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AMIGO SEGURADO Spaghetti Marketing Plan
I. Executive Summary
La Filipina Uy Gongco Corporation launched its Amigo Segurado Spaghetti and
Macaroni in the last quarter of 2012. Amigo Segurado premium pasta is health friendly pasta
made from the choicest durum wheat, guaranteeing the consistent pasta firmness and nutritious
goodness that only an all-natural product can give. It is the pasta for today’s discerning consumer
who wants high quality and healthy food products.
This report forms the marketing plan for Amigo Segurado Spaghetti in the Philippine
consumer market. The plan contains the group’s views on the overall product concept and
proposition, the product’s target market, positioning, marketing strategies for product, price,
place and promotion and short and long-term projections for Amigo Segurado Spaghetti.
La Filipina Uy Gongco Corporation is investing P1 Billion in modern plant and
equipment facilities for mass production of their new pasta product line and it is planning for
expanding its distribution network. This marketing plan propeses to expand its operations in
Panay area which includes the provinces of Iloilo, Antique, Aklan and Capiz.
The place strategy will focus on retail stores around Panay because retail stores are the
primary sources of Filipino households’ in-home consumer packaged goods. Intensive dealer-
distributor network is desired focusing on retailers as key channels for end consumers. As for the
promotion strategy, the company will invest in print, broadcast, and outdoor advertising. The
promotions will be started in the third quarter of 2013 until the second quarter of 2014.
In implementing this proposal the company expects to generate the following net income
for the year; P15,097.18 for 2014 and 2015; P662,556.23 for 2016; P759,007.21 for 2017 and
P1,463,499.71 for 2018.
II. The Challenge
About Amigo Segurado
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AMIGO SEGURADO Spaghetti Marketing Plan
For the longest time, the market in the Philippines was created to by brands that bespoke
of good quality but leaves more for wanting. Amigo Segurado, on the other hand, was coming in
as a player promising to give more for typical pasta consumption and become the ultimate pasta
perfection locally.
Amigo believes in the power of the cooking woman and mother. Cooking is more than
just transforming raw ingredients into a dish. It is the creation of flavor into food, which sparks
delight into everyday meals. With the power of cooking in their hands, women create
relationships and strengthen bonds.
Brand Values
The challenge is to make our products the healthy choice for consumers without
compromising taste, convenience and affordability.
Amigo Segurado believes that good food matters. It adds untold pleasure to our lives.
And everyday meals can be just as magical as special occasions by adapting it to Filipino
cuisines.
Amigo Segurado further believes that it can be:
“A food solution that elevates you out of everyday life and provides you the exciting
ability to create an incredibly tasty meal without any hassles and thus ensure your family’s
good health while remaining within your budget.”
III. Situation Analysis
Company Analysis
In 1901, Mr. Uy Yan Gong (Julian Uy Gongco) opened a bakery and grocery store. The
business thrived thru his hardwork, diligence, and integrity. La Filipina Uy Gongco grew to
become a reputable importer and distributor of general merchandises from the U.S.A., China,
Thailand, Hawaii and Europe. It was one of the biggest trading houses in Panay and Negros
Islands.
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AMIGO SEGURADO Spaghetti Marketing Plan
The Second World War destroyed almost all material wealth he accumulated. Only his
good reputation remained intact. He was incarcerated by the Japanese imperial army and died
shortly after his release from detention.
His eldest son, Mr. Uy Chiong (Jose Uy Gongco) reopened the store after the liberation
in 1946 under the name La Filipina Uy Gongco de Uy Chiong. Strong supports were provided by
the old suppliers of La Filipina Uy Gongco. In 1949, La Filipina Uy Gongco de Uy Chiong
became a partnership adopting the name La Filipina Uy Gongco. Mr. Tan Chin Eng, a cousin
and a new partner, took the helm of the business.
The company became a corporation in 1971 under the name La Filipina Uy Gongco
Corporation. Mr. Alfonso A. Uy (Alfonso Uy Gongco), who joined the company in 1954 at the
age of 15, took over the leadership of the company in the late 1960s up to the present.
From a small bake shop and grocery store, La Filipina has grown into a company
involved in trading of feeds ingredients, fertilizers, sugar, vegetable oils, grains, wheat flour, and
owner-operators of sugar mill, flour mills, animal feeds mills, livestock farms, cargo ships,
hotels, housing projects, shopping mall, and bank.
The company’s success is attributed to its policy of high integrity, reliability as a provider
of quality products and services to customers, equal opportunity employer, responsible corporate
citizenship, and trust worthy relationship with stockholders. The company takes pride in its
people. The strong team composed of a group of able executives and staff who assist the
president in the planning and operation of the group of companies.
The goals of La Filipina Uy Gongco Corporation are the following:
To expand production facility while maintaining the quality of its products
To establish strong sales in the country’s major supermarket chains
La Filipina Uy Gongco Corporation focuses on the following:
Value. We offer greater value to the consumer with nutritous products that have exquisite
flavor.
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AMIGO SEGURADO Spaghetti Marketing Plan
Integrity. Our commitment to the highest standard is the foundation of our customers
trust.
About Pasta
A serving of cooked spaghetti (1/2 cup) contains mere 99 calories, less than half a gram
of fat, and less than 5 milligrams of sodium. Pasta is high in complex carbohydrates, which helps
give us energy.
Pasta comes in many different shapes and sizes. There are simple string-shaped pasta like
spaghetti and vermicelli, ribbon-shaped ones like fettuccine and linguine, short tubes like elbow
macaroni and penne, decorative fancy shapes like farfalle and rotelle, large sheets like lasagna,
and hollow pasta stuffed with filling, like ravioli, manicotti, and tortellini.
It has been part of the Filipino culture to associate pasta with occasions like birthdays,
fiestas, Christmas, etc. Today’s consumers have redefined this tradition. Everyday could be a
very special day without any occasion, thus everyone can eat pasta anytime they want. No matter
what your background or cooking skills may be, everyone should be able to create an incredible
meal without having to spend hour in the kitchen.
Its association with quality, taste, convenience and innovation and the increasing health
consciousness in consumers are the major strengths of the company while its major weaknesses
are its limited distribution, customers’ lack of brand awareness and the highly competitive
established brand competitors.
Customer Analysis
The Philippines’ population has been growing by approximately 2 percent annually,
currently reaching nearly 100 million. This has had a compounding effect on the demand for
food and beverage products.
Consumers in the Philippines have become increasingly price-sensitive due to the
economic recession. Consumers are expected to continue searching for economy brands,
allowing for private label brands to increase their market presence.
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AMIGO SEGURADO Spaghetti Marketing Plan
The Amigo Segurado Spaghetti’s primary target market is the mothers comprising the
housewives, working or professionals who cook regularly or cater food preparations for family
occasions. Potential market also includes the urban professional segment, which has little time to
prepare dinner and will be attracted to quality and freshness of The Amigo Segurado products.
The pasta products are ready to eat in half the time of dry pasta (one to three minutes) and are
fresher than the competition. This gives the Amigo Segurado products a decidedly better taste
and consistency.
Spaghetti is a popular and favorite dish in Philippines. In most of the occasions like
parties and gatherings, spaghetti will be the one of the main stays; even McDonald’s and other
popular fast food chains have spaghetti on their menu. Since, Filipinos are also very fond of
pasta and pizza- the reason why these are always available whether in fast foods or in casual
dining restaurants. What’s not to love about Filipino Sweet Style Spaghetti, a must for a Pinoy
children’s birthday party along with fried chicken and hotdogs on bamboo skewers with a
marshmallow on each end.
Mothers – housewives, working or professionals who cook or cater parties for family
occasions are the primary target market for dried pasta in most of the studies conducted,
dominantly Class C and D but also includes Class B aging 20 to 55 years old.
Purchasing dried pasta is highly seasonal. Higher sales revenue can be achieved during
the 1st quarter of the year for fiesta and graduation celebration purposes. December holidays like
Christmas and New Year is also a good time to generate income. Celebrations like birthdays,
baptism, anniversaries and other special occasions may include spaghetti on their menu.
The followings are the needs, wants and demands of spaghetti to the mothers:
• Mothers need to satisfy hunger, express love, be recognized and prepare the best food for
their family and loved ones.
• Mothers want to buy affordable products to maximize the value for money and at the
same time are concerned about product quality.
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AMIGO SEGURADO Spaghetti Marketing Plan
Competitor Analysis
Direct competitors are other pasta brands like Knorr’s Royal Spaghetti, Ideal Gourmet,
Del Monte’s Spaghetti Italiana, Ram’s Premium Spaghetti and Fiesta Spaghetti. Indirect
competitors include pancit, palabok, take out & delivery noodle dishes, restaurants and fast food
chains like Jollibee, serving spaghetti and other noodle dishes.
Pasta in the Philippines is usually flavored with just spaghetti sauce and meatballs but
unlike other brands of pasta, Amigo Segurado can go perfectly well with the Filipino’s everyday
viand like sardines, adobo, afritada, menudo and other Filipino “ulam”.
When it comes to affordability, White King Fiesta and Ram premium compete with
Amigo Segurado. For a 1kg package, the prices of Knorr’s Royal Spaghetti, Ideal Gourmet, Del
Monte’s Spaghetti Italiana, Ram’s Premium Spaghetti and Fiesta Spaghetti are P105.55, P89.00,
P111.75, P65.10 and P69.00 respectively. Amigo Segurado’s price for a 1 kg package is only
P56.80 which is way cheaper compared to other brands.
Amigo Segurado is just available recently unlike other brands like Knorr’s Royal pasta
that has been established decades ago. Since it is newly launched, it is still not distributed
nationwide. It is only available in some selected supermarkets in Metro Manila and Cebu. Ram
Premium is the only one available in all retail outlets.
In spaghetti pasta, Fiesta is the year 2012’s market leader with 29.4% followed by Knorr
Royal with 21.4% and Ideal Gourmet with 19.6%. Amigo Segurado is trying to steal leadership
of the category from these well-known pasta brands through a combination of aggressive
advertising, very competitive pricing strategy and product differentiation. Endorsements by local
celebrities like actors Richard Yap and Daniel Padilla helped to strengthen consumer awareness
of Amigo Segurado.
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AMIGO SEGURADO Spaghetti Marketing Plan
29.40%
21.40%
19.60%
29.90%
Market Share
Fiesta Spaghetti
Knorr Royal
Ideal Gourmet
Other brands (Del Monte, Ram Premium, Sunshine, etc.)
Figure 1. Market Share of Spaghetti Pasta in the Philippines, 2010
Collaborators
Amigo Segurado is being distributed first in different supermarkets in big cities like
Metro Cebu and Metro Manila. Its main distributors are Gaisano Mall and Ayala Mall.
Philippine Foremost Milling Corporation, sister company of Uy Gongco La Filipina
Corp., provides flour for the production of Amigo Segurado. It has been the first milling industry
in the country to be awarded with the Food Safety Management System (ISO22000:2005)
Certification which is the latest and highest internationally recognized standard specifically
designed for food manufacturing industry. PFMC uses the best wheat, selected from the best
wheat fields in the world and it offers only the best and the purest flour that comes from
Climate (PEST Analysis)
Political and Legal Environment
La Filipina Uy Gongco Corp. is a sister corporation of Philippine Foremost Milling
Corporation, as one of the leading flour and feeds manufacturer in the country and now on the
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AMIGO SEGURADO Spaghetti Marketing Plan
pasta manufacturing, is governed and is abiding all laws applicable to all its operations, may it in
production, administration and others, enforced by the state and through international
agreements.
Producing its nutritional and high quality Amigo Segurado Spaghetti and Macaroni
entails various processing standards which the corporation is adopting. In fact, it has been the
first milling industry in the country to be awarded with the Food Safety Management System
(ISO22000:2005) Certification which is the latest and highest internationally recognized standard
specifically designed for food manufacturing industry.
As well, one of the rigid regulations that the entity is complying with is the Food, Safety,
and Standards Act which requires all firms to mark and label any packaged foods they are
manufacturing, distributing and selling. Labels cannot contain statements that are false or
misleading in any way concerning the food that is in the package. This might apply to misleading
the customer about the quantity of food that is in the package, the nutritional value of the food
that is in the package, or the therapeutic claims to the place of origin for the food products. The
manufacturers of the product also must ensure that the label itself does not mislead consumers in
its shape or appearance. It further prohibits that no food can contain any containment of naturally
occurring toxic substances, toxins, hormones, or heavy metals that are in excess of the act’s
stipulations.
Concerning about quality control, the establishment allows federal inspectors to schedule
regular visits to ensure that the company is adhering to government laws. Moreover, the Amigo
Segurado Spaghetti is enriched with thiamine, niacin, riboflavin, iron and Vitamin A that are
required by the Food and Drug Administration to be present in pasta products and is governed by
the Ministry of Commerce in food trade, foreign investments, food distribution and domestic and
international market activities.
On the other hand, La Filipina Uy Gongco Corp. commits with the environment by
abiding numerous laws through its recycling culture, biodegradable Master packaging and the
boiler technology that position the corporation at the same level of the environmental impact
standards of most industrialized countries in the world. Locally, it complies with the Clean Act
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AMIGO SEGURADO Spaghetti Marketing Plan
Act and Clean Water Act that regulates the proper disposal hazardous substances such as
chemicals, industrial smokes and other trashes. It has been issued also with a Sanitary Business
Permit which certifies that it has passed with the standards set by the Iloilo City Government in
proper housekeeping of the business place.
Economic Environment
Due to certain economic conditions, price becomes the most influential factor in pasta
purchasing decisions for Filipinos. As consumers traded down to cheaper products and price
competition between manufacturers intensified, growth in pasta current value sales in 2011 is
slightly slower than that recorded in 2010 and also below the average for the entire review
period. Growth in retail volume sales meanwhile is up on the previous year and slightly faster
than the 5-year CAGR. This is partly due to greater price competition which attracted more
middle and low income consumers into the category. At the same time, the growing availability
of affordable pasta sauces also encouraged Filipinos to increase their consumption of pasta.
On the competitive landscape, La Filipina Uy Gongco Corp. could able to have
leadership in their pasta brand by a combination of aggressive advertising and a very competitive
pricing strategy. The latter proves particularly influential towards the end of the review period as
economic gloom led Filipinos to trade down to cheaper pasta brands. At the same time,
endorsement by local celebrities like Richard Yap has helped to strengthen consumer awareness
of the Amigo Segurado Spaghetti.
Social and Cultural Environment
The socio-cultural environment is one of the marketing environments where a business
needs a great focus and gather enough and appropriate information for it to excel in the target
market. La Filipina Uy Gongco Corporation Corp. extends its business to the target market by
responding and be sensitive to the demands and needs of the society.
Pastas are portions of a wide and diverse Filipino culture especially during occasions.
Pasta is part of every Filipino family’s birthdays and Christmas. These are the reason why La
Filipina Uy Gongco Corp. is dedicated on their production on pastas and baking products. The
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AMIGO SEGURADO Spaghetti Marketing Plan
firm believes that the best taste comes only from the purest flour and it is by offering the market
with only the purest of raw materials selected from the best wheat fields in the world. The
company values its baking products as Filipinos value bread and pasta. At present, it is proper for
parents to know what their children consume and that is the reason why the business responded
by producing flour products enriched with Thiamine, Niacin, Riboflavin, Iron, fortified with
Vitamin A and Bromate free.
More importantly, with the growing demand on instant yet healthy food options, Amigo
Segurado Spaghetti and Macaroni is the pasta for today’s discerning consumer who wants high
quality and healthy food products. Amigo Segurado is health friendly because it is 98% fat free,
is low in sodium, and is cholesterol-free. It is also a “good carb”, providing complex
carbohydrates needed for the body’s energy needs. Amigo Segurado is therefore a healthy energy
source for today’s active consumer.
Technological Environment
La Filipina Uy Gongco Corp. incorporates the best technology in its Amigo Segurado
Spaghetti and Macaroni production. This dedication to quality has resulted to only the most
nutritionally balanced and most cost-effective products money can buy.
The entity is using production lines that are shipped from foreign nations, installed by
company engineers and are capable of producing around 8,000 pounds of pasta every hour. It has
also formulated a custom bulk handling system to feed the production lines with semolina.
Storage silos are constructed to store the milled semolina and feed a 700 feet long, six-inch
diameter pneumatic tube which can deliver nearly 62,000 pounds of semolina ever hour to
production lines.
As well, robotic technologies are supplied to the business to carry out packaging,
warehousing and storage functions and palletisers are installed. These have the advantage of
being faster than the standard robot gantries for warehousing and they also occupy less floor
space. The palletisers feed the pallets to a Lantech stretch wrapper. The wrapped pallets are then
conveyed to the warehousing area. The new technology allows 83 pallets an hour to be
processed.
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AMIGO SEGURADO Spaghetti Marketing Plan
Moreover, the company facilities are designed to achieve super grading for plant
sanitation. Part of the sanitary design for the facilities includes rounded roof joists and
pharmaceutical-grade Teflon-coated ceiling tiles to prevent dust accumulation. Pharmaceutical-
grade tiling is also used in all production areas.
Furthermore, the pasteurization process is employed in moving the rolls of dough through
a steamer, which heats the dough to 220°F (104°C) in order to kill any existing bacteria.
SWOT Analysis
By analyzing the internal attributes of the product, we have identified the following
strengths which are its edge from other competing brands on its line as well as the product’s
weak points. On its environment, we have identified the following opportunities that could help
the product succeed the competing market as well as threats that if not properly addressed can
be a hindrance in its success.
STRENGTHS WEAKNESSES
Product Related:
Amigo Segurado as a new brand
option for spaghetti buyers and
consumers in the Philippines
Wider variety of taste offered to the
consumers with new innovations for
pasta recipes
Health- friendly pasta brand (98%
fat free, is low in sodium, and is
cholesterol-free)
Filipino-made product (Amigo
Segurado is made for Filipinos)
Launch at a price almost 50% less
than prevailing brands in the market
Low Brand Salience Levels
(Consumers are not really aware of
the brand’s benefits due to newness
to the market)
Limited Distribution/ Availabilty of
Amigo Segurado (still not available
for Panay market)
Need improvements for additional
product size variants (Available only
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AMIGO SEGURADO Spaghetti Marketing Plan
Company Related:
Investment of La Filipina Uy
Gongco Corporation of P 1 billion
on modern plant and equipment
facilities for mass production of their
new pasta product line
Improving and offering new product
lines
Plan for expanding distribution
network; Corporation has its own
shipment facility for flour
distribution that can be incorporated
with pasta distribution
Company’s policy of high integrity
and reliability as a provider of
quality products and services to
customers
on 1kg and 500g size variants)
OPPORTUNITIES THREATS
Improved economy growth for the
period is mostly associated with
consumption and . (Net) disposable
income has increased over the past
few years, thus increasing the
consumers’ purchasing power
(greater amount of Filipino
household purchases is attributed to
food).
Sales in dried processed food sector
Established brands in the market
may produce brand loyalty on the
consumers
Influx of foreign brands in the same
category can give rise to sterner
competition
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AMIGO SEGURADO Spaghetti Marketing Plan
rise in value from US $742.1 million
to US $790.6 million, retail volume
from 399.8 million tonnes to 410.8
million tonnes
A drive of high awareness for
healthy, hygienic and conveniently
packaged food is on the rise
Health consciousness on the rise in
consumers.
Openness of consumers for new,
innovative food preparations
Consumer perception and
willingness for local high-quality
food brands.
Consumers’ call for easily-prepared
food solutions
Goverment support for Filipino-
made products
Consumer exposure to foreign
products has also increased and a
high-quality notion of Filipino
consumers for foreign products
Rise of fast food chains and
restaurants that offer pasta dishes in
their menu
IV. Market Segmentation
Segmenting the market and identifying the target market for Amigo Segurado would help
the group in drafting the appropriate marketing mix strategies needed for Amigo Segurado’s
interaction in its competitive market.
Amigo Segurado for the past few months since its launch have test market Metro Manila
and Cebu. Our paper focuses and limits its target market geographically to the Panay Island
including the provinces of Iloilo, Antique, Aklan and Capiz.
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AMIGO SEGURADO Spaghetti Marketing Plan
Since certain factors and variables bear high correlation with the taste preference and
eating habits of consumers, these factors will be use on further segmenting the Panay market.
Preparing pasta and spaghetti has been a part of every Filipino family’s tradition
especially as part of celebrating special occations.
Identifying and Describing the Target Market
After the group’s analysis on the market, target markets were identified that best
represents the ideal consumers for the product.
Figure 2. Household population, Number of households and Average household size for
Western Visayas
The primary target market is composed of the mothers comprising the housewives,
working or professionals who cook regularly or cater food preparations for family
occasions.
BUYER CONSUMER
Mothers Children
Age 25 - above 5 – 16
Gender Female Male/Female
Family/Household Size 4+ ---
Lifecycle Stage Married with children Kids/Early Teens
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AMIGO SEGURADO Spaghetti Marketing Plan
Average Household IncomeP135, 000 (Dominantly Class C
& D but also includes Class B)N/A
Education --- Primary/Secondary School
Occupation Housewife/Working Woman Students
Table 1. Summary of description for the primary target market
Based on the monthly update for February 2013 of the National Statistics Office for
Region VI, the average household size is 4.6 and a there was a total of 1,526,587 households in
the whole Region.
Other potential target market
Base on the group’s analysis of the market, other than the primary target market there can
be potential target markets than could deliver huge amounts of sale for Amigo Segurado
especially regarding the seasons that could greatly affect the targets market’s buying behavior.
Increase on sales may be expected on the following seasons:
1st Quarter of the Year – Fiesta Season in Panay, Graduation
December Holidays – Christmas & New Year
(Retail stores in Panay may also be a potential B2B target market)
Estimating the Target Market Demand Potential
The target market demand potential would be equal to the number of buyers multiplied
by the uantity of average purchase multiplied by the average price of the product.
TMDP=N ×Q × P
Calculating for variables:
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AMIGO SEGURADO Spaghetti Marketing Plan
N is equal to (number of mothers included in a household classified as Class C, D
including B). Class C, D including B households are those slightly above the poverty line.
Assumed that 1,526,587 households in the whole Region would mean 1,526,587 mothers in the
whole region.
Poverty headcount ratio at national poverty line (% of population) for the Philippines as
identified by the World Bank Organization is 26.5% which would mean 73.5% (100% - 26.5%)
is above the poverty line and is included in the target market.
N=1,526,587 × 73.5 %≈ 1 ,122,041
Q is assumed to be 1 for the average purchase for a household comprising of 4 family
members is 1 pack of a 1 kilogram variant.
P is equal for P 56.00 for it is the average price of 1 pack of the 1kg variant.
So,
TMDP=1,122,041 ×1× P 56=P 62 , 834 , 296
Positioning Statement
Amigo Segurado will be positioned in the target market as follows:
“Ang Amigo Segurado ay Masarap Bagayan.”
Amigo Segurado is a food solution for mothers that elevates them out of everyday
life and provides them the exciting ability to create an incredibly tasty meal without any
hassles and thus ensure your family’s good health while remaining within your budget.
V. Selected Marketing Strategy
Product Strategy
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AMIGO SEGURADO Spaghetti Marketing Plan
About Amigo Segurado Pasta
Amigo Segurado is a health friendly pasta made from the choicest durum wheat,
guaranteeing the consistent pasta firmness and nutritious goodness that only an all-natural
product can give. It is ideal for today’s discriminating consumer who wants high quality and
healthy food products.
Amigo Segurado is health-friendly because it is 98% fat free, low in sodium, and is
cholesterol free. It is a healthy energy source for today’s active consumers.
Packaging
As reflected on its packaging, 100g serving of cooked AmigoSegurado pasta contains 360
calories, 1g of fat, 135mg of potassium, 75g of carbohydrates and 13g of protein. Cooking
instructions showing 4 easy steps to prepare it in just 10 minutes can also be seen on its
packaging.
The Buy Pinoy, Save Jobs logo is also printed on its packaging as Amigo Segurado
participates in Buy Pinoy Exporters Fair that was started as a project by the Philippine Exporters
Confederation, Inc. (PHILEXPORT). Its purpose are to raise the level of consumer
consciousness on the global competitiveness of Filipino made products in terms of design,
quality and price, to awaken the latent patriotism and national pride among Filipino consumers
and product developers and suppliers and to
create, protect and secure jobs of locals through
promotion of the products of their efforts .
Amigo Segurado (plastic pack) is
approved by the Philippine Food and Drug
Administration which primary goal is to ensure
the safety, efficacy, purity and quality of products being made available to the public. Through
effective implementation of the national regulatory framework consistent with international best
practices, it will ensure the health of Filipinos as their vanguard.
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AMIGO SEGURADO Spaghetti Marketing Plan
Amigo Segurado pasta is available in different packages, 1kg, 500g and 250g. To further
enhance the packaging and for the benefit of the consumers, different recipes as part of Amigo
Segurado’s Masarap Bagayan concept should be on its packaging.
The “Masarap bagayan” Concept
The Philippine palate is adventurous in terms of trying out new flavors. To address the
Filipinos’ adventurous side, Amigo Segurado introduces the concept of “Masarap bagayan”.
Amigo Segurado also wants to redefine traditional mentality of Filipinos about pasta.
We intend to communicate what Amigo Segurado should mean to our profiled ideal buyers (e.g.
housewives/ mothers) and consumers. It is much more than merely typical pasta. It is a passport
to the rich Filipino cuisine, adding new ideas and new twists to old favorites. Amigo Segurado
lives to its commitment that spaghetti and macaroni can go perfectly well with the Filipino’s
everyday “ulam”.
Amigo Segurado’s value statement:
“Masarap Bagayan - great food is exhilarating. It elevates us out of the everyday. No
matter what your background or cooking skills, we believe that everyone should be able to
create an incredible meal without having to spend hours in the kitchen.”
The company understands the need of every Filipino family for a high quality and
affordable food so consumers are assured that every product of Amigo Segurado is clean,
accurate in weight and right quality. The company believes that Basta Amigo, Segurado!
Pricing Strategy
Customers usually have a reference price in their mind for a particular product and
therefore they might compare the price of Amigo Segurado pasta with the price of other brands
like Fiesta Spaghetti and Knorr Royal.
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AMIGO SEGURADO Spaghetti Marketing Plan
We aim to have a 15% profit per unit so the total relative costs for producing the Amigo
Segurado Pasta plus other relative costs (e.g. administrative and selling costs) must not be more
than the suggested retail price divided by 115%. So for a 1kg package of Amigo Segurado which
suggested retail price of the company is P56.80, the total cost that should be maximized must not
exceed P49.39 (P56.80 /115%).
Pricing strategy for the launch of Amigo Segurado is based on the objective of satisfying
consumers’ budget. Amigo Segurado is priced cheaper compared with the other brands. Thus,
the effect of lower price can be offset by the increase in sales volume. Furthermore, the
introductory price of Amigo Segurado will be regularly revised according to the changing forces
in the market environment and its performance.
Place Strategy
Amigo Segurado is a product new to the Filipino market competing with existing pasta
(spaghetti and macaroni) brands on the market that have established its distribution channels
allowing its availability to end consumers.
Amigo Segurado’s launch last November 2012 had drive attention to the buying market
for its use of popular stars such as Richard Yap and Daniel Padilla but the problem still resides
on its availability especially to the Panay market. The group thus proposes an extensive and
systematic distribution process and strategy for Amigo Segurado for its availability on the Panay
market.
A Focus on Retail Stores Around Panay
The Consumer Index for Asia for 2012 identified provision stores and retail stores as
primary sources of Filipino households’ in-home FMCG (Fast-moving consumer goods) or
consumer packaged goods where noodles and pasta products pushed packaged groceries’ sales
build up. Supermarkets also grew faster by 8.7% through more trips as well as identifying
Puregold and Robinsons as key retailers the exhibited the fastest growth rates as they expanded
their reach throughout the market.
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AMIGO SEGURADO Spaghetti Marketing Plan
Distribution
An intensive dealer-distributor network is desired focusing on retailers as key channels
for end consumers. Since the target market for Amigo Segurado are mothers included in the
Panay area, the focus would be the identified primary retail stores on key provinces of Panay
such as Iloilo, Aklan, Antique and Capiz included separately the Iloilo City.
The distribution process is carried as follows (downstream):
1. La Filipina Uy Gongco Corporation (with a Panay Main Office in Iloilo City)
distributes or with exclusive distributors in Panay for Amigo Segurado sells it to
various wholesalers in target market areas identified. Since these are high volume
sales, per unit margins are relatively low allowing motivation for distributors.
2. The wholesalers then sell to retailers at a reasonable margin but is relatively
higher compared to the margin for distributors and wholesalers in lower volumes
as well.
3. Retailers would then be the key channel for the product be available to end
consumers. Retailers would be identified as listed below.
Along with the above distribution process a Sales Force for Amigo Segurado is structured
to facilitate the entire process. The structure is as follows:
POSITION ROLE
Territory Sales Officers
(as determined by the number of territories per
target area)
Revenue Target Driven
Responsible for a location/territory
within the targeted area (Iloilo
Province, Iloilo City, Aklan, Antique
and Capiz)
Liaison with retailers
Ensuring product placement,
availability and merchandizing at
20
AMIGO SEGURADO Spaghetti Marketing Plan
POP/POS (point of purchase/point of
sale)
Liaison between the retailer and
wholesaler/distributor
Area Sales Managers
(probably 5, one for each area identified as
Iloilo Province, Iloilo City, Aklan, Antique and
Capiz )
Responsible for a cluster of territories
Managing various territories
Personnel Management
Conflict Management & Problem
Resolution
Panay-Wide Sales Manager
Responsible for a collection of areas
with its key office on Iloilo City.
Responsible for reporting and
communicating the status of
management and sales to the National
office.
21
AMIGO SEGURADO Spaghetti Marketing Plan
Figure 3. Location of the La Filipina Uy Gongco Corporation, Panay Main Office, 21 P. Arroyo
Street, Iloilo City
Identifying Key Locations for Distribution
The focus of the target market is located on key areas of Panay including Iloilo Provine,
Aklan, Antique and Capiz including separately the Iloilo City Area where the Panay Main Office
is located. Key territories for each province areas would include the main municipalities in the
province area and some municipalities based on population distribution and economic growth.
22
AMIGO SEGURADO Spaghetti Marketing Plan
Figure 4. Map of Panay showing the interconnections between key province areas
Key territories would include:
AREA TERRITORY
Iloilo City Iloilo City Territory
Iloilo Province Miag-ao (1st Congressional District)
Santa Barbara (2nd Congressional
District)
Janiuay (3rd Congressional District)
Passi City (4th Congressional District)
Barotac Viejo (5th Congressional
District)
Aklan Kalibo
Malay (9.94% of the total population of
Aklan excluding Kalibo)
New Washington (9.13% of the total
23
AMIGO SEGURADO Spaghetti Marketing Plan
population of Aklan excluding Kalibo)
Antique San Jose de Buenavista
Sibalom (11.48% of the total
population of Antique excluding San
Jose)
Culasi (8% of the total population of
Antique excluding San Jose)
Capiz Roxas City
Tapaz (8.53% of the total population of
Capiz excluding Roxas City)
Pontivedra (7.72% of the total
population of Capiz excluding Roxas
City)
Recommendations for Logistics
It is recommended that La Filipina Uy Gongco Corporation would maximize the use of
its transportation facilities for assisting distribution and delivery of Amigo Segurado from the
production factory and warehouses in Greater Manila Area to key areas in Panay. The shipment
facility of the corporation for their flour products would be a great edge on the distribution to
Panay if it could be incorporated with Amigo Segurado.
La Filipina Uy Gongco Corporation’s investment of P1 billion on a modern plant and
equipment for Amigo Segurado product line across the milling facilities of Philippine Foremost
Milling Corporation is an initiative of the corporation for the improvement and mass production
of their new product line.
Promotion Strategy
24
AMIGO SEGURADO Spaghetti Marketing Plan
Communication Campaign
The objectives of the communication campaign will be as follows:
Create a strong brand association by means of an emotional theme in communication
highlighting the important role the brand plays in terms of care and health of the family.
Own a unique position in consumers’ mind through elaborating the functionality of the
product and try establishing the position as in the positioning statement.
Use best practices and techniques for developing greater brand awareness, interest, and
trial generation.
Maintain consistency in visual presentation to establish strong brand recognition.
Advertising Strategy
Print Advertising
In introducing Amigo Segurado Spaghetti in Panay, the company will employ print
advertising to inform and persuade potential consumers. It will invest in printed ads in
newspapers, flyers, posters and the like.
Broadcast Advertising
The existing TV commercials featuring Richard Yap, also known as Papa Chen and
Daniel Padilla that thematically portray the positioning statement of the company in a creative
and engaging manner will be used in broadcast advertising that will be employed in Panay.
Subsequently, shorter adaptations of the TV commercial will also be developed. The TV
commercial will also be adapted into a radio commercial. The Amigo Segurado tagline will be
retained as is.
Outdoor Advertising
The company recognizes the effectivity and relevance of outdoor advertising. It also has
the potential to reach massive group of customers through a single advertisement.
25
AMIGO SEGURADO Spaghetti Marketing Plan
The company will team up with a bus company to employ bus advertising to firmly
establish awareness and generate quick recall to the potential customers.
Traditional outdoor advertising like posters and billboards which are highly visible to
vehicular traffic would help achieve advertising objectives and increase brand awareness by
placing multiple units in strategic locations.
Activation Strategy
Outdoor Activation
School Activation
Major educational institutions throughout Panay will be activated. The activation intends
to infuse product awareness among the students and the faculty and staff of the colleges and
universities as generating trials. Product awareness will be achieved thru branded kiosks and
stalls placed inside the school cafeteria or canteen. Kiosk attendants will be responsible to
educate potential customers as well as generating interest and desire while inducing trial.
A comprehensive list of educational institutions where the activation will be conducted is
as follows:
PROVINCE COLLEGE/ UNIVERSITY
Aklan Aklan State University, Kalibo
Panay Technological College, Kalibo
Antique University of Antique, Sibalom
St. Anthony's Colleg, San Jose
Capiz Colegio dela Purisima Concepcion, Roxas City
Capiz State University, Roxas City
Iloilo Central Philippine University, Iloilo City
John B. Lacson Foundation Maritime University, Molo, Iloilo City
University of San Augustin, Iloilo City
University of the Philippines-Visayas, Molo, Iloilo City
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AMIGO SEGURADO Spaghetti Marketing Plan
West Visayas State Universities, La Paz, Iloilo City
Mall Activation
The activation of educational institutions will be replicated at various shopping malls
across the city. Along with awareness and trial objectives, interest in the product’s offering will
be enhanced through various games, prizes and freebies. In Gaisano Malls throughout Panay.
Point of Purchase Activation
Point of Purchases of retail stores and supermarkets will also be activated using. A
particular segment of the chosen public market or supermarket will be dedicated as “Amigo ng
Bayan” which would have the following:
A branded kiosk to give it a creatively distinctive look from its surroundings
A promotion agent who is an educated and pleasing male or female promoter that will
persuade potential consumers to that particular area. The promotion agent will provide
information about the product, induce tasting and persuade trial purchase through special
price offering.
Direction Stickers at public markets or supermarkets directing to “Amigo ng Bayan”
area for attractive offerings.
Attractive Point of Purchase (POP) to be placed at strategic locations in the chosen
public market or supermarket
Canteen and Cafeteria Branding
Cafeterias or canteens of selected universities, colleges and pre-schools in Panay will be
activated via branding using the communication campaign’s visual adaptations.
Furthermore, since Amigo Segurado Spaghetti will be served at these venues at
subsidized prices, it is likely to generate greater trial and repeat purchase.
Branded Mobile Vans
27
AMIGO SEGURADO Spaghetti Marketing Plan
During the test market stage, branded Vans will be deployed in targeted areas near
offices, parks and other public places during peak hours to serve Amigo Segurado Spaghetti at
introductory prices.
Sales Promotions
Consumer Promotion
Post launch, a press and radio driven consumer promotion will be designed to invite
consumers to share their own innovations and customizations to Amigo Segurado Spaghetti
Recipes.
Consumers will be asked to share their recipe for a variation of Amigo Segurado
Spaghetti. The recipe will be sent along with 2 empty packages of Amigo Segurado Spaghetti
and customer’s contact information.
The lucky winners would be given cash prizes along with recognition in the form of the
recipe being printed on the packaging along with the customer’s photo (if they so desire).
Public Relations
To help the Department of Health (DOH) and Department of Education (DepEd) in
informing and educating the people about the importance of having good food as part of healthy
living, La Filipina Uy Gongco Corporation will sponsor a food assistance program in selected
areas in Panay. The company will identify schools where to conduct the program.
The food assistance program will be implemented for one month in the selected schools
within Panay. There will be five beneficiaries for the program that would be selected with the aid
of the Department of Education in Region VI.
The launch year marketing budget is as follows:
AMIGO SEGURADO Spaghetti
Launch Budget - Marketing Communications
28
AMIGO SEGURADO Spaghetti Marketing Plan
Budget Ceiling Php 15,000,000
Advertising
Print Advertising
Newspapers (see Note 1 ) Php 49,392
Flyers Php 10,000
Subtotal Php 59,392
Broadcast Advertising
Television (see Note 2) Php 10,380,000
Radio (see Note 3) Php 60,000
Subtotal Php 10,440,000
Outdoor Advertising
Billboard (see Note 4) Php 1,440,000
Bus Advertising Php 50,000
Subtotal Php 1,490,000
Out-of-Home Activation
University/College Activation
Direct Materials (see Note 5) Php 220,000
Direct Labor (see Note 6) Php 22,000
Installation Php 33,000
Subtotal Php 275,000
Mall Activation
Direct Materials (see Note 7) Php 80,000
Direct labor (see Note 8) Php 8,000
Cost of putting up a stall Php 20,000
Subtotal Php 108,000
Point of Purchase Activation
Branded Kiosk Php 10,000
Agent's Salary (see Note 9) Php 10,000
Direction Stickers Php 5,000
Subtotal Php 25,000
Sales Promotion
Consumer Promotion
29
AMIGO SEGURADO Spaghetti Marketing Plan
Promotion Expenses (see Note 10) Php 100,000
Public Relations
Feeding Program (see Note
11) Php 75,000
Over-all Total Php 12,572,392
Notes are provided for in the Appendix.
VI. Short and Long-Term Projection
In this analysis, we will look for the different costs involved in the production of Amigo
Segurado Spaghetti and then comparing it with the total sales to find out the minimum efficiency
at which the plant should operate in order to have a neither loss nor profit relationship. This is
done by finding the break-even point of operation. If the plant operates at the efficiency higher
than that indicated by the break-even point, the plant is operating at a profit and vice versa.
A. Break-even Analysis
The cost involved in the production can be divided into two categories, fixed cost and
variable cost.
30
AMIGO SEGURADO Spaghetti Marketing Plan
Fixed Costs
The total fixed cost per year amounts to Php 2,555,646.17 calculated as follows:
FIXED COSTS FIXED COSTS (IN PHP)
Fixed Costs (Except Utilities) 2,500,000.00
Utilities 55,646.17
Total Fixed Costs 2,555,646.17
Fixed Costs (Except Utilities)
According to FeedLink Philippines and quoted by Manila Bulletin Publishing this 2013,
La Filipina Uy Gongco Corporation is investing Php 1 billion for pasta production, of which Php
250 million (US$ 6.12 million) to set up a pasta production facility. The annual fixed costs
(except utilities) is Php 2.5 million by depreciating the total depreciable investments for 100
years without residual value. The fixed costs will include the following costs except for utilities:
a) Land and Building
This includes the cost of land and 200 square meter building which will be comprised of
the main production area, packing room and storage area. The main production area will
occupy around 50 square meters whereas the packing room and storage area will take up
balance area.
b) Plant and Machinery
Marketing is the key success determinant and the production capacity has to be finalized
accordingly. Keeping in mind the financial viability, the rated production capacity is
assumed to be 140 tonnes per day with 300 working days and 2 shifts per day.
This will necessitate the installation of the following machines:
one extrusion machine
one pre-conditioner
31
AMIGO SEGURADO Spaghetti Marketing Plan
one mixer (50 kilogram capacity)
one pouch packing and sealing machine
one weighing scale
c) Miscellaneous Assets
Other assets like furniture and fixtures, storage facilities, working tables and utensils will
be incurred also.
Utilities
Based on an Indian Research on pasta industries, power requirement on working days
shall be 20 horsepower (14.9139974 kilowatts) per day whereas per working day water
requirement would be 500-550 liters (0.50-0.55 cubic meters). Power requirement per non-
working day will be 30% of that of the power requirement per working day or 4.4741992
kilowatts. Annual expenditure at full capacity utilization will be Php 55,646.17 as computed
below based on March rates of Panay Electric Company (PECO) and Metro Iloilo Water District
(MIWD).
UtilitiesRequirement Per
DayDays
Rate Per Unit in
Php (2013)
Total Cost (in
Php)
Water
(Working Days)
0.55 cubic meters 300 16.5 2,722.50
Electricity
(Working Days)
14.9139974
kilowatts300 11.1067 49,693.59
Electricity (Non-
Working Days)
4.4741992
kilowatts65 11.1067 3,230.08
Total 55,646.17
Variable Costs
32
AMIGO SEGURADO Spaghetti Marketing Plan
The variable cost per ton to be incurred by the corporation is as follows:
Variable Costs Variable Costs Per Ton (in Php)
Manpower Requirements 5,935.71
Raw and Packing Materials 48,750.00
Selling Expenses 19,260.00
Total Variable Costs Per Ton 73,945.71
Manpower Requirements
Based on an Indian Research on pasta industries, the following workers (direct and
indirect) are necessary for the production pasta.
two machine operators
two skilled workers for packing
two semi-skilled workers
two helpers
two salesmen
Using the Daily Minimum Wage Rates for Western Visayas for
non-agricultural/industrial/commercial sectors employing more than ten workers (effective May
31, 2012), each worker will earn Php 277.00 per day. The total salaries payable to the workers
yearly at full regular hours will be Php 831,000.00 while the per ton salaries based on the 140-
tonnes production capacity of the business is Php 5,935.71.
Workers Number
Rate Per Day
(in Php)
Working Days
Total Salaries
(in Php)
Machine
Operator2 277.00 300 166,200.00
Skilled Worker
for Packing2 277.00 300 166,200.00
Two Semi- 2 277.00 300 166,200.00
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AMIGO SEGURADO Spaghetti Marketing Plan
skilled Worker
Helper 2 277.00 300 166,200.00
Salesman 2 277.00 300 166,200.00
Total 831,000.00
Raw and Packing Materials
Amigo Segurado Spaghetti is made with the help of many ingredients with durum wheat
as the major input. Other materials required are corn and rice flour, protein isolates, salt, spices,
edible oil, and preservatives. All of them are easily available and packing materials are equally
important. Pouches shall have to be printed and outer packing will be corrugated boxes.
The average price of raw materials per ton is 50,000 Rupees (Php 37,500) while it is
15,000 Rupees (Php 11,250) per ton for packing materials according to the Hindu Business Line
of 2010. The total raw and packing costs per ton is 65,000 Rupees (Php 48,750).
Selling Expenses
Marketing will be a key element. Expenses shall have to be incurred on transportation,
publicity in local media like newspapers, hoardings and TV scroll, selling commission and free
sampling. A provision of 20% of sales value is made every year to take care of these expenses
since the product is new thus more emphasis is given on this section. This expense can be
reduced once the product is well established in market.
Establishing the selling price per kilogram of Amigo Segurado Spaghetti at the average
market price of Php 96.30, the selling expenses will be Php 19,260 per ton computed as the 20%
of Php 96.30 per kilogram multiplied by 1,000 kilograms per ton.
Final Total Cost Analysis
Costs Total (in Php)
Fixed 2,555,646.17
Variable 73,945.71 per ton
34
AMIGO SEGURADO Spaghetti Marketing Plan
Analytical Break-Even Analysis
Let the total production per year be x tonnes to arrive at the break-even point (in tonnes).
96,300x – 2,555,646.17 – 73,945.71x = 0
22,354.29x = 2,555,646.17
x = 114.32 tonnes
Conclusion: The plant must operate at the minimum of 114.32 tonnes yearly in order to reach
break-even analysis point.
B. Sales Forecast
For 2014 and 2015, the firm will be operating at 115 tonnes production which is a bit
higher than the break-even analysis point since the product is new in the market.
Sales (115 x Php 96,300) Php 11,074,500.00
Variable costs (115 x Php 73,945.71) (8,503,756.65)
Fixed costs (2,555,646.17)
Net income Php 15,097.18
For 2016, the firm will be operating at 3% higher than the production in the last two years
or at 118.45 tonnes since it has established its name in the market and the variable selling
expenses will be reduced to 15% of the sales price from 20%.
Variable Costs Cost Per Ton (in Php)
Manpower Requirements 5,935.71
Raw and Packing Materials 48,750.00
35
AMIGO SEGURADO Spaghetti Marketing Plan
Selling Expenses (Php 96,300 x 15%) 14,445.00
Total Variable Cost Per Ton 69,130.71
Sales (118.45 x Php 96,300) Php 11,406,735.00
Variable costs (118.45 x Php 69,130.71) (8,188,532.60)
Fixed costs (2,555,646.17)
Net income Php 662,556.23
For 2017, the firm will further be operating at 3% higher than the production in 2016 or
at 122 tonnes and the variable selling expenses will remain at 15% of the sales price.
Variable Costs Cost Per Ton (in Php)
Manpower Requirements 5,935.71
Raw and Packing Materials 48,750.00
Selling Expenses (Php 96,300 x 15%) 14,445.00
Total Variable Cost Per Ton 69,130.71
Sales (122 x Php 96,300) Php 11,748,600.00
Variable costs (122 x Php 69,130.71) (8,433,946.62)
Fixed costs (2,555,646.17)
Net income Php 759,007.21
For 2018, the firm will further be operating at 3% higher than the production in 2016 or
at 125.66 tonnes and the variable selling expenses will be reduced to 10% of the sales price from
15% the preceding year.
Variable Costs Cost Per Ton (in Php)
Manpower Requirements 5,935.71
36
AMIGO SEGURADO Spaghetti Marketing Plan
Raw and Packing Materials 48,750.00
Selling Expenses (Php 96,300 x
10%)
9,630.00
Total Variable Cost Per Ton 64,315.71
Sales (125.66 x Php 96,300) Php 12,101,058.00
Variable costs (125.66 x Php 64,315.71) (8,081,912.12)
Fixed costs (2,555,646.17)
Net income Php 1,463,499.71
VII. Conclusion
This report outlines the marketing plan for Amigo Segurado. With existing demand for
Amigo Segurado products presently met by minor competition in the form of independent Pasta,
this report puts forward the viability of launching the Amigo Segurado range of products in
various flavors. Taking into account the absence of any existing brands in the market this report
presents growth potential and profitably in serving this untapped market.
Our paper focuses and limits its target market geographically to the Panay Island
including the provinces of Iloilo, Antique, Aklan and Capiz. The primary target market is the
mothers comprising the housewives, working or professionals who cook regularly or cater food
preparations for family occasions. Base on the group’s analysis of the market, other than the
primary target market there can be potential target markets than could deliver huge amounts of
sale for Amigo Segurado especially regarding the seasons that could greatly affect the targets
market’s buying behaviour. To address the Filipinos’ adventurous side, Amigo Segurado
introduces the concept of “Masarap bagayan”.
37
AMIGO SEGURADO Spaghetti Marketing Plan
Under our pricing strategy, for a 1kg package of Amigo Segurado suggested retail price
of the company is P56.80 thus the total cost that should be maximized must not exceed P49.39.
This proposal needs an intensive dealer-distributor network that is desired on focusing on
retailers as key channels for end consumers. Promotional strategy includes advertising strategy,
activation strategy, sales promotion and public relations.
For the advertising strategy, we have the print, broadcast and outdoor advertising. 11
universities and 5 malls are desired to accomplish our school activation and mall activation
strategy. We will introduce also the concept of “Amigo ng Bayan” which includes a branded
kiosk, promotion agents, direction stickers and attractive point of purchase (POP). Also, La
Filipina Uygongco Corporation will sponsor a food assistance program in selected areas in
Panay. An over-all launch budget of Php 12,572,392 is considered necessary to achieve this
promotion strategy.
To reach break-even analysis point, the plant must operate at the minimum of 114.32
tonnes yearly. In implementing this proposal the company expects to generate Php 15,097 in its
first year of operation.
38
AMIGO SEGURADO Spaghetti Marketing Plan
Appendix 1
Notes to the Launch Budget
Note 1:
Philippine Daily Inquirer
1/16 Page for 6 weeks (3rd week of Nov – Last week of Dec)
Php 8,232 * 6 = Php 49,392
Note 2:
Twice a day TV advertisement for 60days, one in the morning and one in the afternoon.
Duration: 3rd – last week of March, 3rd –last week of November and whole month of December
30 sec commercial, afternoon spot for 60 days
Php 150,000 * 60 = Php 9,000,000
30 sec commercial, morning spot for 60 days
Php 23,000 * 60 = Php 1,380,000
Subtotal Php 10,380,000
Note 3:
Love Radio Ad Package (Php 5000/ month)
Banner Ad 160X160
30 second Ad spots – 5 times a day
Php 5,000 * 12 monts Php 60,000
Note 4:
Billboard Rent (Php 30,000/ month) for 12 months for 4 particular areas in Panay
Php 30,000 * 12 months * 4 = Php 1,440,000
39
AMIGO SEGURADO Spaghetti Marketing Plan
Note 5: Direct Materials include cost of Spaghetti, cups and spoons, and other raw materials needed to carry out the “Free taste” in 11 selected universities and colleges around Panay (5 in Iloilo City and 2 universities each from Aklan, Antique and Capiz)
Php 20,000 * 11 universities = Php 220,000
Note 6:
Php 1000 * 2 promotion agents * 11 universities = Php 22,000
Note 7:
Php 20,000 * 4 malls = Php 80,000
Note 8:
Php 1000 * 2 promotion agents * 4 malls = Php 8,000
Note 9:
Php 1000 * 10 days = Php 10,000
Note 10:
Php 10,000 * 10 winners = Php 100,000
Note 11:
Php 15000 * 5 preschools = Php 75,000
40
AMIGO SEGURADO Spaghetti Marketing Plan
Appendix 2
Short and Long-Term Projections
Break-even Analysis
The cost involved in the production can be divided into two categories, fixed cost and
variable cost.
Fixed Costs
FIXED COSTS FIXED COSTS (IN PHP)
Fixed Costs (Except Utilities) 2,500,000.00
Utilities 55,646.17
Total Fixed Costs 2,555,646.17
Utilities
UtilitiesRequirement
Per DayDays
Rate Per Unit in
Php (2013)
Total Cost (in
Php)
Water
(Working Days)
0.55 cubic
meters300 16.5 2,722.50
Electricity
(Working Days)
14.9139974
kilowatts300 11.1067 49,693.59
Electricity
(Non-Working
Days)
4.4741992
kilowatts65 11.1067 3,230.08
Total 55,646.17
41
AMIGO SEGURADO Spaghetti Marketing Plan
Variable Costs
The variable cost per ton to be incurred by the corporation is as follows:
Variable Costs Variable Costs Per Ton (in Php)
Manpower Requirements 5,935.71
Raw and Packing Materials 48,750.00
Selling Expenses 19,260.00
Total Variable Costs Per Ton 73,945.71
Manpower Requirements
Workers Number
Rate Per Day
(in Php)
Working Days
Total Salaries
(in Php)
Machine
Operator2 277.00 300 166,200.00
Skilled Worker
for Packing2 277.00 300 166,200.00
Two Semi-
skilled Worker2 277.00 300 166,200.00
Helper 2 277.00 300 166,200.00
Salesman 2 277.00 300 166,200.00
Total 831,000.00
Final Total Cost Analysis
Costs Total (in Php)
Fixed 2,555,646.17
Variable 73,945.71 per ton
Analytical Break-Even Analysis
42
AMIGO SEGURADO Spaghetti Marketing Plan
Let the total production per year be x tonnes to arrive at the break-even point (in tonnes).
96,300x – 2,555,646.17 – 73,945.71x = 0
22,354.29x = 2,555,646.17
x = 114.32 tonnes
Conclusion: The plant must operate at the minimum of 114.32 tonnes yearly in order to reach
break-even analysis point.
B. Sales Forecast
For 2014 and 2015, the firm will be operating at 115 tonnes production which is a bit
higher than the break-even analysis point since the product is new in the market.
Sales (115 x Php 96,300) Php 11,074,500.00
Variable costs (115 x Php 73,945.71) (8,503,756.65)
Fixed costs (2,555,646.17)
Net income Php 15,097.18
For 2016, the firm will be operating at 3% higher than the production in the last two years
or at 118.45 tonnes since it has established its name in the market and the variable selling
expenses will be reduced to 15% of the sales price from 20%.
Variable Costs Cost Per Ton (in Php)
Manpower Requirements 5,935.71
Raw and Packing Materials 48,750.00
Selling Expenses (Php 96,300 x 15%) 14,445.00
Total Variable Cost Per Ton 69,130.71
Sales (118.45 x Php 96,300) Php 11,406,735.00
43
AMIGO SEGURADO Spaghetti Marketing Plan
Variable costs (118.45 x Php 69,130.71) (8,188,532.60)
Fixed costs (2,555,646.17)
Net income Php 662,556.23
For 2017, the firm will further be operating at 3% higher than the production in 2016 or
at 122 tonnes and the variable selling expenses will remain at 15% of the sales price.
Variable Costs Cost Per Ton (in Php)
Manpower Requirements 5,935.71
Raw and Packing Materials 48,750.00
Selling Expenses (Php 96,300 x 15%) 14,445.00
Total Variable Cost Per Ton 69,130.71
Sales (122 x Php 96,300) Php 11,748,600.00
Variable costs (122 x Php 69,130.71) (8,433,946.62)
Fixed costs (2,555,646.17)
Net income Php 759,007.21
For 2018, the firm will further be operating at 3% higher than the production in 2016 or
at 125.66 tonnes and the variable selling expenses will be reduced to 10% of the sales price from
15% the preceding year.
Variable Costs Cost Per Ton (in Php)
Manpower Requirements 5,935.71
Raw and Packing Materials 48,750.00
Selling Expenses (Php 96,300 x
10%)
9,630.00
Total Variable Cost Per Ton 64,315.71
44
AMIGO SEGURADO Spaghetti Marketing Plan
Sales (125.66 x Php 96,300) Php 12,101,058.00
Variable costs (125.66 x Php 64,315.71) (8,081,912.12)
Fixed costs (2,555,646.17)
Net income Php 1,463,499.71
45
AMIGO SEGURADO Spaghetti Marketing Plan
Bibliographies
About Us: La Filipina Uy Gongco Corporation. Web. 28 Dec, 2012. <http://www.lfug.com.ph/>
Amigo Segurado, . Web. 28 Dec, 2012.< https://www.facebook.com/AmigoSeguradoPH>
Philippine Foremost Milling Corporation. Web 28 Dec, 2012. <http://www.philforemost.com/>
Philippine Foremost Milling Corporation. Web 28 Dec, 2012.
<https://www.facebook.com/pages/Philippine-Foremost-milling-corporation/
106328576077860>
Noel B. Carilo, MD . “How to Start a Children’s Feeding Program”. Web. 15 March, 2013.
<http://showbizandstyle.inquirer.net/sim/sim/view/20100529-272740/How-to-Start-a-
Childrens-Feeding-Program.
Rodolfo F. Florentino, Ma. Regina A. Pedro. “The Food Assistance Program in the Philippines:
The Issues Involved (Part 1 of 2)”. Web. 15 March, 2013.
<http://www.fnri.dost.gov.ph/index.php?option=content&task=view&id=755>
Rodolfo F. Florentino, Ma. Regina A. Pedro. “The Food Assistance Program in the Philippines:
The Issues Involved (Part 2 of 2)”. Web. 15 March, 2013.
<http://www.fnri.dost.gov.ph/index.php?option=content&task=view&id=1098>
“An Overview of the Philippind Food Market”. Agriculture and Agri-Food Canada. Web. 15
March, 2013. <http://www.ats-sea.agr.gc.ca/ase/6225-eng.htm.>
“Pasta and Noodles Market in the Philippines to 2014”. Web. 15 March, 2013.
<http://www.marketresearch.com/Datamonitor-v72/Pasta-Noodles-Philippines-
6391298/>
“Pasta and Noodles Market in the Philippines to 2014” Web. 15 March, 2013.
<
http://www.datamonitor.com/store/Product/pasta_and_noodles_market_in_the_philippine
s_to_2014?productid=DBCM8617>
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AMIGO SEGURADO Spaghetti Marketing Plan
Euromonitor International, “Pasta In The Philippines” Web. 15 March, 2013.
<http://www.marketresearch.com/Euromonitor-International-v746/Pasta-Philippines-
6741428/>
“Pasta and Noodles in the Philippines to 2013” Dec 2009. Web. 15 March, 2013.
<
http://www.researchandmarkets.com/reports/1195223/pasta_and_noodles_in_the_philippi
nes_to_2013 >
“Pasta and Noodles in the Philippines to 2013” Web. 15 March, 2013.
<http://www.alacrastore.com/storecontent/Datamonitor_Premium_Research_Reports-
Pasta_and_Noodles_in_the_Philippines_to_2013-2122-1636>
“Universities and Colleges in Western Visayas, Philippines” Web. 28 March, 2013.
<http://www.finduniversity.ph/universities/western-visayas/>
DTI Price Monitoring Report, 2011
IPO Annual Survey on World Pasta Industry, 2012
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