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C H A P T E R T H R E E 47

CHAPTER III

MARKETING ASPECT

The very purpose of this study, “A Marketability Study of Hyper Deals: A

Software Application for Advertising”, is to know and study the marketability aspect

of the application. Hyper Deals is primarily developed to be commercially used in

the market by those business entities who wants to extend their advertising

channel to online or in app scheme. It is also to be able to maximize profit of the

business users due to wider coverage of Hyper Deals advertising. But before this

will be finally realized, a further scientific and organized study must be conducted

in order to check and balance the feasibility of Hyper Deals in advertising industry

and also it’s possible income- generating services to be offered to the users and

developers alike.

This aspect of the study will tackle the target market which the Hyper Deals

will be introduced and be used, the demand and supply relation of putting and

sustaining the application in the market with projected computations and analysis,

the market share the Hyper Deals will probably get and the marketing strategy in

introducing the application to the users. All of these important matters will be due

explained in this chapter of the study. This chapter is considered by the proponents

to be the crucial and most important part of the study because this will give an

overview of how will Hyper Deals work in the market, including its distribution,

future development and upgrading and its total marketability. This chapter will

determine if Hyper Deals is really feasible in the market or not.


C H A P T E R T H R E E 48

TARGET MARKET

A target market is a group of particular consumers or organizations most

likely to buy and which will benefit the company’s products or services. For new

businesses, identifying the target market is one of the most complex element to

consider for in the absence of it, the business itself will not prosper. In order to

determine potential customers, knowing the market can be of great help to know

which could be the great source of income. The target market for the proposed

service application are the different business entities within the range of Cebu City

with a capital of PHP 25,000 above or those considered small and medium to large

business enterprises preferably renting or owning space in different malls in Cebu

City. They are chosen as the target market because they will be the instrument in

channeling the business’ market offerings including special promotions to the

customers. The proponents assumes that it is the most qualified target market

knowing that most, if not all of the business entities are now engaging into online

advertisements. Also, Filipinos has the hype of binge shopping when there are

promotions in the market.

POPULATION OF THE TARGET MARKET AND RESPONDENTS

The business population enormous in number and it cannot be counted with

fingers but with the help of research and data request from the places or locations

where the survey will be done. This study employs two sets of respondents –

customer user and business user. The customer user information are gathered by

requesting the figures from the offices assigned where it must be collected. In the
C H A P T E R T H R E E 49

case of this study, as the respondents are USJR students and staff, the data are

retrieved from the Office of the Registrar for the students’ population. The request

covers 6 years of data, 5 historical and the current or present data. The business

population which is also the target market of Hyper Deals, are then collected

through research of number of tenants the defined malls roofed. The business user

respondents are from three big malls in the metropolitan. SM City Cebu and

Robinsons Galleria in North Reclamation Area and the Ayala Center Cebu in Cebu

Business Park. The respondents are the tenants, stalls, shops and kiosks found

inside the malls stated. The proponent may collect useful data for a conclusion to

be drawn which is also important to navigate the validity of the study. The sample

population are then computed using the Cochran Formula. The proponents used

Cochran formula for small population since the population of the two groups of

respondents are considerably small in number as presented in table 9 and 10.

There are total of 900 tenants and 5,768 students. Out of these numbers, 129

tenants and 360 students are chosen s respondents.

Table 9

Business User Current Population

RESPONDENTS
MALLS 2018 POPULATION
(M.E. = .08)

SM CITY CEBU 500 71


ROBINSONS
200 29
GALLERIA
AYALA CENTER CEBU 200 29
TOTAL 900 129
C H A P T E R T H R E E 50

The data for past five years of the three malls are not displayed in the table

above since the mall administration officers forbid to give the information due to

company policy of confidentiality and data privacy.

Table 10

Customer User Past (5 years) and Current Data

COLLEGE
SCHOOL
ARTS AND TOTAL
YEAR COMMERCE ENGINEERING NURSING
SCIENCES
RESPOND RESPON RESPON RESPO
2018- ENTS DENTS DENTS NDENT
TOTAL (M.E. = TOTAL (M.E. = TOTAL (M.E. = TOTAL S (M.E.
2019
0.05) 0.05) 0.05) = 0.05)
3515 1134 1031 88 5768
1st Sem
219 71 64 6 360

The tables presented below are information regarding the results of the

survey conducted by the proponents on August 20 – 24, 2018.

METHODS OF DATA COLLECTION

The process of gathering data from selected respondents or from the

proposed target market is essential to this study in order to get useful information

to be used for determining the marketability of the project. The real purpose of

gathering these information are in order for the proponents to evaluate the

preferences of the target market with regards to the study.

The proponents used survey method in order to collect data. Survey

questionnaires were distributed within (3) three malls within the area of Cebu City
C H A P T E R T H R E E 51

and to the college students of University of San Jose Recoletos Main Campus.

The proponents distributed the questionnaires personally to every business

entities and to the students through their class schedules to conduct a random

survey to the appropriate respondents. Here below is the number of respondents

we have surveyed.

Cochran’s sample size formula for categorical data:

(𝑡)2 (𝑝)(𝑞)
𝑛𝑜 =
(𝑑)2

(1.96)2 (.5)(.5)
𝑛𝑜 = (.05)2
= 384

And

(1.96)2 (.5)(.5)
𝑛𝑜 = (.08)2
= 150

Where:

t = value for selected alpha level of .025 in each tail = 1.96.

(The alpha level of .05 and .08 indicates the level of risk the

researcher is willing to take that true margin of error may exceed the

acceptable margin of error).

(p)(q) = estimate of variance = .25


C H A P T E R T H R E E 52

(Maximum possible proportion (.5) * 1- maximum possible proportion

(.5) produces maximum possible sample size).

d = acceptable margin of error for proportion being estimated = .05

for customer user and = .08 for business user.

Therefore, for a population of customer user is 5,678, the required

sample size is 384 and for a population of business user is 900, the required

sample size is 150.

However, since this sample size exceeds 5% and 8 % of the population (5,

768*.05=288) and (900*.08= 72),

Cochran’s (1977) correction formula should be used to calculate the final

sample size.

These calculations are as follows:

𝑛𝑜
𝑛1 =
𝑛0
1+
𝑝𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛

384
𝑐𝑢𝑠𝑡𝑜𝑚𝑒𝑟 𝑛1 = 384 = 360
1+
5768

150
𝑏𝑢𝑠𝑖𝑛𝑒𝑠𝑠 𝑛1 = 150= 129
1+
900
C H A P T E R T H R E E 53

Where:

Customer user population size = 5, 768

Business User population size = 900

n0 = required return sample size according to Cochran’s formula= 384 (for

customer user) and 150 (for business user).

The sample size or respondents for customer user and business user

respectively is 360 and 129. That is 489 total respondents for the survey.

The formula have given the proponents the sample population shown in the

calculations below for all the respondent groups involved, USJR main students and

staff and SM City Cebu, Robinsons Galleria and Ayala Center Cebu tenants. Table

11 in the next page will show the number of sample population surveyed by the

respondents for the both user groups, customer and business.


C H A P T E R T H R E E 54

Table 11

Sample Population of Customer User and Business User

SAMPLE
2018 TOTAL POPULATION
RESPONDENTS
POPULATION
M.E. = .05 M.E. = .08

Customer User
Group:
USJR Main
Commerce 3515 220
CAS 1031 64
Engineering 1134 71
Nursing 88 5
TOTAL 5768 360
Business User
Group:
SM City Cebu 500 71
Robinsons
200 29
Galleria
Ayala Centre
200 29
Cebu
TOTAL 900 129

The number or respondents needed to be surveyed is 129 for the

business user group and 359 for the customer user group.

In gathering the data for survey using the random sampling really helps in

gathering reliable results of statistical analysis with measurable margins of errors

and degree of confidence. The proponents were able to know the preferences of

the respondents by their answers in the survey questionnaires.

Here below is the results of the survey.


C H A P T E R T H R E E 55

PART I. BUSINESS USER GROUP RESULTS

Advertising Channel Used by Businesses

This item is to know what advertisement channel the business respondents

mostly used in their sale and product or service promotion. Table 12 in the next

page shows the business respondents preferred ad channel as to advertising their

sale and promotions.

Table 12

Advertising Channel Used by Businesses

n = 129

ADVERTISEMENT
TOTAL RANK
CHANNEL
Posters
126 1
(Traditional)
TV and Media 48 3
Online 117 2
Friends 23 4
TOTAL 314*
*Multiple Responses

Table 12 shows that traditional advertising strategy like posters, billboards,

flyers and printed media still is effective as to advertising scheme of the

respondents. Online advertising comes second with 37% which can be

considerably be a basis for the possible usage of Hyper Deals as an online platform

application for advertising. This implies that Hyper Deals have a great potential to
C H A P T E R T H R E E 56

be a choice in terms of advertising products or services of businesses evidenced

by 117 counts or as being 2nd to the traditional way of advertising.

Businesses’ Estimated Budget for Advertisement

This table shows the budget of the business respondents in their

advertisement per ad of a sale or product or service promotion. Table 13 below

shows the estimated budget the business respondents expend for advertising their

sale or promotion.

Table 13

Businesses’ Estimated Budget for Advertisement

n = 129

ESTIMATED
ADVERTISEMENT TOTAL RANK
BUDGET
1000-10000 47 1
10001-50000 42 2
50001-100000 48 1
100001-200000 3 3
Others 0
TOTAL 140*
*Multiple Responses

Table 13 shows that most business respondents either incurs PHP 1,000 to

PHP 10,000 and PHP 50,000 and PHP 100,000 for advertisement. This implies

that small or beginning businesses use the PHP 1,000-10,000 bracket for their

advertisement expenses while bigger or old businesses incurs the PHP 50,000 to
C H A P T E R T H R E E 57

PHP 100,000 range maybe due to bigger range of customers and considerable

number of branches it has.

Businesses’ Willingness to Advertise in Hyper Deals Project

This table shows the interest of the business respondents in using the

application for advertisement purposes. Table 14 is about the willingness of the

business respondents to avail the services of Hyper Deals.

Table 14

Businesses’ Willingness to Advertise in Hyper Deals Project

n = 129

YES/NO TOTAL PERCENTAGE

YES 123 95%


NO 6 5%
TOTAL 129 100%

Table 14 shows that most business respondents are interested to know and

willing to use Hyper Deals in their advertising activities with a percentage of 95

than the 5 percent uninterested group. This implies that Hyper Deals App

Advertising Center have a greater chance to be realized due to its theoretical

demand as of a result of the survey conducted in the three malls in Cebu City.
C H A P T E R T H R E E 58

Businesses’ Possible Budget in Using Hyper Deals Services

This item is to determine how much the target market will be willing to pay

(budget) to Hyper Deals to advertise their sale or product or service promotion on

the app per day per ad. Table 15 is the possible budget the business respondents

will incur in using Hyper Deals advertise their sale or promotion.

Table 15

Businesses’ Possible Budget in Using Hyper Deals Services

n = 129

PRICE
TOTAL PERCENTAGE
RANGE

P100 56 43%
P150 63 49%
P200 8 6%
Others 2 2%
TOTAL 129 100%

Table 15 shows that most business respondents are willing to pay PHP 150

for the ad they will be posting in Hyper Deals. This information is to be considered

in pricing the service Hyper Deals will offer in the market. Second in row with 43 %

says that they are only willing to pay PHP 100 in Hyper Deals if they will use it for

advertising. This implies that the businesses are willing to pay considerably PHP

150 as the basic price for advertising in Hyper Deals.


C H A P T E R T H R E E 59

Businesses’ Average Days of Conducting Sale and Special Promos

Table 16 presents the average days the sale or special product or service

promotion of the business respondents runs.

Table 16

Businesses’ Average Days of Conducting Sale and Special Promos

WEIGHTED
BUSINESS USER
TOTAL AVERAGE per
GROUP
ITEM
DAYS
1 5 5
2 3 6
3 60 180
4 34 136
5 7 35
6 3 18
7 13 91
8 0 0
9 0 0
10 0 0
Others(12) 1 12
Others(30) 2 60
Others(60) 1 60
TOTAL 129 603
WEIGHTED AVERAGE 5

The results tell that the average number of days a business conducts

product or service advertisement in the form of sale or special promotion is 5 days.

This average number, 5, is necessary in computing for the revenue the Hyper

Deals and other forecasts regarding the business quantifiable amounts and values.
C H A P T E R T H R E E 60

Businesses’ Annual Sale or Special Promo Frequency

Table 17 presents the frequency of annually the business respondent’s

conducts sale or special promotion for its product or service.

Table 17

Businesses’ Annual Sale or Special Promo Frequency

WEIGHTED
BUSINESS USER
TOTAL AVERAGE per
GROUP
ITEM
DAYS
1 2 2
2 4 8
3 25 75
4 59 236
5 16 80
6 10 60
7 3 21
8 3 24
9 1 9
10 2 20
Others(12) 4 48
TOTAL WA 129 583
WEIGHTED AVERAGE 5
C H A P T E R T H R E E 61

The results have shown that the average frequency of businesses

conducting sale or special promotions is 5 times a year. It can be mostly interpreted

to be seasonal or through cyclical special occasions happening in a year. This

result implies that most businesses conducts independent sale and promotions of

their products or services five times a year. This figure will be useful in computing

the amount necessary as to the business financial statements and forecast

revenue and other related amounts for the next five years from 2019 to 2023.

PART II. CUSTOMER USER GROUP SURVEY RESULTS

Ad Channel Used by Customers

Table 18 presents the advertisement channel where the customers or the

general public know that there is a sale or special promotions of a product or

service.

Table 18

Ad Channel Used by Customers

n = 360

ADVERTISEMENT TOTAL
RANK
CHANNEL RESPONSES

Posters
214 2
(Traditional)
TV and Media 145 4
Online 321 1
Friends 199 3
TOTAL *879

*Multiple Response
C H A P T E R T H R E E 62

Table 18 shows that customers of the general public are informed of a sale

or promotion of a product or service through online ads. Followed by the traditional

approach and through their friends or oral passage of information in the society

where they co-exist. This implies that the buyers of this era mostly prefer online in

knowing a sale or promo of their favorite product or service. Hyper Deals as an

online advertising channel will be effective as to the buyers’ instrument in knowing

ads regarding a product or service they want to purchase.

Customers’ Way of Buying


Table 19 below presents the way how customers or buyers avail the

product or service them need or want.

Table 19

Customers’ Way of Buying

n = 360

WAY OF
TOTAL PERCENTAGE
BUYING

Personal 470 78%


Online 133 21%
Others 2 1%
TOTAL 605 100%
C H A P T E R T H R E E 63

Table 19 shows that most customers prefer buying personally than ordering

and buying online. This means that most people go to the store or malls personally.

Hyper Deals operates as a leisure walk advertising app which means the nearer

the user to the store the better the ad will pop up on their smartphones.

Customers’ Smartphone Operating System

Table 20 in the next page presents what operating system the customers

using in their smartphones.

Table 20

Customers’ Smartphone Operating System

n = 360

OPERATING
TOTAL RANK
SYSTEM

Android 284 1
Is 101 2
Windows 10 3
Others 1
TOTAL *396

*Multiple Response

The table shows that Android is the mostly used operating system of the

smartphones the customer respondents are using. Hyper Deals is an Android app

meaning it can be downloaded by the majority of smartphone users using Android

OS. This implies that most of the customers are using smartphones compatible of

downloading Hyper Deals. A greater chance for business for the application.
C H A P T E R T H R E E 64

Ways of Updating on Sale or Promotion to Customers

Table 21 in the next page presents what ad channel the customers

wanted to be updated of a sale or product or service promotion.

Table 21

Ways of Updating on Sale or Promotion to Customers

n = 360

ADVERTISEMENT TOTAL
RANK
CHANNEL RESPONSES

Posters
140 2
(Traditional)
TV and Media 129 3
Online 322 1
Friends 98 4
TOTAL *689
*Multiple Response

Table 21 shows that customers mostly prefer to be updated of a sale or

special promotion through online ad channels and followed by the traditional

approach like posters and billboards. This implies that Hyper Deals will have a

greater chance to be an option to inform or update customers of a sale or

promotion of their preferred products or services. Businesses can gain using Hyper

Deals specially its notification system feature.


C H A P T E R T H R E E 65

Customers’ Interest in NOTIFICATION Feature of Hyper Deals

Table 22 presented in the next page shows the interest of the customer

respondents in push notification feature of Hyper Deals or the like.

Table 22

Customers’ Interest in NOTIFICATION Feature of Hyper Deals

n = 360

TOTAL
PERCENTAGE
RESPONSES

YES 316 88%


NO 31 9%
UNDECIDED 13 3%
TOTAL 360 100%

Table 22 shows the interest of customer respondents in push notification

system. Customers comprising of 88% wants to be notified by a sale or special

promotion while the rest prefers not to be updated and some are yet undecided.

This implies that most customers are very interested in the notification feature of

Hyper Deals which will attract them to download the app.


C H A P T E R T H R E E 66

Customers’ Interest in RECEIVING Update of Sale or Promo Feature of

Hyper Deals

Table 23 presents the interest of customer respondent to receive

advertisement of a sale of special promotion of a product or service in the next

page.

Table 23

Customers’ Interest in RECEIVING Update of Sale or Promo Feature of

Hyper Deals

n = 360

TOTAL
PERCENTAGE
RESPONSES

YES 316 88%


NO 33 9%
UNDECIDED 11 3%
TOTAL 360 100%

Table 23 shows that most of the customer respondents would like to receive

an ad regarding a sale or special promotion of a product or service according to

their personal preference. This implies that most of the customers are interested

in receiving updates of a sale or promotion of their favorite product or service from

Hyper Deals.
C H A P T E R T H R E E 67

Customers’ Interest in KNOWING a Sale or Promotion in GOOGLE MAP

Integration Feature of Hyper Deals

Table 24 in the next page presents the interest of customer user

respondent to know a sale or special promotion through the use of Google Map.

Table 24

Customers’ Interest in KNOWING a Sale or Promotion in GOOGLE MAP

Integration Feature of Hyper Deals

n = 360

TOTAL
PERCENTAGE
RESPONSES

YES 288 80%


NO 41 11%
UNDECIDED 31 9%
TOTAL 360 100%

Table 24 shows that most of the customer respondents wants to know a

sale or special promotion with the integration of Google Map with a share of 780

percent. This implies that customers are also interested in Google Map integration

of Hyper Deals. An interest in the app of the customers will drive them to download

the app and use it.


C H A P T E R T H R E E 68

COMPUTATION OF PROJECTED POPULATION

Future data for the population of the target market is needed in this study to

compute the forecasted demand as to the business capability of Hyper Deals

services that would in turn aid the proponents compute the amounts as to revenue,

profit, expenses and other necessary costs deemed to be important in the

calculation of the marketability and feasibility of this study. Since historical data for

the business user is not available, it is assumed that the current population of the

three malls will be constant for the next five years. It is assumed this way since

they are primarily into renting space and need an expansion of their establishment

to realize adding tenants. It is seen that the three establishments will have no

expansion for the next five years.

Table 25

Future Population of the Target Market

MALLS 2018 2019 2020 2021 2022 2023

SM CITY
500 500 500 500 500 500
CEBU
ROBINSONS
200 200 200 200 200 200
GALLERIA
AYALA
CENTER 200 200 200 200 200 200
CEBU
TOTAL 900 900 900 900 900 900
C H A P T E R T H R E E 69

DEMAND

Demand is the need of the market for a certain good or service. It is

something the market will buy for a reasonable price. It is the balancing factor of

the supply in the market. The demand for the service app comes in with the quality

of the service that the customers are willing to avail at a specified price. It surely

represents the eagerness of the customers to avail of the service at a given price.

To measure the profitability of a business depends on the demand of the service.

The proponents conducted a survey and the results are provided in prior and

succeeding tables to determine if the target market’s response regarding to the

proposed service.

PROJECTED ANNUAL DEMAND

The projected annual demand serves as the possible demand of the

proposed project for each year. It gives an overview to the management and

investors and other parties interested in the business. It will determine if there will

be trend and if it increases or decreases in the demand of the service to be

provided by Hyper Deals in advertising. Table 26 shows the projected annual

demand for the proposed application for the next 5 years. The projected annual

demand is computed by multiplying the projected population to the percentage of

the respondents who are willing to avail the service application multiplied by

projected population of the target market. The application will commence and will

be available to the market on January 2019. The remaining months will be used to

compute the projected demand for the particular year. On the following year, the
C H A P T E R T H R E E 70

proponents will be using the 12 months since the application will be operating for

the entire year. In the next page is table 26 showing the projected annual demand

for Hyper Deals advertising service?

Table 26

Projected Annual Demand

PERCENTAGE AVERAGE AVERAGE


OF NO. OF DAYS FREQUENCY
PROJECTED
TOTAL RESPONDENTS FOR OF SALE
YEAR ANNUAL
(a) WHO ARE ADVERTISING PER YEAR
DEMAND
WILLING TO (Table 16) (Table 17)
USE THE APP (c) (d)

2019 900 95% 5 5 21375


2020 900 95% 5 5 21375
2021 900 95% 5 5 21375
2022 900 95% 5 5 21375
2023 900 95% 5 5 21375

The projected annual demand is computed by multiplying the total

population of the target market, the percentage of business respondents who is

interested in using the app, the average number of days of advertising of business

entities and the annual average frequency of conduct of sale or promotion by

business entities a year.

SUPPLY

Supply is an important components in every economic survey or study in

order to define the potential number or quantity of what a business will contribute
C H A P T E R T H R E E 71

or disseminate to the market. It is a guiding and computing factor in order for the

market to adjust as to its quantity and price needs. Law of supply and demand

states the when supply is higher than the demand, there is a surplus, so the price

will go down, and many people will avail products or services affected by the

surplus supply. On the other hand, when the supply is lesser than the demand, the

price will go up since less people can avail of a product or service and it creates a

competition between the buyers. We can observe that every movement of supply

affects the market and its behavior. In the case of Hyper Deals, there is no concrete

supply need for it is an application, uploaded once in Google Play, and let the

people download the app. It can be concluded that Hyper Deals have infinite

supply in the market as it will always be available for downloading in Google Play.

No specific supply can be drawn out from this study. But the proponents have

studied related supply study as to the application to give the readers and users of

this study an overview of supply components of Hyper Deals as an online

application service for advertising.

PROJECTED ANNUAL SUPPLY

Table 27

Projected Annual Supply

PROJECTED
COMPETITOR'S PROJECTED
ANNUAL
YEAR SALES ANNUAL
DEMAND (Table
PERCENTAGE SUPPLY
26)
2019 21375 80% 4,275
2020 21375 80% 4,275
2021 21375 80% 4,275
2022 21375 80% 4,275
2023 21375 80% 4,275
C H A P T E R T H R E E 72

Projected annual supply for Hyper Deals services is 4, 275, 20% projected

share in the market. The 80% competitor’s sales percentage is computed by

adding 20% of the applications or websites closely related to Hyper Deals. They

are Lozada, Shoppe, Zalora and Facebook. The proponents assume that these

related applications and websites have an equal share of 20% each. Hyper Deals

is the first of its kind to be introduced in the market but there are related

applications related to this. The values in projected annual supply is computed by

multiplying projected annual demand by the competitor’s sale percentage less

100%. Since there are close related business like Hyper Deals, competitor’s sale

percentage is 80%. That is why the supply is 20% of the annual demand of Hyper

Deals.

PROJECTED DEMAND AND SUPPLY GAP ANALYSIS

Table 28

Projected Annual Demand and Supply Gap

PROJECTED PROJECTED
PROJECTED
ANNUAL ANNUAL
YEAR DEMAND-
DEMAND (Table SUPPLY
SUPPLY GAP
26) (Table 27)
2019 21375 4,275 17,100
2020 21375 4,275 17,100
2021 21375 4,275 17,100
2022 21375 4,275 17,100
2023 21375 4,275 17,100

The projected demand and supply gap is equal to 17,100 since the demand

of the service of Hyper Deals as computed in table 26 is 21, 375 and the supply is
C H A P T E R T H R E E 73

4,275 as shown in table 27. To get the projected demand and supply gap, demand

is to be subtracted by the supply. Hence, subtracting 21, 375, demand, by 4,275,

supply, is equal to 17,100.

PROJECTED MARKET SHARE

Market share represents the percentage of an industry, or total sales of the

market, that is earned by a particular company over a specified time period. Market

share is computed by taking the company's sales over a period and dividing it by

the total sales of the industry over the same period. Hyper Deals’ projected market

share is computed with the formula shown below.

𝑃𝑟𝑜𝑗𝑒𝑐𝑡𝑒𝑑 𝑀𝑎𝑟𝑘𝑒𝑡 𝑆ℎ𝑎𝑟𝑒

𝐴𝑛𝑛𝑢𝑎𝑙 𝑆𝑒𝑟𝑣𝑖𝑐𝑒 𝐶𝑎𝑝𝑎𝑐𝑖𝑡𝑦 𝑜𝑟 𝐷𝑒𝑚𝑎𝑛𝑑 − 𝑆𝑢𝑝𝑝𝑙𝑦 𝐺𝑎𝑝 (𝑤ℎ𝑖𝑐ℎ𝑒𝑣𝑒𝑟𝑖𝑠𝑙𝑜𝑤𝑒𝑟)


=
𝑃𝑟𝑜𝑗𝑒𝑐𝑡𝑒𝑑𝐴𝑛𝑛𝑢𝑎𝑙 𝐷𝑒𝑚𝑎𝑛𝑑

Table 29

Projected Market Share

PROJECTED
DEMAND- MARKET PROJECTED
YEAR SUPPLY SHARE MARKET
GAP IN UNITS SHARE %
(Table 28)
2019 21,375 4,275 20%
2020 21,375 4,275 20%
2021 21,375 4,275 20%
2022 21,375 4,275 20%
2023 21,375 4,275 20%
C H A P T E R T H R E E 74

The projected market share for Hyper Deals for the next five years has been

a constant 20% since the same population is considered in computing such values

in the table.

MARKETING STRATEGY

Marketing strategy is the process of planning, leading and controlling the

business or service distribution in order to achieve a certain goal in the long run.

Hyper Deals must be coordinated and organized in a manner that the business

user will not regret of using it in order to sustain them using the app and to be able

to widen the coverage of use of the application nationwide. An international wide

usage of Hyper Deals is also one of those goals in which the proponents are taking

into consideration. In order to meet these plans, proper and right marketing

strategy must be able to be formulated to satisfy both the developers, management

of the application, the general public who will use the app and the ultimate user,

the business entities. Marketing strategy is very important for this will be the

starting point of introducing the app in the market and also its sustainability in the

industry of both advertising service channel and online application quality.

Marketing strategy can be seen and perfected by these following criteria of a good

marketing strategy formulation and planning.

Advertising and Other Promotion Tools

A successful advertising campaign will be able to attract customers by

spreading the word about the proposed service of Hyper Deals. Gaining customers

is considered as one of the most challenging parts in building up a business. The

proponents will have to build strong foundation about the business for the potential

customers to put their trust in it. The proponents have formulated the following
C H A P T E R T H R E E 75

advertising and promotion schemes of Hyper Deals introduction to the market. The

proponents made options to choose on how to encourage new customers to avail

of the services proposed. The type of advertising option will be based on the

chosen target audience and what the effective ways to reach as many of them as

possible in a lesser cost. The proponents also evaluate the advertising options to

the kind of environment that the proposed service have. There will be promotions

to create an incentive to buy upon availing the service. The following lists are for

the advertisements and promotions that will serves as an option in encouraging

customers to avail of the services:

Coupons

Coupons presented by the customer user of the application may avail

discount and other related rewards when presented to the partner business stores

of Hyper Deals. In this strategy, more buyers will be interested to shop to the

partner stores of Hyper Deals because of the coupons.

Merits and Rewards

The customer user of the application can accumulate reward points in every

purchase he makes using Hyper Deals and the accumulated points may be used

to get discounts and other related merits from the partner businesses of Hyper

Deals. In this way, more buyers will be attracted to shop to partner businesses of

Hyper Deals due to the merits and rewards the customers can get.
C H A P T E R T H R E E 76

Online Advertising

For reaching and interacting, sharing and creating content with others

through online communities. Facebook and other social media platform might be

tapped to advertise Hyper Deals in a much wider perspective. Creation of

Facebook page and account is also part of this advertising strategy. The

screenshots of the Facebook account and page of Hyper Deals is shown in the

next page.

Figure 31. Hyper Deals Facebook Page

Event Sponsorships

For creating positive PR and raise awareness of the organization as a

whole, Hyper Deals plans to sponsor small events through advertising the event,

like back to school every June or August of some universities in Cebu and the

events conducted by different university academic organization like Junior


C H A P T E R T H R E E 77

Philippine Institute of Accountants Acquaintance parties and the like, in the

application in exchange of posting the advertising materials of Hyper Deals in their

events.

Posters with QR codes

Posters introducing Hyper Deals will be distributed to SM City Cebu, Ayala

Center Cebu and Robinsons Galleria in order for the business entities and the

general public to know the application. There will also be posters in University of

San Jose Recoletos main and Basak campuses. The posters will include QR

codes for easy download of the interested users of the application.

Promotions

Free trial – the app services, advertising, will be free of use for the

first advertisement for a week for the business users who will

download the app.

Free use – the app is off free use for the general public who will use

the app to see sales, deals and promotions of different businesses.

Demonstration – the usage of the app will be demonstrated through

video tutorial to be uploaded in You Tube and through manuals, both

online and hard copy. Hard copy will be given upon request of the

business user.

Business Logo Design

Logo design is important for a business for its identity and unique

commercial personality in the market. Having a business name and/or logo will
C H A P T E R T H R E E 78

give the business a sense of confidence and dignity in the market, specifically in

advertising industry. The image shown below is the logo and name of the business

that will manage the affairs of Hyper Deals. Its components are discussed why

such image, color and font are designed to a specific purpose. This image is given

in exchange of the packaging and product design since we are into application

services which do not entail specific packaging and a design of a product.

The Colors Red and Blue– this symbolizes that Hyper Deals is

a Filipino-made application for the colors, red and blue, are the

dominant colors found in the Philippine flag. It symbolizes

patriotism.

The Shaking of the Hands – this symbolizes the meeting of the

minds or understanding each other's like the meeting of hands. A

transaction between the buyer, general public, and the seller,

business entities.

The Font Style – this symbolizes that the proponent’s proposed

service application is made perfectly for the target market in the

present generation.
C H A P T E R T H R E E 79

The Heart form – every service Hyper Deals will provide to its

users is full of love in a way of providing quality and new

advertising strategy for the business users and reliable usage of

the general public as to searching sales, deals or promotions of

the product or service they want to avail.

Term of sale

The services to be provided by Hyper Deals to the business users will be

paid through online banking, credit and debit card, remittances and other app

offering online payment. This online payment and remittance mode of paying the

services are included in the features of the application. The service fee for using

the advertising feature of Hyper Deals are to be paid immediately upon registration

of the advertisement in the app, unless agreed otherwise. If the business user fails

to comply within the net of thirty (30) days, he will automatically be in default of

payment. If the business users fails to make payment by due date, the business

user will then be charged to an interest of a half (0. 5) percent per month interest

on the unpaid amount and with the suspension of receiving the future services until

full payment is made. In the event that the business user have not paid yet the

payable amount for ninety (90) days from the day of the term, the customer shall

reimburse the proponents a reasonable amount of costs incurred, including

attorney’s fee. If there are any reasons to doubt the solvency or credit of the

business user, the proponents reserve the right to ask for prepayments or

securities for any services to render.


C H A P T E R T H R E E 80

Channel of Distribution

Figure 32. Google Play Logo (Distribution Channel)

The sole distributor of Hyper Deals in the market is Google Play. Google

Play because Hyper Deals is made for Android users only. Google Play will be

utilized to be the distribution channel of the app in order to be able to avail of the

app’s services. Business entities and general public who wish to avail of the

services just need to go to Google Play store, an online store for Android apps.

Downloading the application through Google Play is just as easy as eating a cake,

inputting the necessary information that the server prepared by Google Play

management will then let the user download Hyper Deals. The application is also

open for the public to know if there are promotions or sales happening in an

individual’s favorite shops. The application will be downloaded for free for both the

business and consumer markets.

Pricing Policy

Businesses entities are mainly involved in selling product or service. These

market goods are considered to be the profit generating machinery of every


C H A P T E R T H R E E 81

business. These are the blood of the company in order to bring money or return in

order to continue business operations. Before these goods and services are

introduced or offered in the market, it needs to be assembled and organized.

Product assembly and service organization involves materials, both tangible like

raw materials and intangible like patents, that is covered by a certain cost. These

costs are necessary in order to generate the goods or services. In order to cover

these certain costs, the business needs to generate or sell the market offering

more than the cost it incurs. That is why the product or service needs to be offered

in the market with a certain price. Price is considered to be the monetary exchange

of the good or service a consumer want to buy. Right and proper pricing of these

market goods will enable the company generate profit thus realizing its main

purpose of revenue generation and capital appreciation. In this section, the

proponents will show how the service given by Hyper Deals to its target users, the

businesses, price for the use of the apps features and services. The proponents

will introduce the Market-Based pricing system for Hyper Deals.


C H A P T E R T H R E E 82

Table 30

Percentage of Businesses Who Agree with the Proposed Price

Range

ALLOCATION PERCENTAGE
RESPONDENTS
OF OF
WHO HAVE GIVEN
PRICE RESPONDENTS RESPONDENTS
THEIR BUDGET IN
OPTIONS WHO AS TO THE
HYPER DEALS
ANSWERED CHOSEN PRICE
ADVERTISING
THE FIELD RANGE

PHP 100 53 41%


129 PHP 150 63 49%
PHP 200 13 10%
TOTAL 129 100%

Based from the above data, the proponents concluded that the price range

is suitable and reasonable to the chosen business respondents. By this,

proponents may somehow asses the prices between the price range for the pricing

of the services the Hyper Deals will collate. But in consideration to competitor

based and future contingency costs, it is more appropriate and favorable to base

the final price on such existing outside competitors. The proponents bases the

pricing of the service to the existing almost related online advertising business of

Facebook.

The proponents have decided to correlate the pricing of the services

to be offered to the business entities in the market with the Facebook Ad rates.

Facebook pricing is not fixed as it depends upon many factors like the distance the

ad must reach and the specific group of people who may receive the ad with its
C H A P T E R T H R E E 83

location. The pricing depends upon the specific industry of the product or service

to be advertised and the factors affecting the advertisement like the distance it

reached in miles, the click per ad and the click on the website of the business

creating and posting the ad in Facebook. The rates are shown in table 31.

Table 31

Facebook Ad Rate

U.S. Facebook Ads Pricing by Industry


INDUSTRY
CPM CTR CPC
USD = PHP USD = PHP USD = PHP
Consumer
$ 5.40 ₱ 275.40 $ 1.72 ₱ 87.72 $ 0.31 ₱ 15.81
Packaged Goods
E-Commerce $ 6.27 ₱ 319.77 $ 1.56 ₱ 79.56 $ 0.40 ₱ 20.40
Gaming $ 3.09 ₱ 157.59 $ 0.51 ₱ 26.01 $ 0.61 ₱ 31.11
Retail $ 6.33 ₱ 322.83 $ 1.71 ₱ 87.21 $ 0.37 ₱ 18.87
Travel $ 7.94 ₱ 404.94 $ 2.52 ₱ 128.52 $ 0.32 ₱ 16.32

CPM stands for Cost Per Mile or the cost every 1000 views or

impressions of the ad, CTR for Click Through Rate or the percentage of

impressions per click and the CPC for Click Per Click or the cost per click to the

website of the company posting the ad in Facebook. The proponents have

converted the values in US Dollars to Philippine Peso for better understanding.

This data is retrieved from the website of Fit Small Business.


C H A P T E R T H R E E 84

Table 32

Final Basic Service Price

U.S. Facebook Ads Pricing by Industry

% Basis for
Final Price FINAL
using Outside BASIC
Industry CPM Competitors PRICE
Current Price

Consumer Packaged Goods $ 5.40 ₱275.40 50% ₱ 137.70


E-Commerce $ 6.27 ₱319.77 50% ₱ 159.89
Gaming $ 3.09 ₱157.59 50% ₱ 78.80
Retail $ 6.33 ₱322.83 50% ₱ 161.42
Travel $ 7.94 ₱404.94 50% ₱ 202.47
AVERAGE ₱ 148.05
CTR
Consumer Packaged Goods $ 1.72 ₱ 87.72 50% ₱ 43.86
E-Commerce $ 1.56 ₱ 79.56 50% ₱ 39.78
Gaming $ 0.51 ₱ 26.01 50% ₱ 13.01
Retail $ 1.71 ₱ 87.21 50% ₱ 43.61
Travel $ 2.52 ₱128.52 50% ₱ 64.26
AVERAGE ₱ 68.17
CPC
Consumer Packaged Goods $ 0.31 ₱ 15.81 50% ₱ 7.91
E-Commerce $ 0.40 ₱ 20.40 50% ₱ 10.20
Gaming $ 0.61 ₱ 31.11 50% ₱ 15.56
Retail $ 0.37 ₱ 18.87 50% ₱ 9.44
Travel $ 0.32 ₱ 16.32 50% ₱ 8.16
AVERAGE ₱ 10.25

The final basic price of the Hyper Deals advertising service is calculated

considering the related market of this online advertising service, Facebook Ad. The

proponents deemed that 50% of the related market rate is sufficient as of the
C H A P T E R T H R E E 85

moment since Hyper Deals is new in the market. Different industries are given

different price, the same with Facebook, to have close competition in online

advertising industry. This price will then be the final basic price to be used in the

start of the operations of the business. The final basic price is computed as an

average per industry per ad factor. CPM is PHP148.05, CTR is PHP68.17 and

CPC is PHP10.25.

The range is deemed theoretically enough or fitted to the service by the

proponents. The purpose of the proponents to provide low cost advertising has

been realized. Posting prior to the actual sale of the business entities may also

include discount which is up to 10% depending on the days prior to its actual sale.