Chapter 1 INTRODUCTION

BUSINESS BACKGROUND HISTORY Business Name Business Type Business Address Contact Number : : : : Imperial Appliance Business Plaza Corporation RCT Building, Real Street, Tacloban City (053) 523-0551

Imperial Appliance Plaza started as a single proprietorship but a family partnership in context by Tiu Tek Kian on August 8, 1974 in Iloilo City. It became successful and generated a big income that encouraged them to convert it into a corporation on March 1982 and made its branches in Roxas City, Bacolod and Kalibo and the entire region VI, and later focused on putting up branches in Mindanao areas. In 1996 they started to put up in Luzon area. Currently Imperial Appliance Business Plaza has 49 branches nationwide. The company or the Imperial Appliance Business Plaza envisioned itself to be the leading distributor of appliances and furniture in marketing nationwide. The company was already established based on the good performance of the business and continues success in many years. Indeed the company wants to provide efficient quality service to its customers all over the country. The company is known as the distributor of affordable, trusted and braded appliances and furniture in the Philippines. The company is offering high branded and high quality house appliances and furniture at affordable prices. The
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company offers products such as television, air-condition, electric fan, stove/oven, washing machine, refrigerator, DVD/VCD/CD player, water

dispenser, speaker, blue ray dish and house furniture. All these are under the brand of Sony, Samsung, JVC, Panasonic, Sharp, Sanyo, Kelvinator, Carrier, Matrix and Germania. The company has these strategies like advertising and other promotions which they believe that are very helpful in attracting new customers, making its old customers to come back, and improving its sales. Imperial Appliance Business Plaza has been known to the eye of the market because of its good quality services for its customers and branded and trusted products. It sells quality products and it has very polite employees that merely capture the heart of the customers. In fact, it has been about 37 years in serving its customers all over the country and has already improved their CSM or Customer Service Management. The competitive advantage of this company compared to its competitors is that it sells a product that has high quality and at affordable prices. New customers want it quicker, cheaper, and they want it their way. This company also gives good quality services better than those others. Old customers want more attracting and comforting places buying their needs. They always take good care of their customers. They always assist you and introduce to you every product you want and need. They sell products that have high quality and have known brand names. Further, they always assure that you get what you deserve.

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Their main concern is customer satisfaction. Imperial Appliance Plaza is a start-up company in Tacloban City that operated for 16 years with its variety of products to the people of Taloban City and the rest of the Leyte province. Marketing is critical to its success and future profitability. Imperial Appliance Plaza offers wide range of branded and quality appliances and furnitures. The basic market need is a high quality and affordable appliance products and competitive services. Imperial Appliance Plaza will meet this demand with an ever expanding innovative choice of products and services to cope the customer satisfaction.

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Purpose and Mission

A purpose and mission statement is a companys articulation to its customers, employees and the entire world of the purpose of its existence. Obviously, businesses exist to make money, maximize profits and shareholder value, but the mission statement is more about the front line than the bottom line. That said, in order for a business to be successful, it has to have a clear and broad mission that resonates with the public and tells them why it would be beneficial to do business with your company. Mission statements generally include a statement of purpose, a business statement, and an indication of the companys values. The statement of purpose explicitly states the purpose of the company. The values portion of the statement talks about the common values shared throughout the company and how those common values contribute to the final product. An ideal mission statement should be inspiring to employees. The statement brings a certain focus to the staff as the purpose of their work crystallizes and they are able to see the value of their contribution. Few things in life are as fulfilling as the knowledge that you are contributing something greater than yourself. The mission statement should allow each employee to see their own personal role in the firms success.

To become one of the leading appliance centers in Tacloban City serving the customers with quality appliance and furniture at lowest price, and competitive service
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Purpose of Marketing Plan

Marketing Plan A plan is a way of achieving something. A marketing plan1 is a business document written for the purpose of describing the current market position of a business and its marketing strategy for the period covered by the marketing plan. A marketing plan helps the business establish, direct and coordinate its marketing efforts. It contains information about the company, its products and services, marketing objectives and strategies, as well as how they will measure the success of the marketing activities. It describes all the marketing activities theyll perform during a specified time period (usually one year). They also include any background information and research results they used to select those marketing activities. Finally, theyll documented the cost associated with their planned marketing activities as well as the measurements they use to determine success. The purpose of marketing plan is to build a customer base and determine any opportunities to make a profit. Marketing plan will help the management manage their projected expenses and possible projected income and will also help define times of financial outlay so that when those lulls arrive they arent unexpected. It helps them also to define their market, identify their customers
1

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and competitors, outline a strategy for attracting and keeping customers, and to identify and anticipate change. Clarity in direction is one of the major benefits of a marketing plan. It will decide not only when to advertise, but how and to whom. Planning is a key point and a core business principle that will help determine the future of your business and at the core of your business is the marketing plan. Its not just the finished marketing plan that will help you, but the thoughts you will encounter when writing the plan and the obstacles you will overcome in the process will have a major effect on the way you do the business. You will understand your customer and their needs on a deeper level and you will be better equipped to meet the needs of your customer.

Organization Mission Statement

Vision The countrys leader in marketing, sales and distribution of quality home appliances, furniture and office equipments by providing excellent customer services for every Filipino home and offices. Mission As a company, we commit to: 1. Provide reliable and efficient delivery of services to our customers, suppliers and principals through massive expansion and direct selling.
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2.

Maintain goodwill and corporate prestige through professional selling, competitive pricing, provide counseling and competent technical serving.

3.

Create a people-and service-oriented work environment through the pursuit of corporate values of professionalism, honesty, quality service, hard work, and dedication towards total customer

satisfaction.

Imperial Appliance Plaza

ORGANIZATIONAL CHART

Regional Manager

Branch Manager

Credit & Collection Manager

Accounting Dept.

Collectors

Sales Dept.

Warehouse Dept.

Field Sales Rep.

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Chapter 2 SITUATIONAL ANALYSIS

Situation analysis is a marketing term, and involves evaluating the situation and trends in a particular company's market. Situation analysis is often called the "three c's", which refers to the three major elements that must be studied: Customers, companies, and competitors. The number of "c's" is sometimes extended to four, five, or even six, with "Collaboration", "Company", and "Competitive advantage".

Analysis: Current Products

Product Attributes While most established business has more than one stream of revenue, it is often sales of products that contribute most to this cash flow. The product(s) a company sells will be a huge factor in whether they succeed. The right product can propel any company to fortune and the wrong product can make even the most exhaustive efforts unprofitable. This is because of product attributes. Product attributes are the characteristics of a product like Color, Size or Type. These have significant impact towards business success and must given meticulous and priority attention of the management. For appliances, product features like, power capacity, remote controlled or manually operated, compatibility to other related devices and components is an advantage for
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customers.

Table 1 Imperial Appliance Plaza Products PRODUCTS Sony Color Television LED TV "Sony KDL52NX800" 52 inch with WiFi adn Edge LED Panasonic Panasonic TCP42X1 Plasma Tv panasonic tcp42x1 PRODUCT BRAND ATTRIBUTES

Samsung Samsung LE 32 B 550, from 430 GBP.

JVC

JVC LT26DY8ZG: this 26 inch LCD TV

LG

Available in: 21 - 32, LCD Panel, HDMI Input, PC Input, Karaoke, USB Terminal, Subwoofer output Built in DVD
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player

Toshiba

Toshiba 37 RV 635 D B LCD TV Preview

Whirlpool

Refrigerators

Condura

Condura 9.0CuFt Metallic Silver Refrigerator, Model CTD300MN

Kelvinator

Panasonic
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Panasonic - NR.BU302
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Vegerator Series BottomMount-Freezer ..

Air conditioners

Colin

Available in Window type and split type aircon; .51.5hp, manual and remote controlled, two direction air vane

Condura LED display, turbo mode, manual and wireless, sleep mode 7hr off, auto level swing, active carbon and bio filter

Hitachi Available in window and split type, .5-2.0hp,

Freezers

Eurotek

4.0cub.ft-10.5cub.ft, with inner glass door, interior light, roller caster, safety key lock, double wire basket

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Home Theaters

JVC

1200 watts, DTS,DD, Prologic II, USB Input, Ipod dock, AM/FM tuner, MP3, WMA, WAV, JPED, MPEG4 compatibility, Progressive scan DVD player with 720p and 1080i upconversion
Matte silver aesthetic with black grilles, 350 watts total power handling, 3-CD play, program and exchange support, extended supper bass technology, 3 preset, 3 manual EQ settings, live surround sound settings, auxiliary input, independent subwoofer volume control, dual auto reverse cassette deck

Components

JVC

Electric Fans
Comes in plastic made materials and steel, 220v, 3 speed, 90 degree rotation, VDSE 2 round pins plug, stand fan and desk fan, 50watts power

Gas Stoves

3 gas, gas oven, thermostat control, gas grill with rotisserie/ oven light, 100% porcelain enameled black body, glass top cover, 33(H) x 54(D) x 50(W) centimeters dimension, Oven dimension: 33(H) x 42(D) x 50(W) centimeters, 49.0 Liters capacity (also available in 4 burners)

Rice Cookers

Standard

Furnitures

Dining Table

All furnitures are locally

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made blended with imported material, comes from Narra and Molave wood

Imperial Appliance Business Plaza is one of the well known distributors of the mentioned products. They have been selling these products for about 16 years in Region VIII. They sell branded appliances and furniture and give good quality service to its customers. In fact, they are one of the best sellers and known because of its polite skilled staffs.

Pricing
Pricing strategies for products or services encompass three main ways to improve profits. These are that the business owner can cut costs or sell more, or find more profit with a better pricing strategy. Merely raising prices is not always the answer, especially in a poor environment with so many competitors. Too many businesses have been lost because they priced themselves out of the marketplace. On the other hand, too many business and sales staff leave "money on the table". One strategy does not fit all, so adopting a pricing strategy is a learning curve when studying the needs and behaviors of customers and clients. At Imperial Appliance Plaza products are available at affordable and reasonable prices. Imperial Appliance Plaza adopts 20-40% mark-up pricing for their product and depending on the manufacturers price. This applied by most of
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the distributor and retailer businesses. The products of the company are priced competitively so that the target market share will be realized. With the savings from the massive promotional campaigns and the prices of the merchandize offered, the company can afford to beat the price of its suppliers. Table 2 Imperial Appliance Plaza
Products Price List Product Price Product Price

TV Colored Samsung 21 Sharp 21 JVC FTV 21 Sony CTV 21 Sanyo FTV 21 Refrigerator Samsung GE Panasonic Sharp Sanyo Electrolux Washing Machine Astron Samsung Panasonic (Single) (Twin) Sharp (Twin)

17,595.00 10,290.00 14,190.00 12,812.00 11,595.00 47,995.00 17,595.00 24,599.00 18,995.00 10,395.00 37,695.00 4,800.00 22,995.00 4,999.00 10,799.00 14,790.00

Air conditioner Samsung Panasonic Sharp Carrier Condura

12,195.00 14,799.00 28,195.00 13,360.00 11,899.00

Competitors Price List

Product LCD TV Home Theater Refrigerator (single door) Refrigerator (two door) Freezer Washing Machine (Auto) Washing Machine (Twin) IMPERIAL 25,900.00 8,490.00 10,250.00 15,995.00 13,680.00 13,987.00 8,990.00 EMCOR 24,703.00 5,920.00 15,660.00 19,058.00 13,655.00 14,188.00 8,432.00 RHINE 24,144.00 6,990.00 16,554.00 22,879.00 14,599.00 8,619.00
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DVD Player Airconditionaire Component

1,990.00 13,995.00 16,999.00

2,014.00 19,394.00

3,195.00 18,854.00

Distribution
To evenly and safely distribute appliances to customers Imperial Appliance Plaza simply yet strictly follows the following product distribution. Figure __ Product Distribution

Manufacturer / Supplier

Imperial Appliance Plaza

Customer

Imperial Appliance Plaza is one of the appliance dealers in Tacloban City exclusively distributing quality products of most known brand around the globe. Its products are directly ordered from manufacturers warehouse and authorized national dealer based in Manila and Cebu. Products are delivered to its main store showroom located at Real Street Tacloban City. From its store, walk-in customers bring with them the appliances to their respective home and thats the end of the distribution process. In some case, products are course through company sales agents for processing of documents and payments and delivered to customers respective home as reflected from delivery receipt.

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Promotion A promotional activity that was held by Imperial Appliances Plaza is through product caravan and radio ads placement. In terms of radio advertisement airing schedule depends on the proposal presented by radio station representative according to terms and condition. Non proposal from radio station means no advertisements. Most of the time, radio ads is 30 seconder and duration again depends on the proposal. Imperial Appliance Plaza depend its all year round promotion from its agents that roam around Leyte province and from word-of-mouth of its satisfied customers. There also a product caravan that visits nearby municipalities and even remote towns in Leyte like Burauen, Julita, Tabon-tabon etc.

Analysis: Current Target Market

A current target market is a group of customers that the business has decided to aim its marketing efforts and ultimately its merchandise. A welldefined target market is the first element to a marketing strategy. The target market and the marketing mix variables of product, place(distribution), promotion and price are the four elements of a marketing mix strategy that determine the success of a product in the marketplace. Appliance product target market primarily is the households within the city of Tacloban, nearby municipalities and the entire province of Leyte. Government and private offices and establishments composed the second largest target
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market for appliances. Other institutions such as schools complete the list of potential target market. Target market of appliance products is a general public, from 1 year old to the oldest year of human kind is a potential market the industry. Home appliances benefits every member of the family like television, childrens are fond of watching TV shows and movies. Watching movies it does not happen with television alone a DVD player is needed. Refrigerators contribute a lot to the whole family from preservation of foods to delicacies and deserts including cold water and juices that refreshes everyone. Target market are from low income family to highest income families in Leyte province including those in Samar provinces and Biliran province who has an access and mood to buy their appliances at Imperial Appliance Plaza. Table 3 PROJECTED POPULATION BY FIVE-YEAR AGE GROUP AND SEX Leyte Province
2000-2040

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Source: 2000 Census-Based National, Provincial Population Projections, NSO

Table above presents the size of the target market from year 2000 up to 2040. It is clear that potential market in continuously increasing every year. Target market at present that ages 15-19 in three years time they probably have their own family, therefore they will start investing or buying appliances for their family. This scenario clearly implies the potential growth of appliance industry in the Tacloban and Leyte province in general. Target market for appliances are ages ranging from 15 years old up to 70 years old. Teenagers are now potential market in terms of appliances, they tend to become more technology enthusiast and addicted brought about by technology trend and competition. This figure will serve as basis for Imperial Appliance Plaza in developing greater market saturation.

Table 4 LABOR FORCE AND EMPLOYMENT STATUS OF HOUSEHOLD POPULATION Leyte Province

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Source: National Statistical Coordination Board, Tacloban City

Table 4 presents the comparative data of year 2007 and 2008, it shows the market size of the employed and unemployed. This data will serve as basis for producing more appliances and marketing strategy for the next business year.

Demographic Profile Figure 1 Gender Profile

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39% 61%
Male Female

The above graph shows that out of 250 surveyed potential customers from Tacloban, Burauen, Dulag and Tanauan only 39% are Male buyers while Female composed of 61% who buy appliances and furnitures. As gleaned on the graph, females composed the huge size of appliance customers it is simply maybe because females took charge the budgeting task for the family, while most male are hesitant to do these chores. The data shows that market segmentation of Imperial Appliance Plaza Tacloban Branch must focus on female community it is probably because most females of housewives does the financial management in the family.

Figure 2 Civil Status Profile

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13%

Single

87%

Married

As shown in Figure 2 Civil Status profile, most customers who buy appliances are those married person which is composed of 87% of the market while single is only 13%. This only shows that married person acquires these appliances for their family such as television, washing machine, refrigerator, electric fan and any other appliances that are vital in day to day living of the family. Some singles in the survey ages from 25 years old and above. According to these singles they bought appliances because of personal purpose and satisfaction, they want some souvenirs from their salaries or a good investment while they dont have family. Every year number of couples is increasing this implies that appliances will never be out in market demand and contributed to increasing potential market.

Figure 3 Occupation Profile

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24%

50% 11% 15%

Government Employee Private Employee Self Employed Not Employed

As shown in Figure 3 above not employed composed the big part of the market which is 50%, followed by government employee with 24% then selfemployed with 15% and finally private employee with 11%. Graph implies that not employed population includes those running their little business, engaged in agricultural business, labor force, transport sector, industrial sector. The data implied that customers or buyers of quality appliances are not those who are employed in private and public offices but also those running their own business and even in labor sector. This connotes that the market is huge enough and thus need to be penetrated in time to complete the marketing objectives.

Figure 4 Monthly Income

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8% 16% 26%

14%
5,000-10,000 10,000-20,000

36%

20,000-30,000 30,000-40,000 40,000-above

Customer income is also a factor that affects sales of appliance industry, as shown on the pie graph above, 36% of the customers are earning 10,00020,000 pesos a month, followed by those who are earning 20,000-30,000 with 26%, while earning 30,000-40,000 is composed only of 16% and 14% only are those earning 5,000-10,000 and lastly 8% those earning 40,000 and above. Data presented indicates financial capability of target market. Data shows that those who are earning 40,000 above by the time they earn this amount they have already purchased basic appliances. This market must be penetrated by company sales agent because they are much capable of acquisition of new appliances.

Figure 5 MARKET SHARE

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23% 40%

21% 8% 8%

Imperial EMCOR Du Ek Sam GLEN Marketing RL Appliance

Figure 5 shows the market share of Imperial Appliance Plaza and its competitors in Tacloban City. A survey was conducted by researchers in different area, Tacloban City, Dulag, Burauen, Tanauan and other nearby municipality of Tacloban like Palo and Babatngon composing 500 respondents. The purpose is to identify the market share of the cooperating company of the present marketing study the Imperial Appliance Plaza. The findings shows that Glen Marketing holds the biggest market share of 40% from 200 respondents, seconded by RL Appliance Center with 23%, while Imperial Appliance Plaza holds the 3rd rank with 21% from 105 respondents, and the remaining 16% where shared by EMCOR and DU EK SAM with 8% each. This is a big challenge for the business to capture the big share of its major competitor. Lifestyle

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Lifestyle is also a factor that affects the customers buying behavior. Those who are earning above average especially living in the city tend to buy latest design and advanced featured technology or appliances. While those who are average earner preferred to buy those appliances only enough for their needs and financial capability. Least those who are below average earnings buy only those appliances that is much needed in their daily living or even most of the times they buy those second hand appliances. Cost Focus Imperial Appliance Business Plaza has been known to the eye of the market because of its good quality services for its customers and branded and trusted products. It sells quality products and it has very polite employees that merely capture the heart of the customers. In fact, it has been about 35 years in serving its customers all over the country and 6 years in serving Eastern Visayas and has already improved their CSM or Customer Service Management. The competitive advantages of this company compared to its competitors is that it sells a product that has high quality and at affordable prices. New customers want it quicker, cheaper, and they want it their way. This company also gives good quality services better than those others. Old customers want more attracting and comforting places even in buying their needs. They always take good care of their customers. They always assist you and introduce to you every product you want and need. They sell products that have high quality and have known brand names. Further, they always assure that you get what you
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deserve. Their main concern is customer satisfaction. Market Size and Trends The increasing number of households and the like is on upward trends. There is the resilience of the countrys economy in spite of global economic crisis. The graph below illustrates increasing number of households per year. Figure 5 TOTAL NUMBER OF HOUSEHOLDS BY PROVINCE

15%

5%

15%
Biliran Eastern Samar

65%

Leyte Southern Leyte

The market for appliance products in Leyte province alone is huge. Of four (4) provinces near Leyte namely Biliran, Eastern Samar and Southern Leyte 65% of the total market are in Leyte which is equivalent to 322,527 as of 2010 and continuous growing in number every year. Eastern Samar has a total household of 375,822 and Southern Leyte has 3660,160 households which is both 15% of the total market size while Biliran province has 715,025 households respectively. The graph shows that Imperial Appliance Plaza can still penetrate at least
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10% of the total market per province every year since all of these household will need appliances. It is understandable that all appliances expires it certain period of time depending on manner usage therefore this needs to be replaced. It is also clear that even up to time that this research is written lot of appliance center exists and serve the market for years, yet Imperial Appliance Plaza can slice their market share by convincing their customers to have their purchases at Imperial Plaza. It is believe that having a dedicated authorized sales agent per area will help introduce the business directly to the target market. In every congressional district there should be at least 1 sales agent. Leyte province alone has 5 congressional districts, Samar has 6, and Southern Leyte has 2, while Biliran has only 1 congressional district, for a total of 14 districts.

Analysis: Current Distributors Network

In the wake of increasingly complicated supply chains, distribution network design plays a key role in controlling the cost of doing business. And, in a world of shrinking margins, controlling the cost of doing business can be the
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factor that puts you ahead of your competitors. An optimal distribution network is intelligently designed to minimize costs by providing the customer the right goods, in the right quantity, at the right place, and at right time. In most organizations, controlling distribution costs involves striking a balance between warehousing and transportation. While more distribution centers drives down the cost of transportation, the opposite holds true as well. Figure 1 Distribution Channel Model of Imperial Appliance Plaza

Manufacturers or Suppliers

Imperial Appliance Business Plaza Sales Agents Customers or Clients

The diagram shows a simple three-level model of distribution channel being followed by Imperial Business Plaza. As far as Imperial is concern its products no longer passes through any distribution channel. They are directly bringing the products to the end customers. The sales agents are not channel

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but presented for purposes of illustration that they are just go-between in facilitating or negotiating sales transactions but the products never passes for their distributions. However, as suppliers are concerned, Imperial Business Plaza is serving as channel of distribution. At present Imperial Appliance Plaza has Eighteen (18) active sales agents all are female and Twenty-two (22) in-house employee that composed of sales ladies, stockman and accounting and management staff.

Manufacturers or Suppliers

Imperial Appliance Business Plaza Sales Agents / Credit Investigator Customers

Analysis: Current Competitors

Competitors refer to any person or entity which is a rival against another. In business, it is a company in the same industry or a similar industry which offers a similar product or service. The presence of one or more competitors can
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reduce the prices of goods and services as the companies attempt to gain a larger market share. Competition also requires companies to become more efficient in order to reduce costs. In Tacloban City, Imperial Appliance Plaza immediate competitors are: RL Appliance at Real Street; EMCOR Appliance Center at Gomez Street; CITI Appliance Center and Rainbow Appliance at Zamora Street; Du Ek Sam Appliance Center at Avenida Veteranos and Glen Marketing Inc at Justice Romualdez Street Tacloban City. All these establishments offer almost all the same products and brands.

Competitors Analysis COMPANY Imperial Glen Mktg Emcor Rhine Branch Tacloban Tacloban, Ormoc, Baybay Tacloban, Ormoc Promotion Tarpaulin, Caravan Radio, Tarp, Newspaper Radio, Caravan Agent Products All brands Same Same Same same Market Leyte Region VIII Leyte Leyte Region VIII

Tacloban, Radio, Tarp, Ormoc, RL Newspaper, Baybay, Caravan Calbayog Competitors Distribution Channel

Glen Marketing Product Distribution Channel SUPPLIERS

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TACLOBAN MAIN OFFICE

Glen Marketing distribution channel begins from suppliers. Products are ship to Tacloban Main Office & warehouse. Upon request on unavailability of stock in its branches products are to them. From branches products are sold directly to customers and through their authorized sales agents.

RHINE Marketing Product Distribution Channel

SUPPLIERS

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TACLOBAN OFFICE

Customers

AGENTS

RHINE Marketing distribution channel is simple direct channel. Products are ship from Manila or Cebu suppliers to Tacloban Main Office showroom. Products are sold directly to walk-in customers. Sales Agents delegate the distribution of its products to customers in various places of Leyte. Products are delivered using RHINE Marketing company delivery truck or service vehicle.

EMCOR Product Distribution Channel

SUPPLIERS

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TACLOBAN MAIN OFFICE

ORMOC BRANCH

BAYBAY BRANCH

SAMAR BRANCH

AGENTS

AGENTS

AGENTS

Customers

Customers

Customers

EMCOR distribution channel is similar to Glen Marketing. Products are ship from Manila or Cebu suppliers to Tacloban Main Office showroom. Upon request on unavailability of stock in its branches products are to them. From branches products are sold directly to customers and through their authorized sales agents.

RL Appliance Center Product Distribution Channel

SUPPLIERS

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TACLOBAN MAIN OFFICE

ORMOC BRANCH

BAYBAY BRANCH

SAMAR BRANCH

AGENTS

AGENTS

AGENTS

Customers

Customers

Customers

RL Appliance Center distribution channel is similar to Glen Marketing. Products are ship from Manila or Cebu suppliers to Tacloban Main Office showroom. Upon request on unavailability of stock in its branches products are to them. From branches products are sold directly to customers and through their authorized sales agents.

Analysis: Current Financial Condition

Financial condition is the status of a firm's assets, liabilities and equity positions at a specific point in time, often described in a financial statement.

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Table __ COMPARATIVE FINANCIAL REPORT 2010 Imperial AP Annual Gross Sales Imperial Expenses Cost of Product Transportation expense Spare parts maintenance Utilities (Electricity) Allowances Office Supplies Salaries expense Promotion Expense TOTAL GROSS SALES Less: Tax (30%)
NET Income

2011 22,789,260.00 13,673,556.00 132,000.00 108,000.00 240,000.00 96,000.00 24,000.00 600,000.00 14,873,556.00 7,915,704.00 2,374,711.00
5,540,993.00

18,231,408.00 10,938,845.00 105,600.00 86,400.00 192,000.00 76,800.00 19,200.00 552,000.00 11,970,845.00 6,260,563.00 1,878,169.00
4,382,394.00

As presented on Table ___ Imperial Appliance Plaza annual gross sales from calendar year 2010 increases by 14% on year 2011 from Php1,760,698.00 to 2,000,793.00. Annual net income also increases by 10% from year 2010 Php728,698.00 to Php800,793.00 by year 2011.

Analysis: External Forces

There are several different uncontrollable and controllable aspects of an external business environment that affect the success (or lack thereof) of a
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business. The first uncontrollable factor would be competition. Since everyone has the right to create a business of their own, there is no way to control competition. There will always be someone who believes they can do the same thing you are doing but better. The only way to push this aspect of your external business environment towards success is to be one step ahead of competitors. One way is to research newer products that they may have, or to have competitive prices and sales. External forces is affected by External Forces: changes in technology, political factors, general macro-economic environment, changes in consumer tastes, preferences, purchasing patterns & frequencies and declining market shares due to competition. Economic Population of households in Leyte is continuously increasing every year. In 2000 census survey, there are about 322,527 households in Leyte. Because of this, the need of appliances and furniture also increases. There is an increase in demand of about 5% every year. With this reason, the company may even see the big demand of house furniture and appliances. Big demand means big opportunity and big profit in the part of the company.

Regulatory and Legal Issues The company complied with all the laws and regulatory requirements for the establishment and operation of motorcycle distributor establishment.
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Local regulatory requirements such as Mayors Business Permit, DTI Business Name Registration, BIR Registration, the Sanitary Health Clearance, etc. will satisfactorily comply with. The table in the next page shows the permits and licenses incurred by the company:

Table 5 Legal Document Particulars Barangay Clearance DTI Business Name Registration BIR Registration Mayor's Permit Fire Inspection Certificate Sanitary Health Permit SSS Registration Total Permit and Licenses Amount 150.00 300.00 800.00 4,700.00 400.00 200.00 600.00 7,150.00 Description This clearance is secured from the barangay where the business is located as required for securing mayors permit Business name registration with DTI precedes all other documents required for the business to operate. The registration is good for five years This registration is required to taxation purposes This is a permit issued by the office of city mayor allowing or granting the business to legitimately operate in the city where it is located Required by the city before a mayors permit is issued and as required by laws in compliance of safety measures Required by the city before a Mayors permit is issued in compliance of health and sanitation measures Required by the social services office for purposes of remitting social contributions of employees and the business counterpart

Analysis: Summary

The operating cycle of Imperial Appliance Business Plaza commences on

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its acquisition of appliance and furniture supplies from different manufacturers or distributors of the multinational corporations in which the company has trading and financial relationships until company fully collected the cash sales value of the sold items. Since, sales transactions is either cash or credit and the terms of credit or installments last on an average of 18 months, therefore, the operating cycle of business more or less on the average of one and one-half year. This cycle would not affect too much on financial liquidity of the operation since the business also enjoy almost the same term of credit purchases with suppliers. Second, the business practices low level inventory volume in its warehouse to avoid too high warehousing and inventory costs. As gleaned on the graph presented on gender profile, females composed the huge size of appliance customers it is simply maybe because females took charge the budgeting task for the family, while most male are hesitant to do these chores. Civil Status profile shows that most customers who buy appliances are those married person who is composed of 87% of the market while single is only 13%. This only shows that married person acquires these appliances for their family such as television, washing machine, refrigerator, electric fan and any other appliances that are vital in day to day living of the family. Some singles in the survey ages from 25 years old and above. According to these singles they bought appliances because of personal purpose and satisfaction, they want some souvenirs from their salaries or a good investment while they dont have family.

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Every year number of couples is increasing this implies that appliances will never be out in market demand. Occupation profile presented that not employed composed the big part of the market which is 50%, followed by government employee with 24% then selfemployed with 15% and finally private employee with 11%. Not employed includes those running their little business and into agricultural business and comes from nearby municipalities. Customer income is also a factor that affects sales of appliances, as shown on the pie graph above, 36% of the customers are earning 10,000-20,000 pesos a month, followed by those who are earning 20,000-30,000 with 26%, while earning 30,000-40,000 is composed only of 16% and 14% only are those earning 5,000-10,000 and lastly 8% those earning 40,000 and above. Probably, those who are earning 40,000 above by the time they earn this amount they have already purchased basic appliances, and they buy at time is the one that is new and replacement of their previous appliances.

Chapter 3 MARKETING STRAGTEGY AND OBJECTIVES

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Marketing strategy is a process that can allow an organization to concentrate its limited resources on the greatest opportunities to increase sales and achieve a sustainable competitive advantage. Marketing strategies serve as the fundamental underpinning of marketing plans designed to fill market needs and reach marketing objectives. Plans and objectives are generally tested for measurable results. Commonly, marketing strategies are developed as multi-year plans, with a tactical plan detailing specific actions to be accomplished in the current year. Time horizons covered by the marketing plan vary by company, by industry, and by nation, however, time horizons are becoming shorter as the speed of change in the environment increases. Marketing strategies are dynamic and interactive. They are partially planned and partially unplanned. Marketing Strategy Imperial Appliance Plaza is one of the prime appliance centers in Tacloban City and in Leyte. Imperial Appliance Plaza build loyalty and a great customer base by offering quality and affordable appliances and furniture that will surely respond to the needs of most customers. They also offers affordable and flexible payment or purchase scheme. Customers may avail big discount on cash purchases, Zero percent (0%) interest on selected items using major credit cards for 0-6 months. They can also avail 6 months to 25 months installment payment scheme. After sales service is also an advantage to buying customers with product and service warranty.
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In the past few years of operation since Imperial Appliance Plaza opens its store are Real Street Tacloban City, marketing strategy that was adopted is relied on the suppliers/manufacturers effort on advertising and product positioning. Imperial Appliance Plaza does not have any regular radio and local newspaper advertisement that will help increase customers awareness. Marketing of their product is through their in-house sales agents who execute marketing. Agents are task and responsible of building contacts, make transactions with other institutions for possible volume sales. Imperial Appliance Plaza conducts regular meeting and training with their sales agents to assess their present status and to give them an update on the management present economic condition. Financial Objectives Financial Growth To exceed __ million in the next 5 years. To increase revenue by 10% annually. To increase gross profit by 10% annually. To increase sales by 10% annually.

Financial Efficiency To decrease expenses by 5%.

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To increase net profit by 10% annually. To improve overall efficiency as measured by throughput. To improve overall productivity (doing more with what you have).

Marketing Objectives Current Customer Expand sales to existing customers. Increase customer retention. Increase customer loyalty. Cross sell existing products/services to current clients. Achieve and maintain outstanding customer service. Current Customer: Develop and use a customer database. Current Customer: Anticipate future customer needs through customer feedback. New Customer Introduce existing products into a new market. Introduce new products to new and existing markets. Anticipate future customer needs through customer feedback. To expand sales to the global marketplace.

Chapter 4 TACTICAL MARKETING PROGRAMS

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Tactical Decisions: Target Market Target market in province of Leyte is categorized by gender, civil status, occupation, and monthly income. Based on the finding of the research survey conducted most customers are composed of females with income ranging from 10,000 a month and above and most are married. With this identified target market, marketing strategy will primarily focused on these aspects, the female population. Sales agents are females too, with this scenario; agents can easily persuade or influence the greater market to purchase products of Imperial Appliance Plaza. On the other hand, IMPERIAL Appliance Plaza may also expand its market by penetrating existing offices and various establishments in Tacloban and the entire Leyte for office acquisition of new equipments like air conditioner and office furnitures. Existing Hotels and even under construction residential and other accommodation business in Leyte may be contracted. Proposals may be presented to them ahead of time, agents or the management may join public biddings especially on different Local Government Units (LGU). Residential Commercial establishments Private Offices Government Offices Schools

IMPERIAL APPLIANCE PLAZA TARGET MARKET Tactical Decisions: Product

The company offers wide variety of branded appliances with is locally

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known to market. Most purchased appliance products are DVD player, television, washing machine and refrigerator. In this case, management of Imperial Appliance Plaza may come up with add-on promo with major suppliers of most purchase appliance to attract more customers. For instance, every spot cash purchase of major appliances there is a free rice cooker. This activity is expected to motivate other potential customers to have their appliance shopping at Imperial Plaza. Most customers purchase appliance depends are budget conscious; they consider first their financial capability on buying appliances. Despite of the good product characteristics or attributes definitely customer will buy only what fit their budget. Tactical Decisions: Promotion Imperial Appliance Plaza being situated along Real Street, most passengers of various vehicles plying this street usually pass by the store without recognizing its signages. To date, there were aluminum signage attach to store facing the main street and an steel fabricated billboard hang-up that stretch from 2nd floor of the building to 4th floor. Huge wall painted company name and other product name can be visibly seen for up to 300 meters it is on the left side-wall of the building. Having this signages there should be a perpendicular signage position in front of the building facing on both ways of the street. A very minimal expense for the printing of dual-referral discount card flyer can be established. It will be given to everyone who visits Imperial Appliance
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Plaza. Anyone who purchase appliances that can present discount flyer is entitle of product discount to be determined by the management depending on the kind of product the discount available based on suppliers price. Referral fee and discounts is one of the most effective tool of motivating customers to help find other potential customers considering the attitude of Filipinos. Imperial Appliance Plaza does not have any regular radio advertisement, but direct selling can be effective, it is proposed that management will encourage their sales lady or any of the employees of the company to help find customers and they shall be given a certain commission for every customer referral or personal selling. In addition to what Imperial Appliance Plaza marketing strategy it is suggested that they will try to adopt what other appliance store practicing to encourage more agents and help increase sales. Since the primary focus of Imperial Appliance Plaza target market is Leyte only, interior barangay must be penetrated by sales agents. The management may hire commission based and product incentives based agents who are residents in remote barangays. Based on study, there are also potential customers in remote barangays who are capable to purchase cash basis although products are delivered at home. These hired agents will undergo exclusive and intensive seminars and training courtesy of course by the management to determine their potentials in recruiting customers agents and customers. Interested applicants of becoming sales agents will be required to submit necessary valid documents that will attest

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his/her qualifications. After training, sales agents will be authorized to make transactions at their respective area but definitely they will not receive any collections or payments from customers. A company designate credit investigator will personally visit the house of applicants for installment or term base. Upon approval of the Credit and Collection Head on the findings of the documents presented by applicants and the verification report made by credit investigator the appliances will be delivered to customer subject to terms and conditions. On the schedule time of collection, designate collectors will collect payments from customers.

Tactical Decisions: Distribution Traditionally, as indicated on the distribution channel showed by Imperial
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Appliance Plaza, distribution starts from the suppliers/manufacturers directly to the company warehouse. Then sales agents and sales force will introduce the products to the customers when convinced customers will be escorted to the cashier for payment and once the customers step out from the store transaction is finished. In most time, the company is dependent on walk-in customers and the close transactions by its authorized sales agents on field. This concept on sales agent can be implemented also to any member of the company particularly in their respective residential area. By doing so the potential increase of marketing area of responsibility is possible. This can help increase or even double its sales considering that non-agent employee of the company is twice the number of authorized agents. To avoid company loss or risk in product distribution, in relation to the proposed remote barangay penetration, it is suggested that delivery of products shall be limited to places accessible by company vehicle and only identified safe places. Proposed Product Distribution
Sales Agents Imperial Appliance Plaza Employees

CUSTOMERS

Tactical Decisions: Pricing Pricing method used of Imperial Appliance Plaza depends on the kind of

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products and suppliers price, depending on time of delivery and economic condition. Availment of discount depends again on the kinds of product, season and terms of purchase. Imperial Appliance Plaza gives from 5% up to 20% depending on spot cash purchases. Customers can purchase products using their major credit cards with 0% interest for 6 months and certain percent for 12 months to 24 months terms.

Chapter 5 BUDGETING, PERFORMANCE AND IMPLEMENTATION

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Budgeting lies at the foundation of every financial plan. Market budgeting presents a clear picture of the financial implications of the plan. Performance analysis presents the expected results of the plan including its financial impact. Implementation schedule shows timeliness and identify those responsible for performing task.

Setting the Marketing Budget

Setting up marketing budget for any company future marketing activities needs more time to assess and evaluate the impact of the sales turn-out. Budgeting for this activities demands keen observation on every details to make sure that everything that entails expense is in appropriate track. There are two ways to advertise and both need to be budgeted for, just another spoonful of food for thought. Product Advertising This consists of well, advertising company product. It may be the launching of a new product or service, or it could be remind consumers what you have to offer. This will differ throughout the year as well. Christmas is usually a huge time for toys and gifts; tax time requires more ads at the beginning of the year. Depending on the time span your budget covers these things will have to be kept in mind.

Perfect product advertising particularly in Tacloban City is on the months

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of April-May were series of barangay and municipal fiestas across the province is being held so as the much awaited Tacloban City fiesta celebration where even tourist flourish the city to grace the events; and during the months of OctoberDecember. Imperial Appliance Plaza advertising particularly in radio depends on the promotional bidding submitted to them by the station representative. Ads specification varies also from radio station proposal but most of the time radio advertisement is on AM radio station. Mobile caravan is also made and the area of promotion is determine by the management depends on seasonal promotion schedule. In general, product advertising depends on the advertising made by manufacturer. Promotional Advertising Promotional advertising brings consumers in for a specific product promotion, but promotional ads bring them in because of a special deal. These ads would be coupons, specials, or one time offers. They are great for getting the focus on the company name instead of just a product. They can be effectively done together if that will work for the business. At time, Imperial Appliance Plaza conducts Rolling Store and Caravan Sale to promote the products and at the same time the company.

A.

Advertising Materials
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QTY

PARTICULARS

UNIT COST

TOTAL AMOUNT

REMARKS

30

2x4 Tarpaulin

200.00

2,000

Discount Flyer Labor Cost: Setting up tarpaulin, 3 pax 450.00 @ 150/day x 2 days TOTAL EXPENSE

Will be hang along Maharlika highway from Campetic to Abucay terminal. Rizal 6,000.00 Avenue to Justice Romualdez to Real Street up to Tacloban Astrodome 500.00 Will be distributed in almost crowded area in the city These persons will be 900.00 contracted to install tarpaulin on the streets stated above. 7,400.00

B.

Training/Seminar for Agents Month before the schedule training and Seminar, hiring of agent

applicants must be done. The management will assign any qualified representative of the company will conduct the training it could be the branch manager or the credit collection manager. Seminar staff will be selected among the employee. The management may give additional incentive for the service rendered. The product orientation and training can be done in one (1) day. Product catalog shall be provided by the supplier or manufacturer.

Performance Analysis
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Due to absence of vital information needed for the assessment and validation of the marketing strategy of the cooperating establishment the researchers find it difficult to present the actual company performance analysis. Based on the data gathered, the following is presented in relation to company performance analysis. In terms of Sales (customers purchase per day)

30%

40%
Cash Buyers Credit Card Installment

30%

From the data presented cash buyers of Imperial Appliance Plaza is 40%, in terms of sales performance this is quite good because the return of cost of goods and the profit is instant. While credit card purchases and installment are both share 30% each on overall sales performance.

In terms of Annual Sales (Sales against Expenditures)

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2010
Imperial AP Annual Gross Sales Imperial Expenses Cost of Product Transportation expense (5%) Spare parts maintenance (3%) Utilities (Electricity) (3%) Allowances (5%) Office Supplies (3%) Salaries expense Promotion Expense TOTAL GROSS SALES Less: Tax (30%) NET Income 18,231,408.00 10,938,845.00 105,600.00 86,400.00 192,000.00 76,800.00 19,200.00 552,000.00 11,970,845.00 6,260,563.00 1,878,169.00 4,382,394.00

2011
22,789,260.00 13,673,556.00 132,000.00 108,000.00 240,000.00 96,000.00 24,000.00 600,000.00 14,873,556.00 7,915,704.00 2,374,711.00 5,540,993.00

2012
27,347,112.00 16,408,267.00 138,600.00 111,240.00 247,200.00 100,800.00 24,720.00 600,000.00 7,400.00 17,639,027.00 9,708,085.00 2,912,426.00 6,795,659.00

2013
32,816,534.00 19,689,920.00 145,530.00 114,577.00 254,616.00 105,840.00 25,462.00 600,000.00 7,400.00 20,944,169 11,872,365.00 3,561,710.00 8,310,655.00

Chapter 6 OTHER CONSIDERATIONS

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Internal Factors
The retail market is a highly elastic sector and as such is affected by current economic conditions. Internal strength of Imperial Appliance Plaza is the company tangible assets such land and building which the company owns and its competent manpower. The company is run by more Fifty (50) active and dedicated employees from the regional manager down to sales person positions including security personnel. Imperial Appliance Plaza own the newly constructed 4 storey building and occupying 202 square meter situated right at the heart of the city. The company also owns four (4) delivery trucks and vans, and seven (7) motorcycles.

External Factors
Imperial Appliance Plaza experiences some seasonal trends in the sale of its products. A significant portion of their net sales and operating income are generated during the third and fourth quarter of the fiscal year, which includes the fiestas and Christmas seasons. The amount of profit generated during this time depends on the estimated sales forecasted for those seasons. If by chance, there is an economic down turn during this time, sales will slump and inventory will increase, leading to lower operating and profit margins.

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ANNEX

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Imperial Appliance Plaza Pictorials

The Store

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The Ads

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The Sales Force

The Researchers

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