Chapter 1 THE PROBLEM This chapter discusses the background of the study, objectives, scope and delimitations, as well as the methodology of the study. 1.1 Background of the Study Lambanog wine, also called coconut vodka, is an alcoholic beverage produced in the Philippines. t is a very popular alcoholic drink among men and women in the rural areas of the !outhern Tagalog provinces, where it is widely produced. t is widely enjoyed by the locals and festive occasions are almost incomplete without it "www.sanp "www .sanpablou ablounlimite nlimited.com# d.com#.. t is free from artificial artificial chemicals chemicals because it is made purely from coconut sap. Lambanog processing starts with the pruning of the coconut flowers to let the sap drip from the blossoms blossoms.. The sap is then then collec collected ted and cooked cooked using the fermentation process, producing coconut $tuba%. The tuba is distilled, cooled, and filtered to produce the coconut wine. t may be added with fruit flavors such as berries, raisins, calamansi, mango, and even gum flavor to offer a variety of taste."&scan, '(1(# Lamban Lambanog og wine wine is produc produced ed in the !outhe !outhern rn Tagalog agalog regi region on part partic icul ular arly ly in the the prov provin ince cess of )ue* )ue*on on,, Lagu Laguna na,, and and +atangas. The )ue*on province produces most of the lambanog wine because of abundance in coconut plantations in the area. n the province of Laguna, the unicipality of Liliw located in the eastern part, is considered as the major lambanog producer and distributor. Lambanog wine production has been in e-istence in Liliw since the time of the !panish coloni*ation. Processors take advantage of the abundance of coconut trees in the area. Lambanog wine production gives employment to many residents in Liliw. The market consists of townsfolk as well as nearby towns. +ecause lambanog has only recently begun its introduction onto the international market, trade data tracking e-port and import of this product is very limited. n terms of production, lambanogmaking is still very much a cottage industry with deep historical roots. /owever /owever,, the industry has e-perience e-periencedd setbacks setbacks a few years ago due to infestation of coconuts, shortage of raw materials, and compet competiti ition on from from other other substit substitute ute produc products ts "e.g. "e.g. beer beer, gin, gin, vodka#. !till, the lambanog wine supply is not sufficient to meet its demand. The most pressing problem is the lack of consistent supply of tuba due to unfavorable weather conditions "0onato, 12#. 3ther common problems include loss of workers resulting to injuries, poor technology, lack of government support, high cost of maintaining karita karitan, n, high high cost cost of ac4uiri ac4uiring ng produc productio tionn e4uip e4uipmen ment, t, and stiff stiff competition from the big distilleries of alcoholic beverages "&scan, '(1(#. '(1(#. Curren Currently tly,, the industry industry is being being revive revivedd but it needs needs to determine its current status, the problems besetting the industry, and what directions should it take to become more competitive. The only only known known lamban lambanog og manufa manufactu cturin ringg compan companyy is located in 3ld Poblacion, aitum, !arangani Province in 5eneral !antos City. /ence, the little e-posure of Lambanog to people in the !3C!6!&7589 !3C!6!&7589 area prompted prompted the researchers researchers to conduct conduct the study.
1.2 Statement of the Problem This study aimed to determine the feasibility feasibility of putting up of a Lambanog manufacturing company in 5eneral !antos City. !pecifically, this study aimed to: 1.
'.
0etermine 0etermine the profile profile of the major players players of the Lambanog Lambanog industry along the following areas: a. !ervices; b. Capa Capaci city ty of indu indust stry ry;; c. 6ey 6ey suc succe cess ss fact factor ors; s; and and d. The market; Conduct Conduct a structu structural ral analysis analysis on on the the Lambanog Lambanog industry industry considering the following aspects: a. +arr +arrie iers rs to 8ntr 8ntry; y; b. Thre Threat atss of !ub !ubst stititut ute; e; c. +arga +argain inin ingg Pow Power er of !upp !upplilier er;; d. +argai +argainin ningg Powe Powerr of Costum Costumers ers;; and e. Comp Compet etititio ionn in the the ndu ndust stry; ry;
<. =ormulate strategies for a profitable Lambanog anufacturing in 5eneral !antos City. 1. S!gn!f!cance of the Study This study may be beneficial for the following persons: This study study may give give The bu"!ne""#o bu"!ne""#or!en r!ented ted $er"on". $er"on". This them insights on establishing Lambanog ndustry in 5eneral !antos City as a good incomegenerating business. The results may also help them in considering 5eneral !antos City as a businessfriendly urban place where they could start their planned business. This stud studyy may may help help them them in The coconut coconut farmer". farmer". This understanding that their coconut plantations could also be used for production of Lambanog and not only >buko? products "buko juice, buko salad, buko pie, halohalo, etc#. They could ma-imi *e the use of their coconut plantations in producing Lambanog. The alcohol!c dr!nker". This dr!nker". This study may encourage them to choose choose Philip Philippin pinee produc products ts like Lamban Lambanog og instea insteadd of other other branded alcoholic beverages. Lambanog is not only the cheapest, but it is also the strongest "2((@ alcohol#. &nd also, if Lambanog is readily available in 5eneral !antos City, it would be easier to buy and much cheaper than other Lambanog brands from Lu*on. The go%ernment off!c!al". This off!c!al". This study may provide them awareness on the current performance of the coconut industry that should be given more focus since the Philippines is a tropical country and they could make use of the coconuts produced. t could also aid in formulation of laws regarding the industry. This stud studyy may may give give them them The future future re"earche re"earcher". r". This information and insight on the Lambanog industry and its feasibility within 5eneral !antos City and neighboring areas. This may also enlighten them with new ideas concerning the industry that may help in boosting the country?s economy. 1.& Sco$e and L!m!tat!on" The The stud studyy focu focuse sedd on the the feas feasib ibili ility ty of putt puttin ingg up a Lamban Lambanog og manufa manufactu cturin ringg indust industry ry in 5enera 5enerall !antos !antos City City. The researchers gathered facts to describe the present scenario of the Lamban Lambanog og indust industry ry in the Philip Philippin pines. es. 0ata 0ata came came from from allar allarii 0istillery 0istillery,, Capistrano Capistrano 0istillery 0istillery,, and aitum, aitum, !arangani !arangani Province. Province. oreover, readings from articles on the internet and journals were used for additional information.
=or the proposed project, this covered the five aspects of the feasibility study namely; 1.
'.
<.
B.
.
Organ!'at!onal a"$ect A a"$ect A deals with the type of business, form of business organi*ation, organi*ational setup, hiring, utili*ation, and maintenance of employees. include dess the the Techn!cal echn!cal and o$erat!ona o$erat!onall a"$ect" a"$ect" A inclu methods and means of production resulting from the type and 4uantity of manpower, machinery and e4uipment, raw materi materials als and other other suppli supplies es that that will will be used. used. t also also include the study of climate, soil re4uirements, and farming tools Market!ng a"$ect a"$ect includes the operation and the status of the produc product, t, the promot promotion ion and advert advertise isemen ment, t, the pricin pricingg struct structure ure,, projec projected ted sales sales and the channe channell of distribution. (!nanc!al a"$ect A a"$ect A covers the estimate of the total project cost, initial capital re4uirement, preoperating cost, sources of financing and financial evaluation. includ udes es the the econ econom omic ic Soc!o#eco Soc!o#econom!c nom!c a"$ect a"$ect A incl significance, its contribution to government in the form of ta-es ta-es from from the worker workers, s, privat privatee and public public busine business ss owners.
1.) Re"earch *e"!gn and Methodology The research methodology of this study concerns with the ways and means of approaches approaches to be used to gather essential information related to the study. t includes research method, the respondents, locale of the study, study, research instrumentation, and data gathering procedure. 1.).1 Re"earch Method This study employed the descriptive research design. t involves the description, recording, analysis, and interpretation of the present nature, composition, or process of phenomena. t focuses on prevailing conditions or how a person, group, or thing behaves or functions in the present. t often involves some type of comparison or contrast. This is the most appropriate design to be used in this study becaus becausee it determ determine iness the feasibi feasibilit lityy of puttin puttingg up a Lamban Lambanog og manufacturing in 5eneral !antos City considering the organi*ational, technical and operational, marketing, financial, and socioeconomic aspects. t also determined profile of the players in the industry.
=or the proposed project, this covered the five aspects of the feasibility study namely; 1.
'.
<.
B.
.
Organ!'at!onal a"$ect A a"$ect A deals with the type of business, form of business organi*ation, organi*ational setup, hiring, utili*ation, and maintenance of employees. include dess the the Techn!cal echn!cal and o$erat!ona o$erat!onall a"$ect" a"$ect" A inclu methods and means of production resulting from the type and 4uantity of manpower, machinery and e4uipment, raw materi materials als and other other suppli supplies es that that will will be used. used. t also also include the study of climate, soil re4uirements, and farming tools Market!ng a"$ect a"$ect includes the operation and the status of the produc product, t, the promot promotion ion and advert advertise isemen ment, t, the pricin pricingg struct structure ure,, projec projected ted sales sales and the channe channell of distribution. (!nanc!al a"$ect A a"$ect A covers the estimate of the total project cost, initial capital re4uirement, preoperating cost, sources of financing and financial evaluation. includ udes es the the econ econom omic ic Soc!o#eco Soc!o#econom!c nom!c a"$ect a"$ect A incl significance, its contribution to government in the form of ta-es ta-es from from the worker workers, s, privat privatee and public public busine business ss owners.
1.) Re"earch *e"!gn and Methodology The research methodology of this study concerns with the ways and means of approaches approaches to be used to gather essential information related to the study. t includes research method, the respondents, locale of the study, study, research instrumentation, and data gathering procedure. 1.).1 Re"earch Method This study employed the descriptive research design. t involves the description, recording, analysis, and interpretation of the present nature, composition, or process of phenomena. t focuses on prevailing conditions or how a person, group, or thing behaves or functions in the present. t often involves some type of comparison or contrast. This is the most appropriate design to be used in this study becaus becausee it determ determine iness the feasibi feasibilit lityy of puttin puttingg up a Lamban Lambanog og manufacturing in 5eneral !antos City considering the organi*ational, technical and operational, marketing, financial, and socioeconomic aspects. t also determined profile of the players in the industry.
A Feasibility Feasibility Study on putting up a Lambanog Manufacturing Company in General Santos City
ro!le of the Ma"or layer of the Lambanog industry
Locale of the Study General Santos City
Structural Analysis of the Lambanog $ndustry Services
Respondents of the
Mallari 'istillery +arget +Management arget Mar,et Mar,et and -ey Success Factors
Capistrano Research $nstrument &icada 'istillery
Capacity of the $ndustry 'ata gathering #*mail hone calls
Mar,eting +echnical +echnical Financial
)uestionnaire $ntervie(
Socio* otential otenti al al #stablishment of of a a otential otenti #stablishment Lambanog $ndustry in General Santos Lambanog $ndustry in General Figure I. Research Design of the Study
1.).2 Re"$ondent" The respondents of this study are the < major players in the Philippines? Lambanog ndustry from Tayabas, )ue*on Province, allari 0istillery and Capistrano 0istillery and Dicada 0istillery from aitum, !arangani Province. The allari and Capistrano 0istillery are just two of the big companies of lambanog in anila. Dicada 0istillery is owned and manage by the Dicada family which is a small business entity in aitum !arangani Province. 1.). Locale of the Study This study was conducted at 5eneral !antos City that is classified as a highlyurbani*ed first class city. The city is the gateway to the opportunities, sights, sounds and culture of !3CC!6!&7589 region. +acked with world class infrastructure today, 5en!an and the whole of !3CC!6!&7589 region can be reached by air, land, or sea. The cityEs major economic activity is primarily anchored in two sectors namely the agroindustry and fishing industry. Fith the &groindustry, endowed with rich volcanic soil, ample and well distributed rainfall all throughout the year and a typhoonfree climate, 5eneral !antos City produces e-port 4uality high valued crops such as corn, coconut, pineapple, asparagus, banana and rice. t also yields 4uality e-otic fruits, vegetables and cut flowers. The city is also a top producer and e-porter of 4uality livestock such as poultry, hogs, and cattle. +ut with the continuing growth in population and economy in the passing of time, a number of the cityEs agricultural lands have gradually been converted into built up areas in order to address the relatively growing need of dwelling and viable spaces. +eing a component city and center of commerce and trade in 7egion G known as the !3CC!6!&7589 region and owing to its strategic location and world class infrastructure and support facilities, 5eneral !antos City plays a very important role in the emergence of !3CC!6!&7589 region as the countryEs leading producer of e-port4uality major commodities. 1.).& Re"earch +n"trumentat!on The researchers used an interview guide and internet to gather information with their respondents. &n interview is a formal meeting in person, especially one arranged for the assessment of the 4ualifications of an applicant. t is conversation, such as one conducted by a reporter, in which facts or statements are elicited from another. t is an account or a reproduction of such a conversation. !ince the players are located far from the researchers, the interview guide 4uestionnaire is sent through email and the interview through phone calls. The internet was also utili*ed to substantiate comparison of industry in faraway places. 1.).) *ata ,ather!ng Procedure The researchers secured a communication letter to the players, re4uesting them to participate in the study. 3nce the permission is granted, the researchers will sent a 4uestionnaire through email. =or the interview, the respondents will set the date.
answer method. &fter the data has been gathered, it will be organi*ed, analy*ed and interpreted. Chapter THE +-*STR/ 0-* +TS 0-0L/S+S This chapter discusses profile of the major players in the Philippines? Lambanog industry. t discusses their services, the market, performance, the services they provide to their clients. t also includes the identification of government agencies concerned and an analysis of the strengths, weaknesses, opportunities and threats, and key success factors of the Lambanog industry. 2.1 +ndu"try Background +ndu"try Background n 1H, the Philippines, ndonesia, and ndia accounted for H.H@ of the world?s coconut production of .H million metric tons. &bout '.B@ of the Philippines? arable agricultural land was planted with coconut in 1I "!arian, '(1(#. !ince then, efforts to increase country?s competitive share of the coconut market have been underway, including the push to plant more coconut trees, and to develop new coconut products. The Philippine coconut industry is generally viewed as a monopoly, controlled by a very privileged few. !mall time coconut farmers? livelihoods are being threatened as an increasingly powerful Jnited Coconut Planters +ank, has been buying out or absorbing most of the market share. n response, these farmers have become more organi*ed and united over the past decade "7avi, '((#. The lambanog industry, although it has been around for centuries, takes up a fairly small share of the overall coconut industry. n recent years, the product has been launched onto the world market, and it is hoped that this industry will grow "Delasco, '(1<#. This would, however, necessitate the planting of more coconut trees, since production is dependent upon the amount of sap collected daily. The process of sap collection is largely dependent on the skill of the mangagarit , who have a very risky job. <hough they are afforded health and housing benefits due to the risky nature of their work, their living situations and financial compensation still leave room for improvement. Jnless more safety features are installed for them, it will be hard to attract new workers for this position as public education becomes more accessible, and other job opportunities arise. &s far as the environment is concerned, the lambanog industry does not pose any major threats, since it is in their best interests to encourage more tree planting. +oth the product and the process do not include any harmful chemicals; in fact, it is being marketed as an organic product.
n the Philippines, )ue*on province is the major producer of lambanog wine because of the abundance of coconut plantations in the area. &ccording to Dillaflor "'((#, there are 1B registered lambanog wine processors based on a list provided by the 0epartment of Trade and ndustry "0T#. ost of them are cottage smallscale enterprises with B to ' employees. ! ome of the distillers get their supply of raw materials from their own coconut farms while others rent out. The production capacity of these distilleries ranged from ' gallons to as much as <( gallons of lambanog weekly. The three main distilleries in the country are also located in the )ue*on province the allari 0istillery, the +uncayo 0istillery, and the Capistrano 0istillery "Dito, '((B#. 2.1. Local The 7egion 1' is endowed with rich natural resources and has the potential of becoming one of the fastest developing regional economies in the country. The provinces of !outh Cotabato, !arangani, !ultan 6udarat, and 5eneral !antos City "!3CC!6!&7589# had been provided with modern infrastructure support under the !3CC!6!&7589 &rea 0evelopment Project. The cities of Cotabato and 5eneral !antos work as the region?s main financial, business, and service centers. Dicada family owns a coconut plantation in aitum, !arangani Province and they are the only entrepreneur that produces lambanog in their area. Their business started in '(( when the family decided to make products out of coconut aside from copra. n '(11, they e-panded their small business by distributing lambanog outside aitum "that includes aasim and 5ensan#. The e-pansion of the business stopped there because of financial incapability which results to less e-posure of the product in the market. 2.1..1 The +ndu"try Lambanog production is a thriving industry in coconut producing provinces of the country like the provinces of Laguna, +atangas, &lbay, Cagayan, Camarines !ur, La Jnion, Pangasinan, and )ue*on. Lambanog plays an important role in the development of the coconut industry. The lambanog industry provides another means of employment, and generates additional income for coconut farmers "!anche* 1(#. The revenue from the industry is high, but the e-act figure is not available because some lambanog operations are not registered. n a coconut farm, the owner usually sets aside a certain number of palms to be tapped for lambanog production. The practice of nut and lambanog production assures earnings for farm owners. !tudies have shown that lambanog operations generate more revenues than nut farms "Coronado 1I'; !ui*a 1I#. Lambanog far gives the highest cash return in same area compared to farm solely for nut production. ts laborintensive operation also generates employment in the farm community. n the lambanog industry, it is common practice between the coconut farm owner and the lambanog producer to share e4ually the production cost and the product. The landlord assumes the cost of cultivation and maintenance of the coconut palms while the lambanog producer shoulders the cost of tapping and processing of lambanog. Coconut farmers prefer to produce lambanog because it generates <B times more income for them compared to copra
copra production because they have no capital to operate a lambanog business. The biggest initial e-pense consists of the establishment of a distillation plant. 7unning the business is also e-pensive because of the cost incurred for labor, procurement of special kind of bamboo poles suitable for the purpose, transportation, tools re4uired, and in some cases rental of coconut trees. n the total operating e-penses, labor cost takes the largest share "I(@I@#. Labor e-penses include the payment for the mananaggot or tapper "about 2(@ of the total labor cost# and distillers or tagaluto "about 1'@ of the total labor cost#. 3f the remaining '@<(@ of the total operating e-penses, (@ goes to the procurement of bamboo poles and 1(@ to the rental of the coconut trees, transportation, tools, repair, and maintenance. =andialan "1I2# described the functions of the different constituents of the labor force. The manananggot takes charge of periodically cleaning the farm and the palms, prepares the palms for tapping, trains the spadices to yi eld sap, taps daily appro-imately 11( spadices, and delivers the collected sap to the fermentation and distillery plant. The distiller or tagaluto who works seven hours daily supervises the deposition of the sap in the fermentation contatiners, manages the fermentation of the sap, gathers fuel for the distillery, distills the tuba, and packs the lambanog. The hauler delivers the lambanog from the production area to the entrepreneur?s house and then to the customers. &mong the various operations involved in lambanog manufacture, the most timeconsuming is the tapping or collection of sap, which according to !ui*a "1I# accounted for 2@ of the total labor re4uirement. This is followed by the distillery labor re4uirement "''.H@#. The other labor re4uirements involve cleaning the upper portion of the palm to facilitate easy tapping "1.@# and the repair of the bamboo bridges "1@#. The relative distribution of operating e-penses in a lambanog enterprise was estimated by =andialan "1I2# as follows: .BI@ for rental of coconut trees, H.II@ for labor, <.2 for transportation, 1<.B@ for supplies and materials, (.<@ for tools and e4uipment, <.I@ for bank charges, '.1(@ for depreciation, (.<(@ for repair and maintenance, and (.B2@ for business ta-. The labor e-penses were the highest, with relative distribution of <.@ for installation of bamboo bridges, 21.1H@ for tapping, '.(2@ for hauling, 11.'@ for distillation, and 1.B2@ for transporting the product. +ased on various studies of lambanog production, it can be estimated that for a hectare farm, the manpower re4uired to operate a lambanog business is as follows: HI manananggot "tappers#, ' persons who work for ' hours per day to transport collected sap to the distillery plant, ' persons responsible for distillation, and one person for bottling the product. The yield of sap from the Laguna Tall variety is based on two spadices per palm, where one spadi- has an average sap yield of (.I L per day. The months with lowest "&pril to ay# and highest "&ugust to !eptember# sap yield were taken into consideration. The yield of lambanog is based on the 1I.1@ recovery efficieny. The sap yield is comparable with those reported in other countries: 1.B L per day in alaya "arsden !kilton, 1<1#, 1. L per day in ndia "Patten, 1<2#, and 1.2 L a day in Ceylon "9athanael, 1#. Considering that freshly trickled sap contains total soluble solid of '(K+-'
reported by several workers with freshly gathered sap using the traditional method of collection, the total soluble solids range from IK+- and the p/ decreases to <.(. Therefore, there is a loss of appro-imately (@ of the potential yield of lambanog. The yield of lambanog may be doubled if improved method of sap collection and fermentation "as described by !anche* 12B# and ade4uate temperature control during distillation are employed. The lambanog industry faces some problems: stiff competition with imported alcoholic beverages "wines and li4uors#, maintenance of good 4uality control during the manufacturing process, steady supply of the product in the market, poor packaging of the product, and lack of aggressive market promotion. The biggest challenge to the industry is to produce a 4uality product that suits the specifications of the consumers and market as a whole. Tanimura and !anche* "1I2# concluded that the 4uality of pure lambanog produced in the country varies in terms of total soluble solids "1(.'+-1.<+-#, p/ "<.B.#, acidity "<.1<B.<1#, and alcohol content "
The Mallar! *!"t!llery • • •
t is located in +rgy. Lalo, Tayabas, )ue*on Province and is one of the three major producers in the country, was established in 112. t is a family business whose owners trace their ancestry to a !panish soldier named &landy. n 1'2, the parents of 0oRa Sosefita &landy pioneered the establishment of a lambanog distillery as a family enterprise. This entrepreneurial initiative was handed down to the ne-t generation. Lambanog then became commonly known in Tayabas as &lak =ita of the &landy family. Currently, r. Soselito allari, the grandson of 0oRa Sosefita manages the distillery known as allari 0istillery. /e also reali*ed that to be able to compete in the international market he needed to make more attractive bottles. The Du)o bottle is his latest design and will be introduced in 8urope and the J! in the near future. Today, it still has only '1 employees. !o far, according to r. Soselito, the allari distillery has been the most active in trade fairs promoting product awareness. n the e-port trade, it lists its annual sales at UB(,(((. & onegallon bottle of lambanog retails for U< to UB, depending on the alcohol content "2( or (proof#. Lambanog e-ports have increased since '((1, as reflected by data from a report generated by the Philippine 0epartment of Trade and ndustry, but it seems the listed 4uantities are still too small to be reflected in most international e-portNimport statistics. The a$!"trano *!"t!llery • • •
n the =ood !ervice ndustry, there are many business related establishments that e-ists. This type of business is commonly situated in commercial areas because of their accessibility to the customers. The main service the company would offer e-clusively is the distribution of lambanog in commercial areas throughout region G because of their easy accessibility to the potential customers. Fe also offer speciali*ed or customi*ed lambanog bottles for gifts and occasions "e.g wedding, birthday#. 2.1.. Maor Player" of the +ndu"try The e-istence of the industry can only be reali*ed through its players. There are a lot of Lambanog industry players in the country, especially in )ue*on and Laguna. This difficulty made it hard for the researchers to interact with the appropriate persons for the interview. &nd some business owners were too busy to be interviewed and participate in this study. /owever, the researchers successfully contacted three major players of the industry, allari 0istillery, Capistrano 0istillery and 6atangawan, 5!C. &s to the technical and financial aspects of the business, readings from the nternet and journals were used to supplement additional information since both companies are known countrywide.
8mail: joselitomallariQyahoo.com Cellphone num.: (1I<'IHB =a- num.: (B'I<2'I
8mail: capistranodistilleryQyahoo.com Cellphone 9um.: (B'
The familyowned Capistrano 0istillery in coconutrich Tayabas is one of two leading Philippine makers of lambanog, which it sells to the countryEs biggest supermarket chain. Fhile the allari 0istillery remains in operation, the Capistrano family said it has taken a lead in promoting the drink abroad. $any have compared it to 7ussian vodka or 8nglish gin but what sets our lambanog apart is that you don?t get a hangover,% said Hyearold distiller sabelita Capistrano. n '((1 the government approached the allari and Capistrano houses and 1B other smaller lambanog distillers with a plan to develop the product for e-port. t provided packaging e-pertise, introduced modern bottling operations and sponsored alcoholtasting tours for foreign buyers. The trade department said the drink had been slowly penetrating the beverage markets in &ustralia, Sapan and acau, though official data is unavailable. t faces competition from !ri Lanka in particular, which targets Sapan, !outh 6orea and the aldives with premium blends. The 3!cada *!"t!llery Contact 9umber (B'BI(2(H Dicada family owns a coconut plantation in aitum !arangani Province and they are the only entrepreneur that produces lambanog in their area. Their business started in '(( when the •
family decided to make products out of coconut aside from copra. n '(11, they e-panded their small business by distributing lambanog outside aitum "that includes 6iamba and aasim#. The e-pansion of the business stopped their because of financial incapability which results to less e-posure of the product in the market. 2.1..& a$ac!ty of the +ndu"try The use of coconuts as the basic raw material in lambanog production makes the product uni4ue among alcoholic beverages. Coconut trees that are tapped do not bear nuts. ajority of the processors rent a coconut farm where they get the raw material needed for the production. 3ne owns a plantation while another sourced his raw material from a farm owned by his relative. ost of the farms are situated near the residence of the processor. The distilleries are also found in the farms for easy transport of tuba. 2.1..) 4ey Succe"" (actor" The following are some 4ualities of the Lambanog industry which contribute to its success in the Philippines: ultural Rele%ance. +ecause coconut trees abound throughout the Philippines, and because the process of distilling lambanog from tuba is a relatively ine-pensive process, it is known as a poor man?s drink. =armers often wind down by drinking lambanog after a long day?s work. n )ue*on, drinking lambanog is usually a communal thing A men sit around in a circle and take turns drinking shots from a cup placed in the middle of the group. Jsually, there is also someone singing and playing the guitar to add to the festivities; he takes his turn at drinking too, so the music gets more interesting as the drinking goes on. ,o%ernment +n%ol%ement. Coconut Products are among the Philippines? top ten e-ports. n recent years, other countries have increased their investment in the coconut industries, rivaling the Philippines in terms of e-port production. n response, the country has been looking for new ways to recover its corner on the market. Lambanog was one of the products selected for e-port development. The ndustrial Technology 0evelopment nstitute, along with the 0epartment of !cience and Technology began working with the three biggest distilleries to standardi*e the distillation process; their suggestions improved the 4uality of the product. To prepare for e-port, the government?s +rand 0evelopment Program worked with the distilleries to develop uni4ue bottling and packaging; they hoped to introduce lambanog with a Philippine trademark on the global market to increase its competitiveness. Market Penetrat!on and Potent!al. Lambanog was launched on the e-port market in '((1. 8-posure and popularity have also been helped by the tourism industry. Tourists who visit the Philippines inevitably sample lambanog and look for it abroad. 7ecently, hotels and corporations have begun to introduce creative desserts that feature lambanog as a key ingredient. 3ne of these is the Ferdenberg Corporation anila, whose recipe is called Tirami &sia. Jnder the +rand 0evelopment Program, work is being done to trademark lambanog and make it more competitive on the global market. The distilleries have also begun to release flavored lambanog "ranging from bubblegum, mango, calamansi, and blueberry#, which has increased its appeal on younger consumers. 8fforts are also under way to market it to the more health conscious
En%!ronmental +m$act. +ecause lambanog comes from the distilled sap of the unopened coconut flower, it is in the industry?s best interests to take good care of its coconut trees. &s the demand for lambanog increases, it will naturally serve as an incentive to plant more trees. "Porter, '((# 2.1..5 The Market 0irect selling is the most common way to distribute the product. The processors use their own residences as the main point of distribution. +uyers go directly to their houses to purchase lambanog wine. !ome have signage in front of their houses to attract more customers. Their products are distributed through different channels such as wholesalers, retailers, local consumers, and consumers from other towns and provinces. &ppro-imately I(@ of the firms? products are sold within their respective barangays and within the town. The remaining thirty percent are sold in nearby areas which include 7i*al, 9agcarlan, ajayjay, !ta.Cru*, Pila, Calamba, and !an Pablo City in Laguna, and &ntipolo and Tanay in 7i*al Province. Lambanog wine produced in Liliw has also reached etro anila. =our of the seven firms sell their products on cash basis. The other three processors are accepting (@ down payment or full credit which has to be paid one to two days after purchasing the product. &n estimate of I(@ of total sales is paid in cash while remaining <(@ is through credit. &ccording to the firms, there are no plans to introduce the products to other places because they are satisfied with their present markets. n some instances, they had to buy lambanog wine from other distilleries because they are not able to fill the customer?s order due to limited capacity. !ome of them had transported their products to other provinces but they had to stop because of high costs and difficulty in collecting receivables. &ll firms produce pure lambanog wine, however, two of them make flavored ones. !ome of the flavored variants include coffee flavored wine, tea flavored wine, lambanog soaked with apple peeling, and prunesoaked lambanog. =lavored lambanog is made by re4uest. =irms do not use any brand name for their products. The same si*es are sold by the processors. &ll the packaging materials used are provided by the customers. Purchased lambanog wine is transferred in the containers brought by the buyers. !ome firms lend their regular customers with containers especially if they purchase in large 4uantities. 3ne container or stauffer holds about si- gallons of lambanog. The packaging material used is a big plastic container called the stauffer. 3ne gallon and one half gallon lambanog use smaller plastic containers with handle. !ome firms used glass containers. The price for one stauffer of pure lambanog ranges from PhpI2( Php(( while the price for one gallon lambanog ranges from Php1<( to Php1(. 7etail prices are as follows: twelve ounces of lambanog is sold at the range of Php1' Php1I. =lavored lambanog costs higher than pure lambanog. t is sold for Php1( Php'(( per gallon of any flavor. 2.1..6 The ,o%ernment Role n putting up a Lambanog industry, it is significant to understand the legal needs and its repercussions since it 4ualifies as a geographical indicator that is protectable under the &greement on Trade 7elated &spects of ntellectual Property 7ights, ncluding Trade in Counterfeit 5oods "T7P!# section of the 1B Jruguay 7ound negotiations. The agreement states that all parties should avoid the use of any indication that would mislead consumers regarding the origin of the goods, as well as any acts that would
result in unfair competition. =urthermore, a higher level of protection is provided for geographical indications for wines and spirits, which are protected even when there is no danger of the public?s, being misled as to the true origin. The name $lambanog% would therefore be preserved specifically for the Philippine beverage, even if other countries started to produce a similar product. n recent years, countries like Thailand and ndonesia have become increasingly competitive in producing coconutbased products. Therefore, both the process and the product should be protected as the intellectual property of the Philippines. The following are government agencies concerned with the Lambanog industry: Bureau of (ood and *rug 0dm!n!"trat!on 7B(0*8 t has the mission of protecting consumers in certain defined areas A ade4uacy of controls e-ercised by the processor during processing and safety of the finished product on the market. !ince responsibility for 4uality, including safety is with the processor, his interest lies in the same direction. t is possible to inspect processing practices without inspecting the 4uality products, but hardly possible to inspect for 4uality without knowing the processing procedures. *e$artment of Trade and +ndu"try 7*T+8 t is tasked to e-pand Philippine trade, industries and investments as the means to generate jobs and raise incomes for =ilipinos. Lambanog industry has begun e-porting Lambanog in Sapan, Taiwan, and &lgeria. Lambanog e-ports have increased since '((1, as reflected by data from a report generated by 0T. *e$artment of Sc!ence and Technology 7*OST8 t mandated the ndustrial Technology 0evelopment nstitute "T0#, to render a variety of services to local industries. t generates a large pool of technologies while providing technical services to industry. 0T is multidisciplinary with scientific disciplines, enabling the nstitute to carry on its role in the countryEs industriali*ation program. The institute aims to help alleviate the plight of the lessprivileged sector of society. 7V0 activities are focused on seven major areas, namely: food processing, materials science, chemicals and minerals, electronics and process control, fuels and energy, microbiology and genetics, and environment. *e$artment of 0gr!culture 7*08 t promotes and intensifies commercial crop production. n coming up with priority crop, 0& aslo considered priority commercial crops identified in the !cience and Technology agenda for 9ational 0evelopment "!T&90#. This increases the supply of coconuts for the coconut industry.
a$!tal!'at!on. & huge amount of capital is re4uired in putting up lambanog manufacturing company to commence its operations. The capital should be sufficient on ac4uiring the e4uipments involved. om$et!t!on. The e-istence of the present industry players and their success is a threat to the new entrants. 0ue to their trusted services and product offered and their popularity among customers, new comers would find it difficult to penetrate and outwit competition in the market. ,o%ernment Regulat!on". 5overnment can play a major direct role by affecting entry barriers through controls like 4uality standard. The government can also have direct control as to licensing re4uirements, proper waste disposal, location site and many others. 2.2.2 Threat" of Sub"t!tute &ll business entities in the industry, which includes the producers of substitute products and services, are competing. The more attractive the price and performance alternative offered by substitutes, the firmer the industry lid is. n this type of industry, the threat of substitution is relatively high because of other alternative alcoholic beverages available in almost all retail stores. !ubstitute products include beer, gin, brandy, vodka, and whisky. They became the substitute because of their being popular and trusted in the market. These products come in different si*es and varieties, and prices are either cheaper or at par with the average price of lambanog wine.. The customers are willing to substitute especially if the price of the substitute falls. 2.2. Barga!n!ng Po9er of Su$$l!er +argaining power is the ability to influence the setting of prices. The bargaining power of the seller is low according to the respondents. ore or less, they could not demand for prices since there a lot of e-isting seller in this industry of beers, spirits and other wines, so the customer has the power to choose where heNshe wants and could easily find another choice that would match hisNher standards. n most cases, the entity takes the prices charged by their rivals in the industry as given and ignores the impact of its own prices on the prices of other firms. 2.2.& Barga!n!ng Po9er of o"tumer"
2.2 +ndu"try 0naly"!"
The bargaining power of the customer is high according to our respondent, because of many bar industry e-isting today. Fith this, the customer can e-ert influence over an industry in certain circumstances. The substitute can be easily found by the customer in whom they are very sensitive to prices. The customers base their choice on the type of service that?s why entities are adjusting on the demand of their customers.
The following analyses are based on the performance of Lambanog industry players in )ue*on and Laguna.
2.2.) om$et!t!on !n the +ndu"try
2.2.1 Barr!er" to Entry Potential entrants will face the following barriers in entering the restaurant and bar industry.
& lambanog industry falls into the category of monopolistic competition. Lambanog industry competes in terms of pricing, promotion, labeling and numerous numbers of services offered with a competitive edge in pricing strategy and 4uality service.
The competitors in the industry tries to capture bigger market share through differentiation, lowering of prices due to the
price sensitivity of the consumers and providing satisfaction to the needs of their buyers.
Chapter III THE FEASIBILITY STUDY
This chapter presents the feasibility study of the proposed Lambanog Manufacturing in General Santos City. It includes the management and organization, marketing, technical and financial ealuation of the study. 3. For!s of Business "rgani#ation
!"nership means the legal title to a thing or control oer the thing o"ned, the right possession and disposal. In business enterprise, o"nership means title to and possession of the assets of the enterprise, the po"er to determine the policies of the operation, and the right to receie and dispose the proceeds. In partnership form of organization, partners merely outline the actiities and they can start the operations, so it is easy to form as the single proprietorship, there are more persons to conduct the business and to handle its problems. #o"eer, disagreement bet"een partners sometimes leads to delay and difficulties, "hich could endanger the enterprise. In addition, death, insanity, and insolency of a partner automatically dissole the partnership. $or the proposed business, a partnership form of is more suitable considering the size of the business and the capitalization re%uired to operate. The partnership "ill be composed of fie partners "ho "ill contribute e%ual amount of capital. If the need arises to change the form of o"nership into a corporation, such may be adopted to suit the needs of the business. 3.$ "rgani#ationa% Structure
The organizational chart communicates the formal structure of the business. It coneys ho" the authority and responsibility are delegated throughout the organization. It tells "ho has the authority oer "hom and "ho reports to "hom. $igure & presents the organizational chart of the proposed Lambanog manufacturing company.
General (dministratie and Selling GeneralSuperisor
'roduction Superisor
(ccounting Clerk
Mangagarit* Manananggot -tappers
Tagaluto -+istillers
Salesman
)ottler* 'acker* Cleaner
Stock* arehouse Clerk
Security Guards
+riers
Figure $. "rgani#ationa% Set&u' ()hart*
3.3 +ersonne% ,ua%ifications
/ach employee is carefully selected. /ach %ualified applicant undergoes a selection process "here the most %ualified chosen applicant do %uality "ork output. Table 0 presents %ualifications for the different positions. Ta-%e +ersonne% ,ua%ifications
'osition enera%
1ualifications •
( graduate of any of the follo"ing business course2 )S (ccountancy, )S (ccounting Technology, )S)(3
Ad!inistrati/e
Management
(ccounting,
)S)(
4
Marketing
and Se%%ing Su'er/isor
+roduction
•
Management, )S)( 4 Management ith at least one year related "ork e5perience &6306 years old
•
$ood Technologist, $ood 7utritionist or a graduate
•
of any related course ith at least one year related "ork e5perience
•
Su'er/isor
•
Accounting )%er0
•
• •
preferably in food manufacturing operation &8306 years old )S (ccountancy, )S (ccounting Technology or )S)(3Management (ccounting graduate 'referably "ith at least one year "ork e5perience &0308 years old
•
1arehouse )%er0
• •
Sa%es!an
•
•
Dri/er
• • •
2angagarit
• •
2ananaggot (ta''ers*
•
( graduate of any business or related course &8306 years old 'referably a )S)( 3 Marketing Management Graduate &0308 years old Male &6306 years old Must hae a drier9s license
Male Can climb tall coconut trees Must be physically fit
Taga%uto
• •
(Disti%%er*
•
Bott%er
• •
+ac0er
• •
)%eaner Security uards
• •
Male Must be physically fit 08 years old and aboe 'referably male Must be physically fit #as a &8*&8 eyesight ision &8308 years old Male (ffiliated "ith a security agency
3.4 +ersonne% Duties and Res'onsi-i%ities
The duties and responsibilities of each personnel are presented in table :. Ta-%e $ +ersonne% Duties and Res'onsi-i%ities
'osition enera% Ad!inistrati/e and Se%%ing Su'er/isor
+uties and ;esponsibilities •
• •
+roduction Su'er/isor Accounting )%er0
•
•
• •
1arehouse )%er0
•
•
Sa%es!an
• •
Dri/er
•
•
2angagarit 2ananaggot (ta''ers* Taga%uto (Disti%%er*
• •
• •
Manages the business< formulates and e5ecutes policies. !er all superisor. +etermine the marketing plan.
Superises production and %uality control. ;ecords, classifies and summarizes accounting matters. #andles all monetary disbursements and receipts. Take care of other clerical "orks. Stores all finished products, ra" materials, and supplies. Schedules deliery of goods to buyers. In charge of product distribution and selling. In charge of products promotional actiities. +oes loading and unloading of ra" materials and finished products. +oes the deliery of the product. +oes the climbing*collection of coconut from trees Transferring of coconut sap to containers Manages the fermentation and distilling process Skims the upper layer of tuba of floating impurities
•
Bott%er +ac0er )%eaner Security uard
• • • • •
Maintains the cleanliness of the machinery )ottles the lambanog from distillation 'acks bottles in bo5es Checks final product =eeps the icinity safe. Safe guards the properties, employees icinities
and
The mangagarit*manananggot climb the trees "ithout protectie harnesses to prune the coconut flo"ers before they turn into fruits. The sap is allo"ed to drip into bamboo receptacles. Like high3"ire performers, the tappers naigate a net"ork of bamboo bridges connecting the trees nine metres -08 feet aboe the ground, "ith blades on their "aists and bags tightly strapped to their shoulders. 'runing is mostly done in the afternoon, and the climbers return at da"n to collect the li%uid. $armhands then delier the sap to the distillery in big plastic containers that are carried behind their backs or on pack horses. 3.5 +ersonne% Sa%ary Structure The 'ersonnel Salary Structure is presented in table 6. Ta-%e 3
+ersonne% Sa%ary Structure (For !onth*
'osition
Minimum ;ate
Total -'h'
00*hr
>?,888.88
?&.6*hr
>0,888.88
(ccounting Clerk
68*hr
>&,888.88
arehouse Clerk
:>.?@*hr
>8,888.88
Salesman
:>.?@*hr
>8,888.88
00.00*hr
A,888.88
&6*hr
?,888.88
General (dministratie and Selling Superisor 'roduction Superisor
-Tagaluto, )ottler, 'acker*Cleaner +rier
Magagarit
&68*day
@,688.88
&6*hr
?,888.88
Security Guard
3.6 Su!!ary of +re&o'erating Acti/ities The summary of pre3operating actiities is presented in table ?. Ta-%e 4 Su!!ary of +re&o'erating Acti/ities
Cost
'ercentage
;ental of coconut trees Labor2
6.:@B
Installation of bamboo bridges
0.B
Tapping
A>.>?B
#auling
&.8AB
+istillation
>>.&B
Transporting the product Transportation
>.:AB 0.AB
Supplies and Materials Tools and /%uipments
>0.:B 8.0B
)ank Charges
0.6@B
+epreciation
&.>8B
;epair and Maintenance
8.08B
)usiness Ta5
8.:AB
3.7 Ti!e Ta-%e
Ta-%e 5 8 Ti!e Ta-%e
+re&"'erating Acti/ities 'reparation of )usiness 'lan
>
&
0
:
6
?
@
A
>8
>>
>&
>0
>:
>6
'rocurement of )usiness Licenses, 'ermits, Certification and other legalization General Checking of the Coconut 'lantation ;enoation of the orking*'rocessing (rea 'urchase of Supplies and /%uipment #iring of $orce Labor (dertisements
)HA+TER I9 2ar0eting Feasi-i%ity This chapter presents the marketing feasibility "hich includes the target market, market size and trends, competition and estimated market share. This chapter also includes the sales and distribution strategy, pricing strategy and promotion strategy of the proposed business. 4. 2ar0et Research and Ana%ysis
In establishing a lambanog manufacturing, market research and analysis is an important consideration that "ould help the business itself. The market research and analysis entails the kno"ledge of obtaining the target market, market size and trends, the estimated market share of the proposed enture and the competition in the market. 4.. Target 2ar0et
The main target markets of Lambanog Manufacturing are those alcoholic3drinkers from General Santos and other cities "ho "ould like to e5perience different flaors of lambanog that they neer tasted before. The market of the proposed enture can be e5tended to the people of General Santos City "ho "ould prefer to buy and aail the products comprising of inhabitants of General Santos City "ho belong to the class (, ) and C. (ccording to the 'hilippine income classification for proinces, cities and municipalities General Santos City -+adiangas is a >st class highly urbanized city. The urbanization status of General Santos City -+adiangas is classified as partly urban -'hilippine Islands &8>8. /conomic class ( refers to those people "ho are considered upper3class earners in the society. They earn aboe 'hp>68, 888 a year. Class ) are those people "ho belong to the middle class that are able to lie a satisfactory life. They earn oer 'hp>88, 888 but not oer 'hp>68, 888 in a year. /conomic class C refers to those people "ho hae less purchasing po"er compared to the other t"o classes. These people earn oer 'hp68, 888 but not oer 'hp>88, 888. These economic classes include businessmen, e5ecuties, professionals, blue3 collar "orkers and other employees. The total population of people "ho belongs to the age of legal maDority is 080,: based on the year &8>8 "hich inludes the classes (, ) and C. Since General Santos is a city, alcoholic3drinkers are present in the community "ho has an income and has a capability to buy and consume lambanog products. 4..$ 2ar0et Si#e and Trends
The market size and trends refers to the total population of the lambanog industry in General Santos City e5cluding the transportation industry and the latest status and trends in the target market. This "ill determine the actual number of target consumers of the proposed company9s market. It proDects the possible customers that "ill primarily sere as basis for possible sales and proides definite market segmentation for the company itself. )ased on the 7ational Statistical Coordination )oard -7SC), there are 080,: legal aged person in General Santos City are considered as the market of the proposed study since alcoholic drinks are not aailable and prohibited among children. 4..3 The )o!'etition
The proposed business "ill be competing "ith the e5isting li%uor industry. More specifically, the bars and lambanog established in General Santos City, "hich is closely
related to the proposed business. Currently there are a lot of competitors taking into account the target market that the business intends to sere. Lambanog "ill enter into a market characterize by monopolistic competition. This is a common market structure "here many competing producers sell products that are similar but differentiated from one another. There are zero barriers to enter and e5it and producers hae no degree of control oer price. 4..4 Esti!ated 2ar0et Share
!ur share in the marketplace is estimated to >8B of the total market. This >8B "ill be from the consumers "ho are still patronizing lambanog products as the natie product of our country. In the current generation, many bars and discothe%ues e5ist "hich proide entertainment as "ell as the fresh musics and latest alcoholic drinks that this generation loes "hich made their share almost a half of the total market share. These establishments are the ones "hose influence in the industry is materially incomparable. It means that the control oer the target market is coming from a fairly plenty completion. (lthough this fact e5ists, there are still adantages that the proposed business differs from the other competitors.
2/0
1/0 ./0
3eer Spirits Lambanog
Figure 38 Esti!ated 2ar0et Share 4.$ 2ar0et Strategy
This strategy "ill includes all basic and long3term actiities in the field of marketing that deal "ith the analysis of the strategic initial situation of a company and the formulation, ealuation and selection of market3oriented strategies and therefore contribute to the goals of the company and its marketing obDecties. 4.$. enera% Descri'tion of the 'roduct
The business "ill hae distinct feature, style, and %uality of product to the customers. Lambanog is an alcoholic beerage kno"n for its potency -it is sold in A8 or 8 proof ariations. The lambanog making process has been a tradition passed do"n through generations of coconut plantation. )ecause of its long history as a cottage industry product, lambanog is still beginning to gain "orld"ide recognition. (lso, in an effort to increase its appeal to people of all ages, it is no" marketed in seeral flaors2 mango, blueberry, bubblegum, cinnamon, etc. 4.$.. Brand :a!e
=okos ein is a German "ord "hich means ECoconut ine.F ( fe" ounces of lambanog is an e5perience. hile most "ould compare it to odka, it9s actually a local ersion of the (sian alcoholic beerage called arrack, "hich is based on fermenting coconut sap -(rrack could also be the root "ord of alak, the general term of alcohol in $ilipino. 4.$..$ +roduct Features
To many rural people, s"igging lambanog is part of celebrating life, culture, and tradition. ;ecently, there are claims that local fruit "ines help improe health as the fruits used in the blends reportedly hae curatie effects. +uhat and bignay, for e5ample, can supposedly help cure diabetes and reduce high blood pressure. 4.$..3 +roduct Sty%e
There is a "ide ariety of lambanog2 'ure and Clear lambanog has the e5ceptional yet assertie %uality of a fine alcoholic beerage. Stra"berry flaoured lambanog has the real taste of stra"berry fruit and pink in color, but the spirit of lambanog is still there. )ubble Gum flaoured lambanog has the real taste of bubble gum and blue in color, but the spirit of lambanog is still there. Grape flaoured lambanog has the real taste of grape fruit and iolet in color but the spirit of lambanog is still there. Melon flaoured lambanog has the real taste of melon fruit and orange in color, but the spirit of lambanog is still there. 4.$..4 +roduct ,ua%ity
(s far as the enironment is concerned, the lambanog industry does not pose any maDor threats, since it is in their best interests to encourage more tree planting. To achiee, %uality product the business "ill ensure high customer satisfaction through the successful attainment of the product styles "hich "ill be done by the lambanog manufacturing. )oth the product and the process do not include any harmful chemicals< in fact, it is being marketed as an organic product. 4.$..5 +roduct +ac0aging and La-e%%ing
'roducts must be packaged "ell to increase shelf life. It can be used to encourage potential buyers to purchase lambanog. It improed tamper resistance to deter tampering and also can hae tamper eident features to help indicate tampering. It "as "ritten, electronic, or graphic communications on the packaging or on a separate but associated label. The researchers decided to hae a packaging and labeling as "hat is sho"n in $igure A because of its significance and meaning. The upper design "hich is the E'ILI'I7(S =ay GandaF signifies that the product is made in the 'hilippines and tells ho" beautiful the country is for haing different products such as the Lambanog produced by the researcher. The Ekoko s einF is the product name and the bottles belo" "ere the different flaors of the product "hich is stra"berry, raisins, mango and bubblegum.
4.$.$ Sa%es and Distri-ution Strategy
This section includes the sale and distribution process of the proposed lambanog manufacturing in General Santos City. 4.$.$. "rder +rocessing
The process of ordering should be present in a business to attain customer satisfaction. •
•
•
•
•
Customer should contact us through calls and emails "hich "ill be ans"ered by one of the salesman to be able to recognize of ho" much and "hen their orders are needed. (fter ordering, the salesman "ill tell the "arehouse clerk to schedule the deliery of lambanog to the consumer and ho" much is needed and the address "here it "ill be deliered. Then, the "arehouse clerk "ill inform the drier in the scheduled time to load and delier the finished products and the address of the consumer "ho ordered. !n the day of deliery, the drier "ill be accompanied by one of the salesman "ho "ill collect the payment of the customer. hen the drier arried, he "ill also be the one to unload the finished products and the salesman "ill collect the payment of the customer.
4.$.$.$ +roduct )ontro% 2anage!ent
This pertains to ho" the business manages and controls the purchase of supplies to be able to maintain organized and efficient records of inentory. 4.$.$.$. +roduct ,uantity
This refers to the number of safety stock to be purchased in order to control the inentory management. The company "ill make use of the traditional costing. The %uantity of product to be manufactured "ill be relatiely large "hich "ill be stored in the stock room. It is
good to store the lambanog in a long period of time "hile "aiting for an order because its taste "ill get better. 4.$.$.$.$ +roduct Lead Ti!e
'roduct lead time manifest the timing of the entity in ordering the safety stock. The product lead time depends on the customer of "hat specific day and time "ill he*she "ants the product to be deliered. )ut it is assured that it "ill be deliered in the e5act day, time, and place as "hat the consumer demands. 4.$.$.3 Trans'ortation
This section contains the cost, speed, reliability of the transport and cost of damage in relation to transportation. 4.$.$.3. )ost
;unning the business is also e5pensie because of the cost incurred for transportation. The company "ill handle the deliery of the products to the retail stores, or supermarkets and the cost of gasoline for the deliery is incurred. They may reolutionize transportation one day, but until then, the internal combustion engine is "hat "e9e got. +iesel is e5pensie but certainly more fuel efficient than gasoline po"ered engines. 4.$.$.3.$ S'eed
The transportation of finished goods is to be deliered upon the demanded date of the retail stores or supermarkets. 4.$.$.3.3 Re%ia-i%ity of the Trans'ort
General Santos City is not that populated compared to other cities. The olume of ehicles is not that heay. pon the deliery of the product, there is a smooth transportation along national high"ays but in the streets going to the retail stores or supermarkets are little bit narro" and added "ith many tricycles, there is a light congestion but no delay in deliery. 4.$.$.3.4 )ost of Da!age
In case of damage in transporting the products, the company is liable for the replacement and returns of defected goods. 4.$.$.4 1arehouseStorage
arehouse refers to the place "here the finished products are stored for deliery to consumers. The "arehouse of the lambanog products should hae a room temperature "hich is under the normal condition, &> HC -@8 H$. 4.$.$.5 Distri-ution )hanne%s
The distribution of lambanog products could be in sari3sari stores, supermarkets, public markets, or straight to the final consumer for consumption. The channel of distribution is at its full control.
Sari*sari Store4
Lambano
$inal Consumer
ublic Mar,ets
Figure 58 Distri-ution )hanne% 4.$.3 +ricing Strategy
(dopting a better pricing strategy is a key option to stay iable. It is a learning cure "hen studying the needs and behaiors of customers and clients. 4.$.3. +ricing Structure
Cost3based pricing "ill be adopted "here the cost data "ill be used in determining the selling price. Specially, the full cost pricing "ill be used in order to coer up the operating e5penses. nder the full cost pricing method, selling price is computed by adding the total production and operating cost to a mark3up based on such total cost. The computation belo" sho"s ho" the selling price of the product is arried at. > )ottle 'ackaging Indirect Costs
'hp
>&.0>
+irect Materials
0?.?&6
+irect Labor
0.68
$actory !erhead
A.>
Total Cost
?.606
Mark3up -:8B Selling 'rice per )ottle
0A.?>: >06.>:
4.$.4 +ro!otion Strategy
This inoles the build3up and improement of consumers9 demand. It inoles communication. It may be in erbal and non3 erbal form of strategy. It also deals "ith particular strategy that a business can use in order to encourage the market in the locality to patronize their products and serices to make the business remain stable in the industry. 4.$.4. Ad/ertising
To reach consumer9s a"areness, the product "ill be adertised using tri3media. ;adio and teleision adertisements "ill be used to promote the product. (nd flyer, for a cheaper adertisement, are printed and disseminated to random people or to the target market directly for better business recognition. ith increasing adancement in technology, the use of computers and gadgets may also do by creating "ebsite for on3line adertisements.
4.$.4.$ Direct Se%%ing
Straight for"ardly marketing the product to our potential consumers. It is a "ay to let people kno" about our product and to hold their interest long enough for them to kno" ho" our product can benefit them, "ithout using the teleision or radio for adertising. 4.$.4.3 +u-%icity
The lambanog business need to cultiate effectie media relations, and targeting publicity to key markets are ie"ed as the highest priorities. The business relies on the "ord of the mouth of the consumers for publicity. 7e"s story form about an organization or products, through mass medium at no charge. 'art of public relations, a broad set of communication actiities used to create and maintain faorable relations bet"een the organization and its publics. 4.$.4.4 Sa%es +ro!otion
The business enture "ill proide discount to customers during the holiday*season to attract more clients and hae a greater demand. 'roduct e5hibit and sampling "ill be used as a part of product promotion. ( taste3test campaign "ill also be conducted for product %uality testing.
Chapter TE)H:I)AL FEASIBILITY
This chapter discusses the details of ho" the business "ill delier a product or serice, the materials, labor, transportation, location of the business and the technology needed for the sustainability if the business. 5. Technica% +rocess
This section talks about the procedures of the enture on ho" the product "ill be offered to the market. ( diision of the process "ill be understood in the preceding categories. 5.. The +roduct
Lambanog is "ine made from coconut. It is famous for its potency that normally carries about A8 to 8 proof ariations. It has been passed do"n throughout generations of coconut plantation farmers. The process inoles collecting the sap from the coconut flo"er, similar to rubber tree tapping. The sap is then cooked and fermented to become tuba, a popular coconut toddy. The tuba is then distilled to make lambanog. 5..$ Ra; 2ateria%s
In conducting business operations, the proposed lambanog manufacturing "ill use ra" materials. Such ra" materials and the corresponding cost in the market are sho"n in Table >8. Ta-%e 6 8 Ra; 2ateria%s ;a" Material Coconut Sap /mpty )ottles $laorings2 )ubblegum ;aisins Stra"berry Mango • • • •
1uantity A8 gallons* day &:8 bottles* day
Cost 33 'hp &8.88 each
> kilo > kilo 0.6 liter 0.6liter
'hp >@8.88 'hp >&6.88 'hp >
[email protected] 'hp >86.88
5..3 2anufacturing +rocess
This section "ill tell ho" the Lambanog Manufacturing "orks. The flo" chart of the process is sho"n in $igure >>. )o%%ecting
Coconut sap is the li%uid tapped from the unopened flo"er -spade5 of coconut tree. The sap "hen collected must be pearly "hite in color and s"eet in taste and has the characteristic coconut sap smell. Recei/ing
Coconut sap packed in carbouys -&83L capacity is receied at the production area. •
Transferring to $ermentation ats*Coarse $iltration
The coconut sap is filtered and manually transferred to the fermenting ats. Fer!enting
Coconut sap is allo"ed to ferment in large plastic drums. $ermentation period takes about 03: days to produce an alcohol content of appro5imately @3AB Transferring and Ho%ding
The alcoholic li%uor is transferred to a holding tank that is usually located near or beside the distillation area. The alcoholic li%uor stays in the holding tank until distillation set3up is ready for the ne5t batch. Disti%%ation
The traditional process of distillation is the batch type pot3still process "ith rice hull or "ood as source of fuel. The alcoholic li%uor is heated. The initial distillate -head or Jbating9 "hich contains the undesired methanol and other components is separated and set aside for other purposes. It has a high proof of content -concentration2 >>8 proof. The succeeding distillates that are lambanog hae lo"er alcohol content. #o"eer, as distillation proceeds, the desired alcohol content of A838 proof must be achieed. The distiller uses an alcohol meter -hydrometer to check the alcohol content. It aries from A8 to 8 proof. The remaining li%uor in the distillation at, "hich is the tail, is discarded. It is composed of high alcohol like fusil oil that boils at higher temperature. •
•
'ackaging, the product -Jalak9 is transferred to plastic containers -#+'/3high density polyethylene in full capacity for deliery or storage. Storing
Storing
Collecting
'ackaging
;eceiing
+istillation
Transferring to $ermentation ats
Transferring and #olding
$ermenting
Figure 68 2anufacturing +rocess
5.$ Location Ana%ysis
/nclosed in this part are the location map, icinity map and plant lay 4 out "hich tell about the feasibility of the establishments or entures location to the market. 5.$. Location 2a'
The researchers chose General Santos City because Lambanog Industry in the place is slightly aailable but the sellers but not competitie. This implies that consumers "ill directly go to the firm since it is the biggest company of lambanog and it has a sufficient serice to the customers to attain ma5imum satisfaction. 5.$.$ 9icinity 2a'
$rom General Santos City proper, the researchers "ill pass by to the =atanga"an Central /lementary School in order to go directly to the Lambanog Company at 'rk. 0 Labu )rgy. =atanga"an,General Santos City. The researchers chose the area since the parcel of the land is o"ned by the family of one of the researchers and "ith the permission of the family, the researchers hae agreed to establish the company in that site. The researchers also chose the site because it is accessible to the coconut plantation and it "ill be easy to manufacture lambanog products "ith less effort, time and money. 5.$.3 Esta-%ish!ent Lay&out
This describes the floor plan of the proposed Lambanog Manufacturing 'lant. Interna% 5.3 +roduction :eeds The production needs describes the facilities, the e%uipment, the utilities, and the "aste disposable that "ill be using in manufacturing of lambanog. 5.3. Faci%ities )elo" are the facilities that "ould be established in completing the normal operating cycle of the proposed business. Ta-%e 7 8 Faci%ities
$acilities
+escription
Coconut 'lantation
This is an outdoor rented area of the company "here the coconut trees are maintained.
'roduction (rea
This is the area "here the fermentation and distillation process of making Lambanog is done.
Storage ;oom
This is the area "here the finished products are stored in &83&6 KC.
This is "here the transactions of the business are being recorded. This is also the place "here the records of the business "ere keeped.
!ffice
5.3.$ E
E
,uantity
)ost
Descri'tion
+roduction Based E
0 pcs
'hp
+istillation /%uipment
& pc.
/mpty Containers
08 pcs.
Strainer
6 pcs.
Graduated Cylinder
0 pcs.
Cutted )amboo
88 pcs.
Copper 'ot
& pcs.
@68.88 each (lcoholmeters are for reading -'hp &,&68.88 alcohol content in distilled spirits only. >& -08cm ery accurate (lcoholmeter. 'rofessional grade. 8 3 &88 'roof and 83>88B ab reading. 'hp >68,888.88 each sed for distilling the fermented -'hp 088,888.88 coco sap. 'hp @8.88 each This is "here the collected sap is -'hp &,>88.88 stored for about &3: days. 'hp 08.88 each This is used to filter the coconut sap. -'hp >68.88 'hp 088 each This is "here the distilled coconut -'hp 88.88 sap is measured after. 'hp 0.88 each This is "here the sap is collected -'hp &,@88.88 "hile it is still in the coconut tree. 'hp &,6.88 each sed for fermentation process. -'hp 6,8.88
Ad!inistrati/e E
0 pcs.
'hp &>,888.88 each -'hp ?0,88.88
Telephone
& pcs.
'hp
>,>A.88 each -'hp &,
[email protected] >,8:.88
!ffice Supplies
'hp
$urniture $i5tures
'hp &A,068.88 each
(ir Condition
0 pcs.
'hp
06,88.88 each -'hp >86,888.88
Generator
> pc.
'hp
?8,888.88
+h'
63>=67.??
Tota%
sed for keeping records of the business and also for communication. sed for communication. sed for office "orks in the flo" of the business. sed for the accommodation of guests and people inside the office. sed for the conenience of the emlpoyees in the office and in the conference room sed for the continuation of production in case of electricity loss or black3out.
5.3.3 Uti%ities
To make the business operational, it "ill hae the follo"ing utilities presented on table >8 and "ith its corresponding description and estimated cost per month. The estimated total of the utilities e5pense "ould be 'hp A,888.88. Ta-%e @ 8 List of Uti%ities Uti%ity 1ater
E%ectricity
Heat Te%e'hone Internet
Descri'tion It is a necessity of the business for sanitary purposes -"ashing and cleaning of the e%uipments and etc. It is a necessity of the business to start its operation. /lectricity "ill proide light to the "hole area especially at night -for security purposes. $urthermore, it is used to generate the e%uipments use in making lambanog. It is used in cooking the coconut sap for fermentation. Medium of communication to clients and suppliers sed for other business transactions done in the internet.
T"TAL
Esti!ated )ost +h' 3>6??.?? 'er !onth
+h' >???.?? 'er !onth
+h' >5??.?? 'er !onth +h'
5??.?? 'er !onth
+h'
???.?? 'er !onth
+h' 7>???.?? 'er !onth
5.3.4 1aste Dis'osa%
The business shall hae a proper "aste disposal in order to maintain a clean healthy enironment. The main "aste that "ill eentually produce by the production area are the "aste from fermentation and distillation process. The "aste "ill be disposed in a certain area since it is not harmful because it is a biodegradable "aste. 5.4 Su''%iers Trans'ortation Factors
The suppliers of the materials -"hich supplies the empty bottles and fire"ood "hich is needed in the normal operation of the business has to consider the follo"ing2 A/ai%a-i%ity of Su''%y. There are really times "hen the needed amount of supply that the business firm needs is not sufficient enough . Distance. The supplier of the business must be in local area only -General Santos City because the products needed are readily aailable in this area. It is also ideal to hae a supplier near the production area for lo"er cost . Unforeseen e/ents. There are things that cannot be predicted that could preent the normal operating transportation of supplies to the production area.
5.5 La-or Su''%y
The business "ill hire >6 employees. These employees "ill mostly come from the locale or else"here. The potential employees "ill be searched through adertisements in the flyers and other kinds of adertisement. heneer an applicant has possesses the re%uirement that are needed on a certain Dob then he*she "ill be hired on the spot or "ill still be on hold and filtered if there are other potential applicant perfect for the Dob. 5.6 2anufacturing )ost Data Ta-%e ? 2anufacturing )ost Data
+irect materials used +irect labor Manufacturing oerhead applied Total manufacturing costs
'hp >@0,&88.88 'hp
@@,688.88
'hp
6,888.88
'hp &66,@88.88
The cost of finished goods in making lambanog is attained by adding all the direct labor, direct materials and Manufacturing !erhead. (fter haing the sum of those, a markup is imposed unto the product. Costs that are directly and indirectly traceable unto the product include depreciation, permits and licenses, repairs and maintenance, insurance, rent, supplies, salaries and "ages, utilities and miscellaneous e5penses. The total proDect cost represents the business9 capital re%uired for the startup of operations. It includes the fi5ed capital, and "orking capital. The summation of those capitals "ould then be the grand total cost of proDect.
