Introduction

In the present world, it is almost impossible to imagine a life without a deodorant. Both men and women of all ages use
deodorants. Although many individuals use deodorants, most of them have not thought how the life would be if deodorant does not
exist or what other benefits they can acquire from a deodorant. Many people believe that it is a way to get rid of body odor, where
others think that the product is meant for enjoying fragrance. However, the use of this useful skin care product is not limited to these
minor benefits. On the contrary, there are various appealing benefits of using quality deodorants whether the user is a man or a
woman. Some of the important advantages are detailed below.

The primary benefit of using a deodorant is keeping away the formation of bacteria that cause bad smell on your body,
especially along armpits. When you wear the deodorant on your body, the sterilizing ingredients in the substance kills any bacteria
found on your body. Moreover, it also avoids any potential bacterial growth that can have a negative impact on your overall health.

Often people start sweating after returning from a stressful routine. Sweating is a bodys mechanism to cool you down.
However, sweating makes you uncomfortable and uneasy due to its bad smell, and you feel like bathing. This can take away a lot of
time, especially when you are in a hurry to attend a meeting or a personal social event. Luckily, you can get away with such a situation
by using a deodorant. Besides helping you to eliminate odorous perspiration from your body, the deodorant will make you ready for
the event in no time.

It is an undeniable fact that bacteria are one of the main causes of health problems. There is no better place for bacterial
growth than armpits and corner parts of your body. Often people ignore itching and inconvenience caused by bacterial growth on their
body. However, this is certainly a wrong idea. If you do not address the problem quickly, it can trigger a number of health issues on
your body skin. You might observe rashes on your skin, pus formation as well as many other skin issues. In addition to this, you might
feel tired due to persistent skin issues. This can have bad effects on your work and personal life. Thankfully, you can get away with
such a scenario by using a suitable deodorant that kills bacteria from all parts of your body.

Apart from this, deodorants keep you refreshed all the time. No matter how tired you are, you can get ready for any
upcoming activity by spraying deodorant on your body. Besides reducing your fatigue and tiredness, deodorants enhance your overall
mood to get ready for any activity or event.

The natural personal care market is now outperforming the growth of the traditional market. Companies are expanding their
product line and are offering new natural products to capture the mounting interest of green consumers. One product showing a
significant rise in popularity is natural deodorant.

Consumers are demanding more than just a natural deodorant, and are unwilling to sacrifice efficacy for natural ingredients.
Companies are listening to consumers demands. They are now heavily investing in green chemistry and are creating natural
deodorants with equally effective results as the strongest chemical deodorants. Consumers no longer have to make a sacrifice to avoid
harmful ingredients.

One such natural ingredient allowing deodorants to be both natural and effective is potassium alum, a naturally occurring
mineral. Deodorant companies are replacing their harmful or toxic chemical ingredients used to prevent odor with the natural mineral.
And if they arent, they should.

The Product

There are many chemical ingredients within deodorant and antiperspirants that include perfumes, additives, parabens and
other toxins. Specifically, aluminum in the form of aluminum chlorohydrate, is the main component that is used in antiperspirants to
prevent sweating. It is easily absorbable into the human body, as it seeps into the skin and into the sweat ducts in order to keep the
armpit from releasing moisture by blocking, clogging, or closing the pores. While seeping into the skin, the aluminum is also able to
enter our bloodstream and into our brain. Daily use of these aluminum-based products will result in chronic exposure to this harmful
substance, which is highly detrimental for our health. Studies have shown that increased levels of aluminum has been linked with
neurological disorders like Alzheimers and is associated with cancer, particularly breast cancer.

Our bodies produce sweat to naturally expel waste products or other toxins from the body and to keep us cool. When we use
antiperspirants that hinder sweat, these toxins accumulate in the armpit and can travel and cause damage to the adjacent breast cells.
Aluminum has also been studied to alter DNA, as it binds to it and can change it, which also damages the nearby breast cells. Its
interesting to note that the majority of breast cancers occur in the area closest to the armpit (the upper outer quadrant).

Most people may be thinking that natural deodorants simply dont do the job like the others, and no one wants to emit
embarrassing, unpleasant odors, but natural deodorants do work. Its just a matter of finding the right one for your body. A good,
natural deodorant should consist of only natural ingredients.

Lack of knowledge and a fear of sweaty armpitsa subject no one wants to talk aboutmay make you shy away from
natural deodorants. But you shouldnt disregard the concerns surrounding some of the ingredients in conventional deodorants and
antiperspirants. Every day we slather these products under our arms, an area where many lymph nodes lie close to the surface of the
skin. And even though these products effectively block sweat, many of the popular drugstore brands are loaded with questionable
ingredients that are worth examining, if not also replacing with safe alternatives.

Potassium alum is a natural deodorant ingredient that provides very effective odor protection, and best of all, it is an equally
effective alternative to synthetic active ingredients. The preferred form of potassium alum for the commercial production of natural
products, other than crystal deodorant stones, is potassium alum powder. Potassium alum powder makes it possible to formulate a
variety of products that have natural odor protection such as deodorant.

Potassium alum is a safe natural way to control body odor or deodorant. It is hypoallergenic, easily washable, it is not an
antiperspirant thus it does not clog the skin pores. Potassium alum works by eliminating the odor causing bacteria so the body would
not smell while maintaining the natural way of sweating. Tawas is applied by gently rubbing the crystal in the armpits or feet while the
area is damp from showering or washing. Tawas leaves an invisible layer to the areas it is applied. The crystal has no scent and gives
24 hour protection.

The product that Ill be introducing is made of potassium alum power as the main ingredient, cornstarch, to create a finer
powder that would not irritate underarm skin especially to the sensitive ones and scented powder, to reduce the smell of alum and
replace it with a more aromatic scent. This would be carefully packed in a sealed 50g container, ready to use deodorant for the
consumers.

MARKETING ASPECT

Market Environment

The market for deodorants registered growth during the years 2008 and 2009, albeit at a slower rate than in previous years.
With the recovery from the financial crisis in 2010, the market is projected to post healthy growth in the coming years driven by
manufacturers increased focus on delivering technologically advanced products in various novel product formats.

2015 marked the rising concern among consumers in regard to their health. With increasing disposable incomes, preventing
diseases rather than curing them is the goal of a lot of individuals, especially those from young professional consumer groups.
Sports and other outdoor activities undertaken on a regular basis are considered to be fun yet healthy ways to improve ones body,
and they prompt those who are not using deodorants to try to use these items as a daily personal care habit. This hugely
contributed to the 5% value sales increase in 2015 as it was necessary to combat increased sweating and its disadvantages.

Deodorants is expected to achieve a value CAGR of 3% at constant 2015 prices over the forecast period, showing a rather
stable performance is imminent. The category is at its maturation stage as further developments, promotions and new product
launches remain very limited. Growth will largely come from greater awareness and sophistication among consumers, who will
shift from higher-quality brands to deodorants for use on a daily basis. Moreover, as middle-income consumers rise in number,
deodorant use might increase due to changing lifestyles. Information dissemination on the benefits of using deodorants on a daily
basis might be necessary to further strengthen the category over the forecast period. The forecast period growth of the category
will be higher than the review period rate.

Producers are more or less compelled to offer innovative products that deliver quick, effective protection against odor and
wetness. Another major trend in the deodorants market includes the shift towards more natural products. The increase in
awareness about the benefits of natural products, led to a rise in demand for deodorants using naturally made alternatives on the
products existing in the market.
This product suits the taste of men and women who prefer to use all natural products for their hygiene. Aside from this, it is
definitely cheaper than the leading deodorant and antiperspirant products in the market making a way for consumers to be
hygienic and cost saver as well.
Competitor Analysis
In the growing market of antiperspirant or deodorant, various competitors of Natural deo have been emerging with all its
competitive offers.
Colgate-Palmolive offers men continuous protection with the Speed Stick 24/7 Non-Stop Protection, claiming that its the
first and only mens antiperspirant deodorant with new revolutionary Micro-Absorber Technology. According to the company, this
formula contains polymer beads that can absorb up to 100 times their weight in wetness. The product comes in antiperspirant gel and
deodorant sticks in four fragrances: Fresh Rush, Clean Blast, Cool Fusion and Icy Surge. They retail for Php200.
Unilever has highest market stake in Deodorant category in the Philippines with its brands Axe, Dove, Lynx and others.
Axe Body Spray of Unilever has attractive smell and an eye-catching packaging. These are for men between 15 and 25.It
offers 8 different body sprays in 60 countries all over the world. It is sold in many places to make the consumer feel that it can be easy
to find everywhere. Its also used as a perfume. So, the price is a little bit higher than a traditional deodorant Between Php250 and Php
300.
Dove is one of the major brands in female category and is can emerge as a market leader with its unique variants, competitive
rates and exquisite fragrance and active ingredients (lemon grass, silk powder, 1/4th moisturizer, pearl actives, cucumber) Dove
released a marketing campaign in 2008 playing less on super models and emphasizing more on real women. Dove regularly uses
magazines like cosmopolitian, Femina, Marie claire for advertisements. Online advertisement has been excessively seen in past 3
years with launch of new variants of Deodorants. Distribution channels for Dove are same as like any other Unilever brand.
Deodorants are also available on online shopping sites.
Lynx is the most popular mens deodorant. It is a product under the Unilever. The antiperspirant/deodorant market has been a
low-profile category, never generating the same excitement in terms of product entries and market battles such as what shampoos
have. However, recently with the growing number male concerning about their grooming and how they look, deodorant market has
increase reasonably.
Nivea is chief competitor as both brands target same segment of customer and variants of deodorants of both the brands are
positioned on the similar lines, however packaging and advertising of Nivea is more attractive and appealing to women.
Human Natures all natural deodorant stick offers the same benefits as to this product such as, no stains or streaks on clothes,
no harsh alcohol that can darken underarms, no aluminum salts, no phthalates (synthetic fragrances), no triclosan, and no parabens.
Their campaign is to ditch those chemical-laden deo sticks and make the switch to an all-good, all-natural breakthrough in deo
protection. They are retail for php 199.75. It is almost the same price range as to the leading competitor brands.
Marketing Objectives
 In a highly competitive market, establishing and distinguishing a product name among the other parallel products are
challenges that are not easily meet. The importance of carefully planned communication marketing in achieving these ends cannot be
underestimated.

Awareness of the objectives is the key in planning a successful plan. It is only with this information that decisions can be made
on identifying the audience that you are trying to reach, what message you hope to deliver to them, and how you can best accomplish
this.

Natural deos objectives are to create sustainable brand awareness among the existing and potential customers. Brand means
giving a product or a business name a distinct identity. Brand image is very important in marketing, not only because consumers can
recognize it but because many brands can make the consumer look cool because the brand names are widely recognized. A lack of
awareness and recognition of the product among the customers are a dreadful situation for existing products. It is important that the
product or brand can establish as presence in the marketplace to let the customers know the benefits they offer.

Equally important objective of the product is getting the message heard by the audience or the targeted market. It is important
that the company take into account that the product delivers timely information on the new launch of new product development in
order to create awareness.

Another objective of Natural deo is to create brand positioning in the hearts of the customers. Positioning is how the product
appears in relation to other product in the market. Brand positioning is identifying where the specific brand is placed within the
marketplace and its relationship to competitive brands. It is determined by defining the brands benefits to the consumer, opportunities
for which the brand is best suited, the brands target audience and who are its main competitors are.

Marketing and Sales Strategy

Consistent with the objectives of this plan to create sustainable awareness and brand positioning, marketing communication
strategies are identified to the advantage of the said product.
According to (1973), any business has two basic requirements: marketing and innovation. Marketing assumes the task of
guaranteeing the conditions of communication and information that allow demand for need fulfillment to be met through production of
goods and services. Ultimately, it is customers which include buyers and users who determine the nature of the businesses that can
operate.
Integrated marketing actions, when applied to meeting the needs of consumers and buyers can generate profits and other
corporate results through customer satisfaction. This matching of corporate and customer interests requires the parties to
communicate. This communication can be spontaneous and ad hoc, but experience shows that careful management of marketing
communication can add value for all involved.
The management practice of marketing has emerged as a coordinating function or discipline that acts as a bridge between the
needs of the provider to stay in business and to prosper, and the needs of buyers and consumers for access to desirable value-for-
money products, and other stakeholders in a society that has normative, expressive, cognitive, as well as instrumental institutions.
Marketing communication is concerned with effectively and efficiently providing information about the business and the
products to chosen customer groups. Marketing communication is no different to other forms of human communication.
Consumer behavior is what people do as consumers as they seek to live their lives, including exchanging some things for
value products or services that satisfy their needs - this includes processes of browsing such as 'window-shopping', reading magazines,
and watching television, and selection, purchase, use, evaluation and influencing others, and disposal.
As managers, we are concerned with where and when we can cause representations of ourselves and our products to enter the
minds of relevant buyers and consumers. Consumption is communicative and requires human interaction for it to make sense.
Consumption is derived through communication.
Essentially, we need to consider how people react to marketing communication actions. Although, at this point, we are mostly
looking at marketing relationships from the perspective of the provider, we should not forget that both marketers - the provider and the
buyer/consumer - may initiate communication situations.
The global market for deodorants is full of intense competition. With the big personal care players all jostling for position;
and it appears that new product innovations and technologies are the way to get ahead.
The truth is the global market only has a few players holding a major share of the market, with Unilever. Procter & Gamble,
and Beiersdorf AG amongst others all battling it out. Unilever is the leading market participant and offers world-renowned brands,
such as Dove, Lynx/AXE and Impulse.
Deodorant companies are offering additional features as part of their efforts to differentiate their products from those offered
by their rivals.
In order to enhance their presence in an extremely competitive marketplace, Manufacturers need to develop new products
with innovative technologies, such as deodorants with anti-white marks technology and skin-friendly deodorants.
It is not only the formulations that have been the focus of innovation either: Unilever went to town on its packaging from the
waste reduction angle, having the size of its aerosols, but maintaining the same amount of content. In additions, such as deodorants
with moisturizing features and deodorants with hair growth retardant abilities have also been targeted and not only push up the sales
volume but also ensure enhanced revenues due to their increased prices.
In a highly competitive market, establishing and distinguishing a product name among the other parallel products are
challenges that are not easily meet. The importance of carefully planned communication marketing in achieving these ends cannot be
underestimated.
Having all the facts gathered, the company cannot go on a head to head competition with these established brands. And so,
mentioned below are the marketing and sales strategy that the company needs.
 The most effective strategy for this starting product with less capital is to go for a direct sales talk and demonstration in the
prospective stores locally. The product would be displayed in a stand through providing the store with display allowance and hire a
person to push the product in the market.
Since, the target of this product is the economical people; low cost leadership would be an effective strategy to use. Alum is
definitely cheaper than all of the leading deodorant and antiperspirant brand existing.
Integrated Marketing and Communication Strategy
On the other hand, integrated marketing communication is a shift towards more personalized, customer-oriented, technology-
supported marketing systems. This is managed by a brand-level, cross-functional team to integrate marketing and marketing
communication activities. Brand management requires integration of systems of communication, especially when, as we saw in
chapter twelve, a relationship-marketing strategy requires that customers are treated differently to prospective customers.
Internal and external communicative activities/actions communicate whether or not they are done with the intention of
communicating. Thus, planning for the comprehensive use of a range of activities that provide communication opportunities and
coherent messages recognizes that consumers and buyers do not see discrete advertising, public relations, and sales promotion.
The adoption of a true integrated marketing strategy requires, in many cases, a redesign of the business system to ensure that
the making of promises and efforts to keep promises are coordinated. (1993) proposed that any model of marketing communication
should analyze what happens with the customer rather than starting with the marketer.

Sales force Brochures, appointments, manuals

Retail merchandising Display and shelf-facings, point-of-sale materials

Dealer/distributor Brochures, manuals, training

Production Quality assurance, training, quality management

Brand management Standard-setting, after-sales service

Internal communication Newsletters, briefings, team-working, grapevine

Advertising Messages, information content, style, vehicle

Location of outlets, vehicle condition, driver courtesy and safety,

Distribution
packaging

Pricing Value-for-money relative to competitors - quality and status

Products Quality consistent with price and advertising messages

Attitude, behaviour, orientation, and preparedness of sales, technical,

People
delivery and reception staff

Technology and methods of product and co-production, convenience,

Processes
reliability, safety

Market research Hearing what customers, consumers, and buyers want and like/dislike

Complaints, comments, and requests Access to responsible, responsive people

TECHNICAL ASPECT
Supply
Tawas is available in many countries in Asia. It is readily available and can be bought from street-side markets or over the counter
in pharmacies. For example, in Philippines most markets have a supply of tawas and in particular markets next to churches such as
Quiapo Church or Baclaran Church.
Divisoria would be be an excellent market to purchase tawas since it has a wide assortment of low-priced goods and wholesale
and bargain shopping. This means that there are many alternative suppliers of tawas to choose from at a lower cost for a good quality.
There are a lot of things to consider. First, ensure to support the firms operations with an uninterrupted flow of materials and
services. Usually, this could be the problem in manufacturing industry, the lack of supply leading to inefficiency. Moreover, we need
to buy competitively and wisely (achieve the best combination of price, quality and service).Hence, we should not overlook to develop
reliable and effective supply sources. This could happen if we develop and maintain healthy relations with active suppliers and the
supplier community. Then we propose that, the company should not only stick to one supplier alone but it must have an alternative
secondary or tertiary supplier to avoid operational interruption.
 Other direct and indirect materials could also be found in Divisoria such as cornstarch, scented powder for the indirect
materials, seasoning cup and sticker as the other direct materials needed for packaging.
Production Flow
Strain the potassium alum to remove any unwanted crystals that could wound the underarm skin. Place it in a basin
Add cornstarch and scented powder to the mixture and incorporate all the materials well.
Place it in a 50g seasoning cup and seal it well
Place it in a shrinking plastic bag for packaging and use heat gun for sealing.

Technology
The following procedures dont need so much technology for production. The only technology that would be use is the heat
gun for packaging the product. Since this is a starting business, it would go for a manual process starting from mixing all dry materials
until placing it in the container. As the company would expand in the near future and more demand is needed, it would switch
gradually from manual to technological to ensure better quality and productivity.
Costs
Potassium Alum Php 750.00/sack
Cornstarch Php 1,100.00/ sack
Seasoning Cup Php 1.85/ pc
Sticker Php 0.35/ pc
Scented Powder Php 38.00/pc
Shrinking plastic Php 950.00/ roll
ORGANIZATION AND MANAGEMENT ASPECT
Business Form and Organization
Of all the choices to make when starting a business, one of the most important is the type of legal structure you select for the
company. Not only will this decision have an impact on how much tax to pay, it will affect the amount of paperwork of the business is
required to do, the personal liability to face and the ability to raise money.
The company chose the sole proprietorship as the structure. Since this is a starting business, this would be the easiest to form
and offers complete managerial control to the owner. There are a few disadvantages to consider, however. Selecting the sole
proprietorship business structure means that the entrepreneur is personally liable for the company's liabilities. As a result, own assets
are at risk, and could be seized to satisfy a business debt or legal claim filed against the natural person.
Raising money for a sole proprietorship can also be difficult. Banks and other financing sources are reluctant to make
business loans to sole proprietorships. Thats why, having a good credentials of the owner is very important. In most cases, it has to
depend on the owners own financing sources, such as savings, home equity or family loans.
The company chose the functional organizational structure. A structure of this type groups individuals by specific functions
performed. Common departments such as human resources, accounting and purchasing are organized by separating each of these areas
and managing them independently of the others.
The advantage of this type of structure is that functions are separated by expertise but the challenges comes in when different
functional areas turn into silos that focus only on their area of responsibility and dont support the function of other departments.
Capitalization
A capitalization strategy is essential for anticipating long-term needs. It ensures disciplined spending; eliminating the
likelihood that a business will burn through its capital too quickly, or obtain so little that it becomes hamstrung by funding constraints.
Capitalizing start-up can have long-term effects on the companys success. Funding start-up expenses, inventory and
operations is a challenge for many business owners. It's important to understand and explore the options are available to entrepreneurs,
their risks and rewards, their plusses and minuses.
Capitalization is the first or seed money. It is the investment that the business owner and any other investors make in the firm.
The company got to have a comprehensive business plan which is best-guess on the goals and objectives of the companys start-up,
the target market, how it will get them to buy from you, how much money it needs and when revenue will start to come in and how
much.
A business can be capitalized with either equity or debt financing. When starting a business, or when operating the business,
owners need to determine how to balance these two options.
The company would choose the debt financing. Debt is a loan issued to the company. The document that evidences the debt is
a promissory note, which explains the terms of the loan, such as when the loan will be repaid and at what rate interest must be paid. As
opposed to equity, lenders receive no ownership interest in the business.
A good advantage of this kind of financing is that business owners keep control of the business because they dont have to
give up ownership in exchange for the debt. Moreover, regular and timely repayments can build business credit, which is helpful for
future borrowing and insurance. Lastly, Interest payments on debt are tax deductible as a business expense.
The downside to debt is that repayment will require sufficient cash flow, which may be difficult for a startup, especially a
startup without much capital to begin with or without a viable product to sell. In addition, too much debt will cause the business to be
considered thinly capitalized. Furthermore, Taking on debt from friends and family and not being able to repay it may harm those
relationships. Worse, if the lender required collateral and the business cannot pay on the debt, the business may lose the collateral. And
finally, startups often are required to personally guarantee loans, which could make those owners personally liable if the business
cannot repay the loan.
Weighing all the advantages and disadvantages, the company prefers to use debt financing for capitalization of this new
business venture.
The startup capital that this business needs is not that huge. It only requires an amount of Php 275,000 as a starting capital.
This is because there is no need to buy heavy equipment for production or a huge plant. Although, the company is open for expansion
once the product has already a good phasing in the market.
Personnel requirement & Qualification Standard
The personnel dont need to be a college graduate with a bachelor degree. Intellectual capability is not given so much
emphasis since it a manual process, there is no need to operate advanced equipment that only qualified and educated people can do.
What the company is looking for is an efficient and effective personnel that is hardworking and able to perform the job well.
Process qualification is the qualification of manufacturing and production processes to confirm they are able to operate at a certain
standard during sustained commercial manufacturing. Data covering critical process parameters must be recorded and analyzed to
ensure critical quality attributes can be guaranteed throughout production. Once all processes have been qualified the manufacturer
should have a complete understanding of the process design and have a framework in place to routinely monitor operations. Only after
process qualification has been completed can the manufacturing process begin production for commercial use. It should be noted that
equally important as qualifying processes and equipment is qualifying software and personnel. A well trained staff and accurate,
thorough records helps ensure ongoing protection from process faults and quick recovery from otherwise costly process malfunctions.
In many countries qualification measures are also required, especially in the pharmaceutical manufacturing field.
Personnel must wear appropriate gowns during the process. The gown should provide a barrier between the body to prevent
contamination from particles generated by, and microorganisms shed from, the body. The gowns are clean and no shedding, and cover
the skin and hair (face-masks, elastic gloves, aprons are examples of common elements of gowns). If the gown is found to be torn or
defective or dirty, it should be changed immediately. Gloves should be sanitized frequently.
Company Registration
To ensure full and legal operation of the business, it needs to undergo through proper registration. The first step is to register
the business with the Department of Trade and Industry, Bureau of Internal Revenue, and Social Security System (SSS).
Register the business with the DTI and obtain a Business Name Registration Certificate. Next is to obtain
Barangay/Municipality/Regional Clearance from the concerned local government where will be the business be situated.
Requirements are Business Name Registration Certificate, Two valid IDs and Proof of address of business location. Then go to the
mayors office in order to secure a business permit in the municipal level. It is required to bring Business Name Registration
Certificate, map/sketch of location where your business will be located, two valid IDs, and Community tax certificate (in some cases)
Proceed to the Bureau of Internal Revenue (BIR) district office where the business will be located. The requirements are
Business Name Registration Certificate, Mayors permit, Barangay clearance, proof of business address (e.g. lease/rental agreement,
land title), Book of Accounts, to be stamped by BIR (which can be purchased in office supplies stores) and Receipts and invoices from
BIR accredited print shops, to be stamped by BIR
Then, Obtain a TIN, fill out an application form for a Certificate of Authority to Print Receipts and Invoices, have the Book
of Accounts, receipts, and invoices stamped by the BIR.
And lastly, apply as a self-employed member of the Social Security System (compulsory for business owners in the
Philippines).
Product Registration
When applying for a License to Operate as Cosmetic Importer/Distributor, the company will be required to appoint a
pharmacist who will sign papers ensuring the safety of the of the potassium alum deodorant and the compliance of the company with
the Standard Operating Procedures (SOP). The SOP must describe the several steps followed by the company according to the FDA
Requirements of Good Distribution Practice World Health Organization.
The presence of the pharmacist is also required during the FDA inspection in the companys premises as well as the signature
in the application form for the LTO. The appointment of a pharmacist is mandatory for as long as the LTO is active.
The FDA of the Philippines has issued a list of ingredients that cannot compose the formula of any cosmetic when applying
for a Certificate of Product Registration (CPR). The list is named List of substances which must not form part of the composition of
cosmetic products and contains 63 pages with substances completely prohibited or allowed until a certain percentage.
Although these ingredients will not be evaluated during the LTO application, the list will be strictly taken into consideration
by the time the company submits the package of application for the Certificate of Product Registration.
Despite of the bureaucratic process imposed by the FDA and the long timeline to approve documents submitted by the
company, the governmental agency does not require the applicant to conduct laboratory tests and its not rare to find in the market
cosmetic products containing hazardous substances. The last recall ordered by the FDA was released last May 13th requesting the
removal of 28 cosmetic products from the market after the FDA found toxic elements in their composition, such as lead and mercury.
The company is aiming to register this cosmetic product in the near future, thus it is better to start now. The process seems
taking longer and longer. The timeline to register one single cosmetic product will not take less than 12 weeks, assuming the company
was granted with the License to Operate as Cosmetic Importer/Distributor. However, due to recent changes in the FDA, including the
reduction of internal staff, future applicants will need much more patience to finally see their products on the shelves of local stores.
When registering a new cosmetic product in the Philippines, its fundamental to receive accurate advice to avoid longer waits
and additional costs.
 1st quarter 2nd quarter 3rd quarter 4th quarter
Schedule of Raw Materials placed in production:

Raw materials in inventory, beginning balance 12,058.20 10,962.00 12,606.30

Add: Current period raw materials purchases 63,579.60 85,686.30 79,839.90 84,042.00
Less: Raw materials inventory, ending balance (9,865.80) (12,606.30) (12,058.20) (10,962.00)
Direct materials placed in production 65,772.00 84,042.00 80,388.00 73,080.00

Schedule of Cost of Good Manufactured:

WIP inventory, beginning balance 6,557.61 5,568.50 6,781.20
Add current period manufacturing costs:
Direct materials 65,772.00 84,042.00 80,388.00 73,080.00
Direct labor 22,275.00 28,462.50 27,225.00 24,750.00
Manufacturing overhead 12,402.00 17,551.00 16,758.00 13,540.00
Total current period manufacturing costs 100,449.00 130,055.50 124,371.00 111,370.00
Total cost in work in process 107,006.61 135,624.00 131,152.20 111,370.00
Less: WIP inventory, ending balance (5,350.33) (6,781.20) (6,557.61) (5,568.50)
Cost of goods manufactured 101,656.28 128,842.80 124,594.59 105,801.50

Schedule of Cost of Goods sold:

Finished goods inventory, beginning balance 13,758.47 1,058.02 12,990.08
Add: cost of goods manufactured 101,656.28 128,842.80 124,594.59 105,801.50
Cost of goods available for sale 115,414.75 129,900.82 137,584.67 105,801.50
Less: finished goods inventory, ending balance (11,541.47) (12,990.08) (13,758.47) (1,058.02)
Cost of Goods sold 103,873.27 116,910.73 123,826.20 104,743.49

Projected Income Statement

1st quarter 2nd quarter 3rd quarter 4th quarter

Sales 172,181.00 211,653.00 210,230.00 184,941.00

Cost of Goods Sold (103,873.27) (116,910.73) (123,826.20) (104,743.49)
Gross Profit 68,307.73 94,742.27 86,403.80 80,197.52
Less: operating expenses
Selling (17,218.10) (21,165.30) (16,818.40) (18,494.10)
General and Administrative (5,165.43) (6,349.59) (5,045.52) (5,548.23)
Operating profit 45,924.20 67,227.38 64,539.88 56,155.19

Direct Material Budget

1st quarter 2nd quarter 3rd quarter 4th quarter

Pottassium Alum 13,500.00 17,250.00 16,500.00 15,000.00

Seasoning Cup 43,956.00 56,166.00 53,724.00 48,840.00
Sticker 8,316.00 10,626.00 10,164.00 9,240.00
Total Direct Material 65,772.00 84,042.00 80,388.00 73,080.00

Direct Labor Budget

 1st quarter 2nd quarter 3rd quarter 4th quarter
Budgeted production units 23760.00 30,360.00 29040.00 26400.00
Labor hours required per unit 1.50 1.50 1.50 1.50
Total labor hours need for production 594.00 759.00 726.00 660.00
Cost per labor hour (labor rate) 37.50 37.50 37.50 37.50
Total cost of direct labor 22,275.00 28,462.50 27,225.00 24,750.00

Manufacturing Overhead
1st quarter 2nd quarter 3rd quarter 4th quarter

Variable Overhead:
Indirect materials 4,410.00 6,700.00 6,390.00 4,750.00
Indirect labor 3,341.25 4,269.38 4,083.75 3,712.50
Total Variable overhead 7,751.25 10,969.38 10,473.75 8,462.50
Fixed Manufacturing Overhead 4,650.75 6,581.63 6,284.25 5,077.50
Total Manufacturing overhead 12,402.00 17,551.00 16,758.00 13,540.00

TOTAL 100,449.00 130,055.50 124,371.00 111,370.00