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ECONOMIC ASPECT | 18
GENERAL MARKET DESCRIPTION
As the country’s economy grows, consumers’ purchasing power also
increases. With more money to spend, Filipino consumers have become more
interested in shopping and want convenience along the way. For this reason,
supermarkets have then sprouted from across the different areas of the country
to serve insistent demand. One common thing these supermarkets lack is the
technological advancement to best serve the growing demands of the people
from different walks of life. Why do they still confine in the traditional bar code
scanning when there is now available RFID technology that can improve their
operations and at the same time can promote convenience among the
shoppers? Why not revolutionize the typical trolley shopping system to an
automated push cart, the E-Cart: ASSET?
As of now, Technocart Corporation chooses to operate in the National
Capital Region (NCR) and Region III for the following reasons:
1. Technocart Corporation wants to get the attention of big supermarkets.
There are various supermarkets and shopping center in NCR and Region
III. They are commonly confined in the cities and city-like areas such as
Quezon City, Pampanga, and Tarlac. Targeting these areas could give a
better market demand for Technocart Corporation's E-Cart: ASSET.
2. There is a strong evidence of feasibility.
Technocart Corporation also chooses to operate in the said area
because of a strong evidence of feasibility as reflected in the surveys
made upon shoppers and to some extent; supermarket owners also
support the reinvention. Technocart Corporation will ensure that it has the
capacity to operate in the entire area.
3. The process of innovation comes little by little.
ECONOMIC ASPECT | 19
In the event of innovation like this, it will be hard for the administration of
supermarkets to create a nationwide alteration of all its mall branches. In
short, to make the reinvention less risky, it is first tested in a single branch
and eventually, to next branches and so on. It depends upon the actual
results of its success whether the intended outcome reflected in the
feasibility study meets the reality.
FACTORS AFFECTING DEMAND
Before projecting and analyzing the demand, Technocart Corporation
considers some factors that can influence its target market. These are:
Price
The price of the product is one of the most important factors that
influence demand. Price is not constant. As the price of the product increases,
quantity demanded falls because of the decrease in the consumers' ability to
buy. In the same manner if the price decreases, the demand increases. Target
market might get discouraged by the expensive capital outlay but if they will
measure the innovation in the long run, it will be much beneficial saving the
salaries of their cashiers which are paid monthly.
Market Size
The determinant of the market size lies on the number of potential buyers
that may patronize the product. This factor affects the demand in a way that if
the product embraces a bigger market size, this will lead to a larger number of
potential buyers and similar to this, a smaller market size leads also to a smaller
target market. Supermarkets in NCR and Region III as the target market of
Technocart are considered a big market size.
Ability to buy
The demand of the E-Cart: ASSET is influenced by the size of the
supermarkets' income and ability to buy. High-end supermarkets have more
ECONOMIC ASPECT | 20
means to shift from traditional pushcarts to adapting E-Cart: ASSET system
because they have the means to invest whereas medium and small-sized
supermarkets have the tendency to retain their current system because E-Cart:
ASSET requires a large amount of investment.
Substitute Products and Services
Adapting to fully integrated technological system like what is promised by
E-Cart: ASSET requires branch by branch application before it can materialize. It
requires change in some of the traditional system companies’ exercise. Due to
this reason, supermarkets may still prefer to use their traditional pushcarts and
shopping service. With this threat, Technocart Corporation must ensure that
benefits from its E-Cart: ASSET will prove that the investments of potential markets
are worth it.
Potential Competitors
There is a lot of opportunity for investors and businesses to reinvent
technology into greater heights. Technocart Corporation sees that there will
come a time that new entrants with the same reinvention, the E-Cart: ASSET, will
flourish and post a challenge to the company. This factor will affect the demand
for E-Cart: ASSET because primarily, our target markets will have much more
options and thus requiring Technocart Corporation to always seek for
competitive edge like improved product specifications.
Tastes and Preferences
The target market's tastes and preferences continue to change
depending on several factors like habits, social customs, season, trend,
judgment, observations, insights, and understanding with regards to innovation.
Any change in these factors has a corresponding effect on the demand. In a
rapidly changing economy, more investors and companies adapt to
technological advancements. This refers to the change in ideas and business
ECONOMIC ASPECT | 21
practices. To respond with the call of innovation, E-Cart: ASSET revolutionizes not
only the traditional push carts in the supermarkets but also the whole retail
shopping experience. The shoppers are the lifeblood of our target market, the
supermarkets. Shoppers find this innovation as the answer to what they call as
convenience and budget friendly shopping galore. As our target market
responds to the varying demand for innovation these end consumers lift,
Technocart Corporation will also be at par with the trend by providing our target
market this essential improvement, thus increasing the demand for E-Cart: ASSET.
DEFINING THE MARKET
1. Acceptability as to Shoppers
Technocart Corporation clearly identifies supermarkets as its target
market. But before considering the stand and preference of these
supermarkets, the company has considered first the point of view of the
different shoppers who will use E-Cart: ASSET. The choice of the shoppers has
a tremendous effect on the decision of our target market: Would they
patronize our innovation or not?
Survey method and Statistical Treatment of Data
To gather all relevant data and enable the corporation to analyze
the perception of shoppers, the proponents conducted a survey on
different supermarkets. The said survey was done outside certain
supermarkets in Bulacan to make sure that only those who really buy and
make use of trolleys be the precise representation of the survey
participants.
The original sample size of the respondents was 100. It was adjusted
after the meeting of Technocart Corporation with Robinson’s supermarket
after it has known that the average number of shoppers who transacts
ECONOMIC ASPECT | 22
with the supermarket daily is 2,200 based on the interview with Ms.
Maricel, manager of Robinsons Supermarket, on July 2, 2015.
The adjusted sample size of the survey consisted of 338 respondents
and was determined based on Slovin’s formula:
N
[1+N (e)2]
Where:
N = Population
(e)2= Margin of error*
1+ 2,200 (.05)2
Division of respondents
1. Low spending and high spending shoppers.
This is relevant because the acceptability of E-Cart: ASSET from the
point of view of the shoppers may vary depending on the amount of their
spending and their bargaining power. Mostly, High end shoppers might
prefer to use E-Cart: ASSET compare to those shoppers who has a low
bargaining power.
The respondents were divided into two groups: P 3,000 and below
and P3,000 above. The amount of P3,000 was get from the average
spendings of shoppers based on the survey gathered.
338 respondents =
Sample Size =
*margin of error refers to
acceptability of the group to
recognized error in the
determination of sample size
2,200
ECONOMIC ASPECT | 23
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
37%
63%3,000 pesos and below
Above 3,000 pesos
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
3,000 pesos and below Above 3,000 pesos
28%
42%
69%
58%
3%0%
Always
Sometimes
Never
The following are the summarized results of survey from shoppers:
EA_Illustration#1: Division of respondents based on the amount of their groceries
EA_Illustration#2: Respondents with regards to their experience in a long lane
cashier
ECONOMIC ASPECT | 24
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
3,000 pesos and below Above 3,000 pesos
95% 95%
5% 5%
Yes
No
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
3,000 pesos and below Above 3,000 pesos
100%95%
0%5%
Yes
No
EA_Illustration#3: Effectiveness of E-Cart: ASSET in saving time and effort
EA_Illustration#4: Consumers who are willing to adapt technological
advancement in shopping
ECONOMIC ASPECT | 25
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
3,000 pesos and below Above 3,000 pesos
95% 97%
5% 3%
Yes
No
EA_Illustration#5: Consumers who prefer to use E-Cart: ASSET
2. Age
This is relevant because the acceptability of E-Cart: ASSET from the
point of view of the shoppers may vary depending on their age. An old
one might not prefer to use E-Cart: ASSET because they are not willing to
adapt technological advancements while a younger one might be willing
to use E-Cart: ASSET.
ECONOMIC ASPECT | 26
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
43%
57%
Above 40
40 and below
The following are the summarized results of survey from shoppers:
EA_Illustration#6: Division of respondents based on their age.
EA_Illustration#7: Respondents with regards to their experience in a long lane
cashier
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
40 and below Above 40
23%
43%
68%
57%
9%
0%
Always
Sometimes
Never
ECONOMIC ASPECT | 27
EA_Illustration#8: Effectiveness of e-Cart: ASSET in saving time and effort
EA_Illustration#9: Consumer who are willing to adapt technological
advancement in shopping
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
40 and below Above 40
100%95%
0% 5%
Yes
No
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
40 and below Above 40
97% 95%
3% 5%
Yes
No
ECONOMIC ASPECT | 28
EA_Illustration#10: Consumers who prefer to use E-Cart: ASSET
The above data acquired from the surveys states that most of the
shoppers are interested to use E-Cart: ASSET. They prefer to use E-Cart:
ASSET because it has a lot of features that can improve their life by means
of saving time and effort.
2. Acceptability as to Supermarkets
After considering different opinions of shoppers, the next step for
Technocart Corporation is to consider the stand and preference of its target
market which are the supermarkets. This is one of the most important and
crucial part of the aspect since this will define the prospective customers of
the company which will eventually determine the feasibility of E-Cart: ASSET.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Above 40 40 and below
97% 95%
3% 5%
Yes
No
ECONOMIC ASPECT | 29
Survey method and Acceptability of Demand
Technocart Corporation first determines the list of supermarkets in
nearby places that has the potential to be the respondents of its survey.
Then, the corporation categorizes its market into three main types:
Massive type, Bodega type and Convenient Store type. Below are the lists
of supermarkets among the three categorizations:
EA_Illustration#11: Categorization of supermarkets
EA_Illustration#12: Number of branches in each supermarket
TARGET MARKET CATEGORIZATION
MASSIVE TYPE
BODEGA TYPE CONVENIENT STORES
TYPE
Robinson’s
Supermarkets
Merkado Markets
N.E Supermarkets
Robinson’s Easy
mart
Tibagan
COOPMART
CVC
Supermarkets
Categorization
Supermarket
No. of Branches in
Region III NCR
Massive Type Robinson's Supermarkets 14 25
Merkado Market 0 1
Bodega Type N.E Supermarkets 6 0
Robinson's Easy mart 6 2
Convenient Stores Tibagan COOPMART 2 0
CVC Supermarkets 4 3
ECONOMIC ASPECT | 30
Technocart Corporation conducts its survey by first sending some
appointment letters and a sample of its abstract to schedule their meeting
regarding questions that determine their position regarding E-cart: ASSET.
Sending of letters is done through e-mails and hard copy both on main stores
and nearby branches.
The meeting started with a brief discussion of the product. The team
prepared a PowerPoint Presentation and gave their insights regarding the
product. There is a good interaction between the team and the manager
regarding some benefits and future problems that might be encountered
during the implementation and production of E-Cart: ASSET. Robinson’s
Supermarkets also allows the team to gather some data primarily financial
and non- financial in nature to be used in the technical and financial aspect
of the study.
As a result of the long discussion, the following results to the stand of
the supermarket.
Per Categorization
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Massive Type Bodega Type Convenient StoreType
100% 100%
50%
0% 0%
50%Yes
No
ECONOMIC ASPECT | 31
EA_Illustration#11: E-Cart: ASSET is economically feasible among supermarkets
As a whole
EA_Illustration#12: E-Cart: ASSET is economically feasible among
supermarkets
Per Categorization
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Supermarkets
83%
17%
Yes
No
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Massive Type Bodega Type Convenient StoreType
100% 100%
50%
0% 0%
50%Yes
No
ECONOMIC ASPECT | 32
EA_Illustration#13: Possibility that the company will invest on E-Cart: ASSET
As a whole
EA_Illustration#14: Possibility that the company will invest on E-Cart: ASSET
3. Economist Perception
In order to ensure the projection of demands regarding E-Cart: ASSET
be feasible, Technocart Corporation seeks the advice of some professionals
specifically a professor and a well-known consulting group in Manila.
The discussion with Mr. Mario Alex Clarin, the Strategic Management
Professor in Baliuag University resulted to a positive evaluation regarding E-
Cart: ASSET.
“I like the idea, I believe that this E-Cart: ASSET is the next way that customers
can buy from retail stores because as we all know technology is becoming
miniaturized. It’s a very innovative practice in the retail industry because no
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Supermarkets
83%
17%
Yes
No
ECONOMIC ASPECT | 33
one has start of this in the Philippines, which I know of. I believe there is a
reason and there is a drive for this product in the future.”
The discussion with Abrea Consulting Group also resulted to a positive
evaluation.
“The idea seems to be interesting. Before we can say it is feasible, the group
must prove that adoption E-Cart: ASSET has a favorable impact on the
income of supermarket. But overall the idea was nice and sounds good.”
DEMAND PROJECTION
Supermarkets are patronized mostly by middle age and technology
proficient consumers. Every business structure should be tough enough to heed
the call of technological advancements. End consumers have the never ending
process of satisfying their needs by means of purchasing items from supermarkets
and shopping centers thus creating the raging demand for innovation in the
shopping industry. Innovation that caters convenience among what these
supermarkets consider as their ultimate source of income - the shoppers.
In light of the foregoing, Technocart Corporation foresees the strong
demand of E-Cart: ASSET and its potential entrance to the market because of
the survey which resulted to a favorable response of both shoppers and
supermarket as shown in the illustration above. The flourishing demand for the
product is reflected by the booming number of supermarkets and shopping
centers all over the country that could add up to its prospects.
SUSTAINABILITY OF THE PRODUCT
Sustainability refers to how Technocart Corporation will enable itself to
keep on the track both with the continuous technological innovation and
market stability. It encompasses the continuous enhancement of the products
specifications and the proactive marketing strategies to the varying stimuli of the
ECONOMIC ASPECT | 34
wild business environment. The going concern assumption of E-Cart: ASSET is
deemed sufficient enough as Technocart Corporation promotes to establish a
good relationship with its suppliers and market. Both are actively participating in
the system. There would be a continuous profit on the part of Technocart such as
that coming from maintenance service which lies solely on the hands of the
former. This is also a test to Technocart on how it will respond to the system
support with regards to the operations of its product.
Sustainability is also at hand once sales of E-Cart: ASSET becomes stable
and further growing. Supermarkets which improve their operations and cost
efficiency would be a better representation of its sustainability of the product
and thus, confronting other prospective target market to go in line with the
innovation.
ECONOMIC VIABILITY OF THE PRODUCT
Economic viability is when a project proves to be economically feasible,
innovative and sustainable in terms of investing financial resources into the
project. Funding for the project must be compatible with the demands and
constraints that occur during the project's life span. It is an activity that can
support itself financially. It also deals with how the target market will respond to
its market entrance. The following are some factors indicating the feasibility of E-
Cart: ASSET.
1. High acceptability of the product both by Supermarket and shoppers
2. Abundance of raw materials available in the market.
3. New and improved features of the product.
4. Minimization of human errors (cashiers).
5. Reduction of theft on the part of grocery stores.
6. Huge production facilities are not necessary. (Outsourcing of the product
parts)
7. Convenience on the part of shoppers.
ECONOMIC ASPECT | 35
8. Proficiency of programmers and electronics engineers are at hand.
9. Budget friendly.
10. New avenue of marketing/advertisement to other business operations.
COMPETITION
As the E-Cart: ASSET is to be the first electronic push carts to be operated
in the Philippines. Its competitors are those companies who traditionally created
a typical cart which is now currently seen in the market. These indirect
competitors of Technocart Corporation are given importance in the Marketing
Aspect wherein the company has set some means of marketing and distributing
the product in order to be competitive.
Also, to ensure that E-Cart: ASSET has a competitive advantage it does
not only uses technology that revolutionizes not just the typical trolleys that
shoppers use in the supermarkets but the whole shopping experience. This
breakthrough in the shopping industry promotes among others convenience on
the part of shoppers and efficiency in cost and operations on the part of
supermarkets. Other features were already mentioned in the economic
feasibility. E-Cart: ASSET attests to be worth it of investment as it does not only
promise a one-time return of investment for the company but good harvest in
the long run through maintenance income. Businesses who will adapt to the
innovation will basically lay away its cost in cashier machine procurement and
salaries of cashier staff. This is definitely favorable especially for investors who
plan to venture to supermarket business. Technocart believes that through the
entrance of E-Cart: ASSET in the market, people will ease the shopping hassles
and supermarkets will be more efficient and profitable, enabling Technocart to
live with its mantra of making standard as its way of life.
ECONOMIC ASPECT | 36
SUPPLY ANALYSIS
In the analysis of supply, Technocart Corporation has conducted a
detailed study regarding the availability of inputs including the raw materials
such as push cart, tablet(monitor), RFID sticker, charger of battery, battery
modules, load balancer TP link, weather proof UTP cable, Rj45 connector, RFID
writer, HP DL380, network attached storage, uninterruptible power supply (UPS),
rack, HP ML150 G5 (Tower Server), RF module, GP90A long range proximity
reader, as well as the availability of labor and overhead that are needed for the
production and operations.
Outsourcing is a practical cost-saving strategy when used properly. It is
sometimes more affordable to purchase a good from companies with
comparative advantages than it is to produce the good internally. Offshore
outsourcing can help in saving time, effort, manpower, operating costs, and
training costs, thus giving overall cost advantage.
In relation to this, Technocart Corporation has opted to contract and
outsource the raw materials for production as enumerated above, and
excluding the supplies such as soldering irons, wires, screws, electrical tapes, and
general purpose tool set which the corporation will provide.
It has been presented in the management aspect the requirements and
qualifications needed for manpower. Also, presented in the technical aspect is
the list of possible suppliers of materials across the country and in China.
Technocart ensures that there is availability of the skilled manpower and enough
materials to meet the future demands.