Business Plan Charcoal
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Pamantasan ng Lungsod ng Pasig Alcalde Jose St., Pasig City
BUSINESS PLAN OF SLD COMPANY ON CARBONIZED CHARCOAL BRIQUETTE MADE FROM AGRICULATURAL WASTES
Submitted to: Professor Seigfred Sapang Product Management MM-106
Submitted by: Aban, Robert Louis Ecat, Jessely Espiritu, Rochele Macuja, Angelita Manaog, Ericka Jan Permison, Nora Sibayan, Cherielyn Villa, Nikka
August 01, 2012
VISION: To dominate charcoal industry
MISSION: To create brand that would retain in the mind of the consumer
Charcoal, a form of amorphous carbon, is produced when wood, peat, bones, cellulose, or other carbonaceous substances are heated with little or no air present. Most charcoal is used for recreational, restaurant, and home cooking in the form of charcoal briquettes. A small amount of charcoal is used in certain metallurgical processes and as a filter to remove organic compounds such as chlorine, gasoline, pesticides, and other toxic chemicals from water and air. Before the advent of briquettes, charcoal was used in lump form, often screened to remove pieces smaller than one-half inch. This practice left behind a large volume of unusable fines. It was the accumulation of charcoal fines, the desire to produce a uniformly sized product with uniform burning rates, and the need to supply a cleaner product for home and recreational markets that led to the production of charcoal briquettes. Moreover, government discourages cutting of trees to make charcoal because of environmental issues. The proponents decided that carbonized charcoal briquette made from agricultural wastes (e.g. corn cobs, dried leaves-dried water lily, coconut husks, rotten and the peel of vegetables and fruits) would be a great alternative. In Pasig City, where more than 600,000 residents lives (according to 2007 census of National Statistics Office) that produces 300,000 kilos of garbage a day is a great source of raw materials. According to studies of TAO Shelter-Magazine for Sustainable Human Settlement, each person in Metro Manila generates an average of half of a kilogram of waste every day. Carbonized charcoal briquette when burned, emit a steady heat with low clean flame and therefore environment friendly fuel alternative for cooking and other industrial uses. It is also easy to ignite and burns completely in at least 50 minutes. The technology of making charcoal briquettes was developed by the DENR through its research arm, the Ecosystems Research and Development Bureau (ERDB).
With the advent of technology, majority of household user of charcoal comes from the province Industry users of charcoal includes restaurants and fast food stores who offer grilled products like Mang Inasal, Chick-Boy, Jollibbe, Chowking and other high end and nonbrand diners.
Charcoal in the Philippines, unlike in the United States do not carry manufacturers brand, this is because the industry is not well developed and mostly confined in the backyard of small farmers in the provinces
With the growing awareness of healthy lifestyle, people now begin to patronize grilled based food And with convenient lifestyle, comes fast food who include grilled meats (chicken, pork, fish) into their menu
SLD Company is a manufacturing company dedicated to converting agricultural waste into commercially viable products. We intend to: To achieve sales of Php 3,744,000 by penetrating Jollibee Food Corporation(who owns 70% of Mang Inasal, Jollibee, and Chowking) and different supermarkets and grocery stores over the next 12 months To increase profit by 95% offering small packed charcoal to different market stalls, community stores and small grocery stores over the next 12 months To create the pioneer brand name of charcoal briquette in the Philippines by providing quality products over the coming years To expand our market globally by supplying the product to the well-known brand over the next 1-2 years To develop and innovate charcoal related products by research and development and alliances with charcoal related companies (e.g. grill maker, clinics and spas, water purifying company) over the next 2-3 years
PROBLEMS Competition with commercially improved fuel and modern technology Inadequate source of agricultural waste supply Lack brand equity Stiff competition with global brands
Steps to minimize risk 1. Charcoal cannot compete head on with the use of LPG- liquefy petroleum gas and electricity but it still has functions in the household and business like grilling and barbecuing. And some households prefer to use charcoal as their fuel because of low price and small retail packaging. 2. Direct supply to restaurants, fast foods and hotels 3. Partnership with government agencies who manage waste disposal. Agricultural wastes that are pre segregated from major markets can be delivered in our company site. 4. Creating brand name and printing it in our packaging to introduce brand awareness. Collaborating with related product such as matches and lighter companies to offer it in conjunction with charcoal. For instance, a sack of charcoal briquette with one free lighter or match. 5. Intensive research in global markets. Supplying to different restaurants, hotels, burger stands and non-brand conscious part of the market.
OPPORTUNITY 1. High cost of petroleum products 2. Free advertising with government partnership 3. New environmental consciousness that highlights conservation and emphasis on reusing of waste products. 4. Globalization
SALES FORECASTS/GOALS The future trend in charcoal used domestically is difficult to forecast with precision due to inadequate statistics especially in the Philippines and other developing countries. But the steady growth of population and the rising price of oil and gas based energy causes the demand for charcoal in the Philippines and other developing countries to expand constantly. As per the statistics of Department of Energy the percentage share of household and businesses using charcoal as fuel is 1.5%, and that is 1,350,000 of the entire population of 90,000,000 (projected population of the Philippines as of 2012 as per National Statistics Office). And households used at least 3kgs of charcoal per day. The demand for the entire country is 4,050,000 kgs per day. SLD Company will be able to supply only 624,000kgs per month which will increase by 5% every year. This is base on the capability of the company to supply the demand of the market. Table 1 Sales ForecastUNIT SALES (KGS) 2012 7,488,000 10.00 2013 7,862,400 10.00 2014 8,255,520 10.00 2015 8,668,296 10.00 2016 9,101,711 10.00
UNIT PRICE (KG) TOTAL SALES
74,880,000.00 78,624,000.00 82,555,200.00 86,682,960.00 91,017,108.00
Table 2 Cost of Good Per PiecePlastic Sticker Utilities Tapioca Flour Chemical Labor Php Per piece 0.15 0.2 0.02 0.8 5 0.14 6.31
MARKETING OBJECTIVES 1. To increase profit by 95% by partnering with different fast food chain company 2. To increase sales by 5% every year by offering charcoal in small packaging 3. To create brand recognition for charcoal products
MARKETING PROGRAM 1. POSITIONING STATEMENT General Marketing Objective(s): To build good image, increase product awareness and inform consumers about the effectiveness and benefits of the SLD carbonized charcoal briquettes.
Rational for objective(s): For the product to be trusted and to gain loyal consumers, the product must have to build good reputation and fully inform and aware the consumers about its existence.
Positioning Statement: To household and business, SLD is the brand of carbonized charcoal briquettes that is cost-effective due to it is cheaper, comes in small packs suited for daily earners budget and burns longer and more steadily.
2. TARGET MARKET(S) Primary market: Household dominates the whole population, price conscious population segment due to priorities and expenditures prefer buying in retain than in bulk. Secondary market: Food and Beverage Industry Includes restaurant which uses charcoal in grilled products Includes liquor manufacturers in filtration and purification Profit oriented Price sensitive
Metal Industry Price sensitive Profit oriented Uses charcoal for electroplating and metal purification processes Environmental sector Service oriented Environmental sensitive Aims to promote green environment Uses charcoal in spill cleanings, air and water purification, ground water treatment and large scale water filtration system.
3. PRODUCT STRATEGY Carbonized charcoal briquette is a fuel and was used blast furnaces until the advent of coke. Today most charcoal is used for recreational, restaurant, and home cooking in the form of charcoal briquettes. A small amount of charcoal is used in certain metallurgical processes and as a filter to remove organic compounds such as chlorine, gasoline, pesticides, and other toxic chemicals from water and air. Product Objectives o Carbonized charcoal can be developing to use as beauty ingredients in spas and salon. EX. Ponds facial wash with carbon o Water filter
4. PRICING STRATEGY o Brief Description The company will use market penetration as a pricing strategy and retail pricing strategy to satisfy the customer in buying carbonized charcoal in lower price and at the same time to maximize the companys profit. o Strategy Market Penetration Pricing Strategy The price is set at a lower level to serve as an instrument for penetration mass market.
Retail Pricing Strategy The company will offer retailing strategy to encourage customer to buy carbonized charcoal. And also has a lower price that the customer can avail to products.
5. ADVERTISING STRATEGY
A. NATIONAL ADVERTISING
BRIEF DESCRIPTION The company use to adver