answer 3.1-3.4

MARKETING PLAN

1.1 Description of the Product

The product is a Crutch with detachable umbrella holder. The product is made up of adjustable aluminum depending on the height bracket. The detachable umbrella holder is also made up of alloy which any umbrella can be used. The frame of the forearm crutch is usually made from an aluminium alloy. Aluminium has a low density and thus a low weight, to make it mobile and easily manoeuvrable. It also has high strength so that the crutch will support the full weight of a person without bending or buckling. Aluminium is also easy to machine and corrosion resistant to ensure a long life.

Plastic cuffs are used on the forearm crutch. It is usually made from a plastic - such as Nylon-6/6. It has good abrasion and hydrocarbon resistance, to handle the repeated friction and contact to skin when walking. It also has high strength and stiffness to provide sufficient support to the user.

The grip handles of the forearm crutch can be made from either the same plastic as the cuffs or from rubber. The plastic provides more wear resistance and durability, but the rubber is more comfortable and can also absorb more shock.

The tip of the forearm crutch is made from rubber. The rubber provides plenty of grip and stability to prevent slipping when walking. It also has good shock absorption to dampen the shock of walking.

1.2 Comparison of the Product with Its Competitors

This crutch with detachable umbrella holder is very unique since a crutch with umbrella holder is new to the market. This works as both an umbrella and a crutch that can assist the PWD's in walking, as well as, can be used during any seasons in the country either sunny or rainy. There have been many crutch products offered that can be bought in the market or through online shops; however, the unique factor of this product is that the crutch or cane is detachable from the umbrella. In this case, the PWD can both use the crutch and the umbrella at the same time. In addition, this umbrella can be easily removed from the crutch and very easy to use.

1.3 Location

As finding a good spot to stand a business, the location of the business is located at KM. 5 Balili, Along National Road, La Trinidad, Benguet Philippines near Jollibee foods Corporation. La Trinidad is the capital of Benguet, It is well-known for its beautiful tourist spots. KM. 5, La Trinidad is a passageway that connects different places like Baguio City, and other provinces of Benguet.

1.4 Market Area

According to Rodrigue, 2020, Market area is a surface over which a demand or supply offered at a specific location is expressed. The business would be supplying crutches to the different hospitals in Baguio City and to walk-in customers with prescriptions from doctors of what specific crutches they need. Hospitals in Baguio City include BGH (Baguio General Hospital) and Medical Center, Saint Louis University - Hospital of the Sacred Heart, Notre Dame de Chartres Hospital, Pines City Doctors Hospital, and Baguio Medical Center.

1.5 Main Customers

It is an important task to know who the main customers are when starting a business. It helps build a foundation when formulating a market strategy. The main customers are the groups of people who have specific needs and wants that the business wants to provide. They are the ones who the business wants to reach.

Needs of people differ as time passes by and because of this people look for products that can serve their needs and wants. Our generation today, people usually tend to look online for the products and services that they need and people have their own reasons for looking for products online. One reason is that some customers are not capable of going outside because of physical disabilities.

The main customers of the proposed business would be the people who have walking disabilities that have a hard time using umbrellas while using their crutches. They also considered people with other disabilities who want to integrate the umbrella holder in their physical aid tools. The main customers would therefore be those people who have walking disabilities, those who are looking for crutches for physical therapy, and the new patients who are recommended and/or required by doctors, physical therapists, or healthcare professionals to use crutches.

1.6 Total Demand

According to Chappelow, 2020, Demand refers to a customer's desire to purchase goods and services and are willing to pay a price for a specific good or service. Demand would depend on how many customers are going to buy the product and are willing to pay the price for the product.

Patients that need to use crutches, as stated above would be the main customers of the product, the proponents have gathered information from the Philippine Statistics Authority to determine the projected demand for the product.

According to the PSA, the average annual population growth rate is 2.36%. The table below was computed by adding 2.36% to the annual population every year. It shows the annual population for the years 2015 to 2020.

Year

Population

Persons with disability

2015

358,124

4,297

2016

366,576

4,399

2017

375,227

4,503

2018

384,082

4,609

2019

393,147

4,718

2020

402,425

4,829

2,279,581

27,355

The table above shows the average number of persons with disability annually. It was computed by multiplying the annual population per year by 1.2% according to PSA. The business plan however needs information of the annual population for the next five year so the proponents used the same computation above to determine the projected annual population for the years 2021 to 2025 as shown in the table below.

Year

Population

Persons with disability

2021

411,922

4,943

2022

421,643

5,060

2023

431,594

5,179

2024

441,780

5,301

2025

452,206

5,426

2,159,146

25,910

Therefore the total demand for the next five years is 25,910 which are those persons with disability.

1.7 Market Share

Market share represents the percentage of an industry, or a market's total sales that is earned by a particular company over a specified time period. It is calculated by taking the company's sales over the period and dividing it by the total sales of the industry over the same period. It is commonly used to give a general idea of the size of the company in relation to its market and its competitors.

1.8 Selling Price

The average price of crutch here in the Philippines ranges from 500-800 depending on its quality. Since our product has a unique feature of an attachable and detachable umbrella. This can be sold for at least 700-1000, depending on the quality. The user would prefer paying a small amount more for the added benefits of our product.

1.9 Sales Forecast

One important factor of success is good planning, and this involves the forecasting of sales; that is determining the amount of sales in advance. It helps to estimate the amount of production to be done. One barrier of having effective forecasting is the uncertain environment

Sales can be forecasted through:

1. Conservative Estimation (50-60 %)

2. Moderate Estimation (60-70%)

3. Aggressive Estimation (70% and Above)

The sales forecast for the first five years is as follows:

Year

Sales in (qty)

Every pair of Crutches

Sales (in amt)

1200 per pair

2021

3,000

3,600,000

2022

6,000

7,200,000

2023

9,000

10,800,000

2024

12,000

14,400,000

2025

15,000

18,000,000

1.10 Promotional Measures

Promotional Advertising Strategy

The company decided to put a strategic cost in terms of promotion by giving a free umbrella for the first 50 customers who will avail our product. Another, since PWD's are the main customers we will be given a discount not only 20% which is a standard discount of a PWD but up to 25% depending on the amount of crutches with umbrella holders they will purchase. The team assumed that there would be a customer every day.

The advertising strategies that will be used by the company is through the use of social media platforms like Facebook, Instagram and Twitter. Since many people are into social media it is better to promote products here to give awareness to our brand and also to connect to customers and to help the company boost its sales. This is a free platform where we can lessen the expenses of our company

1.11 Marketing Strategy

The market strategy that we use to introduce our product is through advertisement and social media. For advertisement we can post it on magazines, billboards, direct mails, and newspapers and for social media we will post the item with complete information and guidelines. We make sure also to accommodate inquiries in time and no late responses.

1.12 Marketing Budget

The budget that will be needed in promoting the product is around P300,000. The possible distribution channels are selling directly to consumers, retailers, supermarkets, wholesalers, and pharmacies.

2 PRODUCTION OR OPERATION PLAN (Choose what is appropriate to your business, Production if it is a product and Operation if otherwise)

2.1 Production Process

For the production process first you need to adjust height brackets according to the product standard or market requirement. Second, determine the Chemical mechanism to aluminum for adjusting it into a rod size. Third, Adjoining the rod as per the requirement of the product. Fourth, Attach the detachable bracket for the umbrella holder. Fifth, process the aluminum alloy for manufacturing forearm crutch. Sixth, Deploy corrosion-resistant aluminum only in the production process then use Nylon 6/6 for plastic cuffs on the forearm crutch. Finally, use rubber for grip handles and not the plastic because rubber is more comfortable than plastic due to its good shock absorption to dampen the shock of walking.

2.2 Fixed Capital

Buildings :

Main unit : 5,000,000

3 subunits : 4,500,000 (1,500,000 each)

Machinery :

Extraction machinery : 2,500,000

Clotting machinery : 2,000,000

Auto-hammer : 500,000

Welding machines: 3,000,000

Loaders Cranes : 3,000,000

Punch fitter : 300,000

Auto-Assembler : 600,000

Computer systems : 2,500,000

2.3 Life of Fixed Capital

The life of the fixed assets (buildings and machinery)

Buildings :

Main unit:40 years

3 subunits: 25-30 years each

Machinery :

Extraction machinery: 15 years

Clotting machinery: 15 years

Auto-hammer: 5 years

Welding machines: 7 years

Loaders Cranes: 10 years

Punch fitter : 3 years

Auto-Assembler: 5 years

Computer systems: 6 years

2.4 Maintenance and Repairs

The main aim of equipment maintenance is to maintain the functionality of the equipment and to minimize its breakdowns.

For mechanical equipment, the maintenance management will involve repair, replacement, and serving of tools.

It also ensures the proper working and to intercept fluctuations that occur in the duration of the production process.So for the maintenance, the manufacturing team and production manager needs to be concerned and the steps should be : monthly assessment of maintenance. Focus on the execution plans for repairing the damages. Yearly oil and plastic paint to the building and furniture adjoined to the building. Weekly physical verification of machinery. The spare parts are available locally

2.5 Sources of Equipment

Crutches are medical devices designed to aid in ambulation, by transferring body weight from the legs to the torso and arms.[1] They are mainly used to assist individuals with lower extremity injuries and/or neurological impairment. Most crutches classify into the following three categories: axilla, forearm, and platform.

Our main sources of equipment is the JEA STEEL Industries, Inc. ,a Filipino-owned company manufacturing world-class light gauge steel profiles for drywall partitions and suspended ceiling assemblies, t-runners, hat-type and c-purlins, corner-beads & door jambs framings. Produces premium quality products that are attune to the needs of the consumers. Support the global movement to preserve our environment by taking the lead in manufacturing environment-friendly products.

Another is the DIGICARE Medical Products Incorporated Digicare Medical Products is one of the most trusted suppliers of medical equipment and supplies. They have been catering to some of the Philippines' leading dealers and wholesalers of medical products for more than a decade. They guarantee to their consumers that they only offer top quality, reliable and durable products at competitive prices.

2.6 Planned Capacity and 2.7 Future Capacity

Since pandemic has arisen and triggered almost all business in the world to close, we are now forced to do the new normal. The proponents decided to open the factory from Mondays to Fridays 8:00 AM to 3:00 PMPm only and the two remaining days are reserved for disinfection and cleaning the factory to avoid the spread of the said virus. Some of the materials used will be available in the local market, whereas others will be on the other country. The company will also be the delivery service for some buyers who have a bunch of orders.

We have kept our capacity a bit larger than what is required today since we are new in the market and there are only a few competitors who have upgraded their product crutches. We expect that our product will be widely used since it is new and badly needed by the PWD to decrease effort in holding their umbrella, also this can be used in any weather.

Future Capacity Utilization:

Year

Capacity Utilization

Sales ( in qty)

2021

75%

7,500

2022

80%

16,000

2023

85%

25,500

2024

90%

31,500

2025

100%

40,000

2.8 Terms and Conditions of Purchase of Equipment

The purchase equipment that our company avail will be paid monthly depends on the paying terms condition where the equipment was purchased. The rental equipment at red cross will be paid full and the payment depends on how long the equipment will be used.

2.9 Factory Location and Layout

The factory is located at KM. 5 Balili, Along National Road, La Trinidad, Benguet Philippines near Jollibee foods Corporation. The arrangement of the factory is U shape layout. Raw materials enter one side of the U and at the other side of the U is the finish or sub-assembly of the products.

2.10 Raw Materials

The raw materials that are required for the crutch with detachable umbrella holders are aluminum, foam, fabric, and rubber stoppers. For aluminum the materials needed must be 2,000kg. Foam materials needed 1,000 meters. Fabric needed 500 meters. Rubber stopper materials needed 500 pieces.

2.11 Cost of Raw Materials

The overall cost of raw materials is 350,000 pesos. The total price for aluminum is 150,000 pesos. For the foam, the total is 100,000 pesos. Fabric total price is 50,000pesos. Lastly for rubber stoppers is 50,000 pesos.

2.12 Raw Materials Availability

As stated by International Financial Reporting Tool, raw materials can be explained as substance or material used in the manufacturing or primary of goods. Raw materials are used to produce the expected outcome of the product that will be used in the manufacturing process. When the raw materials are selected, the processing of these materials should be properly selected in order to minimize costs.

The proponents have chosen suppliers such as, JEA Steel Industries, Inc., E-Wha Foam Philippines, Inc., RK Rubber, and Filtra Timber. These suppliers will be able to provide the necessary raw materials needed for production. The JEA Steel would be the one to provide the aluminum steel needed for the production of the crutch frame, E-Wha Foam would be the one to provide the EVA(ethylene-vinyl acetate) foam on the grips and crutch pad to support the user, while RK Rubber would be the supplier for the rubber support at the base of the crutches and the hand grip coating, the Filtra Timber would be the supplier for the wood at the base of the crutch that is covered by the rubber.

According to industry gov., "Philippines sits on vast reserves of minerals, both metallic and non-metallic. Aside from gold and copper, the country is also rich in iron ore reserves of almost 300 million metric tons". They said that the rapid development of the Philippines resulted in higher demand for iron and steel products domestically and regionally and that the Philippine economy has been performing beyond expectations over the years. The manufacturers of iron and steel in the Philippines have expanded their production which would indicate reliable availability of raw materials for steel. The following raw materials such as EVA foam, wood, and rubber would only be utilized in small portions, thus the availability of the raw materials would be efficient enough to produce the needed parts for the crutch and spare parts.

As for the equipment for the production of the crutches, the equipment needed will be rented from Red Cross Philippines.

2.13 Labor

There will be a need for local staff in Baguio City for the production and manufacturing. It is estimated that one manager and four supervisors are needed for the highly skilled employees. There would also be a need for lightly-skilled operators and laborers for the flow and production of the raw materials. The responsibility of the laborers would be to support the operators, the operators would be responsible for the use of the machine and the transportation of the raw materials. The requirement for laborers would have to be an elementary graduate, the requirements for the operators of the equipment would be a certificate of equipment management from TESDA, for the operators of the transportation which requires vehicles would be a driver's license and that he/she is a high school graduate.

The responsibility of the supervisors would be that each would supervise the production in the different parts of the production process, while the managers would be responsible for the overall management of the manufacturing and production process of the business. As for the manager, requirements would be that he/she is a college graduate with any degree related to business management, for the supervisors, requirements would be a college graduate with any degree related to management.

2.14 Cost of Labor

The average salary for supervisors in the Philippines is Php 23,113 per month, while the average salary for managers would be Php 78,000 monthly. According to Philippine Construction Materials Prices, the average hourly rate for light-skilled operators is Php 72.80, and the daily rate is Php 582.40. While the hourly rate for the light-skilled laborers is Php 63.93, and the daily rate is Php 511.40.

2.15 Labor Availability

According to PSA (Philippine Statistics Authority) the employment rate in January 2020 was estimated at 94.7%, however, during April 2020 the unemployment rate increased to 17.7% but decreased to 10.0% in July of 2020 which is still higher than the unemployment rate of the same month a year ago which was 5.4%. Using this information, many workers have been laid off in work due to the Covid-19 Pandemic that caused some businesses to have a declining profit. For that reason it resulted in the termination and laid off employees. These unemployed workers would then be looking for possible job opportunities and would be available for hire in the business with the stated requirements. There would be vacations and leave that employees would need and because of these some employees may have to fill in for the position of those workers who are not available for work. However this will not affect the production.

2.16 Labor Productivity

A concept used to measure the efficiency of the worker and is calculated as the value of output produced by a worker per unit of time, such as an hour. By comparing the individual productivity with average, it can be identified whether a particular worker is under-performing or not. The concept can also be used on a national level so as to calculate GDP (Gross Domestic Product) of a country. The workers increased productivity would mean the effective use of resources and lower cost of production. The lower average costs, in turn, will lead to good profits. A company where labor productivity is high will have a competitive edge over others. With respect to employees, the employees having better productivity can claim the benefits of performance-based benefits provided by the company. Improved productivity also means the overall economic conditions will be improved.

2.17 Factory Overhead Expenses

Overhead expenses are what it costs to run the business. Expenses can be divided into several different types, including equipment costs, inventory, and facilities costs. The costs incurred during the manufacturing process, not including the costs of direct labor and direct materials. Factory overhead is normally aggregated into cost pools and allocated to units produced during the period. It is charged to expense when the produced units are later sold as finished goods or written off. The allocation of factory overhead to units produced is avoided under the direct costing methodology, but is mandated under absorption costing. The allocation of factory overhead is required when producing financial statements under the dictates of the major accounting frameworks. Since the costs and expenses relating to a company's administrative, selling, and financing functions are not considered to be part of manufacturing overhead, they are not reported as part of the final product cost on financial statements.

2.18 Production Cost

The company takes all costs and expenditures that it needs to produce a quantity of goods or services, and then divides these amounts by that quantity. Product cost per unit is a figure used by businesses to determine the actual cost of a single unit of product. Product cost per unit includes all variable and fixed costs. Fixed costs include those items that a business must pay no matter how many goods or services are sold or offered by the business. Examples of fixed costs include insurance, the building lease and the cost of the machine used to produce the products. Variable costs include those items that change with the number of products sold or offered.

3 ORGANIZATION AND MANAGEMENT PLAN

3.1 Form of Business

[How will the business be organized?]

3.2 Organizational Structure

[How will the business be managed and operated?]

3.3 Business Experience and Qualifications of the Entrepreneur

[What is the business experience and qualifications of the entrepreneur?]

3.4 Pre-Operating Activities

[What pre-operating activities must be undertaken before the business can operate?]