

1,775,605

2024

1,800,291

2025

1,824,977

2026

1,849,663

2027

1,874,349

2028

1,899,034

2029

1,923,720

2030

1,948,406

See appendix for computation Table 6 shows the projected supply of “pandesal” for the next 10 years, from year 2021 to 2030. It shows that it is increasing as the years go by. 2,000,000 1,950,000 1,900,000 1,850,000 1,800,000 1,750,000 1,700,000 1,650,000 1,600,000

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

Figure 6. Projected Supply of “Pandesal” Figure 6 shows the graphical representation of the projected supply of “pandesal” in the year 2021-2030. The graph illustrates that there is an increasing number of supplies of “pandesal” for the next ten years.

3. Demand-Supply Analysis The analysis of the demand and supply helped the proponents to determine the possible market share of the product. In this study, the possible number of customers will depend on the projected demand taking into consideration that the supply is also increasing as the years go by.

Table 7 Demand-Supply Analysis of the Kai-Vegan “Pandesal” (in pcs) Year 2021

Projected Demand 8,078,678

2022

Projected Supply

Potential Market

1,726,233

6,352,445

8,272,807

1,750,919

6,521,888

2023

8,466,936

1,775,605

6,691,331

2024

8,661,065

1,800,291

6,860,774

2025

8,855,196

1,824,977

7,030,219

2026

9,049,325

1,849,663

7,199,662

2027

9,243,454

1,874,349

7,369,105

2028

9,437,583

1,899,034

7,538,549

2029

9,631,714

1,923,720

7,707,994

2030

9,825,843

1,948,406

7,877,437

See Appendix for computation

Table 7 shows the potential market of the Kai-Vegan “Pandesal” for the next 10 years. In the year of 2021 is 6,352,445. To determine the potential market; the proponents subtracted the projected supply from the projected demand.

C. Market Share Market share was used to determine the percentage of the market’s total sales of the business in the market over a period of time. It is used to determine how much share of percentage will be the Kai-Vegan “Pandesal” in the market.

Table 8 Market Share of Kai-Vegan Pandesal Particulars

Total (pcs)

Percentage (%)

177,000

0.022

Potential Remain

6,175,445

0.764

Competitor

1,726,233

0.214

8,078,678

100

Kai-Vegan Pandesal

TOTAL

See Appendix for computation Table 8 shows the market analysis for Kai-Vegan. With the use of survey questionnaire and the gathered information from interviews, the proponents computed the market share using the per piece consumption. The computation of Kai-Vegan total annually production is 177,000 which obtained the percentage of 2.2 % while the potential remain is 6,175,445 which obtained the percentage of 76.4%.

Market Share of Kai-Vegan Pandesal

21.37% 2.19% Kai-Vegan Pandesal Potential Remain Competitor 76.44%

Figure 7. Market Share of Kai-Vegan Pandesal in San Jose, Batangas

Figure 7 graphically illustrates the market share of Kai-Vegan Pandesal. 4. Price Study The price of the product greatly affects the consumer’s decision to buy a certain product. It is a factor that must be considered to be able to give the right price for the product. In setting up the price, the working capital such as materials for the production, direct and indirect raw materials expense, labor cost, store supplies

(consumables), advertising expense, production supplies and utilities are taken into consideration. The possible attainable production in the starting year is (production sched) The proponents came up with the price considering all the other expense in making the “pandesal” such as the bread, vegetables, the gas used to cook it, the packaging for the retailers, the labor, all the other ingredients and the surveys.

Table 9 Price of Kai-Vegan Pandesal per Piece `Particulars

Prices per Piece (Php)

Kai-Vegan

3.50

See Appendix for computation Table 9 shows the price of the Kai-Vegan Pandesal 3.50 per piece. The proponents came up with these prices taking account all the other costs of making "pandesal" whereas the total investment costs were divided by the operating costs.

5. Marketing Program A marketing program is coordinated, thoughtfully designed set of activities that help achieved the company’s marketing objectives and to have a successful business. The marketing objectives are the strategic sales goals used to promote goods and services. A. Packaging Label

Figure 8 Kai-Vegan Logo Figure 8 shows the packaging logo of Kai-Vegan “Pandesal”. When it comes to presenting the business, creating a good business logo is one of the most important factors to consider. The proponents will make a packaging label that will be appealing to its possible customers.

B. Types of Packaging The first thing that attracts consumer to buy a product is its physical appearance. The type of packaging f...