CHAPTER II

MARKET STUDY

This chapter describes the business marketing strategies, objectives and tactics that will help in

the selling and promotion of the product. The market study indicates the market supply, demand

and market gap. The researcher will also present the marketability and feasibility of the product.

Objectives of the study

A market study is conducted:

1. To gather data regarding on target customer preferences about the product.

2. To determine the marketability of the product.

3. To analyze the possible market share of the product.

4. To gather additional information for the market standing of the mentioned product.

Research Methodology

Research Design

The Descriptive-Exploratory research design was used by the researcher to

conduct the feasibility of the product. This research design is suitable for conducting this

research for the purpose to achieve the objective of this study. Exploratory research, it focused

on studying a relatively unstudied, exploratory research is the method to use when there is

limited knowledge in the topic. This study will also use a descriptive approach which is
appropriate to use when there is limited existing information available on a topic. According to

McCombes (2019), this type research design seek to answer what, where, when and how

questions, but not why questions. A descriptive research design can use a wide variety of

research methods to investigate one or more variables. The research will conduct a survey to

Gauge public opinion on the product we are proposing and evaluate the satisfaction of the public

to the proposed product.

Research Locale

The study entitled “Feasibility Study for Manufacturing Extension wires that can be Activated

and Deactivated” was conducted at Lucena City, one of the known cities in Quezon Province.

The Province is composed of 39 Municipalities and 1 City with a total of 1,980,045 populations

as of 2020. Quezon Province is a good place to hold the study not just because of the researchers

is residing in Lucena City, Quezon Province but also with that total of the population. There is a

higher possibility for us to gather markets as our product are means to use in households.

2015 Population 2,122,830

Table 2.1 Computation
Annual Population Growthfor 2020 population based on annual population growth rate.
x 1.33%
Total 28233.639
5 years(2015-200) x 5
Additional Population for 5 Years 141,168
Total Population for 2020 2,263,998
Research Participants

The respondents of the study were (400) households heads in Quezon Province. The respondents

are chosen since the study is focus in manufacturing a product specifically extension wires that

have a function of activation and deactivation. Which means the respondents will also be the one

could be benefited by this propose business of the researchers. The researcher use Slovin’s
formula to compute the sample size on which the study was conducted. The Slovin’s Formula is

given with the computation below.

N
n=
1+Ne2

Where:

n= is the sample size

N= is the population size and;

E= is the margin of error

Table 2.2 Computation for Total Target Market

Total Household head population 518077
Less: Above Poverty Rate (22.70%) 117604
Target Market 400474

COMPUTATION:
400,474
n=
1+ [400,474(5%2)]
n= 399.60 Or 400 Respondents

The researcher gather the population data of Lucena City including the 39 Municipalities

in Quezon Province namely, Agdangan, Alabat, Atimonan Buenavista Burdeos Calauag

Candelaria Catanauan,Dolores,GeneralLuna,,GeneralNakar, Guinayangan Gumaca Infanta

Jomalig Lopez Lucban Macalelon Mauban Mulanay PadreBurgos Pagbilao Panukulan

Patnanungan Perez Pitogo Plaridel Polillo Quezon Real Sampaloc San Andres SanAntonio San

Francisco San Narciso Sariaya Tagkawayan Tayabas Tiaong and Unisan to compute for the

possible target market of the said product.

According to the official website of Quezon, Province, around 518,077 of the population is

categorized in the total household head population. For this reason only 400,474 was included in

the computation of the sample size because the researcher deducted 22.7% above poverty rate to

the total household head population in Quezon, Province.

Research Instrument

In the study, the researchers used survey and questionnaires data gathering technique, the survey

will be conducted through online by using Google forms to be answered by the participants.

They used questionnaires wherein the respondents had a set of question to be answered

pertaining to the acceptability of the product in the market. The researcher consulted their

research adviser on the development of the research instrument to be used before conducting the

survey.
Data-Gathering Procedures

The researcher asked the approval to their research adviser to collect data and information for the

market study objectives. Upon requesting for approval, the researcher also asked their research

adviser on the survey questions they have made and to see if it is ready to conduct the survey to

the 400 respondents. With the permission and approval of the adviser the researcher immediately

conduct the survey through online platform which Google forms were used. The study was

conducted for 2 weeks with 400 respondents as their preference for the Extension wire product.

After collecting the data the researchers tallied the survey. The results would be the basis for the

marketability of the product.

Treatment of Data

In order to test the objectives of the study, the researchers used statistical data analysis in order to

interpret the data being gathered from several surveys to the selected respondents. The

researchers applied a statistical treatment which is the weighted mean to compute for its

acceptability of Extension wire capable of activating and deactivating product. The quantitative

data then were analyzed using simple average and simple percentage.. These scales were

computed with the use of this formula:

 5f+4f+3f+2f+f
WM=
N
Where in:

WM = Weighted Mean

f = Frequency

n = Number of respondents

For the evaluation of the study, the researchers will use the following scale for the interpretation

of the gathered data.

Weighted point Range of weighted mean Descriptive rating

5 4.21 – 5.00 (HA) Highly Accepted
4 3.41 – 4.20 (A) Accepted
3 2.61 – 3.40 (SA) Slightly Accepted
2 1.81 – 2.60 (U) Unaccepted
1 1.00 – 1.80 (HU) Highly Unaccepted
Formula for Simple Average:
∑x
Simple Average=
N

Where:

X= the value of item

N= is the total number of the items

Formula for Simple Percentage:

f
Simple Percentage= X 100
N
Where:
 f= is the frequency of occurrence of the items

N= is the total number of the items

Demand

The term “demand” refers to a consumers’ desire to purchase goods and services and the

willingness to pay a price for a specific good or service.

Most of the houses here in the Philippines, extension cords is available at their home. A lot of

extension cords brand are now in the market. Extension cords are useful and convenient product

inside the house.

The specific targets for this product are people in each household that is working, that has the

capacity and willingness to acquire the product. Around 107,835 people in Lucena City are
categorized in working population. The researcher plans to sell this product in Lucena City, with

107,835 individuals are working.

Target Market

Keyxtension primary market are the working individuals in each household, ages 18 years old

and above, belong to all class of household in Lucena City. Who has the capacity and willingness

to avail safer and high quality products.

Projected Demand

To determine the projected demand of the above mentioned product, the researchers considered the total

population of working class, market acceptability rate and their willingness to avail the product. Below is

the computation of projected demand:

Total Population 266,260

Working Population Rate 40.50%
Total Working Population 400474
Extension Cord users 80%
Target Market Population 86,268
Willingness to Purchase Rate 42%
Target Consumers- Extension Cord 36,233
Frequency of availing 3 times a year
Total Projected Demand(in units) 108,699
Projected Share in Total Demand- JMCA Co. 6.2%
Projected Demand (in units)- JMCA Co. 6,739
Based on the computation above, the total projected demand of JMCA Co.’s extension cord is

six thousand seven hundred thirty nine (6,739). The projected share in total demand of the

business is half of the lowest market share in the same industry.

Supply

Supply is the willingness and ability of producers to create goods and services to take them to

market. Supply is positively related to price given that at higher prices there is an incentive to

supply more as higher prices may generate increased revenue and profits.

Currently, a lot of companies are manufacturing extension cords here in Philippines. Omni

extension cord is the leading brand in the Philippines.

Existing Manufacturers of Extension Cord

MARKETING STRATEGIES/PROGAMS

Product Positioning Strategy

Keyxtension is the safest and convenient extension cord. It can cut the current from its socket

when not in use to prevent electrical accident. Moreover, you don’t need to unplug the power

plug from the socket, because you can turn it on and off by twisting the plug left and right just

like extension cord with switch button. However, unlike extension cord with switch button

keyxtension is not easy for kids to turn on because it needs to plug in any power plug to twist the

socket. Therefore, keyxtension will only work when it is in use.

Figure 2.1 Packaging

Pricing

The proposed business will use cost-based pricing in determining the price of the product.
This method is said to be the most appropriate strategy to price items that are massively
produced. The pricing strategy adds a markup of 75% to the product’s unit cost in order to
determine the selling price.

Table 2.2 Selling Price of Keyxtension

Cost of goods sold 1,753,263.50

Divided by annual production 28008
Cost per unit 63
Markup Rate 175%
Selling Price 110

Place

The researchers concentrated the distribution of the product to the department store and
hardware since these stores are most likely the place where people can buy ready-to-use
products.
 Figure 2.2 Distribution Flowchart

JMCA co. Department Store and

(Manufacturer) Target Customer
hardware

Table 2.5 List of Department Stores in Lucena City

Unitop
Joy City
Novo
Friend City
La suerte hardware
Ace hardware
Citi hardware

Promotion

Advertising

Promotion is a marketing mix element concerned with the positioning and branding of a
product or service. It also helps to create a public image of the product as well as the company.

The traditional way of advertising will be done to promote keyxtension. The company
will acquire slots at radio stations specifically the Barangay LS 91.1 Lucena for advertising
which will last for thirty (30) seconds each. The marketing and selling department will also
provide printed materials for distribution throughout Lucena City. Social Medias such as
Facebook, Instagram and Twitter will be also used and post a video how the keyxtension works
in order to better promote and introduce the product.