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LESSON 1: Introduction to Feasibility 🌷(6) Parts to any effective Feasibility Study 1. The Project Scope — defines the business problem...

LESSON 1: Introduction to Feasibility 🌷(6) Parts to any effective Feasibility Study 1. The Project Scope — defines the business problem and/or opportunity to be addressed. FEASIBILITY Project participants and end-user The initial design stage for any project or plan. Project sponsor An analysis of the viability of an idea. “Should we proceed with the proposed idea?” 2. The Current Analysis — define and understand the Analysis takes all of a project’s relevant factors into current method of implementation (system, product) account (economic, technical, legal, and scheduling Stop and correct any problems encountered in the considerations) to ascertain the likelihood of current system. completing the project successfully. 3. Requirements — depend on the project’s overall Feasibility can provide a company’s management with purposes. important information that could prevent the company from Technical and capital requirements of the venture. entering carelessly into risky businesses. 4. The Approach — represents the recommended solution or course of action to satisfy the requirements. Feasibility studies help determine: Does the recommended approach satisfy the Does the company possess the required resources or requirements? technologies? Is it also a practical and viable solution? Does the proposal offer a reasonable return vs risk from the investment? 5. Evaluation — examines the cost effectiveness of the 🌷The Goals of Feasibility studies are as follows: approach selected. After the total cost of the project calculated, a 1. Understand thoroughly all aspects of a project, cost and evaluation summary is prepared concept, or plan. (cost/benefit analysis, return on investment) 2. To become aware of any potential problems that 6. Review – substantiate the thoroughness and accuracy could occur while implementing the project. of the Feasib Study and to make a project decision; 3. To determine if after considering all significant either approve it, reject it, or ask that it be revised factors, the project is viable—that is, worth before making a final decision. 🌷(4) Contents of Feasibility Study undertaking. 🌷Reasons to DO or NOT TO DO a Feasibility Study 1. Introduction/Summary — general description of the NOT project and your preliminary plan for its completion. We know it’s feasible. An existing business is already Narrative about the project, product, service, doing it. plan or business. Why do another study when one was done just a few 2. Marketing Aspect — factors affecting the market of the years ago? project and appropriate marketing program for the Feasibility studies are just a way for consultants to product. make money. The market analysis has already been done by the 3. Management Aspect — identification of duties and business that is going to sell us the equipment. responsibilities, flow of authority and manpower level Why not just hire a general manager who can do the requirement of the study. study? 4. Technical Aspect — helps to determine the efficacy of Feasibility studies are a waste of time. We need to the proposed project by examining the details of your buy the building, tie up the site and bid on the intended process (materials, logistics and technology) equipment. it helps determine the capacity of the project. DO (reasons to conduct a feasibility study) 5. Financial Aspect — project cost, working, capital, Gives focus to the project, and outline alternatives sources of funds, finance projection and analysis. Narrows business alternatives 6. Socio Economic — projects should be geared toward Identifies new opportunities through the investigate not only for profit generation but also for its social and process economic benefits. Identifies reasons not to proceed Enhance the probability of success by addressing and 7. Findings and Recommendations — use the data for mitigating factors early on that could affect the possible risks and successes the project could project encounter. Provides quality information for decision making Provides documentation that the business venture When to conduct a Feasibility Study? was thoroughly investigated When considering launching a new business, adding Helps in securing funding from lending institutions a new product line, or acquiring a rival. and other monetary sources Helps to attract equity investment Who conducts a Feasibility Study? III. Description of your BUSINESS STRUCTURE / TYPE OF Company management (project team), senior BUSINESS ORGANIZATION managers, qualified consultant Contains a narrative description of the legal 🌷Feasibility Study vs Business Plan requirements for establishing the business and why this is the right structure for your business. Feasibility Study Is this a viable business venture? 🌷(4) TYPES OF BUSINESS ORGANIZATION Narrow the scope of the project to identify the best 1. Sole Proprietorship — incorporated business that has business scenarios just one owner who pays personal income tax on profits Conducted before the business plan earned from the business. Business Plan 2. Partnership — formal agreement by two or more parties Outlines the actions needed to take a proposal from to manage and operate a business and share its profits. idea to reality. Deals with only one alternative or scenario. 🌷(3) TYPE OF PARTNERSHIP 1. General Partnership Prepared only after the business venture has been Contribute capital and expertise deemed to be feasible. \ Actively manage and exercise control If a proposed business venture is considered to be feasible, a Have unlimited legal liability business plan is usually constructed next that provides a Ex. Law firms who have the ability to work "roadmap" of how the business will be created and independently benefit from a larger market. developed. 2. Limited Partner The business plan provides the “blueprint” for project Only contribute capital (asset) implementation. If the venture is deemed not to be Do not manage and cannot exercise control feasible, efforts may be made to correct its deficiencies, Cannot be a party to any legal claims other alternatives may be explored, or the idea is dropped. 3. Limited Liability Partnership Limits the legal liability of all partners Have protection from the wrongful acts of the other partners (negligence, misbehavior, LESSON 2: MANAGEMENT ASPECT unprofessional conduct) 3. Corporation — created when a business is incorporated by MANAGEMENT ASPECT a group of shareholders with a common goal. Shareholders It describes the form of business organization that is best share ownership of a business as represented by their suited for the proposed subject: holding of stock shares. The organizational structure, the number of personnel needed, their qualifications, their compensation, and 4. Cooperatives Organizational Structure — reflects the the projected time before the project is implemented. fact that they are owned and controlled by their members. The main objective is to determine the option Effective cooperative operations depend on fours groups effectiveness of the organization set-up. (members, board of directors, management, and employees) PURPOSE IV. COMPANY MISSION AND VISION ➔ To define the legal and corporate structure of business. Mission — defines what an organization does. ➔ It may also include professional background information Vision — defines where it wants to go, the purpose about the founders and principles of the business and statement defines why it exists. what skills they can contribute to the business. V. COMPANY LOGO 🌷(15) The ORGANIZATIONAL FEASIBILITY STUDY should A symbol or designed used to identify a company or organization, as well as its products, services, include: employees, etc I. INTRODUCTION Management aspects discuss the name of the firm, type VI. Company Goals and Objectives of organization, vision and mission, manpower Business Goals — represent the direction in which a resources, job description and qualifications, and company intends to go and define what the organization management feasibility. wants to achieve. Business Objective — specifies the methods and paths that II. OBJECTIVES OF THE STUDY can help a business achieve that goal. It refers to the specific goals or outcomes that the study aims to achieve. VII. Key Business Operation Business operations are the actors that companies carry out daily to grow the firm’s value and increase profits. 🌷(4) Type of Business Operations External Business Practices and Principles 1. Production — refers to the business operations that Do you have a customer policy or philosophy? Examples of involve changing inputs into final goods ready to be customer philosophies include: purchased by customers. We do not serve clients; we team with clients to 2. Procurement — refers to any activity that takes meet their goals. place to obtain all the goods and services needed for We value creativity and imagination and use these to a business to run its daily operations. our client’s advantages. 3. Quality Assurance — type of business operation that Our employees maintain high ethical standards that makes sure that the goods and services produced are reflect on how we treat our clients. of high quality. X. Professional Skills and Resumes 4. Customer Service — ensures that all the concerns of A brief overview of all founders, employees and partners a customer are addressed. involved in the business that will be contributing their Internal Organization — construction of an organization skills and input into how the business is operated. You with regards to how tasks are assigned, communication should also include any bard members, directors, and flows, hierarchy levels are maintained and other operations officers. that help an organization achieve its goals. Manpower Requirements / Job Analysis VIII. ORGANIZATIONAL STRUCTURE Job Analysis brings together and evaluates the It refers to how various tasks are divided, resources are information about the content and requirements of deployed and how units/departments are coordinated in individuals regarding the specific job in terms of an organization. activities involved and attributes needed to perform the Includes a set of formal tasks assigned to individuals activities. and departments, formal reporting relationship, and It is performed by enumerating all positions needed a design to ensure effective coordination of for the business to operate. employees across departments/units with the help Manpower is composed of the partners only from the of authority, reliability, responsibility, and partnership. Each should possess the qualification in accountability, which are fundamental to develop order to undertake an effective and efficient organizational structures and workflow based on arrangement of resources in the organization. their clear understanding by all employees. 🌷(4) Important Principles in Organizational Structure Job Description — includes an overview, role, summary, catalog of responsibilities, and the qualifications and 1. Authority — right to make decisions, issue orders, experience required for a particular role. (ex. Sales assistant and allocate resources to achieve desired outcomes. sells the products) 2. Reliability — degree to which the project team member can be dependent on to ensure the success Job Specification — an official document which describes of the project with a sound and consistent effort. the duties, required knowledge, skills and abilities and 3. Responsibility — obligation incurred by individuals in minimum qualifications of state jobs. (ex. Male/Female, must their roles in the formal organization effectively be 18 years old above) performing assignments or to work on the success of XII. RECRUITMENT, SELECTION & HIRING OF WORKERS the project with or without guidance or authorization. RECRUITMENT 4. Accountability — extent to which an individual or 1. Recruitment Planning — vacant positions are analyzed project team is answerable to the project and described. It includes job specification and its stakeholders and provides visible evidence of action. nature. (Accountability = Authority + Responsibility) The employee must be qualified, experienced, with capability to take responsibilities required to IX.PRINCIPLES AND PRACTICE OF A BUSINESS achieve the organization’s objectives. Internal Operations Business Principles and Practices 2. Strategy Development — this is on how or which Businesses that are incorporated must have a board strategy to adopt for recruiting the potential employee of directors. for the organization. Do you offer services where clients need to be screened for eligibility for financial aid or social 3. Searching — line managers verifies and permits the services. existence of the vacancy, the search for potential Do you have hiring and employee training and employees starts. management practices in place? 4. Screening — where the process of filtering the Do you have an overall corporate philosophy or work applications of the potential employee for further culture that inspires, encourages, or offers selection process. incentives to employees? 5. Evaluation and Control — effectiveness and the validity Do you have an anti-discrimination policy in place? of the process and methods are assessed. SELECTION / Hiring of Workers determined by the role, experience level, and 1. Preliminary Interview — initial meeting to gather basic market standards. information about how an applicants’ goals, skills, and Employee benefits are non-wage compensations qualifications can benefit a company’s needs. that supplement the salary package. These can include health insurance, retirement plans, paid 2. Receiving Applications — after preliminary, he is time off, and other perks, such as gym required to fill in the application form in the prescribed memberships. format. This contains the candidate data such as age, qualification, experience. LABOR CODE This information helps the interviewer to get a fair The Labor Code is among the most important laws idea about the candidate and formulate questions to companies need to follow when it comes to employing get more information about him. workers. It outlines the employment practices and relations, 3. Screening Applications — screened by the screening including employee benefits and compensation: committee who prepare a list of those applicants whom Minimum Wage they find suitable for the interviews. Overtime Pay This shortlisting criteria could be: age, sex, Night Differential qualification, experience of an individual. Once the Holiday Pay list is prepared, the qualified candidates are called 13th Month Pay for the interview either through a registered mail or Maternity Leave e-mails. Laws on Mandatory Contributions: 4. Employment Tests — to check the mental ability and Laws include: skill set of an individual such as intelligence tests, a. Republic Act 8282 (Social Security Act of 1997) aptitude tests, interest tests, psychological tests, This law ensures that contributions to the Social personality tests. These tests are conducted to judge Security System (SSS) provide unemployment, the suitability of the candidate for the job. maternity, injury, sickness, and disability 5. Employment Interview — session with the candidate is benefits, and also serves as a retirement plan conducted to gain more insights about him. The for private employees. interviewer asks questions from the applicant to discover more about him and to give him the accurate b. Republic Act No. 9679 (Home Development Mutual picture of the kind of a job he is required to perform. Fund Law) Known as the PAG-IBIG Fund Law, this act 6. Checking References allows employees to access low-interest housing 7. Medical Examination — mental fitness are checked to loans and other investment opportunities ensure that he is capable of performing the job. This through their contributions. stage is not rigid and can take place anywhere in the process. It ascertains the applicant’s physical ability to c. Republic Act No. 10606 (National Health Insurance fulfill the job requirements. Act of 1995) This law mandates that contributions to 8. Final Selection — candidate who qualifies all the rounds PhilHealth provide healthcare services access to of a selection is given the appointment letter to join the all employed persons and their dependents. firm. This is a complex and lengthy process as it involves several stages than an individual has to qualify before TAX LAWS getting selected for the job. Taxation laws also affect an employee’s compensation. These laws, for instance, set the ceiling of salaries and POLICIES AND REGULATIONS benefits that would be excluded from tax computations. 1. Recruitment Policy — the potential employee must meet the requirements and pass the step by step process of the 4. Routine Work Policy — the employee’s working time recruitment. starts from 8:00 am to 6:00 pm. 2. Time Periods Policy — employees must follow established 5. Termination Policy — it is beneficial for all parties work schedules. The usual work schedule is 48 hours per that the employment separation process is as clear week, Monday through Friday. as possible so misunderstandings and distrust between the Rest periods may not be “saved” to shorten the employee and the organization can be avoided. employee’s workday, and to extend lunch break. This termination of employment policy applies to all Abuse of rest period may result in loss of the prospective or current employees of the organization privilege. in regards to possible separation of employment. 3. Employee Compensation and Benefits Policy 6. Resignation Policy — employees must give their written Compensation refers to the payment employees notice letter at least 30 days (one month) in advance. receive in exchange for their labour, including 7. Complaints and Grievances — grievance procedure policy wages, salaries, and bonuses. This monetary outlines a business's processes and guidelines for filing a compensation is straightforward and is usually formal complaint regarding a workplace, job, and/or co 🌷(8) TYPES OF PROTOTYPING worker dispute or issue. 1. Sketches and Diagrams — using a rule and ink, a paper. Businesses implement a grievance procedure policy 2. 3D Printing or Rapid Model — create a realistic model of to help address employee concerns in a constructive a design using a computer and printing machine. and fair manner. 3. Physical Model — made with anything from building bricks to craft paper. 8. Code of Ethics — outlines a company’s ethical principles 4. Wireframe — digital diagram or layout of the that govern all employee decisions and behavior product-websites, software or other digital tools. 5. Role — play through virtual or augmented reality. 6. Feasibility — used to test certain features that are added LESSON 3: TECHNICAL STUDY at a later stage in the design process. 7. Working Model — to see if it actually functions the way TECHNICAL ASPECT you intended. It helps you determine the efficacy of your proposed 8. Video Prototype — animated video or even a simulation project by examining the details of your intended that explains and graphically represents a project. process, including materials and labor, logistics and III. PRODUCTION PROCESS/PROCESS FLOW technology related to producing, delivering and tracking It discusses how the products will be produced the products or services you intend to develop. specifying each step that will be involved, and the time 🌷How to conduct a TECHNICAL FEASIBILITY STUDY involved. It is shown in a process flow chart where some of I. TECHNICAL STUDY the following symbols will be used. How? When? How much? Where? What? II. PRODUCT TYPE A preview or early sample of a product or idea you plan to invest in and eventually reproduce in large quantities. TRANSPORTATION STORAGE OPERATION, Delay Equipment, Purpose: Machinery, Furniture and Fixtures Providing a real, working sample that can be tested It discusses or describes the technology that will be used and evaluated for errors and efficacy in manual, mechanical, automated or robotics. It aids designers when it comes to the visualization If the production process is done manually, then the and manufacturing of the real product. use of equipment, machinery, furniture and fixtures To save money and time in the long run. The more will be limited. you know before you invest in mass production, the It should include the description, the specification, better decisions you can make to avoid pitfalls. and the prices of the listed assets. To prototype development process: How to prototype a IV. MACHINERY AND EQUIPMENT product Machinery — refers to machines collectively or a specific Phase 1: Define the product and its Feasibility machine used for a particular function. It typically involve Research – learn whether your idea is with the moving parts and is often powered by electricity, fuel, investment. energy resource.s Initial specifications and drawings. Ex. Lathes, cranes, tractors and conveyor bells Phase 2: Detailed Designs Functionality: Machinery usually performs a specific Alpha testing – conduct a risk analysis, answering mechanical function or process (cutting, lifting, transporting materials) questions such as whether the materials are affordable and sustainable. Your goal is to identify Equipment — a broader term that encompasses tools, any threats to product development, your supply machinery and other apparatus that are necessary for a chain, and profitability. particular purpose or activity. Beta testing – gathering feedback on its appearance Ex. Hand tools (hammers and wrenches), office and functionality. equipment (computers and printers) and safety equipment (helmets and gloves) Phase 3: Final Design Functionality: It can be used for various tasks, not Results in a manufacturer — ready product design. limited to mechanical processes. It includes items To define the metrics that determine quality. that may not have moving parts. Complexity: It can range from simple tools to complex machines but is not exclusively defined by mechanical function.  Things to consider: Identify and individually list according to type & use, 1. What are possible locations for the facility specifications, capacities & costs must be described in (office/manufacturing plant)? detail, the origin of the machinery & equipment, whether 2. What size facility is needed? local or imported, the manner of & cost of transporting 3. What are the costs involved in the building? them must be indicated, what type of equipment and 4. Do you need to fit it out? technology will the business need to produce its 5. How much will it cost to get all necessary utilities product/service? connected? 6. Does the proposed location have adequate access to The equipment suppliers: infrastructure and services such as highways, railway Who are the potential suppliers of the equipment? and utilities? Where are they located? 7. Will you need to build your own facility, or purchase What sort of service and warranties do they provide? an existing one? How long will it take to acquire the equipment and 8. Where will the facility be located in relation to your begin operations? customers? 9. Who will be responsible for transport of goods FURNITURES AND FIXTURES between the facility and the market? Furniture — the category can include anything you sit on or 10. What are the costs involved? use to hold other objects, such as chairs, tables, desks, cupboards, and bookshelves. VII. RAW MATERIALS AND SUPPLIES Fixtures — can include items that serve a practical or The required raw materials should be listed down and functional purpose, such as lighting, wall mounts, the basis for their selection must be presented. The whiteboards, and doors. descriptions and specifications on their physical, mechanical, and chemical properties must also be given, V. LOCATION the current and prospective cost of raw materials, the The proponent is required to gather maps in order to availability and continuity of supply, and the current show where the proposed project will be located in the prospective sources should also be included, and the discussion, the proponent should also describe the volume required at various phases of operations must be distance of the proposed project from its competitors as clearly presented. well as its supply of raw materials, public markets, roads, communication facilities. VIII. PACKAGING The proponent needs to discuss the environmental Promotes product recognition allowing customers to conditions of the place whether it be rural, urban or identify, describe, and differentiate items from similar near schools. commodities. The packages’ different colors, sizes, The accessibility to, and availability of raw material fonts, shapes, and graphic designs facilitate brand source the availability of cheap or moderately-price recognition, which occurs when consumers identify a utilities such as power, water, or fuel. particular brand by its attributes. The combined cost of transporting raw materials and Clarity, Creativity, Consistency and fuel to the site. Consumer-Centricity The proximity to distributing outlets. The availability of skilled and unskilled labor. CAPACITY / SCHEDULING The maps and charts of the proposed site must be It determines the maximum capacity, the production, included. schedule, the number of shifts per day, number of working hours per day, etc. LAYOUT/FLOOR PLAN Things to consider in the production schedules; It discusses how the place (factory, store, or office) looks Minimum and maximum rated capacity; like and how it is arranged. Fixed costs, actual capacity utilization A good layout is characterized by minimum material The number of shifts per day handling, effective space utilization, smooth Number of operating days per year workflow, safe and conducive working area for the workers, safety and sanitation facilities and UTILITIES COSTS flexibility of arrangements. Fuel, water, and electricity. It also includes other costs that the proposed project will incur like supplies, VI. BUILDING telephone, telex, maintenance, repairs, insurance, It should determine whether it is necessary to put up to taxes, licenses, and SSS contribution. rent or to lease a building. If a building is to be The provision foreseen costs such as miscellaneous constructed, he should provide a computation for the cost and contingencies is also included. cost of the building. The utilities must be determined in relation to the This includes the determination of the life of the production schedule and capacity utilization defined building as well as the depreciation method to be alternative sources of these utilities and the used. feasibility of their use must also be described. PRODUCTION COSTS ○ What is the size of the market? (the total number It includes the initial raw materials costs, labor costs, of potential buyers of a product within a market) operating costs, and other costs to produce the product. ○ What are their ages? ○ Where do they live? WASTE DISPOSAL SYSTEM ○ What gender are they? It discusses how to dispose of the wastes and also the cost of disposing. 4) SWOT Analysis Strengths What are you doing well? What sets you apart? LESSON 4: MARKETING ASPECT What are your good qualities? MARKET FEASIBILITY Weaknesses It is used to determine the extent to which the What could you improve? goods/services generated by the project are needed or Are resources adequate? demanded and to design the appropriate marketing What do others do better than you? strategies and plans that will help ensure that the Opportunities project’s outputs will reach and be accepted by the What are your goals? target users. Are demands shifting? How can it be improved? MARKETING ASPECT Threats It seeks to determine the opportunities and threats, the What threats could harm you? target market, the total demand and supply of the What are factors outside of your control? product, the competition and the making program which refers to the product, price, place and promotional 5) DISTRIBUTION PLAN strategies. A detailed strategy that outlines the steps required to move a product/service from production to the final customer. The difference between Feasibility Studies and Marketing Plan: 🌷(3) Types of Distribution Channels Direct — allow the consumer to make purchases from the Feasibility Studies manufacturer. It may mean lower costs for consumers Done on ideas, campaigns, products, processes, and entire because they are buying directly from manufacturers. Ex. A company that manufactures clothes and sell s businesses and they look at how things work, if they will look and if there are potential problems. them directly to its customers using an e-commerce platform. (+Telemarketing) Marketing Plan Indirect — it allows customers to buy the goods from a Maps out specific ideas, strategies and campaigns based on wholesaler/retailer. This is typical for goods that are sold in feasibility study investigations and are intended to be traditional brick-and-mortar stores. implemented. Hybrid — it used both direct and indirect. A product/service Paints a more detailed picture of how the company will manufacturer may use a retailer to distribute a use marketing to achieve the goals laid out in the product/service. In addition, it also makes sales directly business plan. with the consumer. What is a Marketing Study? 6) MARKET SEGMENTATION The process of perceiving, understanding, stimulating and It determines how your organization divides its customers or satisfying the customer needs, wants and expectations cohort into smaller groups based on characteristics such as through goods and services specially selected target market age, income, personality traits, or behavior. which is better than the competitors. The process of the business to build strong customer 🌷(5) Types of Target Segmentation relationships in order to gain loyalty from them. Demographic Segmentation — (age, race, gender, family 🌷(19) Marketing Feasibility Study Contain: structure, educational level, occupation and income level) one of the simplest and most commonly used forms of 1) Introduction segmentation because the products we buy, how we use the 2) Objectives of the Study product, and how much we are willing to spend on them is 3) MARKET DESCRIPTION based on demographic factors. It describes the targeted segments in detail and provides Geographical Segmentation — potential customers have context for the marketing strategies and detailed action needs, preferences,s and interests that differ according to programs. their geographic region. It helps to determine where to sell It is the opportunity to get particular about the and advertise, as well as where to expand your business following: Firmographic Segmentation — (company size, number of ○ Who actually will be interested in your product? employees) it would illustrate how addressing a small business would differ from addressing an enterprise Importance of Supply Analysis corporation. It helps manufacturers to analyze the impact of production Behavioral Segmentation — divides market by behaviors and changes, policies on increase or decrease in supply of decision-making patterns such as (purchase, consumption, finished goods. lifestyle and usage) Another example can be the impact of increase in wages in the market on supply. The labor cost would go up and Psychographic Segmentation — (lifestyle, personality traits, it will drive the costs of product along with it. values, opinions, and interests of consumers.) Large markets like If the supply has to be kept constant, the costs would go the fitness market use psychographic segmentation when up and if costs have to be kept constant the supply they sort their customers into categories of people who care would go down hence driving the prices up if the about healthy living and exercise. demand is unchanged. 7) DEMAND ANALYSIS The process of understanding the customer demand for a 🌷(5) Supply Analysis Parameters: product/service in a target market. Companies use this to Product’s Own Price determine if they can successfully enter a market and As the price rises suppliers are willing to produce more. generate expected profits to expand their business Input Prices operations. If the price of the input goes up, the cost of producing It also gives a better understanding of the high-demand the goods increases. Therefore at each price producers markets for the company’s offerings using which need to sell their goods for more money. Increase in the businesses can determine the viability of investing in price of inputs leads to a decrease in supply. each of these markets. 🌷(4) Steps in Market Demand Analysis Technology It leads to an increase in the efficiency of the 1. Market Identification production process which results in the shifting of the Surveys or customer feedback can be leveraged to supply curve to the right. determine the current customer satisfaction levels. Any Expectations of the Market comments indicating dissatisfaction can be taken into If suppliers expect prices to go up in the future, they consideration for planning improvements that will decrease their supply today and save inventory to sell eventually enhance customer satisfaction. for a higher price in the future. 2. Business Cycle The next step is to assess the stage of the business cycle Number of Producers Present that each market is undergoing. A business cycle ideally If the number of producers increases, then we can comprises three stages: expect the supply curve to shift outward to the right, a. Emerging — show higher consumer demand and low thus increasing the supply at every price. But this additional supply may result in a surplus, and the extra supply of current pro/ser. competition may cause prices to drop. b. Plateau —depicts the break-even level of the market c. Declining — lagging consumer demand for the 9) DEMAND & SUPPLY GAP ANALYSIS company’s goods/services. The gap refers to the difference between the supply and 3. Product Position demand for that product. In other words, it means a Companies must develop products or tailor their services to consumer-need that supply has not yet met. meet a specific niche in the market. For companies, a gap in the market represents an Products must be differentiated from the peers in the opportunity for it to widen its customer base. market so that they meet the specific needs of Gap in the Market Attributes consumers, and thereby create higher demand for the It is something original, it is new; there is nothing like it company’s goods or services. in the market. 4. Evaluate Competition It already exists. An upgrade or improvement would A crucial factor of demand analysis is determining the boost sales significantly. number of competitors in the market and their current The product already exists. Nobody has tried to sell it in market share. a new market. Introducing it to a new market would Markets in the emerging stage of the business cycle tend increase sales considerably. to have fewer competitors. This translates to a higher How do you Close the Gap? profit margin for your company. Reconsider your offerings 8) SUPPLY ANALYSIS A gasoline station that offers an "average" level of A research and analysis done to understand the supply service at prices higher than those of self-service trends and responses to changing market and production stations might either target the low cost segment, variables. It takes into account the production costs, raw lowering prices and cutting costs, or targeting a materials costs, technology, labour wages. premium service and "beefing up" service. 10) COMPETITIVE EDGE What is the price range of your product’s competitors? By differentiating your products, service, personnel or What is the price range of your target audience? brand, you can establish a unique position in your market. What price is too high for your audience? What price is too low? To build a Competitive Advantage. A company can use of: 🌷(3) Main Methods: What price best fits your target market? 🌷(4) Types of Pricing: 1. Cost Leadership — to become the lowest cost manufacturer or provider of a good/service. Premium Pricing — high price now, high price in the future. Ex. It has been known as the low cost carrier in (Ex. Chanel) the PH. They want all their passengers to have Penetration Pricing — low price now, high price in the an attainable low cost but high quality service. future. (Ex. Netflix) Price Skimming — high price now, low price in the future 2. Differentiation — involves developing unique goods (Ex. Electronic Products) or services that are significantly different from Loss Leader — low price now, low price in the future (Ex. competitors. Grocery Store) Ex. The luxury brand is some of the most expensive and accessories but doesn’t stop Place — where you sell your product and the distribution thousands of people from buying their products. channels you use to get it to your customer. They made sure to create products always up to Where will you sell your product? Where does your target audience shop? an extremely high-quality standard, making What distribution channels are best to reach your target their high cost seem worth it. market? 3. Focus — users an approach to identify the needs of a niche market and then developing products to align Promotion — how you advertise your product/service. What is the best time to reach your target audience? to the specific need area. What marketing channels are most effective for your target Ex. DIET Coke for those with diabetes. audience? What marketing messages would most resonate with your 11) CURRENT MARKET CONDITION target audience? Enterprise environmental factors that can affect many What advertising approaches are most persuasive to your aspects of a project. The conditions affect what can be target audience? purchased and at what prices. It also affects the prices that can be set for any 14) PROPOSED MARKETING STRATEGIES products, services, or results creed by the project. The size of the market, the business competitors and 🌷(9) Types of Marketing Channels Digital Advertisements — refers to ads delivered the proportions of large and small businesses in the through digital channels (socmed, websites and mobile market. apps) Primary Research includes focus groups, polls, and Emails surveys. Events — involve hosting or participating in trade shows, Secondary Research includes academic articles, conferences, product launches, and workshops to infographics, and white papers. promote a brand, product or service. Influencer Marketing — socmed marketing approach 12) LIST OF COMPETITORS and their PRODUCTS and PRICES that uses endorsements and product mentions from DIRECT AND INDIRECT COMPETITORS influencers. Search Engine Optimization — focused on optimizing Direct Competitors — companies offering the same your content to get ranked as high as possible on search product/services as you. These companies sell to the same engines. types of target audience and markets. (Ex. Nike and Adidas) Content Marketing — creation and sharing of online Indirect Competitors — businesses with different material (videos, blogs, socmed posts) products/services that target the same client needs as your Social Media — leverages the power of popular socmed business. (Ex. Starbucks and Dunkin) networks to achieve marketing and branding goals. Word-of-Mouth — consumer’s interest is reflected in 4P’s of MARKETING their daily dialogues. Product — the good or service being marketed to the target Traditional Marketing — offline media to reach an audience. audience (print ads, billboards) What is your product? What does your product do? 15) UNIQUE SELLING PROPOSTION Does the product meet an unfilled need or provide a novel experience? Who is your product’s target audience? How is your product different from what others offer? 13) PRICING Price — the cost of a product/service.  Channel — your channel, or sales team, is central to understanding customer needs and is where you will likely find the majority of information for successful positioning. Your channel is a direct connection to the customer, and through their experience, you can get information such as the customer profile, customer problems, competitive intelligence and the purchase process. With experience in the entire sales cycle, channels will help you identify brand strength to effectively focus your positioning strategy on what you do. Competition — a final step in formulating a product position 16) SALES STRATEGY is paying attention to your competition and their position. A plan designed to help position a product in the If yours is unique and easily differentiated from what is marketplace in order to increase revenue and reach specific on the market, then your positioning statement (your sales goals. assertion of brand uniqueness) is effective. 🌷(5) Example of Sales Strategy: 🌷(7) Types of Positioning Strategies 1. Upselling and Cost-selling A selling pitch where you attempt to sell a more expensive 1. Product Characteristics or Consumer Benefits — the or higher-quality product to a customer who is already focus is on quality. It addresses the brand's durability, interested in your product, increasing the perceived value dependability or reliability and style. proposition of the sale. 2. Pricing — focuses on the relationship between price and Cross-Selling — instead of selling a more quality and the consumer's perception of the value of a expensive/higher quality product, you see a product. complementary product. 3. Product Process — when a brand is associated with a 2. Bundling specific user or class of users. Endorsements by famous When you offer products/services as a package deal at a personalities or product influencers are examples. discount price. 4. Use of Application — a brand reaches a larger market or 3. Free Trials changes the purpose of the brand/product, positioning The excellent way to generate interest in your based on use is functioning. product/service. They’re also great for lead generation, as 5. Product Class — products are positioned based on the they show who’s interested in your product. Free trials work category they belong to. It can be done if two products lie by allowing potential customers to try out your in the same product class. product/service for free for a limited time. 6. Cultural Symbols — is to identify something like a symbol 4. Discounts very meaningful to people that has not been used by They work by offering respective customers a reduced price competitors and harness it to associate your brand with that on your product/service. symbol. 5. Referrals 7. Competitors — using competitors as a frame of reference Ask your satisfied customers the word about your business, to differentiate a brand is another type of positioning. and offer incentives like discounts/freebies to sweeten the Positioning your brand against competitors is an obvious deal. challenge on quality and asserts that your brand is 17) POSITIONING STRATEGY superior with a competitive edge. It is also referred to as product positioning, which refers to 18) FUTURE PLANS AND STRATEGIES OPPORTUNITIES how a brand wants to be perceived in the mind of customers A process in which an organization's leaders define their relative to computing brands. vision for the future and identify their organization's goals The objective is to establish a single defining and objectives. characteristic of a brand in the mind of the consumer. 🌷(3) Keys of Strategic Positioning (3C’s) a. Market Penetration — refers to an expansion strategy that looks to grow the distribution of existing products Customer — central to positioning is knowing your focus by within existing markets. identifying what the buyer wants and needs. b. Product Development Strategy — involves developing Research to see if there is a problem customers need a new and improved products for an existing customer base solution for and what needs they might report via made up of current customers and potential customers who surveys, interviews and reviews. already own or are in the market for something similar. Listening to buyer needs and placing a high importance on those needs is pivotal in getting customer attention c. Market Development — centers around introducing and loyalty. existing products to new markets. d. Diversification Strategy — requires both develop a new product and to enter a new market. Related Diversification — diversifying into business lines in the same industry. Unrelated Diversification — diversifying into new industries such as Amazon entering the grocery store business with its purchase of whole foods. Geographic Diversification — operating in various geographic markets, which is the corporate strategy of Starbucks. 19) SURVEY QUESTIONNAIRE It is used to understand the consumer’s preferences about a particular product/service being studied.