This chapter is where you will be able to read the entire description of the Des chocolate soap physically, and substantially. The proponents also gave emphasis on the benefits the consumer could gain upon using the product which is the smoothness of the skin. This is also where they can see the demand and supply analysis as well as the price study of the product.
The product is chocolate soap. It shall be named Dés as a play to the word ‘Desire’. It shall take the form of a solid bar soap. It is a soap intended for bath that contains certain ingredients extracted from the cacao fruit turned into chocolate. The weight of the soap will be 100 grams per bar excluding the packaging. This soap contains natural oils and essences that will make it good for the skin. According to an article in Day Spa magazine: “the antioxidant-rich seeds of the cacao tree work wonders on the senses, and tighten, firm, and hydrate the dermis.” All antioxidants fight free radical damage, reduce skin inflammation, and are soothing for the skin. There is an age-old myth that chocolates trigger acne and are responsible for other skin problems like oily and dull skin. However, lying to rest this myth, researchers have proven it otherwise. It has been proven that a healthy share of chocolate can give you fabulous skin that radiates health and beauty(Alphonse, 2011).
The following are the active ingredients in chocolate that has great benefits when it comes into contact with the skin (Alphonse, 2011): * Flavonoids, which are a type of antioxidants, contain a compound called epicatechins. This component has antiseptic and anti-inflammatory properties which protect the skin from damage, caused due to pollution, exposure to harmful chemicals and smoking. * Collagen and elastin play a key role in preventing wrinkles and skin discoloration. However, free radicals present in the body tend to destroy these components of the skin, thereby triggering skin problems. Chocolate, is a rich source of flavanols, a type of flavonoids, which help in fighting against free radicals. They also repair damaged cells, making the skin healthy and blemish-free. * Cocoa, the primary ingredient of Dés Chocolate Soap, is known to increase the moisture in the skin, making it hydrated, and thereby preventing its flaking. * Chocolate helps in exfoliation of dead cells, increases the blood flow and promotes cell renewal, through the presence of polyphenols which has anti oxidizing properties (Chitira, 2010).
Strategic Management Assignment two On Strategic Choices made by Nestle (Chocolate & Confectionery Division) Introduction The strategic Choices made by Nestlé’s Chocolate & Confectionaries division are discussed on the basis of the cost leadership strategy, differentiation strategies and Focus strategies used in the Generic strategies and in the corporate level strategic directions used by ...
* The vitamins and minerals present in chocolate makes it a very good moisturizer for the skin.Chocolate also contains shea butter and cocoa butter which gives it excellent nourishing and skin softening properties (Chitira, 2010).
Déshave moisturizing effect that will suit both the face and the body, leaving them smooth and moisturized. Another implied characteristic of Dés Chocolate Soap is its effect on the feeling of the user. Chocolate is well known to have intense sensory properties. According to a New York Times article, just the smell of chocolate will activate pleasure-anticipation and food-reward neurons. Its absorption through the skin, coupled to smell activation, will increase endorphins, which could help make people feel elated. As a soap, the product Dés shall altogether contain hygienic properties but not lose its moisturizing effect.
The product will be structured to look like a bar of chocolate, that is, it has chocolate color, chocolate smell and should physically look like a replica of a bar of edible chocolate. It shall be packaged in an attractive and equally elegant box. The packaging should trigger the interest of the target market and should stand out from other products’ packaging. The packaging should also make it clear that the product is soap, not edible chocolate – stressing the hygienic and moisturizing properties of the soap. Dés is a product that makes it possible the fun and elegance chocolate has to be on soap.
The Ansoff product-market matrix helps to understand and assess marketing or business development strategy. Any business, or part of a business can choose which strategy to employ, or which mix of strategic options to use. This is one simple way of looking at strategic development options: Each of these strategic options holds different opportunities and downsides for different organizations, so ...
Questionnaires were used in order to identify the target market for Dés Chocolate Soap. By using stratified quota sampling in the floating of the questionnaire, the target market for the chocolate soap are females ages 18 – 35 who are from Dagupan City whether as a resident, a student or a visitor. They represent the group that has the highest number of respondents answering yes to the question ‘Would you like to try chocolate soap?’Majority of the target market are students studying in universities and colleges in the city. However, the proponents will not limit the strategies to the studentsonly. The strategies and plans for the product should come to terms with females in the classes A, B, C, and/or D economic status. This is becausethe image perception to the soap will appeal to those in the higher classes, while the affordability will appeal to the lower classes. With these conditions considered, chocolate soap should be performing well at the chosen target market.
With today’s new era, there is a noticeable dynamic change found everywhere. Something is being introduced and something is fading to obsolescence. Dés chocolate soap, which falls under the category of soap industry, is indeed a part of this dynamics. One consideration the proponents see is the fact that mankind has unlimited wants. And one of the major factors that they need to consider in doing the feasibility study is the assumption of demand, referred to as the willingness and the power of the buyer to purchase the product, Dés Chocolate Soap.
Growing urbanization through the expansion of business process outsourcing (BPO) in the Philippines provided more opportunities for the educated younger population. This resulted in higher purchasing power for this segment, and thus allowed faster growth for male- and female-specific bath and shower products in 2011. Male-specific products such as adidas Body Wash, Nivea for Men and Dove Men+Care continued to experience positive growth. Female-specific products such as Olay and Johnson’s Body experienced the same. (Report Linker, 2011)
Table of Content Chocolate History3 1. Market Area3 2. Market Structure 3. Market 4. Market Dynamics 5. Market evolution 6. Market conjuncture 7. Demand and offer 8. Prices and tariffs 9. Imports and exports Chocolate History Chocolate has been used as a drink for nearly all of its history, but until the 16th century, no European had ever heard of the popular drink from the Central and South ...
Des is a soap intended to make the skin smooth and healthy. The proponents believe that not the entire market of soap industry would always prefer to select the soap specialized for whitening and anti-aging and other soap variants. That would mean that Des chocolate soap has a high chance to garner market share into this kind of industry because there are still consumer who would prefer to use soap that will make skin simply improve its texture. By this way, the proponents are also educating the consumer to be contented on their natural color. Using the Pareto Analysis, the proponents computed the market share and demand for Dés Chocolate Soap.
ThePareto principle serves as a general reminder that the relationships between two variables are not balanced (Investopedia US., 2012).In this study, the Pareto analysis was associated with the imbalance between the major and minor players in the industry. 80% in the industry is played by major players and 20% played by the minor players. The business chose Pareto Analysis as their basis becauseit is the most appropriate approach to the analysis of the data since there is limited information about the industry.The business will enter the 20% minor industry players which produces 248 bars of soap a day. Dés Chocolate Soap will produce 300 bars of soap every week which will give them 4.03% market shareof the 20% supplied by minor players.
Using an annual industry growth rate of 4.2% (Report Linker, 2011) the table above shows the projected demand for the target population of 17, 174 individuals from the year 2012 – 2016. Supply Analysis
After the dexterity of demand analysis, the proponents would also emphasize the importance of supply analysis which pertains on how much will be the quantity of Des chocolate soap that should be disseminated to the target market on a specific place and situation. Using the 4.03% market share of Dés Chocolate Soap, the proponents will supply 14, 400 bars of soap every year. That would amount to Php 810, 000 of sales on the bars of soap on 2012.
Explain what is meant by the term "an economic model" and outline a model of price and output determination in a free market. Examine the effect of a change in real disposable income on equilibrium price and output. An economic model or theory is a simplified explanation and analysis of economic behaviour. It allows us to predict, and therefore intervene, if we do not like the outcome of a ...
Assuming an increase in demand of 20% annually,based on 1.15% growth rate in the city and the 44% of the respondents saying they want to use chocolate soapeveryday, including the 42% percent who wants to buy soap twice amonth,ceteres paribus, the table above shows how much bars of soap is supplied to the market from 2012 – 2016.
The price associated with Désis fifty-six pesos and 25 centavos (Php56.25).
A lot of respondents from the survey report said that they would be willing to spend 50-100 pesos for a bar of chocolate soap (42%), and Php 56.25 is a good price to start with. First, because Dés probably could be new to the consumers and giving a price like this would attract them to buy the soap, and second is that, given the allowances of students, any price higher than Php 56.25 could already be expensive for them.
Technically, the price could cover the costs associated with producing the product and still come up with a few pesos left for profit. Comparing the Dés’ price with other “mass-used” soaps’ price like Likas Papaya, the chocolate soap surely faired enough. And Dés is a soap containing special components. If other luxury soaps are taken into consideration, these soaps’ price surely is a number higher than 56.25. The table below shows the prices of other brands of soaps in the industry.
Conclusively, Php 56.25 should be the ideal price because it is suited to the students’ budget, it is very cheap for a chocolate soap and the students will surely get more than what they pay for.
Factors Affecting the Market
Factors Affecting Demand
Several factors affect the demand of every purchaser as purported in most books of Economics. A change by one or combination of them will basically change the demand data of Des chocolate soap. The factors affecting demand includes: Change in taste and preferences, number of buyers, income/allowance, prices of related goods, price expectations, the marketing mix, education, marital status, skin type and social factors. * Change in Taste and Preferences- A favourable change in consumer tastes and preferences will change the demand data .Des chocolate soap is a new product so most of the target market will divert into it to try and to compare on the other soap they had used previously. There has been a shift in soap use from basic soap to specialty soaps, thus the emergence of varied specialty soaps in the market. Because Des Chocolate Soap is specialty soap, the proponents can work this advantage to their favour.
Supply and demand plays a vital role in the economy. Price is the central determinant of both the demand and supply, for example the higher the price of a good or a service the less the product is demanded. In circumstance where the price goes down, demand increases. The response of price and quantity demanded create an inverse relationship between the two. Whereas demand portrays the consumer ...
However, when people change their preference on soaps and shifts to another type, Des Chocolate Soap will surely be affected. * Change in the Number of Buyers- The increase of the population of the target market will relatively change in demand. Females are in a deep accolade in searching on products that will improve their complexion and with today’s generation, males too, are getting conscious to in improving their skin so there is great number of buyers for soap. Des is of their options. Having an annual growth rate of 1.15% annually, and the fact that more people converge to Dagupan City for different purposes assures that number of buyers will increase every year. * Change in the Economic Landscape of Dagupan City –Though the city is known for its Bangus industry, other industries are also booming. The proponents see that this will affect demand in a sense that people will be eager to get a taste of the industry that’s been mushrooming in their place. * Income/Allowance–The allowances of students, as well as the income (for working students) will affect the demand for Dés Chocolate Soap.
* Prices of Related Goods- There could be either an increase or decrease of demand when there is a change of prices of related goods where it extends on the application of substitute good (one that can be used in place of another good) and complementary good (one that is used together with another good).
* Substitute good- Inflation happens anytime and anywhere. Buyers have the mentality of being practical so they often purchase cheaper products in replacement of more expensive ones. This is one advantage of the product since it was priced better than the other brand. * Complementary good- Due to the strong demands of cosmetic and other beauty products, we believe that Des will be included as a complement together with lotions as well as creams being a part of their sophistication. (Economics, -McGraw-Hill,16th Edition) * 4Ps(Product, Price, Place, Promotion)-The 4Ps contributes a large portion affecting the demand where : * The Product- is the main reason why the producer exists creating demand on their target market.
Product, Price, Promotion & Placement Now that we have analyzed our marketing research and we have identified our potential target markets as being in the young adult to middle age adults and from the lower middle class and upward income bracket it is time to develop our plans to reach into these markets and grow IPT. How we target these markets is a series of techniques known as product, ...
* The Price- is an obstacle from the standpoint of the consumer, who is on the paying end. (McGraw-Hill,16th Edition,pp.45) Consumers are price conscious so there is a higher chance that they will choose Des chocolate soap because of its low price. * Place-one of the important factors to consider that could alter the demand Is the location for this would provide the transparency whether the product has a high accessibility or not. * Promotion- will be a big help to increase the demand of the target market because it lets the prospect know that your business exists, giving * Education –The degree of education of every consumer may vary that may also alter in lieu with their comprehension about the product specifically its benefits. * Marital Status-Diverting women’s status from single to married would also change the demand data. Single women are vigilant about their physical appearance which includes their complexion.
While married women too would mean that they must exert more effort to maintain their good looks and the possibility of trying and continue patronizing the Des chocolate soap is amenable. * Skin Type- There are lots of different whitening product already flooded on the market as well as other variants like antibacterial, sulphur soap. But we have to admit that a natural complexion will always return on its natural form annealed by the contentment of every mankind. So smoothening products like Does chocolate soap could garner interest for the people want a natural complexion. * Social Factors-The influence of one’s group may increase the demand of Des chocolate soap for the easy relaying about the product.
Factors affecting Supply
Like demand, supply too, has several factors affecting. The proponents must bear in their mind that the main reason why there is a change in supply is because of the cost. Other factors affecting supply are resource prices, taxes and subsidies, prices of other goods, technology, and the number of sellers in the market. * Resource Prices-Price do fluctuate, sometimes there is inflation and eventually deflation. In connection with this, if the price of the resource for the production of Des became high, therefore the output price is also high and vice versa.The product’s ingredients have shown to be stable in price in the last few years, according to observation. It does not seem to show that these fluctuations in prices will occur in the next five years, all things being held constant.
* Taxes and Subsidies –Although taxes are intended for the development of our country, business owner consider taxes as costs, therefore Des tend to lower its supply when they have a high tax. While subsidies are being given by the government to lessen the burden of business owners in production cost, therefore the output price becomes lower. * Price of Other Goods-This is when the producer switches to other products when they realize that the prices of the other goods are high and vice versa. * Technology- In comparison with resources and technology, resources are more costly. Technology is an important tool for the success of the business because this helps to produce more units of output. By the aid of technology, which, in this case is the soap making machine, the supply of Des chocolate soap may tend to increase because of fewer resources.
Product and Positioning
DésChocolate Soap will be structured in accordance with the results of the survey conducted. The primary component, which is cocoa butter or chocolate, will be used as the primary differentiating factor from other soaps present in the industry. As a soap containing a considerably ‘new and innovative’ ingredient, the proponents assume that people will be curious with the product. This way, Dés Chocolate Soap will be branded as the ‘new bath soap that gives the feeling of luxury and the benefits of chocolate to users’. The features of the product are:
The logo is a drawing of four inclined squares with brown or chocolate color. This is a representation of chocolate bars – fitted for the product which is chocolate soap
The brand name
The name of the product, Dés, is used to design the brand name of the chocolate soap. As mentioned earlier, Dés is a play to the word desire. Desire because chocolate is somehow desired by many people.
The sweetest touch…This will be the tagline for the product. It is a metaphor to the contact of the soap on skin. And since chocolate is sweet, it was used to describe the sweet touch of chocolate on skin when consumers use the soap. The tagline is included in the packaging of the product.
The price of Dés Chocolate Soap is P56.25. This was formulated using a suggested computation by the Sales Management professor of the proponents and a market-oriented pricing. The results of the survey questionnaire, provided in the table below were made as a basis for pricing the product. Integrated with the market response, a cost-plus pricing was used in order to come up a considerable mark-up that wouldsustain the conduct of the business. The following table shows the market’s ability to buy Dés Chocolate Soap.
Table 2.4 shows that 42% of the respondents are willing to buy the soap for Php 50.00 – Php 100.00. With this information, the proponents came up with the price which was based on the computation below.The ‘missing’ represents the respondents who are not willing to buy the soap. Cost of Raw Materials (for production of 100 bars of Dés Chocolate Soap)
In comparison to other players in the soap industry, Dés Chocolate Soap’s price could be considered a bit high by some, while considerable to others. For example, those who use Sika or Dove will find the price high, while those who use Likas Papaya or Maxipeel might find the price of Dés considerable. Considering this, the proponents might, in the future consider lowering the price of the soap when the market share gets bigger and when the demand increases.
The people of Dagupan City, especially the women, are the market for the chocolate soap. Therefore, stores should be put up to strategic places. One of the primary places where women go are malls and shopping centers. This is where people come and go. Nepo Mall Dagupan, as one of the leading malls in the city is where the business center of Dés Chocolate Soap be established. Downtown-bound jeepneys also pass the mall. Therefore, the business center location should be strategically put up in Nepo Mall where people have more chances of coming in contact with it. The store should be placed in a fairly high-end looking kiosk or a mall space. This can add up to the connotation of luxury and elegance. Also, when people are taking a stroll down the busy place, they should have a high chance of noticing the store because of its appearance. The space should offer Chocolate soaps to the people and shouldbethe place where retailers can pick up the product and make orders.
The product, also, could be distributed to convenience stores and supermarkets and groceries like Watson’s, 7-eleven, CSI and Robinson, among others, to provide an extra fame and exposure for Dés. People, mostly in their free time, go to malls and convenience stores. This shall be used as the reason why the chocolate soap could be distributed to malls and convenience stores. Also, this will get this local product be lined up with nationwide soaps and with these, Dés should stand out. People will notice this chocolate soap because they don’t see it often. The supply of soaps should come from the business center. Another distribution means is the retailing of the soap to individual persons for sale to end-consumers.
It is very ideal that a chocolate soap could be sold from a store of its own and at the same time, be distributed to marketing channel/intermediaries like retailers. The figure below shows the multi-channel distribution that the proponents will be using for the product. Channel 1 is a direct channel. The product will reach the end-consumers directly from the manufacturer. Channel 2 means that Dés Chocolate Soap will go from manufacturer to wholesaler to retailer, or from manufacturer to retailer, and eventually to the end-consumers.
Figure 2.1Distribution Channels of Dés Chocolate Soap
The product would be promoted in different ways. Due largely to the influence of televisions to target market and to the fact that femalesages 18-35 spend time watching TV, Dés should have an advertisement at the regional TV stations like ABS-CBN Channel 32 and GMA TV 10. But this would be done when the business can already handle the costs.This will serve as a mean to gain awarenessfor the product from the people ofDagupan City. The advertisement should feature a woman using the soap and feeling beautiful about her skin. This is to reflect the benefits the people will get from the soap. The TVC could also be uploaded to social networking sites like facebook.com and youtube. This is due to the fact that the internet has a strong influence to the target market, especially students. This way, the promotional strategies of Dés Chocolate Soap will easily spread to the target market.
Another plan is to give out “extras” when buying soap, especially so in the first few weeks – like a limited promo. When the customers buy a box of soap, the extra should be a smaller version of the soap attached to the regular box. This could be used for the face, so the soaps could be separate for the face and body; and also on trips where pople have to pack smaller soaps.
The proponents will also distribute leaflets and flyers prior, during and subsequent to the product launch. Tarpaulins will also be located to different places in Dagupan City. One more strategy is to give out loyalty cards to frequent buyers where they get discounts on their next purchases. These promotions are just a few to mention. A lot could change as the taste of the market change. Cited here are those that would entice a student to buy the soap, especially on its launch.