Chapter 1 THE PROBLEM
This chapter discusses the background of the study, objectives, scope and delimitations, as well as the methodology of the study. 1.1 Background of the Study
Lambanog wine, also called coconut vodka, is an alcoholic beverage produced in the Philippines. t is a very popular alcoholic drink among men and women in the rural areas of the !outhern Tagalog provinces, where it is widely produced. t is widely enjo enjoy yed by the the loca locals ls and and fest festiv ive e occa occasi sion ons s are are almo almost st inco incomp mple lete te with withou outt it "www.sanpablounlimited.com#. t is free from artificial chemicals because it is made purely from coconut sap. Lambanog processing starts with the pruning of the coconut flowers to let the sap drip from the blossoms. The sap is then collected and cooked using the fermentation process, producing coconut $tuba%. The tuba is distilled, cooled, and filtered to produce the coconut wine. t may be added with fruit flavors such as berries, raisins, calamansi, mango, and even gum flavor to offer a variety of taste. "&scan, '(1(# Lambanog wine is produced in the !outhern Tagalog region particularly in the provinces of )ue*on, Laguna, and +atangas. The )ue*on province produces most of the lambanog wine because of abundance in coconut plantations in the area. n the province of Laguna, the unicipality of Liliw located in the eastern part, is considered as the major lambanog producer and distributor. Lambanog wine production has been in e-istence in Liliw since the time of the !panish coloni*ation. Processors take advantage of the abundance abundance of coconu coconutt trees trees in the area. Lamban Lambanog og wine wine product production ion gives gives
employment to many residents in Liliw. The market consists of townsfolk as well as nearby towns. +ecause lambanog has only recently begun its introduction onto the international market, trade data tracking e-port and import of this product is very limited. n terms of production, lambanogmaking is still very much a cottage industry with deep historical roots. /owe /owever ver,, the the indus industr try y has has e-per e-perie ience nced d setb setbac acks ks a few few years years ago ago due due to infestation of coconuts, shortage of raw materials, and competition from other substitute products "e.g. beer, gin, vodka#. !till, the lambanog wine supply is not sufficient to meet its demand. The most pressing problem is the lack of consistent supply of tuba due to unfavorable weather conditions "0onato, 12#. 3ther common problems include loss of workers resulting resulting to injuries, injuries, poor technology technology,, lack of government support, high cost of maintaining karitan, high cost of ac4uiring production e4uipment, and stiff competition from the big distilleries of alcoholic beverages "&scan, '(1(#. Currently, the industry is being revived but it needs to determine its current status, the problems besetting the industry, and what directions should it take to become more competitive. The only known lambanog manufacturing company is located in 3ld Poblacion, aitum aitum,, !aranga !arangani ni Provinc Province e in 5enera 5enerall !antos !antos City City. /ence, /ence, the little little e-posur e-posure e of Lambanog to people in the !3C!6!&7589 area prompted the researchers to conduct the study.
employment to many residents in Liliw. The market consists of townsfolk as well as nearby towns. +ecause lambanog has only recently begun its introduction onto the international market, trade data tracking e-port and import of this product is very limited. n terms of production, lambanogmaking is still very much a cottage industry with deep historical roots. /owe /owever ver,, the the indus industr try y has has e-per e-perie ience nced d setb setbac acks ks a few few years years ago ago due due to infestation of coconuts, shortage of raw materials, and competition from other substitute products "e.g. beer, gin, vodka#. !till, the lambanog wine supply is not sufficient to meet its demand. The most pressing problem is the lack of consistent supply of tuba due to unfavorable weather conditions "0onato, 12#. 3ther common problems include loss of workers resulting resulting to injuries, injuries, poor technology technology,, lack of government support, high cost of maintaining karitan, high cost of ac4uiring production e4uipment, and stiff competition from the big distilleries of alcoholic beverages "&scan, '(1(#. Currently, the industry is being revived but it needs to determine its current status, the problems besetting the industry, and what directions should it take to become more competitive. The only known lambanog manufacturing company is located in 3ld Poblacion, aitum aitum,, !aranga !arangani ni Provinc Province e in 5enera 5enerall !antos !antos City City. /ence, /ence, the little little e-posur e-posure e of Lambanog to people in the !3C!6!&7589 area prompted the researchers to conduct the study.
1.2 Statement of the Problem
This This study study aime aimed d to deter determi mine ne the the feasi feasibi bilility ty of putt puttin ing g up of a Lamb Lamban anog og manufacturing company in 5eneral !antos City. !pecifically, this study aimed to: 1. 0etermine 0etermine the profile profile of the the major players players of the the Lambanog Lambanog industry industry along the following areas: a. !erv ervices; b. Capac Capacit ity y of indus industry try;; c. 6ey succe success ss fact factors ors;; and and d. The The mark market et;; '. Conduct a structura structurall analysis analysis on the Lambanog Lambanog industry industry considerin considering g the following following aspects: a. +arri +arrier ers s to to 8ntry 8ntry;; b. Threa Threats ts of !ub !ubst stit itut ute; e; c. +argain +argaining ing Power Power of !upplie !upplier; r; d. +argain +argaining ing Powe Powerr of Costu Costumers mers;; and e. Compet Competiti ition on in in the the ndus ndustry try;; <. =ormulate strategies for a profitable Lambanog anufacturing in 5eneral !antos City.
1. S!gn!f!cance of the Study
This study may be beneficial for the following persons: The bu"!ne bu"!ne""# ""#or! or!ent ented ed $er"on $er"on". ". This his stud study y may may give give them them insi insigh ghts ts on
business. The results may also help them in considering 5eneral !antos City as a businessfriendly urban place where they could start their planned business. The coconut farmer". This study may help them in understanding that their
coconut plantations could also be used for production of Lambanog and not only >buko? products "buko juice, buko salad, buko pie, halohalo, etc#. They could ma-imi*e the use of their coconut plantations in producing Lambanog. The alcohol!c dr!nker". This study may encourage them to choose Philippine
products like Lambanog instead of other branded alcoholic beverages. Lambanog is not only the cheapest, but it is also the strongest "2((@ alcohol#. &nd also, if Lambanog is readily available in 5eneral !antos City, it would be easier to buy and much cheaper than other Lambanog brands from Lu*on. The go%ernment off!c!al". This study may provide them awareness on the
current performance of the coconut industry that should be given more focus since the Philippines is a tropical country and they could make use of the coconuts produced. t could also aid in formulation of laws regarding the industry. The future re"earcher". This study may give them information and insight on
the Lambanog industry and its feasibility within 5eneral !antos City and neighboring areas. This may also enlighten them with new ideas concerning the industry that may help in boosting the country?s economy. 1.& Sco$e and L!m!tat!on"
The study focused on the feasibility of putting up a Lambanog manufacturing industry in 5eneral !antos City. The researchers gathered facts to describe the present scenario of the Lambanog industry in the Philippines. 0ata came from allari 0istillery,
Capistrano 0istillery, and aitum, !arangani Province. oreover, readings from articles on the internet and journals were used for additional information. =or the proposed project, this covered the five aspects of the feasibility study namely; 1. Organ!'at!onal a"$ect A deals with the type of business, form of business organi*ation, organi*ational setup, hiring, utili*ation, and maintenance of employees. '. Techn!cal and o$erat!onal a"$ect" A includes the methods and means of production resulting from the type and 4uantity of manpower, machinery and e4uipment, raw materials and other supplies that will be used. t also include the study of climate, soil re4uirements, and farming tools <. Market!ng a"$ect includes the operation and the status of the product, the promotion and advertisement, the pricing structure, projected sales and the channel of distribution. B. (!nanc!al a"$ect A covers the estimate of the total project cost, initial capital re4uirement, preoperating cost, sources of financing and financial evaluation. . Soc!o#econom!c a"$ect A includes the economic significance, its contribution to government in the form of ta-es from the workers, private and public business owners.
1.) Re"earch *e"!gn and Methodology
The research methodology of this study concerns with the ways and means of approaches to be used to gather essential information related to the study. t includes research method, the respondents, locale of the study, research instrumentation, and data gathering procedure.
This study employed the descriptive research design. t involves the description, recording, analysis, and interpretation of the present nature, composition, or process of phenomena. t focuses on prevailing conditions or how a person, group, or thing behaves or functions in the present. t often involves some type of comparison or contrast. This is the most appropriate design to be used in this study because it determines the feasibility of putting up a Lambanog manufacturing in 5eneral !antos City considering the organi*ational, technical and operational, marketing, financial, and socioeconomic aspects. t also determined profile of the players in the industry.
A Feasibility Study on putting up a Lambanog Manufacturing Company in General Santos City
ro!le of the Ma"or layer of the Lambanog industry
Locale of the Study General Santos City
Structural Analysis of the Lambanog $ndustry Services
Respondents of the
Mallari 'istillery +arget Mar,et Management and -ey Success Factors
Capistrano Research $nstrument &icada 'istillery
Capacity of the $ndustry 'ata gathering #*mail hone calls
Mar,eting +echnical Financial
)uestionnaire $ntervie(
Socio* otential #stablishment of of a a otential #stablishment Lambanog $ndustry in General Santos Lambanog $ndustry in General (!gure +. Re"earch *e"!gn of the Study
1.).2 Re"$ondent"
The respondents of this study are the < major players in the Philippines? Lambanog ndustry from Tayabas, )ue*on Province, allari 0istillery and Capistrano 0istillery and Dicada 0istillery from aitum, !arangani Province. The allari and Capistrano 0istillery are just two of the big companies of lambanog in anila. Dicada 0istillery is owned and manage by the Dicada family which is a small business entity in aitum !arangani Province. 1.). Locale of the Study
This study was conducted at 5eneral !antos City that is classified as a highly urbani*ed first class city. The city is the gateway to the opportunities, sights, sounds and culture of !3CC!6!&7589 region. +acked with world class infrastructure today, 5en!an and the whole of !3CC!6!&7589 region can be reached by air, land, or sea. The cityEs major economic activity is primarily anchored in two sectors namely the agro industry and fishing industry. Fith the &groindustry, endowed with rich volcanic soil, ample and well distributed rainfall all throughout the year and a typhoonfree climate, 5eneral !antos City produces e-port 4uality high valued crops such as corn, coconut, pineapple, asparagus, banana and rice. t also yields 4uality e-otic fruits, vegetables and cut flowers. The city is also a top producer and e-porter of 4uality livestock such as poultry, hogs, and cattle. +ut with the continuing growth in population and economy in the passing of time, a number of the cityEs agricultural lands have gradually been converted into built up areas in order to address the relatively growing need of dwelling and viable spaces.
+eing a component city and center of commerce and trade in 7egion G known as the !3CC!6!&7589 region and owing to its strategic location and world class infrastructure and support facilities, 5eneral !antos City plays a very important role in the emergence of !3CC!6!&7589 region as the countryEs leading producer of e-port4uality major commodities. 1.).& Re"earch +n"trumentat!on
The researchers used an interview guide and internet to gather information with their respondents. &n interview is a formal meeting in person, especially one arranged for the assessment of the 4ualifications of an applicant. t is conversation, such as one conducted by a reporter, in which facts or statements are elicited from another. t is an account or a reproduction of such a conversation. !ince the players are located far from the researchers, the interview guide 4uestionnaire is sent through email and the interview through phone calls. The internet was also utili*ed to substantiate comparison of industry in faraway places. 1.).) *ata ,ather!ng Procedure
The researchers secured a communication letter to the players, re4uesting them to participate in the study. 3nce the permission is granted, the researchers will sent a 4uestionnaire through email. =or the interview, the respondents will set the date. The researchers conducted the interview through 4uestion and answer method. &fter the data has been gathered, it will be organi*ed, analy*ed and interpreted.
Chapter THE +-*STR/ 0-* +TS 0-0L/S+S
This chapter discusses profile of the major players in the Philippines? Lambanog industry. t discusses their services, the market, performance, the services they provide to their clients. t also includes the identification of government agencies concerned and an analysis of the strengths, weaknesses, opportunities and threats, and key success factors of the Lambanog industry. 2.1 +ndu"try Background +ndu"try Background
n 1H, the Philippines, ndonesia, and ndia accounted for H.H@ of the world?s coconut production of .H million metric tons. &bout '.B@ of the Philippines? arable agricultural land was planted with coconut in 1I "!arian, '(1(#. !ince then, efforts to increase country?s competitive share of the coconut market have been underway, including the push to plant more coconut trees, and to develop new coconut products. The Philippine coconut industry is generally viewed as a monopoly, controlled by a very privileged few. !mall time coconut farmers? livelihoods are being threatened as an increasingly powerful Jnited Coconut Planters +ank, has been buying out or absorbing most of the market share. n response, these farmers have become more organi*ed and united over the past decade "7avi, '((#. The lambanog industry, although it has been around for centuries, takes up a fairly small share of the overall coconut industry.
n recent years, the product has been launched onto the world market, and it is hoped
planting of more coconut trees, since production is dependent upon the amount of sap collected daily. The process of sap collection is largely dependent on the skill of the mangagarit , who have a very risky job. <hough they are afforded health and housing
benefits due to the risky nature of their work, their living situations and financial compensation still leave room for improvement. Jnless more safety features are installed for them, it will be hard to attract new workers for this position as public education becomes more accessible, and other job opportunities arise. &s far as the environment is concerned, the lambanog industry does not pose any major threats, since it is in their best interests to encourage more tree planting. +oth the product and the process do not include any harmful chemicals; in fact, it is being marketed as an organic product. n the Philippines, )ue*on province is the major producer of lambanog wine because of the abundance of coconut plantations in the area. &ccording to Dillaflor "'((#, there are 1B registered lambanog wine processors based on a list provided by the 0epartment of Trade and ndustry "0T#. ost of them are cottage smallscale enterprises with B to ' employees. !ome of the distillers get their supply of raw materials from their own coconut farms while others rent out. The production capacity of these distilleries ranged from ' gallons to as much as <( gallons of lambanog weekly. The three main distilleries in the country are also located in the )ue*on province the allari 0istillery, the +uncayo 0istillery, and the Capistrano 0istillery "Dito, '((B#. 2.1. Local
The 7egion 1' is endowed with rich natural resources and has the potential of becoming one of the fastest developing regional economies in the country. The
provinces of !outh Cotabato, !arangani, !ultan 6udarat, and 5eneral !antos City "!3CC!6!&7589# had been provided with modern infrastructure support under the !3CC!6!&7589 &rea 0evelopment Project. The cities of Cotabato and 5eneral !antos work as the region?s main financial, business, and service centers. Dicada family owns a coconut plantation in aitum, !arangani Province and they are the only entrepreneur that produces lambanog in their area. Their business started in '(( when the family decided to make products out of coconut aside from copra. n '(11, they e-panded their small business by distributing lambanog outside aitum "that includes aasim and 5ensan#. The e-pansion of the business stopped there because of financial incapability which results to less e-posure of the product in the market.
2.1..1 The +ndu"try
Lambanog production is a thriving industry in coconutproducing provinces of the country like the provinces of Laguna, +atangas, &lbay, Cagayan, Camarines !ur, La Jnion, Pangasinan, and )ue*on. Lambanog plays an important role in the development of the coconut industry. The lambanog industry provides another means of employment, and generates additional income for coconut farmers "!anche* 1(#. The revenue from the industry is high, but the e-act figure is not available because some lambanog operations are not registered. n a coconut farm, the owner usually sets aside a certain number of palms to be tapped for lambanog production. The practice of nut and lambanog production assures earnings for farm owners. !tudies have shown that lambanog operations generate more
cash return in same area compared to farm solely for nut production. ts laborintensive operation also generates employment in the farm community. n the lambanog industry, it is common practice between the coconut farm owner and the lambanog producer to share e4ually the production cost and the product. The landlord assumes the cost of cultivation and maintenance of the coconut palms while the lambanog producer shoulders the cost of tapping and processing of lambanog. Coconut farmers prefer to produce lambanog because it generates <B times more income for them compared to copra making. /owever, most of them have no choice but to engage in copra production because they have no capital to operate a lambanog business. The biggest initial e-pense consists of the establishment of a distillation plant. 7unning the business is also e-pensive because of the cost incurred for labor, procurement of special kind of bamboo poles suitable for the purpose, transportation, tools re4uired, and in some cases rental of coconut trees. +n the total o$erat!ng e$en"e" labor co"t take" the large"t "hare 3456# 4)67. Labor e$en"e" !nclude the $ayment for the mananaggot or ta$$er 3about 856 of the total labor co"t7 and d!"t!ller" or tagaluto 3about 126 of the total labor co"t7. Of the rema!n!ng 2)6#56 of the total o$erat!ng e$en"e" 956 goe" to the $rocurement of bamboo $ole" and 156 to the rental of the coconut tree" tran"$ortat!on tool" re$a!r and ma!ntenance. (and!alan 319487 de"cr!bed the funct!on" of the d!fferent con"t!tuent" of the labor force. The manananggot take" charge of $er!od!cally clean!ng the farm and the $alm" $re$are" the $alm" for ta$$!ng tra!n" the "$ad!ce" to y!eld "a$ ta$" da!ly a$$ro!mately 115 "$ad!ce" and del!%er" the collected "a$ to the
da!ly "u$er%!"e" the de$o"!t!on of the "a$ !n the fermentat!on contat!ner" manage" the fermentat!on of the "a$ gather" fuel for the d!"t!llery d!"t!ll" the tuba and $ack" the lambanog. The hauler del!%er" the lambanog from the $roduct!on area to the entre$reneur;" hou"e and then to the cu"tomer". 0mong the %ar!ou" o$erat!on" !n%ol%ed !n lambanog manufacture the mo"t t!me#con"um!ng !" the ta$$!ng or collect!on of "a$ :h!ch accord!ng to Su!'a 319497 accounted for )86 of the total labor re ).&46 for rental of coconut tree" =9.446 for labor .98 for tran"$ortat!on 1.9&6 for "u$$l!e" and mater!al" 5.96 for tool" and e =#4 manananggot 3ta$$er"7 2 $er"on" :ho :ork for 2 hour" $er day to tran"$ort collected "a$ to the d!"t!llery $lant 2 $er"on" re"$on"!ble for d!"t!llat!on and one $er"on for bottl!ng the $roduct.
The y!eld of "a$ from the Laguna Tall %ar!ety !" ba"ed on t:o "$ad!ce" $er $alm :here one "$ad! ha" an a%erage "a$ y!eld of 5.4) L $er day. The month" :!th lo:e"t 30$r!l to May7 and h!ghe"t 30ugu"t to Se$tember7 "a$ y!eld :ere taken !nto con"!derat!on. The y!eld of lambanog !" ba"ed on the 14.)16 reco%ery eff!c!eny. The "a$ y!eld !" com$arable :!th tho"e re$orted !n other countr!e"> 1.&9 L $er day !n Malaya 3Mar"den Sk!lton 1917 1.)9 L $er day !n +nd!a 3Patten 1987 and 1.)8 L a day !n ?eylon 3-athanael 19))7.
Considering that freshly trickled sap contains total soluble solid of '(K+-'
with water and alcohol made from molasses. 3nly a limited volume of lambanog is being produced due to the very old and tall trees. Production, therefore, cannot supply the demand of the market. This practice impairs the natural character of lambanog, thus affecting its 4uality. To mask the natural flavor of lambanog, synthetic fruit flavors and colors are now being added during formulation. Tuba and lambanog are produced using very crude traditional methods. The general steps in its manufacture have not changed since time immemorial, although slight improvements have been adopted. Tuba, known internationally as coconut toddy, is produced through the action of a wide variety of natural flora that originates from the environment and from the coconut inflorescence. 2.1..2 Ser%!ce"
n the =ood !ervice ndustry, there are many business related establishments that e-ists. This type of business is commonly situated in commercial areas because of their accessibility to the customers. The main service the company would offer e-clusively is the distribution of lambanog in commercial areas throughout region G because of their easy accessibility to the potential customers. Fe also offer speciali*ed or customi*ed lambanog bottles for gifts and occasions "e.g wedding, birthday#. 2.1.. Ma@or Player" of the +ndu"try
The e-istence of the industry can only be reali*ed through its players. There are a lot of Lambanog industry players in the country, especially in )ue*on and Laguna. This difficulty made it hard for the researchers to interact with the appropriate persons
for the interview. &nd some business owners were too busy to be interviewed and participate in this study. /owever /ow ever,, the res researc earchers hers succ successf essfull ully y con contac tacted ted thr three ee maj major or play players ers of the indust ind ustry ry,, al allar larii 0is 0istil tillery lery,, Cap Capist istrano rano 0is 0istil tillery lery and 6at 6atanga angawan wan,, 5!C 5!C.. &s to the technical and financial aspects of the business, readings from the nternet and journals were wer e use used d to sup supple plemen mentt add additi itiona onall inf inform ormati ation on sin since ce bot both h com compan panies ies are know known n countrywide. The Mallar! *!"t!llery
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8mail: joselitomallariQyahoo.com
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Cellphone num.: (1I<'IHB
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=a- num.: (B'I<2'I
t is locate located d in +rgy. Lalo, Lalo, Tayabas, Tayabas, )ue*on Province Province and is one of the three major producers in the country, was established in 112. t is a family business whose owners trace their ancestry to a !panish soldier named &landy. n 1'2, the parents of 0oRa Sosefit Sose fita a &l &landy andy pio pionee neered red the est establ ablish ishmen mentt of a lam lamban banog og dis disti tille llery ry as a fam family ily enterprise. This entrepreneurial initiative was handed down to the ne-t generation. Lambanog then became commonly known in Tayabas as &lak =ita of the &landy family fam ily.. Cur Current rently ly,, r r.. Sose Soselit lito o al allari lari,, the gra grands ndson on of 0oR 0oRa a Sose Sosefit fita a man manages ages the distillery known as allari 0istillery. /e also reali*ed that to be able to compete in the international market he needed to ma make ke mo more re at attr trac acti tive ve bo bott ttle les. s. Th The e Du) u)o o bo bott ttle le is hi his s la late test st des desig ign n and wi willll be introduced in 8urope and the J! in the near future.
Today, it still has only '1 employees. !o far, according to r. Soselito, the allari distillery has been the most active in trade fairs promoting product awareness. n the e-port trade, it lists its annual sales at UB(,(((. & onegallon bottle of lambanog retails for U< to UB, depending on the alcohol content "2( or (proof#. Lambanog e-ports have increased since '((1, as reflected by data from a report generated by the Philippine 0epartment of Trade and ndustry, but it seems the listed 4uantities are still too small to be reflected in most international e-portNimport statistics. The ?a$!"trano *!"t!llery
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8mail: capistranodistilleryQyahoo.com
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Cellphone 9um.: (B'
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=a- 9um.: (1I2<2H
leadi le ading ng Ph Phililip ippi pine ne ma make kers rs of la lamb mban anog og,, wh whic ich h it se selllls s to th the e co coun untry tryEs Es bi bigg ggest est supermarket chain. Fhile the allari 0istillery remains in operation, the Capistrano family said it has taken a lead in promoting the drink abroad. $any have compared it to 7ussian vodka or 8nglish gin but what sets our lambanog apart is that you don?t get a hangover,% said Hyearold distiller sabelita Capistrano. n '((1 the government approached the allari and Capistrano houses and 1B other other smalle smallerr lamban lambanog og distil distillers lers with a plan plan to develop develop the product product for e-port. e-port. t provided packaging e-pertise, introduced modern bottling operations and sponsored alcoholtast alcoholtasting ing tours for foreign buyers. The trade department department said the drink had been slowly penetrating the beverage markets in &ustralia, Sapan and acau, though official
Sapan, !outh 6orea and the aldives with premium blends.
The A!cada *!"t!llery •
Contact 9umber (B'BI(2(H
Dicada family owns a coconut plantation in aitum !arangani Province and they are the only entrepreneur that produces lambanog in their area. Their business started in '(( when the family decided to make products out of coconut aside from copra. n '(11, they e-panded their small business by distributing lambanog outside aitum "that includes 6iamba and aasim#. The e-pansion of the business stopped their because of financial incapability which results to less e-posure of the product in the market. 2.1..& ?a$ac!ty of the +ndu"try
The use of coconuts as the basic raw material in lambanog production makes the product uni4ue among alcoholic alcoholic beverages. beverages. Coconut trees that are tapped do not bear nuts. ajority of the processors rent a coconut farm where they get the raw material needed needed for the product production ion.. 3ne owns owns a planta plantatio tion n while while anothe anotherr sourced sourced his raw material from a farm owned by his relative. ost of the farms are situated near the residence of the processor. The distilleries are also found in the farms for easy transport of tuba. 2.1..) ey Succe"" (actor"
The following are some 4ualities of the Lambanog industry which contribute to its
?ultural Rele%ance. +ecause coconut trees abound throughout the Philippines,
and because the process of distilling lambanog from tuba is a relatively ine-pensive process, it is known as a poor man?s drink. =armers often wind down by drinking lambanog after a long day?s work. n )ue*on, drinking lambanog is usually a communal thing A men sit around in a circle and take turns drinking shots from a cup placed in the middle of the group. Jsually, there is also someone singing and playing the guitar to add to the festivities; he takes his turn at drinking too, so the music gets more interesting as the drinking goes on. ,o%ernment +n%ol%ement . Coconut Products are among the Philippines? top ten
e-ports. n recent years, other countries have increased their investment in the coconut industries, rivaling the Philippines in terms of e-port production. n response, the country has been looking for new ways to recover its corner on the market. Lambanog was one of the products selected for e-port development. The ndustrial Technology 0evelopment nstitute, along with the 0epartment of !cience and Technology began working with the three biggest distilleries to standardi*e the distillation process; their suggestions improved the 4uality of the product. To prepare for e-port, the government?s +rand 0evelopment Program worked with the distilleries to develop uni4ue bottling and packaging; they hoped to introduce lambanog with a Philippine trademark on the global market to increase its competitiveness. Market Penetrat!on and Potent!al. Lambanog was launched on the e-port
market in '((1. 8-posure and popularity have also been helped by the tourism industry. Tourists who visit the Philippines inevitably sample lambanog and look for it abroad. 7ecently, hotels and corporations have begun to introduce creative desserts that feature lambanog as a key ingredient. 3ne of these is the Ferdenberg Corporation anila,
being done to trademark lambanog and make it more competitive on the global market. The distilleries have also begun to release flavored lambanog "ranging from bubblegum, mango, calamansi, and blueberry#, which has increased its appeal on younger consumers. 8fforts are also under way to market it to the more health conscious consumers as an organic wine. En%!ronmental +m$act . +ecause lambanog comes from the distilled sap of the
unopened coconut flower, it is in the industry?s best interests to take good care of its coconut trees. &s the demand for lambanog increases, it will naturally serve as an incentive to plant more trees. "Porter, '((# 2.1..= The Market
0irect selling is the most common way to distribute the product. The processors use their own residences as the main point of distribution. +uyers go directly to their houses to purchase lambanog wine. !ome have signage in front of their houses to attract more customers. Their products are distributed through different channels such as wholesalers, retailers, local consumers, and consumers from other towns and provinces. &ppro-imately I(@ of the firms? products are sold within their respective barangays and within the town. The remaining thirty percent are sold in nearby areas which include 7i*al, 9agcarlan, ajayjay, !ta.Cru*, Pila, Calamba, and !an Pablo City in Laguna, and &ntipolo and Tanay in 7i*al Province. Lambanog wine produced in Liliw has also reached etro anila. =our of the seven firms sell their products on cash basis. The other three processors are accepting (@ down payment or full credit which has to be paid one to two days after purchasing the product. &n estimate of I(@ of total sales is paid in cash while remaining <(@ is through credit. &ccording to the firms, there
their present markets. n some instances, they had to buy lambanog wine from other distilleries because they are not able to fill the customer?s order due to limited capacity. !ome of them had transported their products to other provinces but they had to stop because of high costs and difficulty in collecting receivables. &ll firms produce pure lambanog wine, however, two of them make flavored ones. !ome of the flavored variants include coffee flavored wine, tea flavored wine, lambanog soaked with apple peeling, and prunesoaked lambanog. =lavored lambanog is made by re4uest. (!rm" do not u"e any brand name for the!r $roduct". The "ame "!'e" are "old by the $roce""or". 0ll the $ackag!ng mater!al" u"ed are $ro%!ded by the cu"tomer". Purcha"ed lambanog :!ne !" tran"ferred !n the conta!ner" brought by the buyer". Some f!rm" lend the!r regular cu"tomer" :!th conta!ner" e"$ec!ally !f they $urcha"e !n large t:el%e ounce" of lambanog !" "old at the range of Ph$12# Ph$14. (la%ored lambanog co"t" h!gher than $ure lambanog. +t !" "old for Ph$195# Ph$255 $er gallon of any fla%or. 2.1..4 The ,o%ernment Role
n putting up a Lambanog industry, it is significant to understand the legal needs and its repercussions since it 4ualifies as a geographical indicator that is protectable
under the &greement on Trade 7elated &spects of ntellectual Property 7ights, ncluding Trade in Counterfeit 5oods "T7P!# section of the 1B Jruguay 7ound negotiations. The agreement states that all parties should avoid the use of any indication that would mislead consumers regarding the origin of the goods, as well as any acts that would result in unfair competition. =urthermore, a higher level of protection is provided for geographical indications for wines and spirits, which are protected even when there is no danger of the public?s, being misled as to the true origin. The name $lambanog% would therefore be preserved specifically for the Philippine beverage, even if other countries started to produce a similar product. n recent years, countries like Thailand and ndonesia have become increasingly competitive in producing coconut based products. Therefore, both the process and the product should be protected as the intellectual property of the Philippines. The following are government agencies concerned with the Lambanog industry: Bureau of (ood and *rug 0dm!n!"trat!on 3B(0*7
t has the mission of protecting consumers in certain defined areas A ade4uacy of controls e-ercised by the processor during processing and safety of the finished product on the market. !ince responsibility for 4uality, including safety is with the processor, his interest lies in the same direction. t is possible to inspect processing practices without inspecting the 4uality products, but hardly possible to inspect for 4uality without knowing the processing procedures. *e$artment of Trade and +ndu"try 3*T+7
t is tasked to e-pand Philippine trade, industries and investments as the means to generate jobs and raise incomes for =ilipinos. Lambanog industry has begun e-porting Lambanog in Sapan, Taiwan, and &lgeria. Lambanog e-ports have increased since '((1, as reflected by data from a report generated by 0T. *e$artment of Sc!ence and Technology 3*OST7
technologies while providing technical services to industry. 0T is multidisciplinary with scientific disciplines, enabling the nstitute to carry on its role in the countryEs industriali*ation program. The institute aims to help alleviate the plight of the lessprivileged sector of society. 7V0 activities are focused on seven major areas, namely: food processing, materials science, chemicals and minerals, electronics and process control, fuels and energy, microbiology and genetics, and environment. *e$artment of 0gr!culture 3*07
t promotes and intensifies commercial crop production. n coming up with priority crop, 0& aslo considered priority commercial crops identified in the !cience and Technology agenda for 9ational 0evelopment "!T&90#. This increases the supply of coconuts for the coconut industry. 2.2 +ndu"try 0naly"!"
The following analyses are based on the performance of Lambanog industry players in )ue*on and Laguna. 2.2.1 Barr!er" to Entry
Potential entrants will face the following barriers in entering the restaurant and bar industry. ?a$!tal!'at!on. & huge amount of capital is re4uired in putting up lambanog
manufacturing company to commence its operations. The capital should be sufficient on ac4uiring the e4uipments involved. ?om$et!t!on. The e-istence of the present industry players and their success is
a threat to the new entrants. 0ue to their trusted services and product offered and their popularity among customers, new comers would find it difficult to penetrate and outwit
,o%ernment Regulat!on". 5overnment can play a major direct role by affecting
entry barriers through controls like 4uality standard. The government can also have direct control as to licensing re4uirements, proper waste disposal, location site and many others. 2.2.2 Threat" of Sub"t!tute
&ll business entities in the industry, which includes the producers of substitute products and services, are competing. The more attractive the price and performance alternative offered by substitutes, the firmer the industry lid is. n this type of industry, the threat of substitution is relatively high because of other alternative alcoholic beverages available in almost all retail stores. !ubstitute products include beer, gin, brandy, vodka, and whisky. They became the substitute because of their being popular and trusted in the market. These products come in different si*es and varieties, and prices are either cheaper or at par with the average price of lambanog wine.. The customers are willing to substitute especially if the price of the substitute falls. 2.2. Barga!n!ng Po:er of Su$$l!er
+argaining power is the ability to influence the setting of prices. The bargaining power of the seller is low according to the respondents. ore or less, they could not demand for prices since there a lot of e-isting seller in this industry of beers, spirits and other wines, so the customer has the power to choose where heNshe wants and could easily find another choice that would match hisNher standards. n most cases, the entity takes the prices charged by their rivals in the industry as given and ignores the impact of its own prices on the prices of other firms.
The bargaining power of the customer is high according to our respondent, because of many bar industry e-isting today. Fith this, the customer can e-ert influence over an industry in certain circumstances. The substitute can be easily found by the customer in whom they are very sensitive to prices. The customers base their choice on the type of service that?s why entities are adjusting on the demand of their customers. 2.2.) ?om$et!t!on !n the +ndu"try
& lambanog industry falls into the category of monopolistic competition. Lambanog industry competes in terms of pricing, promotion, labeling and numerous numbers of services offered with a competitive edge in pricing strategy and 4uality service. The competitors in the industry tries to capture bigger market share through differentiation, lowering of prices due to the price sensitivity of the consumers and providing satisfaction to the needs of their buyers.
Chapter THE (E0S+B+L+T/ ST*/
This chapter presents the feasibility study of the proposed Lambanog anufacturing in 5eneral !antos City. t includes the management and organi*ation,
.1 (orm" of Bu"!ne"" Organ!'at!on
3wnership means the legal title to a thing or control over the thing owned, the right possession and disposal. n business enterprise, ownership means title to and possession of the assets of the enterprise, the power to determine the policies of the operation, and the right to receive and dispose the proceeds. n partnership form of organi*ation, partners merely outline the activities and they can start the operations, so it is easy to form as the single proprietorship, there are more persons to conduct the business and to handle its problems. /owever, disagreement between partners sometimes leads to delay and difficulties, which could endanger the enterprise. n addition, death, insanity, and insolvency of a partner automatically dissolve the partnership. =or the proposed business, a partnership form of is more suitable considering the si*e of the business and the capitali*ation re4uired to operate. The partnership will be composed of five partners who will contribute e4ual amount of capital. f the need arises to change the form of ownership into a corporation, such may be adopted to suit the needs of the business.
.2 Organ!'at!onal Structure
The organi*ational chart communicates the formal structure of the business. t conveys how the authority and responsibility are delegated throughout the organi*ation.
t tells who has the authority over whom and who reports to whom. =igure ' presents the organi*ational chart of the proposed Lambanog manufacturing company.
5eneral &dministrative and !elling 5eneral!upervisor
Production !upervisor
&ccounting Clerk
angagaritN anananggot "tappers#
Tagaluto "0istillers#
!alesman
+ottlerN PackerN Cleaner
!tockN Farehouse Clerk
!ecurity 5uards
0rivers
(!gure 2. Organ!'at!onal Set#u$ 3?hart7
. Per"onnel Cual!f!cat!on"
8ach employee is carefully selected. 8ach 4ualified applicant undergoes a selection process where the most 4ualified chosen applicant do 4uality work output. Table < presents 4ualifications for the different positions. Table 1 Per"onnel Cual!f!cat!on"
Position ,eneral
)ualifications •
& graduate of any of the following business course: +! &ccountancy, +! &ccounting Technology, +!+&
0dm!n!"trat!%e
anagement
&ccounting,
+!+&
A
arketing
and Sell!ng Su$er%!"or
Product!on
•
anagement, +!+& A anagement Fith at least one year related work e-perience '< years old
•
=ood Technologist, =ood 9utritionist or a graduate
•
of any related course Fith at least one year related work e-perience
•
Su$er%!"or
•
0ccount!ng ?lerk
•
• •
preferably in food manufacturing operation '(< years old +! &ccountancy, +! &ccounting Technology or +!+&anagement &ccounting graduate Preferably with at least one year work e-perience '<<( years old
•
Darehou"e ?lerk
• •
Sale"man
•
•
& graduate of any business or related course '(< years old Preferably a +!+& arketing anagement 5raduate '<<( years old
*r!%er
• • •
Mangagar!t
• •
Mananaggot 3ta$$er"7 Tagaluto
•
• •
3*!"t!ller7 Bottler
• • •
Packer
•
?leaner Secur!ty ,uard"
•
• •
ale '< years old ust have a driver?s license ale Can climb tall coconut trees ust be physically fit ale ust be physically fit <( years old and above Preferably male ust be physically fit /as a '(N'( eyesight vision '(<( years old ale &ffiliated with a security agency
.& Per"onnel *ut!e" and Re"$on"!b!l!t!e"
The duties and responsibilities of each personnel are presented in table B. Table 2 Per"onnel *ut!e" and Re"$on"!b!l!t!e"
Position
0uties and 7esponsibilities
,eneral 0dm!n!"trat!%e
•
anages the business; formulates and e-ecutes
•
policies. 3ver all supervisor. 0etermine the marketing plan.
and
Sell!ng Su$er%!"or
•
Product!on
•
!upervises production and 4uality control.
Su$er%!"or 0ccount!ng ?lerk
•
7ecords, classifies and summari*es accounting
• •
Darehou"e ?lerk
•
•
supplies. !chedules delivery of goods to buyers. n charge of product distribution and selling. n charge of products promotional activities.
•
0oes loading and unloading of raw materials and
•
Sale"man
*r!%er
•
•
Mangagar!t
• •
Mananaggot 3ta$$er"7 Tagaluto
• •
3*!"t!ller7 Bottler
• • •
Packer ?leaner Secur!ty ,uard
matters. /andles all monetary disbursements and receipts. Take care of other clerical works. !tores all finished products, raw materials, and
•
• •
finished products. 0oes the delivery of the product. 0oes the climbingNcollection of coconut from trees Transferring of coconut sap to containers
anages the fermentation and distilling process !kims the upper layer of tuba of floating impurities aintains the cleanliness of the machinery +ottles the lambanog from distillation Packs bottles in bo-es Checks final product 6eeps the vicinity safe. !afe guards the properties, employees
and
vicinities The mangagaritNmanananggot climb the trees without protective harnesses to
bamboo receptacles. Like highwire performers, the tappers navigate a network of bamboo bridges connecting the trees nine metres "<( feet# above the ground, with blades on their waists and bags tightly strapped to their shoulders. Pruning is mostly done in the afternoon, and the climbers return at dawn to collect the li4uid. =armhands then deliver the sap to the distillery in big plastic containers that are carried behind their backs or on pack horses.
.) Per"onnel Salary Structure
The Personnel !alary !tructure is presented in table . Table Per"onnel Salary Structure
Position
inimum 7ate
Total "PhP#
<
1H,(((.((
H'.Nhr
1<,(((.((
&ccounting Clerk
(Nhr
1',(((.((
Farehouse Clerk
B1.HINhr
1(,(((.((
!alesman
B1.HINhr
1(,(((.((
5eneral &dministrative and !elling !upervisor Production !upervisor
"Tagaluto, +ottler, <<.<
2,(((.((
'Nhr
H,(((.((
'(Nday
I,((.((
'Nhr
H,(((.((
PackerNCleaner# 0river agagarit !ecurity 5uard
.= Summary of Pre#o$erat!ng 0ct!%!t!e"
The summary of preoperating activities is presented in table H.
Table & Summary of Pre#o$erat!ng 0ct!%!t!e"
Cost 7ental of coconut trees Labor:
Percentage .BI@ =9.446
nstallation of bamboo bridges
<.@
Tapping
21.1H@
/auling
'.(2@
Transporting the product
1.B2@
Transportation !upplies and aterials Tools and 84uipments +ank Charges 0epreciation
<.2@ 1<.B@ (.<@ <.I@ '.1(@
7epair and aintenance
(.<(@
+usiness Ta-
(.B2@
.4 T!me Table
Table ) > T!me Table
Pre#O$erat!ng 0ct!%!t!e"
Preparation of +usiness Plan Procurement of +usiness Licenses, Permits, Certification and other legali*ation 5eneral Checking of the Coconut Plantation 7enovation of the ForkingNProcessing
1
'
<
B
H
I
2
1(
11
1'
1<
1B
1
Purchase of !upplies and 84uipment /iring of =orce Labor &dvertisements
?H0PTER +A Market!ng (ea"!b!l!ty
This chapter presents the marketing feasibility which includes the target market, market si*e and trends, competition and estimated market share. This chapter also includes the sales and distribution strategy, pricing strategy and promotion strategy of the proposed business. &.1 Market Re"earch and 0naly"!"
n establishing a lambanog manufacturing, market research and analysis is an important consideration that would help the business itself. The market research and analysis entails the knowledge of obtaining the target market, market si*e and trends,
&.1.1 Target Market
The main target markets of Lambanog anufacturing are those alcoholic drinkers from 5eneral !antos and other cities who would like to e-perience different flavors of lambanog that they never tasted before. The market of the proposed venture can be e-tended to the people of 5eneral !antos City who would prefer to buy and avail the products comprising of inhabitants of 5eneral !antos City who belong to the class &, + and C. &ccording to the Philippine income classification for provinces, cities and municipalities 5eneral !antos City "0adiangas# is a 1st class highly urbani*ed city. The urbani*ation status of 5eneral !antos City "0adiangas# is classified as partly urban "Philippine slands '(1(#. 8conomic class & refers to those people who are considered upperclass earners in the society. They earn above Php1(, ((( a year. Class + are those people who belong to the middle class that are able to live a satisfactory life. They earn over Php1((, ((( but not over Php1(, ((( in a year. 8conomic class C refers to those people who have less purchasing power compared to the other two classes. These people earn over Php(, ((( but not over Php1((, (((. These economic classes include businessmen, e-ecutives, professionals, bluecollar workers and other employees. The total population of people who belongs to the age of legal majority is <(<,B based on the year '(1( which inludes the classes &, + and C. !ince 5eneral !antos is a city, alcoholicdrinkers are present in the community who has an income and has a capability to buy and consume lambanog products. &.1.2 Market S!'e and Trend"
The market si*e and trends refers to the total population of the lambanog industry in 5eneral !antos City e-cluding the transportation industry and the latest status and trends in the target market. This will determine the actual number of target consumers of the proposed company?s market. t projects the possible customers that will primarily serve as basis for possible sales and provides definite market segmentation for the company itself. +ased on the 9ational !tatistical Coordination +oard "9!C+#, there are <(<,B legal aged person in 5eneral !antos City are considered as the market of the proposed study since alcoholic drinks are not available and prohibited among children. &.1. The ?om$et!t!on
The proposed business will be competing with the e-isting li4uor industry. ore specifically, the bars and lambanog established in 5eneral !antos City, which is closely
related to the proposed business. Currently there are a lot of competitors taking into account the target market that the business intends to serve. Lambanog will enter into a market characteri*e by monopolistic competition. This is a common market structure where many competing producers sell products that are similar but differentiated from one another. There are *ero barriers to enter and e-it and producers have no degree of control over price. &.1.& E"t!mated Market Share
3ur share in the marketplace is estimated to 1(@ of the total market. This 1(@ will be from the consumers who are still patroni*ing lambanog products as the
discothe4ues e-ist which provide entertainment as well as the fresh musics and latest alcoholic drinks that this generation loves which made their share almost a half of the total market share. These establishments are the ones whose influence in the industry is materially incomparable. t means that the control over the target market is coming from a fairly plenty completion. <hough this fact e-ists, there are still advantages that the proposed business differs from the other competitors.
2/0 1/0
./0
3eer Spirits Lamban og
(!gure > E"t!mated Market Share &.2 Market Strategy
This strategy will includes all basic and longterm activities in the field of marketing that deal with the analysis of the strategic initial situation of a company and
the formulation, evaluation and selection of marketoriented strategies and therefore contribute to the goals of the company and its marketing objectives. &.2.1 ,eneral *e"cr!$t!on of the $roduct
The business will have distinct feature, style, and 4uality of product to the customers. Lambanog is an alcoholic beverage known for its potency "it is sold in 2( or ( proof variations#. The lambanog making process has been a tradition passed down through generations of coconut plantation. +ecause of its long history as a cottage industry product, lambanog is still beginning to gain worldwide recognition. &lso, in an effort to increase its appeal to people of all ages, it is now marketed in several flavors: mango, blueberry, bubblegum, cinnamon, etc. &.2.1.1 Brand -ame
6okos Fein is a 5erman word which means $Coconut Fine.% & few ounces of lambanog is an e-perience. Fhile most would compare it to vodka, it?s actually a local version of the &sian alcoholic beverage called arrack, which is based on fermenting coconut sap "&rrack could also be the root word of alak, the general term of alcohol in =ilipino#. &.2.1.2 Product (eature"
To many rural people, swigging lambanog is part of celebrating life, culture, and tradition. 7ecently, there are claims that local fruit wines help improve health as the fruits used in the blends reportedly have curative effects. 0uhat and bignay, for e-ample, can supposedly help cure diabetes and reduce high blood pressure. &.2.1. Product Style
There is a wide variety of lambanog: Pure and Clear lambanog has the e-ceptional yet assertive 4uality of a fine alcoholic beverage. !trawberry flavoured lambanog has the real taste of strawberry fruit and pink in color, but the spirit of lambanog is still there. +ubble 5um flavoured lambanog has the real taste of bubble gum and blue in color, but the spirit of lambanog is still there. 5rape flavoured lambanog has the real taste of grape fruit and violet in color but the spirit of lambanog is still there. elon flavoured lambanog has the real taste of melon fruit and orange in color, but the spirit of lambanog is still there. &.2.1.& Product Cual!ty
&s far as the environment is concerned, the lambanog industry does not pose any major threats, since it is in their best interests to encourage more tree planting. To achieve, 4uality product the business will ensure high customer satisfaction through the successful attainment of the product styles which will be done by the lambanog manufacturing. +oth the product and the process do not include any harmful chemicals; in fact, it is being marketed as an organic product. &.2.1.) Product Packag!ng and Labell!ng
Products must be packaged well to increase shelf life. t can be used to encourage potential buyers to purchase lambanog. t improved tamper resistance to deter tampering and also can have tamper evident features to help indicate tampering. t was written, electronic, or graphic communications on the packaging or on a separate but associated label. The researchers decided to have a packaging and labeling as what is shown in =igure 2 because of its significance and meaning. The upper design which is the
how beautiful the country is for having different products such as the Lambanog produced by the researcher. The $koko s Fein% is the product name and the bottles below were the different flavors of the product which is strawberry, raisins, mango and bubblegum.
(!gure &> Packag!ng and Labell!ng &.2.2 Sale" and *!"tr!but!on Strategy
This section includes the sale and distribution process of the proposed lambanog manufacturing in 5eneral !antos City. &.2.2.1 Order Proce""!ng
The process of ordering should be present in a business to attain customer satisfaction. •
Customer should contact us through calls and emails which will be answered by one of the salesman to be able to recogni*e of how much and when their orders are needed.
•
&fter ordering, the salesman will tell the warehouse clerk to schedule the delivery of lambanog to the consumer and how much is needed and the
•
address where it will be delivered. Then, the warehouse clerk will inform the driver in the scheduled time to load and deliver the finished products and the address of the consumer who
•
ordered. 3n the day of delivery, the driver will be accompanied by one of the
•
salesman who will collect the payment of the customer. Fhen the driver arrived, he will also be the one to unload the finished products and the salesman will collect the payment of the customer.
&.2.2.2 Product ?ontrol Management
This pertains to how the business manages and controls the purchase of supplies to be able to maintain organi*ed and efficient records of inventory. &.2.2.2.1 Product Cuant!ty
This refers to the number of safety stock to be purchased in order to control the inventory management. The company will make use of the traditional costing. The 4uantity of product to be manufactured will be relatively large which will be stored in the stock room. t is good to store the lambanog in a long period of time while waiting for an order because its taste will get better. &.2.2.2.2 Product Lead T!me
Product lead time manifest the timing of the entity in ordering the safety stock. The product lead time depends on the customer of what specific day and time will heNshe wants the product to be delivered. +ut it is assured that it will be delivered in the e-act day, time, and place as what the consumer demands.
This section contains the cost, speed, reliability of the transport and cost of damage in relation to transportation. &.2.2..1 ?o"t
7unning the business is also e-pensive because of the cost incurred for transportation. The company will handle the delivery of the products to the retail stores, or supermarkets and the cost of gasoline for the delivery is incurred. They may revolutioni*e transportation one day, but until then, the internal combustion engine is what we?ve got. 0iesel is e-pensive but certainly more fuel efficient than gasoline powered engines. &.2.2..2 S$eed
The transportation of finished goods is to be delivered upon the demanded date of the retail stores or supermarkets. &.2.2.. Rel!ab!l!ty of the Tran"$ort
5eneral !antos City is not that populated compared to other cities. The volume of vehicles is not that heavy. Jpon the delivery of the product, there is a smooth transportation along national highways but in the streets going to the retail stores or supermarkets are little bit narrow and added with many tricycles, there is a light congestion but no delay in delivery. &.2.2..& ?o"t of *amage
n case of damage in transporting the products, the company is liable for the replacement and returns of defected goods.
Farehouse refers to the place where the finished products are stored for delivery to consumers. The warehouse of the lambanog products should have a room temperature which is under the normal condition, '1 KC "I( K=#. &.2.2.) *!"tr!but!on ?hannel"
The distribution of lambanog products could be in sarisari stores, supermarkets, public markets, or straight to the final consumer for consumption. The channel of distribution is at its full control.
Sari*sari Store4
Lambano
=inal Consumer ublic Mar,ets
(!gure )> *!"tr!but!on ?hannel &.2. Pr!c!ng Strategy
&dopting a better pricing strategy is a key option to stay viable. t is a learning curve when studying the needs and behaviors of customers and clients. &.2..1 Pr!c!ng Structure
Costbased pricing will be adopted where the cost data will be used in
up the operating e-penses. Jnder the full cost pricing method, selling price is computed by adding the total production and operating cost to a markup based on such total cost. The computation below shows how the selling price of the product is arrived at. 1 +ottle Packaging ndirect Costs
Php
1'.<1
0irect aterials
0irect Labor
<.(
=actory 3verhead
2.1
Total Cost
H.<
arkup "B(@# !elling Price per +ottle
<2.H1B 1<.1B
&.2.& Promot!on Strategy
This involves the buildup and improvement of consumers? demand. t involves communication. t may be in verbal and non verbal form of strategy. t also deals with particular strategy that a business can use in order to encourage the market in the locality to patroni*e their products and services to make the business remain stable in the industry. &.2.&.1 0d%ert!"!ng
To reach consumer?s awareness, the product will be advertised using trimedia. 7adio and television advertisements will be used to promote the product. &nd flyer, for a cheaper advertisement, are printed and disseminated to random people or to the target market directly for better business recognition. Fith increasing advancement in
technology, the use of computers and gadgets may also do by creating website for on line advertisements.
&.2.&.2 *!rect Sell!ng
!traight forwardly marketing the product to our potential consumers. t is a way to let people know about our product and to hold their interest long enough for them to know how our product can benefit them, without using the television or radio for advertising. &.2.&. Publ!c!ty
The lambanog business need to cultivate effective media relations, and targeting publicity to key markets are viewed as the highest priorities. The business relies on the word of the mouth of the consumers for publicity. 9ews story form about an organi*ation or products, through mass medium at no charge. Part of public relations, a broad set of communication activities used to create and maintain favorable relations between the organi*ation and its publics. &.2.&.& Sale" Promot!on
The business venture will provide discount to customers
during
the
holidayNseason to attract more clients and have a greater demand. Product e-hibit and sampling will be used as a part of product promotion. & tastetest campaign will also be conducted for product 4uality testing.
Chapter D TE?H-+?0L (E0S+B+L+T/
This chapter discusses the details of how the business will deliver a product or service, the materials, labor, transportation, location of the business and the technology needed for the sustainability if the business. ).1 Techn!cal Proce""
This section talks about the procedures of the venture on how the product will be offered to the market. & division of the process will be understood in the preceding categories. ).1.1 The Product
Lambanog is wine made from coconut. t is famous for its potency that normally carries about 2( to ( proof variations. t has been passed down throughout generations of coconut plantation farmers. The process involves collecting the sap from the coconut flower, similar to rubber tree tapping. The sap is then cooked and fermented to become tuba, a popular coconut toddy. The tuba is then distilled to make lambanog. ).1.2 Ra: Mater!al"
n conducting business operations, the proposed lambanog manufacturing will use raw materials. !uch raw materials and the corresponding cost in the market are
Table = > Ra: Mater!al" 7aw aterial Coconut !ap 8mpty +ottles =lavorings: +ubblegum 7aisins !trawberry ango • • • •
)uantity 2( gallonsN day 'B( bottlesN day
Cost Php '(.(( each
1 kilo 1 kilo <. liter <.liter
Php 1I(.(( Php 1'.(( Php 1
).1. Manufactur!ng Proce""
This section will tell how the Lambanog anufacturing works. The flow chart of the process is shown in =igure 11. ?ollect!ng
Coconut sap is the li4uid tapped from the unopened flower "spade-# of coconut tree. The sap when collected must be pearly white in color and sweet in taste and has the characteristic coconut sap smell. Rece!%!ng
Coconut sap packed in carbouys "'(L capacity# is received at the production area. •
Transferring to =ermentation DatsNCoarse =iltration
The coconut sap is filtered and manually transferred to the fermenting vats.
Coconut sap is allowed to ferment in large plastic drums. =ermentation period takes about <B days to produce an alcohol content of appro-imately I2@
Tran"ferr!ng and Hold!ng
The alcoholic li4uor is transferred to a holding tank that is usually located near or beside the distillation area. The alcoholic li4uor stays in the holding tank until distillation setup is ready for the ne-t batch. *!"t!llat!on
The traditional process of distillation is the batch type potstill process with rice hull or wood as source of fuel. The alcoholic li4uor is heated. The initial distillate "head or >bating?# which contains the undesired methanol and other components is separated and set aside for other purposes. t has a high proof of content "concentration: 11( proof#. The succeeding distillates that are lambanog have lower alcohol content. /owever, as distillation proceeds, the desired alcohol content of 2(( proof must be achieved. The distiller uses an alcohol meter "hydrometer# to check the alcohol content. t varies from 2( to ( proof. The remaining li4uor in the distillation vat, which is the tail, is discarded. t is composed of high alcohol like fusil oil that boils at higher temperature. •
Packaging, the product ">alak?# is transferred to plastic containers "/0P8high
!toring
Collecting
Packaging
7eceiving
0istillation
Transferring to =ermentation Dats
Transferring and /olding
=ermenting
(!gure => Manufactur!ng Proce""
).2 Locat!on 0naly"!"
8nclosed in this part are the location map, vicinity map and plant lay A out which tell about the feasibility of the establishments or ventures location to the market. ).2.1 Locat!on Ma$
(!gure 4> Locat!on Ma$
The researchers chose 5eneral !antos City because Lambanog ndustry in the place is slightly available but the sellers but not competitive. This implies that consumers will directly go to the firm since it is the biggest company of lambanog and it has a sufficient service to the customers to attain ma-imum satisfaction.
).2.2 A!c!n!ty Ma$
(!gure 8 > A!c!n!ty Ma$
Company at Prk. < Labu +rgy. 6atangawan,5eneral !antos City. The researchers chose the area since the parcel of the land is owned by the family of one of the researchers and with the permission of the family, the researchers have agreed to establish the company in that site. The researchers also chose the site because it is accessible to the coconut plantation and it will be easy to manufacture lambanog products with less effort, time and money. ).2. E"tabl!"hment Lay#out
This describes the floor plan of the proposed Lambanog anufacturing Plant. +nternal
Eternal
). Product!on -eed"
The production needs describes the facilities, the e4uipment, the utilities, and the waste disposable that will be using in manufacturing of lambanog. )..1 (ac!l!t!e"
+elow are the facilities that would be established in completing the normal operating cycle of the proposed business. Table 4 > (ac!l!t!e"
=acilities
0escription
Coconut Plantation
This is an outdoor rented area of the company where the coconut trees are maintained.
Production &rea
This is the area where the fermentation and distillation process of making Lambanog is done.
!torage 7oom
This is the area where the finished products are stored in '(' C. This is where the transactions of the business are being recorded. This is also the place where the records of the business were keeped.
3ffice
)..2 E
Jnder this section are the e4uipment needed for the daily operation of the proposed venture.
Table 8> E
E
Cuant!ty
?o"t
*e"cr!$t!on
Product!on Ba"ed E
< pcs
Php
Computer !et
< pcs.
Telephone
' pcs.
Php '1,(((.(( each Jsed for keeping records of the "Php H<,((.((# business and also for communication. Php 1,12.(( each Jsed for communication. "Php ',
0istillation 84uipment 8mpty Containers !trainer 5raduated Cylinder Cutted +amboo Copper Pot
I(.(( each &lcoholmeters are for reading "Php ','(.((# alcohol content in distilled spirits only. 1' "<(cm# Dery accurate &lcoholmeter. Professional grade. ( '(( Proof and (1((@ abv reading. ' pc. Php 1(,(((.(( each Jsed for distilling the fermented "Php <((,(((.((# coco sap. <( pcs. Php I(.(( each This is where the collected sap is "Php ',1((.((# stored for about 'B days. pcs. Php <(.(( each This is used to filter the coconut sap. "Php 1(.((# < pcs. Php <(( each This is where the distilled coconut "Php ((.((# sap is measured after. (( pcs. Php <.(( each This is where the sap is collected "Php ',I((.((# while it is still in the coconut tree. ' pcs. Php ',.(( each Jsed for fermentation process. "Php ,(.((# 0dm!n!"trat!%e E
3ffice !upplies =urniture V =i-tures &ir Condition
< pcs.
5enerator
1 pc.
).. t!l!t!e"
To make the business operational, it will have the following utilities presented on table 1( and with its corresponding description and estimated cost per month. The estimated total of the utilities e-pense would be Php 2,(((.((. Table 9 > L!"t of t!l!t!e" t!l!ty Dater
*e"cr!$t!on
Electr!c!ty
Heat Tele$hone +nternet
TOT0L
t is a necessity of the business for sanitary purposes "washing and cleaning of the e4uipments and etc.# t is a necessity of the business to start its operation. 8lectricity will provide light to the whole area especially at night "for security purposes#. =urthermore, it is used to generate the e4uipments use in making lambanog. t is used in cooking the coconut sap for fermentation. edium of communication to clients and suppliers Jsed for other business transactions done in the internet.
E"t!mated ?o"t Ph$ =55.55 $er month
Ph$ 11555.55 $er month
Ph$ 1)55.55 $er month Ph$
)55.55 $er month
Ph$
1555.55 $er month
Ph$ 14555.55 $er month
)..& Da"te *!"$o"al
The business shall have a proper waste disposal in order to maintain a clean healthy environment. The main waste that will eventually produce by the production
area are the waste from fermentation and distillation process. The waste will be disposed in a certain area since it is not harmful because it is a biodegradable waste. ).& Su$$l!er;" Tran"$ortat!on (actor"
The suppliers of the materials "which supplies the empty bottles and firewood# which is needed in the normal operation of the business has to consider the following: 0%a!lab!l!ty of Su$$ly. There are really times when the needed amount of
supply that the business firm needs is not sufficient enough . *!"tance. The supplier of the business must be in local area only "5eneral
!antos City# because the products needed are readily available in this area. t is also ideal to have a supplier near the production area for lower cost . nfore"een e%ent". There are things that cannot be predicted that could
prevent the normal operating transportation of supplies to the production area. ).) Labor Su$$ly
The business will hire 1 employees. These employees will mostly come from the locale or elsewhere. The potential employees will be searched through advertisements in the flyers and other kinds of advertisement. Fhenever an applicant has possesses the re4uirement that are needed on a certain job then heNshe will be hired on the spot or will still be on hold and filtered if there are other potential applicant perfect for the job. ).= Manufactur!ng ?o"t *ata Table 15 Manufactur!ng ?o"t *ata
0irect materials used 0irect labor anufacturing overhead applied Total manufacturing costs
Php 1I<,'((.(( Php
II,((.((
Php
,(((.((
Php ',I((.((
The cost of finished goods in making lambanog is attained by adding all the direct labor, direct materials and anufacturing 3verhead. &fter having the sum of those, a markup is imposed unto the product. Costs that are directly and indirectly traceable unto the product include depreciation, permits and licenses, repairs and maintenance, insurance, rent, supplies, salaries and wages, utilities and miscellaneous e-penses.