CHAPTER 2 MARKET STUDY INTRODUCTION
The market study is the most essential part of this feasibility study. This study includes the demand, supply, demand and supply situation, pricing strategies, marketing program, promotions, and marketing budget. A careful analysis of the demand and supply of the product is needed for it dictates d ictates the feasibility and profitability of the entire project. GENERAL OBJECTIVE In order to achieve a certain goal, the objective must be ascertained. The general
objective of this study is to determine the marketability of the product or service. This includes the demand and supply situations, pricing strategies and marketing programs, and the survey results. SPECIFIC OBJECTIVE Also, this study seeks to determine the following specific objectives:
1. The size, the nature, and growth of total demand for the product; 2. The description and price of the service to be rendered; 3. The supply situation and the nature of competition; 4. The different factors affecting the market of the product; and 5. The appropriate marketing program for the product. BUSINESS DESCRIPTION The business, Imprints, intends to penetrate the markets of T-Shirt Printing within Quezon City. The effectivity of the strategies would take effect and align on the key success factors and different external influences within the internal and external body of the business. Facts are purely based on research methods utilized within the time duration of preparation.
For this business plan, t-shirt printing is then aligned to necessary criteria to find a certain target market. By finding compatible data, the plan seeks potential feasibility and success. Imprints acquired the presented target markets through these segmentation bases: Target Target M arket: arket:
Imprints target markets compose of:
1) Adolescence – comprises comprises of 13 – 13 – 19 19 year-old individuals 2) Young Adult/Adults – comprises comprises of young income-generating professionals, 20 – 20 – 40 40 years of age Secondary Priorities for targeting include: 1) Group Markets – markets who buy in bulk or may contain individuals who can be induced to buy. Schools & Educational Institutions – Schools Schools are also in need for bulk orders within purposes of events or attire requirements. Examples of this purpose are: Intramurals shirts which almost all the students are required to have (Grade school to High School, School Fair shirts, acquisition of school organization attires, School Varsity shirts for sports, and other alike. Schools & Educational Institutions can be a source of a large-base purchase but a disadvantage over revenue can occur when a discount for a bulk-order is requested. Settlement over such issue could be the solution such such as agreements of “meeting halfway” to gain a win-win win-win situation. Business/Offices – Businesses are in need of team building shirts, company shirts, company souvenirs and giveaways that we can most likely provide. The company’s trendy designs would be our main main attraction them to acquire dealings with us. With our repertoire of designs and our creative designing team it would be easy to have customizations with varieties of prices.
Imprint can also provide group shirts (friends, family, Organizations/Groups – Imprint teams, dance troops, etc.). In such market, requirements would be most likely within customized designs for their own to acquire a certain trademark to the people or uniqueness.. Couples – Couples could be a small market / may not be a trend anymore but provision of products over celebrations, anniversaries and especially during Valentines can be a source of revenue. Sports Teams – Examples such as: Neighbourhood League, Amateur Team, Professional Teams, Company Sports Teams would be potential sources of revenue. Specials Events – Catering in special events would be a potential source of revenue. Having a functional need for t-shirt print would result to large revenue (e.g. t-shirts prints for the purpose of theme attires, souvenirs, gifts, etc.). Examples of special events are: weddings, birthday party celebrations, debuts, gaming tournaments, fun runs, concerts, voluntary causes, etc.
Potential compatibility to traits:
Impulse buyers
Quality-seekers
Trend-following individuals
Yearns for sophistication
DEMAND SITUATION
To develop Imprints’ targeting strategies and marketing efforts necessary, demand analysis helps the business in order to measure the current demand as well as project the future demand. The location of our proposed business is at 302 Boy Scout Circle Tomas Morato Avenue, Diliman, Quezon City. The number of the respondents in the survey is computed through Slovin’s Formula: Where: n
=
number of respondents
N
=
population
e
=
margin of error set at 5%
Survey Results:
A. Personal Background
1. Distribution of the Respondents According to Age
16%
5% 45%
13-21 years old 22-40 years old 41-64 years old
34%
64 years old and above
Table 1. Distribution of Respondents According to Age Age Bracket 13 to21 years old 22 to 40 years old 41 to 64 years old 64 years old and above Total
Frequency 182 137 63 18 400
Percentage 45% 34% 16% 5% 100%
The pie chart portrays the distribution of the respondents according to age. The result shows that 182 or 45% of the respondents are from the age of 13 to 21 years old, 137 or 34% of the respondents are from the age of 22 to 40 years old, 63 or 16% of the respondents are from the age of 41 to 64 years old, and 18 or 5% of the respondents are from the age of 64 years old and above. It shows that the majority of the respondents are from the age of 13 to 21 years old. 2. Distribution of the Respondents According to Sex
40% Male
60%
Female
Table 2. Distribution of Respondents According to Sex Sex Male Female Total
Frequency 159 241 400
Percentage 60% 40% 100%
The pie chart portrays the distribution of the respondents according to sex. The result shows that 159 or 40% of the respondents are male and 241 or 60% of the respondents are female. It shows that the majority of the respondents a re female.
3. Distribution of the Respondents According to Social S tatus
16% 49% Student 35%
Employed Unemployed
Table 3. Distribution of Respondents According to Social Status Social Status Student Employed Unemployed Total
Frequency 198 140 62 400
Percentage 49% 35% 16% 100%
The pie chart portrays the distribution of the respondents according to social status. The result shows that 198 or 49% of the respondents are students, 140 or 56% of the respondents are employed, and 62 or 16% of the respondents are unemployed. It shows that the majority of the respondents are students. 4. Distribution of the Respondents According to Weekly Allowance for Students
12% 27% 61%
Less than P500 P501- P750 P751 and above
Table 4. Distribution of Respondents According to Weekly Allowance for Students Weekly Allowance Less than P500 P501 to P750 P751 and above Total
Frequency 23 54 121 400
Percentage 12% 27% 61% 100%
The pie chart portrays the distribution of the respondents according to their weekly allowance for students. The result shows that 23 or 12% of the respondents have weekly allowance of less than P500, 54 or 27% of the respondents have weekly allowance of P501 to P750, and 121 or 61% of the respondents have weekly allowance of P751 and above. It shows that the majority of the respondents have weekly allowance of P751 and above.
5. Distribution of the Respondents According to Monthly Income for Emplo yees
25%
16% Less than 10 000 31%
10 001- 15000 15001- 20000
28%
20001 and above
Table 5. Distribution of Respondents According to Monthl y Income for Employees Monthly Income Less than P10,000 P10,001 to P15,000 P15,001 to P20,000 P20,001 and above Total
Frequency 22 42 38 34 400
Percentage 16% 31% 28% 25% 100%
The pie chart portrays the distribution of the respondents according to their monthly income for employees. The result shows that 22 or 16% of the respondents have monthly income of less than P10,000, 42 or 31% of the respondents have monthly income of P10,001 to P15,000, 38 or 28% of the respondents have monthly income of P15,001 to P20,000, and 34 or 25% of the respondents have monthly income of P20,001 and above. it shows that the majority of the respondents have monthly income of P10,001 to P15,000.
6. Distribution of the Respondents According to Savings in a Month
5% 31%
17%
Less than 500 501- 1500 22%
1501- 2500 2501- 3500
25%
3501 and above
Table 6. Distribution of Respondents According to Savings in a Month Savings in a Month Less than P500 P501 to P1,500 P1,501 to P2,500 P2,501 to P3,500 P3,501 and above Total
Frequency 22 69 88 98 123 400
Percentage 5% 17% 22% 25% 31 100%
The pie chart portrays the distribution of the respondents according to their savings in a month. The result shows that 22 or 5% of the respondents have savings of less than P500, 69 or 17% of the respondents have savings of P501 to P1,500, 88 or 22% of the respondents have savings of P1,501 to P2,500, 98 or 25% of the respondents have savings of P2,501 to P3,500, and 123 or 31% of the respondents have savings of P3,501 and above.
.
B. T-Shirt Preferences
1. How many times are you willing to buy customized t-shirts in a year?
3%
4% 7% Never 33%
53%
Once 2 to 5 6 to 10 above 10
Table 7. Distribution of Respondents According to Times they bu y Customized Shirts. Number of Times They Buy Customized Shirts Never Once 2 to 5 6 to 10 Above 10 Total
Frequency
Percentage
30 15 130 213 12 400
7% 4% 33% 53% 3% 100%
Of the total number of respondents, 30 or 7% of the respondents answered that they never ordered customized shirts while 15 or 4% of the respondents answered that they ordered customized shirts once. 130 or 33% of the respondents answered that they ordered 2 to 5 times, 213 or 53% of the respondents answered 6 to 10 times, and 12 or 3% of the respondents answered for above 10 times.
2. If you were to order customized printed shirts, would you give your own design or choose within the store?
34%
Choose a Design 66%
Give a Design
Table 8. Distribution of Respondents According to Whether The y Choose a Design or Give a Design Classification Choose a Design Give a Design Total
Frequency 137 263 400
Percentage 34% 66% 100%
263 or 66% of the respondents answered that they will give their own designs while 137 or 34% of the respondents answered that they will choose designs within the store. 3. Number of Designs
10%
Single Multiple 90%
Table 9. Distribution of Respondents According to Number of D esigns They Want Number of Designs Single Multiple Total
Frequency 41 359 400
Percentage 10% 90% 100%
359 or 90% of the respondents answered that they want multiple number of designs while 41 or 10% answered they only want single design. 4. Category of Design you like?
0% 26%
16% Quotes 21%
Numbers Cartoons/animations Memes
37%
Others
Table 10. Distribution of the Respondents According to Category of Designs They Like Category of Designs Quotes Numbers Cartoons/Animations Memes Others Total
Frequency 65 86 146 103 0 400
Percentage 16% 21% 37% 26% 0 100%
Majority of the respondents answered cartoons/animations as the category of the design that they want for their shirts, with 146 answers or 37% of the respondents. 103 or 26% of the respondents answered that they want memes as the design while 76 or 20% of the respondents answered numbers. Only 86 or 21% of the respondents answered quotes as design.
5. If you are willing to buy a high-quality shirt, how much are you willing to pa y?
14%
6%
22%
P250-P300 P301-P350
18%
P351-P400 23% 17%
P401-P450 P451-P500 P501 and above
Table 11. Distribution of Respondents According to How Much They’re Willing to Pay Price Range They ’re Willing to Pay P250 to P300 P301 to P350 P351 to P400 P401 to P450 P451 to P500 P501 and above Total
Frequency 89 93 69 72 55 22 400
Percentage 22% 23% 17% 18% 14% 6% 100%
Most of the respondents answered that they are willing to pay P301 to P350 to buy a high quality shirts, with 93 answers or 23% of the respondents followed b y P250 to P300 with 89 answers or 22% of the respondents.
6. What buying method do you prefer?
3% 23%
Online Walk in 74%
Telephone
Table 12. Distributions of Respondents According to Buying Method They Prefer Buying Methods Online Walk in Telephone Total
Frequency 92 293 10 400
Percentage 23% 74% 3% 100%
Of the total number of respondents, 293 or 74% of them prefer walk in as a buying method while 92 or 22% of them prefer online. Only 10 or 1% of the respondents prefer to buy via telephone.
7. Would you like to avail high-quality shirts?
8%
Yes No 92%
Table 13. Distributions of Respondents According to Who Will Avail High Quality Shirts Classification Yes No Total
Frequency 369 31 400
Percentage 92% 8% 100%
369 or 92% of the respondents answered that they like to avail high quality shirts and only 31 or 8% of the respondents answered they don’t like to avail high quality shirts. 8. What kinds of shirts do you prefer?
13%
14%
17%
V-Neck Plain 20%
V-Neck Colored Round Neck Plain Round Neck Colored
15% 21%
Long Sleeves Raglan
Table 14. Distribution of Respondents According to Kind of Shirt They Prefer Kind of Shirts V-neck Plain V-neck Colored Round Neck Plain Round Neck Colored Long Sleeves Raglan Total
Frequency 57 80 83 59 69 52 400
Percentage 14% 20% 21% 15% 17% 13% 100%
57 or 12% of the respondents prefer V-neck Plain shirts and 80 or 14% of the respondents prefer V-neck colored shirts. 83 or 21% of the respondents prefer round neck plain shirts and 59 or 15% of the respondents round neck colored shirts. 69 or 17% of the respondents prefer long sleeves and 52 or 13% of the respondents prefer raglan.
Past Demand
There is no available data about the demand of T-shirt printing for the past years. Therefore, the proponents assumed that the demand determined from the survey is the same as what the demand was for last five years. To compute the annual demand, the total population will be multiplied by the market acceptability rate and frequency of availing. The computed frequency of availing per month is:
Where: FoA
=
frequency of availing
dpm
=
days per month (how often they avail of a karaoke room)
hpd
=
hours per day (number of hours they avail per session)
ppg
=
persons per group (number of persons per group)
The total annual demand for the past five years and the projected demand are presented below. Year 2010 2014 2015 2016 2017 2018 2019
Population Market Acceptability Frequency of Availment Annual Demand 35,697 38,368 38,997 39,637 40,287 40,948 41,619
94.00% 94.00% 94.00% 94.00% 94.00% 94.00% 94.00%
6 6 6 6 6 6 6
201,331 216,396 219,944 223,553 227,219 230,947 234,731
DEMAND-SUPPLY SITUATION
By using the demand-supply analysis, the proponents will come up with a difference which will be the unserved market, unserved demand or demand gap. Demand gap is computed by subtracting the projected annual supply from the projected annual demand as shown below: Year
Annual Demand
Annual Supply
Demand Gap
2010 2014
201,331 216,396
2015 2016 2017 2018 2019
219,944 223,553 227,219 230,947 234,731
187200 187200 187200 187200 187200 187200 187200
14,131 29,196 32,744 36,353 40,019 43,747 44,531
Market Share Analysis
Every business must determine its market share which will serve as a basis of marketing strategies of the establishment. It will define the extent of demand the business need to satisfy. Out of the demand gap, the proponents agreed to cover only 15% as a starting point. This rate will increase by 1.5% each year so as to expand the market share of the business.
Market Share (in hours) for Five Years Academic Year
Population
Annual Demand
Demand Gap
Target Percentage
Target Annual Market Share
2014
38,368
216,396
29,196
15.00%
10,871
2015
38,997
219,944
32,744
16.50%
12,305
2016
39,637
223,553
36,353
18.00%
13,815
2017
40,287
227,219
40,019
19.50%
15,403
2018
40,948
230,947
43,747
21.00%
17,073
T-Shi rt Pr inti ng Trends in th e Phil ippines :
Equipment T-shirt printing equipments are developing since companies wanted to diversify product lines and product t-shirt printing equipment. Pioneer companies like Hewlett-Packard and Epson changed the “game” of t-shirt printing quality with their production of heat-press equipment to partner their quality inkjet/laser printers. Such equipments are available within the Philippines since 2009.
Designs Filipinos are trend followers. Following trends may be seen as a “sheep effect” where it can be seen commonly in this example: a celebrity-induced creation of a trend. Within designs, hypes and trends have a fast – very fast cycles/passage within population preferences. Within this fact, memes, icons, and quotations are mostly used in designs. Within the Philippines, most Filipinos tend to wear shirts that express themselves. On a psychological aspect, Filipinos tend to express on a subliminal way. Within this fact, trend within designs are mostly lined within an individual’s expressions and emotions.
Design Knowledge Availability of designs over the internet has given the community so much to innovate with. Also, the availability of image editing and enhancing software within torrent site has given many people the opportunity to own one without buying and owning a license. Within this unethical advantage, most people obtained knowledge using these available software.
The Economy Of T-shirt Printing & Its Customers T-Shirt Printing establishments have been rising within the nation since the growth of fashion within the Philippines within the year 2005. T-shirt printing businesses rose from sole proprietors who innovated and learned how to print shirts on their own with the assistance of the Internet.
Marketing M ix Strategy
Product
Imprints would be offering high quality shirts sourced from a researched supplier (See Appendices for more details) printed with quality designs by utilization of procedures with the absence of difficulty due to the equipment used characterized with the latest technology. Considerations of high quality which is available within Imprints: 1) Fabric 100% Pure Augmented Cotton – results to quality texture, weight, and fabric density for comfort. 2) Durability – 5 Years of comparable difference 3) Washing Convenience - Cotton is easy to clean; it can be laundered or dry-cleaned. It withstands high water temperatures, so it can be b oiled and thus sterilized Design:
According to our survey, here are our proposed designs for our start-up Category Songs, Bands
Quotation
Strategy
Filipinos are in hype with music. With the influence of media such as MYX within the Philippines, Imprints would dedicate designs that would support OPM (which can also be considered as a voluntary movement of the business towards community support) Within the Philippines, most Filipinos tend to wear shirts that express themselves. On a psychological aspect, Filipinos tend to express on a subliminal way. Within this fact, trend within designs are mostly lined within an individual’s expressions and emotions.
Memes
Icons
This would still instill decency over Imprints products for which quotation are maintained out of obscenity. Memes are internet trends. Sources like 9gag would be a great source of designs but would incorporate copyright by making parodies to avoid any violations. Icons are composed of all individuals who are trending like celebrities.
Imprints designs are not limited within the list. The list provides the foundation of designs Imprints would provide in its launch. The main objective of Imprints is to provide designs that are in trend or hype. Price Pricing strategies: Market Penetration – Since the business would have well-entrenched competitors on its location, penetrating the market with lower prices would be the business’s strategy. Psychological Pricing – The use of – P1 pricing together with the lower prices of Imprints products are utilized.
Impronts prices would give a rebuttal to the competitors present. The business would contradict the practice of having 100% - 300% mark-up within products offered by having 48% - 70% Markup within the products without jeopardizing generation of profit. PRODUCT ITEMS PRODUCT COSTING Direct Material Direct Labor Overhead Total Cost Add: Mark Up Selling Price
Plain Ring
158.00 4.00 10.00 172.00 107.00 279.00 279.00 CONTRIBUTION MARGIN PER UNIT Selling Price 279.00 Less : Variable Cost 172.00 Contribution Margin 107.00 CONTRIBUTION MARGIN RATIO Selling Price 100% Variable Cost 62% Contribution Margin 38%
Colored
Plain V-Neck
Colored V-Neck
Raglan
Long Sleeve
178.00 4.00 10.00 192.00 107.00 299.00 299.00
168.00 4.00 10.00 182.00 107.00 289.00 289.00
188.00 4.00 10.00 202.00 107.00 309.00 309.00
198.00 4.00 10.00 212.00 107.00 319.00 319.00
208.00 4.00 10.00 222.00 107.00 329.00 329.00
299.00 192.00 107.00
289.00 182.00 107.00
309.00 202.00 107.00
319.00 212.00 107.00
329.00 222.00 107.00
100% 64% 36%
100% 63% 37%
100% 65% 35%
100% 66% 34%
100% 67% 33%
Communication Channels
Social Networking Sites
Website Forums Individuals
Communication from Imprints (Inbound/Permission Marketing)
Word-Of Mouth Marketing Group Markets (Bulk-Orders)
E-mail
Phone Calls/ Mobile Messaging
Promotion Promotion Strategies:
Strategies Encouraging Impulse Buying: 1) Encouragement to Shop – Increase Brand Reputation Imprints would have Online Advertising & Print Media promoting the love for Imprints. Promotion towards the brand would potentially increase brand awareness and would eventually turn into recognition. 2) Loss Aversion Switch – Giving Limited Time Offers Giving limited time offers would provide customer the need to purchase. Normally this would affect the purchase decisions of customers by causing them to prevaricate over a purchase especially if it has high quality. 3) Twisted Heuristics Heuristics – unconsciously held rules of thumb
The business can take advantage of this by packaging up combinations of products as bulk buys. Customer would potentially get the impression that it must be good value would potentially purchase than researching any further. 4) Discounting Seasonal discounts especially in predicted times of low sales. Advertising:
1) Print Media – Traditional Print Media providing brochures, etc. 2) Online Advertising – Utilizing Social Networking Sites especially Facebook to provide online advertisements via organic advertising (within the first year of operation) 3) School “Celebrity” Advertising – To minimize advertising expenses, Imprints would use famous students within schools to bring the brand hype onto the group market (especially the target market) 4) Government-Aid Advertising – Community Assistance Imprints would take permission and assistance from the government of Quezon to place friendly reminders within the community (especially schools and businesses within). This would not only increase brand awareness but also shows Corporate Social Responsibility Others:
1) Attending to Cosplay Conventions - With the influence of Cosplay, the business would also provide t-shirt designs dedicated to such events and would cater goods within the event 2) Sponsoring School Merchandise Sponsoring school merchandise would be a unique way to provide a certain brand image over markets.
Advertisements
Competitor Analysis
Critical Success Factors
Competitors
B Print To Shirts 1
C Tarpaulin & Shirt Prints 1
D Score
E Revinch
Advertising
A Amazing Playground 2
1
1
F Tees & Prints 2
Customer Service
2
1
3
2
3
3
Compliance To Price-Sensitiveness
1
3
4
2
2
1
Expertise
3
2
3
3
3
4
Product Quality
4
2
3
3
3
4
E – Commerce
3
1
1
1
1
3
Customer Loyalty
4
2
3
2
2
4
Expansion
2
1
1
1
1
3
Market Share
4
1
3
2
2
4
Product Line Offerings
3
2
2
2
2
3
Total
28
16
24
19
20
31
*1-lowest, 4-highest
Competitor
Monthly Customers
Average Price
A B C D E F
1000 450 700 200 400 800
400 120 80 180 250 600
T-Shirts Produced Monthly 2000 4000 2800 1600 3200 2000
Monthly Sales 800,000 480,000 224,000 288,000 800,000 1,200,000
Competitors’ Map
SWOT ANALYSIS STRENGTHS
-
REPERTOIRE OF DESIGNS AND PATTERNS FOR SHIRTS HAS A COMMUNITY IMPACT
-
UP TO DATE TECHNOLOGY IN DESIGNING AND MANUFACTURING – DELIVERY OF VALUE
-
DELIVERING SERVICES (CAN BE A POTENTIAL USP)
-
FLEXIBLE & VERSATILE
WEAKNESSES
-
”EXPERIENCE” IN HANDLING SITUATIONS SUCH AS (RUSH ORDERS, FORTUITOUS EVENTS AND SUCH)
-
TRANSPORTATION FOR SUPPLIES
-
DIFFICULTY IN ESTABLISHING BRAND TO THE PUBLIC
CUSTOMER ORIENTED & DRIVEN OPPORTUNITIES
-
-
-
-
HIRING OF POTENTIAL EMPLOYEES (IF BUSINESS GROWS) T-SHIRT TREND WILL REMAIN AS A BUSINESS OPPORTUNITY NOT ONLY FOR THIS YEAR BUT TO THE COMING YEARS AS WELL. CONTINUOUS GROWTH FOR ONLINE COMMERCE IMPROVING INVESTMENT CLIMATE OF THE PHILIPPINES WITH 49.1%. ND RANKED 2 IN ASIA NEXT TO MYANMAR IMPROVING BUSINESS CLIMATE, PHILIPPINES PART OF THE TOP 10 (FOR SMALL TO MEDIUM BUSINESSES).
THREATS
- NECK TO NECK ONLINE COMMERCE COMPETITION DUE TO THE ALIENATION OF E-BUSINESSES IN THE ONLINE WORLD (FACEBOOK, TWITTER, INSTAGRAM ETC.)
-
COSTS FOR RAW MATERIALS IS RISING
-
UNDETERMINED PRICING CLIMATE FOR PETROLEUM
-
UNDETERMINED PHILIPPINE CLIMATE (COULD AFFECT OUR TRANSPORTATION AND LOCATION OF OUR BUSINESS)
Demand & Supply Analysis
Brgy. Laging Handa Brgy. Paligsahan Brgy. Santa Cruz Brgy. South Triangle
5,606 4,848 4,868 12,344
Brgy. Obrero
8,031
Source: http://web0.psa.gov.ph/content/quezon-city-population-peaked-28-million-results-2010-census-population-and-housing
Year
Population Market Acceptability Frequency of Availment Annual Demand
2010 2014 2015
35,697 38,368 38,997
94.00% 94.00% 94.00%
6 6 6
201,331 216,396 219,944
2016 2017 2018 2019
39,637 40,287 40,948 41,619
94.00% 94.00% 94.00% 94.00%
6 6 6 6
223,553 227,219 230,947 234,731
Competitor Monthly Customers Average Price A B C D E F
1000 450 700 200 400 800 3550
T-Shirts Produced Monthly
400 120 80 180 250 600
Year
Annual Demand
Annual Supply
Demand Gap
2010 2014
201,331 216,396
2015 2016 2017 2018 2019
219,944 223,553 227,219 230,947 234,731
187200 187200 187200 187200 187200 187200
14,131 29,196 32,744 36,353 40,019 43,747
187200
44,531
2000 4000 2800 1600 3200 2000 15600
Monthly Sales 800000 480000 224000 288000 800000 1200000 3792000
