III-Notes LESSON 1-3 PDF

III(LESSON 3) Parts of a Technical Feasibility: Production/Operation Process Labor Requirement Machinery and Equipment Advertisement Furniture and Fixture Office Expense Selling Equipment Store Location Store Layout Waste Management and Disposal System Quality Control System P...

III(LESSON 3) Parts of a Technical Feasibility: Production/Operation Process Labor Requirement Machinery and Equipment Advertisement Furniture and Fixture Office Expense Selling Equipment Store Location Store Layout Waste Management and Disposal System Quality Control System PRODUCTION/OPERATION PROCESS Involves the design, planning, and control of production systems and processes. The production will show the ingredients in making the product and the step-by-step procedure. LABOR REQUIREMENT Refers to the amount of human labor needed for a variety of task. This will include store personnel, production personnel, etc. MACHINERY AND EQUIPMENT Are the tools and implements that a business uses to produce goods or services. They are considered tangible long-term assets that can benefit a business for many years. ADVERTISEMENT Advertising is a marketing tactic that involves paying for space to promote a promote a product, service or cause. List the prices of the advertisement part of your product that includes flyers, tarpaulin, etc. FURNITURE AND FIXTURE Is a term used to describe movable items in a building or space that are not permanently attached to the structure. This may include food display, chairs, tables, bulbs, trash bin, etc. OFFICE EXPENSE Are cost related to the operation of the business. This include items such as salaries and benefits, rent, utilities, office supplies, office services, etc. SELLING EQUIPMENT Refers to the items used in selling. This may include cash box, packaging box, etc. SITE LOCATION Refers to the selection of a specific place to establish a business, factory, or production unit. Provide a map of the site location. STORE LAYOUT Is the arrangement of merchandise, displays, shelves, and aisles in retail store to improve the shopping experience and traffic flow. It could be an ordinary layout or 3D layout. WASTE MANAGEMENT AND DISPOSAL SYSTEM Is a process for managing waste from its creation to its final disposal. QUALITY CONTROL SYSTEM Is a set of procedures that ensure a product or service meets a desired level of quality. This may include the equipment used in the production process and the customer service. MARKET FEASIBILITY STUDY(lesson 2)III MARKET POTENTIAL ⚫ is essential in determining the total sales for a given market. The analysis must provide a determination if the market is large enough to sustain the business entry in light of the competitive market conditions MARKETING is described by the American Marketing Association as "an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders. MARKETING MANAGEMENT is a process of setting marketing goals for an organization (considering internal resources and market opportunities), the planning and execution of activities to meet these goals, and measuring progress toward their achievement. MARKETING PLANS  summarizes the who, what, where, when, and how much questions of company marketing and sales activities for the planning year. It is the marketing plan that details when expenditures will be made, what level of sales will be achieved, and how and when advertising and promotional expenditures will be made. Here are the major elements of a marketing plan: Major elements of a marketing plan: 1. Situation Analysis describes the total marketing environment in which the company competes and the status of company products and distribution channels. 2. Opportunity and Issue Analysis analyzes the major external opportunities and threats to the company and the internal strengths and weaknesses of the company, along with a discussion of facing the company. key issues 3. Goals and Objectives outlines major company goals and the marketing and financial objectives. 4. Marketing Strategy provides the company's marketing strategy statement, summarizing the key target buyer description, competitive market segments the company will compete in, the unique positioning of the company and its products compared to the competition, the reasons why it is unique or compelling to buyers, price strategy versus the competition. 5. Sales and Marketing Plan outlines each specific marketing event or action plan to increase sales. For example, it may contain a summary of quarterly promotion and advertising plans, with spending, timing, and share or shipment goals for each program. MARKET RESEARCH is the function that links the businesses products or services with the consumer. is the systematic gathering, recording, and analyzing of data about your market. Market research focuses and organizes marketing information. It ensures that such information is timely and permits businesses to:. Reduce business risk Spot current and upcoming problems in the current market  Identify sales opportunities Develop plans of action Marketing concept 1. COMMODITIES AND DIFFERENTIATED PRODUCTS Commodities and differentiated products are the two ends of the product spectrum. A product is a commodity when all units of production are identical, regardless of who produces them. A differentiated product can be easily distinguished from those of its competitors. Commodities tend to be raw materials like corn, wheat, copper, crude oil, etc. Only commodities can be traded on "futures" markets because every unit Is the same. Commodities are often Inputs to other ("finished") products. These finished products may in turn be differentiated ones. 2. PRICE TAKERS People that produce commodities are referred to as "price takers." This means that an individual producer has no control over his/her price. On any day, the producer must take what the market offers. 3. DIFFERENTIATED PRODUCTS A company's product is a differentiated product if it is unique and cannot be substituted for a competitor's product. If the product is different, the producer can make the case that it is better. If it is a better product, in the eyes of customers, and they are willing to pay more, then the company can charge a higher price for it. The customers can see a difference in value between it and a possible substitute. 4.PRICE MAKER The producer of a differentiated product is said to be a price maker rather than a price taker. A price maker has some influence over price, but not as much as most people believe. Essentially, a producer of a differentiated product creates a separate market for that product, to the extent that they are able to do so through marketing demand. activities and 5. PERCEPTIONS ARE EVERYTHING There is the false perception in agriculture that the emergence of niche markets provides for unlimited product differentiation. 6. THE VALUE-ADDED DIFFERENTIATED FALLACY Differentiation only takes place when the product you produce is seen as different. 7. TARGET MARKETING  is the practice of directing the marketing effort at a specific market segment. A target market, or segment, on which a business may focus, is a group of potential buyers that the business believes will want to or do want to buy that product. 8. BRANDING is one of the most important factors influencing an item's success or failure in today's marketplace. A brand is a combination of name, words, symbols, design, reputation and association. It identifies a product and/or its company and differentiates it from competition. 9. NICHE MARKETING is marketing a product or service in a small portion of a market that is not being readily served by the mainstream product or service providers. These "niches" can be geographic areas, a specialty industry, a specific demographic or ethnic group, one gender, a specific interest group, or other special group of people. 10. ETHNIC MARKETING What is ethnicity? It is a multidimensional expression of identity that includes race, origin or ancestry, language and religion. It is influenced by immigration, blending and intermarriage, which very often influence the strength of ethnic identification. SALES FORECASTING is the process of organizing and analyzing information in a way that makes it possible for the business to estimate future sales. The forecast estimates the number of units of product or service a business will sell within a specified time period and at a given price. ESTIMATING MARKET POTENTIAL It reveals whether a market is sufficient to support the size and scope of the business being contemplated. The market potential provides information for sales forecasting, which in turns helps determine the overall feasibility of the business idea. CREATING A PRICE STRATEGY The price of the product may need to support a high-cost manufacturing process, or exclusive system, or extensive advertising. On the other hand, pricing adjustments can compensate for a lower quality product, less effective promotions, or erratic merchandising efforts by distributors. Creating an effective pricing strategy should accomplish four goals: 1.) Provide a rate of return to the business that is acceptable to the cooperative. (e.g. generate profit); 2.) Take into consideration consumers' demand at the price that is set; 3.) Take into consideration the image or branding of the product or service; and 4.) Take into consideration quality of the product, the type of distribution channels, and the quality of promotion. SETTING THE PRICE In order for a business to survive in the long term, the pricing must cover the total cost of operating the business, plus a rate of return to the cooperative. FIXED EXPENSES are those expenses that do no change over time or as production changes. Fixed expenses can also be called "indirect" expenses, as they are not directly associated with the final product. Fixed costs are those that have to be paid even if the company is not producing any goods. VARIABLE EXPENSES are those expenses that change as production changes. Examples can include raw materials or electricity. Variable expenses can also be called "direct" expenses, as they are directly associated with production. BREAKEVEN ANALYSIS - It compares alternative income and expense estimates to determine the suitability of each price. It can also be used to analyze the potentiall profitability of a capitall investment business. ffor a sales-based BREAKEVEN POINT OF A PRODUCT is the point where total re received equals the total associated with the sale of the product. - To provide a complete analysis, the breakeven analysis should include two sections: first one to amally the income/expens relationship, and the second incorporate actual forecasts into the analysis. As a result, if the product can be sold in a larger quantity than that which occurs at the breakeven point, then the business should make a profitt otherwise below this point, it will be a loss. III (LESSON 1) WHAT IS A FEASIBILITY STUDY? Should provide comprehensive analysis and evaluation of the market, operational, technical, managerial and Financial aspects of your business concept or oppurtunity According to Investopedia, Feasibility Study is an assessment of the practicality of a proposed plan or project. The plan or project that we want to assess is a business. P The practicality of the business means it answers the question "is it doable or possible? and "is it profitable? A feasibility study provides cooperative project committees with an understanding of the viability of a business concept. A VIABLE CONCEPT MUST: Create or meet a consumer's need Provide a competitive advantage over a competitor's product or service Provide a superior delivery characteristics Provide a return on investment that is acceptable to the investor, FEASIBILITY STUDY VS BUSINESS PLAN A feasibility study provides an assessment of the viability of the business under consideration. The business plan focuses on what steps are required to be completed if it is decided to go ahead with the proposed business launch. The feasibility study, however, identifies and analyzes several product or service alternatives and recommends the best business model. OBJECTIVE OF A FEASIBILITY STUDY To determine whether or not the business idea is doable and profitable.  If a feasibility study will result to Impossible product or service, then it is not feasible, hence the business idea failed the feasibility study. If a feasibility study will result to loss for the period of time, hence the business idea failed the feasibility study. THINGS TO HAVE BEFORE CONDUCTING FEASIBILITY STUDY 3 RAW MATERIALS 1. Product or Service - this is where the whole study will follow. It should be possible to produce 2. Competitive Advantage - this is what sets your product or service apart from its competitors. In the eyes of consumers 3. Target Market-this is a particular group of consumers at which your product or service is almed FIVE ASPECTS OF A FEASIBILITY STUDY 1. MARKETING SPACE - is the aspect of a feasibility study that shows if the product or service of the business has a demand and supply in the market. 2. TECHNICAL ASPECT - is the aspect of a feasiblility study that determines if the product or service demanded can be produced with the capacity requirement available. 3. FINANCIAL ASPECT-is the aspect of a feasibility study that provides the projected financial position and performance of the business based on the financial assumptions given 4. MANAGEMENT ASPECT-is the aspect of a feasibility study that shows the organizational chart of the business, the job description and specification of each position and also the compensations and benefits an employee of the business will get. 5. SOCIO-ECONOMIC-assess the social economic, and environmental implications of a project or study. It helps determine if the effects of a project are justified.