MUNDO ECO Bags Company

alternative in shopping or plastic bags. It is companys own advocacy to build this kind of business as support in protecting the environment. The company will have its won warehouse located at the manufacturing site. It is the place wherein the finished goods are stored prior to its delivery in the market. The warehouse department consists of warehouse clerks who will be responsible for monitoring and keeping record of the products as its physical existence. The company will acquire delivery truck as a mode of transporting the products to its customers in order to provide a quick and efficient means of distributions. Before the time of the actual delivery, the quality control supervisor inspects the products to ensure that they are properly coned and final approval shall be first given

MARKET AREA To enable the economical use of the companys resources and to generate sufficient sales that will result or yield on expected high profit, it is our major concern as entrepreneur to determine our market area. MUND Eco Bags Company, producer of non-woven polypropylene (PP) bags, intends to target different business establishments of NCR as their market area of distribution. The reason is that, NCR is a region that produces huge amount of plastic wastes amounted to 7,417 metric tons a day based on the report released by Eco Waste Coalition.

CHANNELS OF DISTRIBUTION The distribution of non-woven PP bags has a simple structure. The products will be coming from our plant that will be then delivered directly to prospective customers to our target market area. Our company will be the one who will pass the product directly to the customers.

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This format has the advantage of minimizing the cost of acquisition of our product by the end users. Our sales agents will be responsible in negotiating our product to potential customers. They will persuade the wholesalers to try our product. After the transactions have been confirmed, our product will be delivered to them.

MUNDO E-BAGS COMPANY CUSTOMERS

The terms of sale will be 2/10, n/30. This means that the lcient can avail of 2% dsicousnt uon payent withn 10 days. The firm requires 50% downpayjent in every purchase and the balance withi 30 days. The credit limit of each custmer will be strictly followed so as to monitor the credit status and to prevent too much debt maturity.

MAJOR USERS Products sold in different supermarkets, RTW outlets, utility stores, bookstores that use plastic bags as their packaging. In line with the current drive to do away with plastics to eliminate pollutants, this study is proposed at replacing these plastic bags with a more durable and reusable bags. The target market/consumers of the eco-friendly bags are the business establishments such as supermarkets like Macro, Uniwide, RTW stores like RRJ Store, Triumph, French Toss,

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Otto shoes, and even bookstores like Rex bookstores within the National Capital Region.The products, though are not limited to them as users, but also for individuals who wish to avail of these products either for personal use or for giveaways who may need it in bulk or big orders. .

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ANALYSIS OF PAST AND PRESENT DEMAND AND SUPPLY

HISTORICAL DEMAND There were no actual historical data for the demand of non-woven polypropylene bags. To provide basis for the demand of the product in the market, the researchers conducted a survey to establish the data, which will be the basis in projecting the future demands, as well as having the historical ones. These survey respondents were qualified as to users, willing to use and nonusers. The random sampling method had been used through telephone to survey the respondents. The researchers have considered the users as the basis for present demand. Users were easier to quantify since they could give a concrete and clear view of the demand. Table 1 Summary of Household Population within National Capital Region (NCR) Year 2000 2003 2006 2007 2008 Number of Household 2,132,000 2,293,000 2,362,000 2,416,000 2,454,000

The table above shows the summary of the household population within the National Capital Region. In the year 2000, there were about 2, 132, 000 households in the metro. The number increased in 2003 with a surveyed 2, 2093, 000 households. With the advent of 2006, the number of households totaled at 2, 362, 000. By 2007, there were about 2, 416, 000 households

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and by 2008, the number of households in the NCR reached at 2, 454, 000. Hence, it can be gleaned from the data that there is a steady increase in the household population in NCR for the past 7 years. This maybe due to the fact that more and more families from the provinces are migrating in the city to seek greener pastures or looks for high-paying jobs. The bottom-line is, with the increase in the population, more and more people will be expected to use bags as an integral part of their everyday lives. In analysis of the data in Table 1, the researchers were able to get the 38.33 rate of increase in the household population in NCR as can be synthesis from 2000 to 2008. Hence, the following table shows the projected number of households that will populate the NCR for the next five years. Table 2 Projected Household Population within National Capital Region (NCR) from 2009 to 2013 Year 2009 2010 2011 2012 2013 Number of Household 2,492,000 2,531,000 2,569,000 2,607,000 2,646,000

It can be gleaned from Table 2 that in 2009, it is expected that 2, 492, 000 families or household will live in NCR. Come 2010, this number will increase to 2, 531, 000. By 2011 and 2012, the number of household will reach 2, 569, 000 and 2, 607, 000 respectively. Finally, by 2013, the projected household population in NCR will hit 2, 646, 000 families. From the data above, one can easily notice that there is a steady increase of household population in Metro

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Manila. This is a reality that also predicted to happen to other metropolitan cities around the Philippines and in the world due to unabated migration from the outskirts of the country. In synthesizing the data provided by the National Statistics Office (NSO), it shows that for the past years, there is a steady increase in household population in NCR due mainly to migration from the provinces. The trend is expected to continue within the next five years as more and more families are predicted to settle in Manila. With the increase in population, there will be an increase in demand for services and products. Hence, NCR has remained its position as one of the most profitable market areas for those who would like to engage in business. This advantageous characteristic of Manila is well-defined; hence, the company will use this competitive edge to introduce its products. It is expected that with proper advertisements and effective market strategies, the company will able to take advantage of the growing population of NCR for at least the next five years.

Result of the Survey

1. To establish a basis in assessing the present demand of non-woven Polypropylene bags in

the NCR, the group conducted a survey to know the percentage of household users and non-users of non-woven Polypropylene bags in the metro. Table 3 which follows presents the result of the survey. Table 3 Percentage of Household Users and Non-Users of Non-Woven Polypropylene Bags in the National Capital Region (NCR)

MUNDO ECO Bags Company

Users Total No. of respondents No. of Respondents Percentage 400 117 29.25% Non-users 400 283 70.75%

The table 3 shows that there were about 400 respondents who were pooled in the survey to determine the number of users and non-users of non-woven Polypropylene bags in the NCR. From among the 400 surveyed families, 283 families or 70.75% answered that they do not use non-woven Polypropylene bags while 117 or 29.25% answered in the affirmative. The survey only shows that when translated into a macro perspective view of the whole NCR, a substantial one-fourth of the total household population of the city uses non-woven Polypropylene bags. This is a large in numbers and by the fact that many people from the provinces are coming to NCR everyday to transact business or buy goods and services in the establishments located within the city. These are undocumented clients which can be still be eyed as additional prospective clients or customers of the Mundo Eco Bags Company.
2. For the group to know the average number of bags per household, a survey of number of

bags being used by the 117 families who use non-woven Polypropylene bags was likewise conducted. The following table shows the results of the survey: Table 4 Average Number of Non-Woven Polypropylene Bags Being Used per Household in the National Capital Region (NCR)

MUNDO ECO Bags Company

Users Total no. Users of NonWoven PP bags Total no. of bags Average bag per household 117 280 2.39 3 bags / household

The table 4 shows that there were about 280 bags being used by the 117 families who answered positively that they are using non-woven Polypropylene bags or about 2.39%. By getting the average of the number of bags per household, it yielded that there is an average of 3 bags being used per household.
3. For the group to know the total demand of bags in NCR for the year 2008, the total

number of households in 2008 provided by the NSO and the data from Table 4 was used. Table 5 shows the results of the computation: Table 5 Demands of Non-Woven Polypropylene Bags in the National Capital Region (NCR) for 2008 Percentage of users Total No. of Household (in 2008) Total No. of users Average bag / user Total Demand of bags Year 2008 29.25% 2,454,000 717,795 3 bags / user 2,153,385 bags

The table 5 shows that there were about 29.25% of 2,454,000 households in the NCR in 2008 or about 717,795 are using non-woven PP bags. Each family used at least three (3) bags which yielded a total of 2,153,385 bags for the year 2008. It also shows that there are 33.92% from the non-users are willing to purchase the bag.

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From the survey conducted by the group, it shows that there is a demand of about 2,153,385 non-woven Polypropylene bags for the year 2008 in the whole NCR. This is based on the number of bags being used by each household from among the 117 users from the 400 families employed in the survey. However, this data is still partial in a critical look at it because the data are derived only from households of NCR. The survey didnt deal with the households outside the metro who engage in business or buy goods and services in the city. The researchers admit that it will be very hard to conduct a survey on these groups of customers since they vary from day to day or from one establishment to another. The total demands of non-woven Polypropylene bags for the year 2008 manifest that there is a huge amount of bags that can are needed and used by the consuming public (refers only to Metro Manila households and delimited to households outside the province who use bags in buying goods and services from business establishments in the NCR). From the standpoint of the researchers, the market area is somehow profitable. This assumption is based on the number of households in the NCR that continues to increase from 2008 until 2013 from data provided by the NSO. From these expected increase in household numbers the next five years, the demand for non-woven Polypropylene bags will likely increase. This scenario opens a very advantageous position for the company to open this business and introduce the products among the consuming public of the NCR.

PROJECTED DEMAND Based on the data gathered from the National Statistics Office, the total numbers of households within the National capital Region were 2,132,000 for the year 2000, 2,932,000 for

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year 2003 and 2,362,000 for the year 2006. Due to financial constraints NSO cannot conduct census yearly so they perform it every three years. To project the population in a yearly basis, the researchers have used linear regression in order to project the population growth yearly. The projected population is multiplied by percentage of users of non-woven bag to obtain the projected demand. The following table shows the projected demand of non-woven Polypropylene bags in the NCR using the data obtained from Table 5. Table 5 Projected Demands of Non-Woven Polypropylene Bags in the National Capital Region from 2009-2013 Year 2009 2010 2011 2012 2013 Demand 2,187,608 2,220,953 2,254,298 2,287,643 2,321,865

Table 5 shows that in 2009, there is a projected demand of 2,187,608 non-woven Polypropylene bags. In 2010, an increase to 2,220,953 non-woven Polypropylene bags is expected. By 2011, about 2,254,298 non-woven Polypropylene bags are predicted to be needed by the consuming public. In 2012, NCR will need 2,287,643 non-woven Polypropylene bags. Finally, in 2013, non-woven Polypropylene bags totaling to 2,321,865 pieces are expected to be used by the people from NCR. The data in Table 5 utilized the projected population of NCR per household as revealed in Table 2. The projected household populations were multiplied each by 117 household who agreed that they use non-woven Polypropylene bags based on the survey as revealed in Table 3.

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Generally, there is an increasing demand for non-woven Polypropylene bags from 2008 to 2013 (as represented graphically in Figure 1) due to the fact that there is a projected increase in the number of household populations in the NCR on the same span of years based on the population growth rate provided by the NSO. Hence, it can be assumed that with the increase in population and demands in non-woven Polypropylene bags, the market area, that is the National capital region, is a highly profitable market area for the company to start its business on the production and selling of the said product. Producing companies have to take environmental issues into account when designing and producing products and services. Non-woven Polypropylene bags, which will be produced by the Mundo Eco Bags Company, enters a market where it competes with other materials as well as recycled material from other companies or firms specializing on the same products. On this market, the group assumes that a balance between demand and supply of the different materials is obtained through variations in the price. An increased demand of bags from the distribution systems should then result in a price reduction. This, in turn, should result in an increased use of the non-woven Polypropylene bags and/or a reduced use of material from other systems. If the use is affected the most depends on which activity is most sensitive to changes in the price. The non-woven Polypropylene bags can be calculated through the use of estimates of the sensitivity to price changes - i.e., the price elasticity of demand and supply on the market for recycled material.

Projected Household Population within National Capital Region (NCR) from 2009 to 2013

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Year 2009 2010 2011 2012 2013 Number of Household 2,492,000 2,531,000 2,569,000 2,607,000 2,646,000

Figure 1 Projected Demands of Non-Woven Polypropylene Bags in the National Capital Region from 2009-2013

DEMAND
2,350,000 2,300,000 2,250,000 2,200,000 2,150,000 2,100,000 2009 2010 2011 2012 2013 DEMAND

HISTORICAL SUPPLY The historical supply of this study was based from two sources. The local supply and the import supply of non-woven PP bags in the Philippines. For the local, the plant capacity of the existing manufacturer of polypropylene bags here in the Philippines. Presently, there is only one major producer of polypropylene bags in the Philippines. This is the Green Leaf Eco Bags Company which started only last August 2007. The said

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manufacturer was kind enough to give the group a certified true copy of their production schedules, which served as the basis of getting supply. The data for the importation of non-woven PP bags was gathered from the National Statistics Office. The importation of non woven PP bags starting from January, 2004 up to August, 2008. Table 6 shows the import of non-woven Polypropylene bag in the Philippines. The source of data is from National Statistics Office. Table 6 Import of Non-Woven Polypropylene Bags in the Philippines Year 2004 2005 2006 2007 2008 Supply 15,202 415,126 143,246 807,224 74,645

It can be gleaned from the table that in 2004, there were 15,202 non-woven Polypropylene bags imported by the country. In 2005, there were 415,126 bags imported almost 1000% increase the previous year. By 2006, 143,246 bags were imported which registered a decrease in demand. In 2007, non-woven Polypropylene bags totaling to 807,224 was imported, a sudden increase in the supply. Finally, in 2008, there was drop in supply as 74,645 bags were only imported. The table shows that there is an unstable market for non-woven Polypropylene bags from 2004 to 2008. The see-saw number of non-woven Polypropylene bags imported from 2004 to 2008 is due to the increasing and decreasing demand of bags from the consuming public. In astute scrutiny of Table 6, it can be noticed that once the import of bags increases heavily as

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compared from the previous year, the number of imports for the succeeding year usually goes down. In 2005, there was a huger increase of imports as compared to 2004 imports. The following year (2006), the number of imports fell down heavily and increased again on a very high number in 2007. In the following year (2008), the number of imports went down.

Green Leaf Eco Manufacturing

Customers Monthly Supply of Bag from Green Leaf Eco Manufacturing

Customers

Demand per month

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Modern Outlet Groceries Companies Schools Others 5,000 10,000 10,000 500 200

Figure 2 Customers Monthly Supply of Bag from Green Leaf Eco Manufacturing

38.91%

0.78% 19.45%

Customers
Modern Outlet Groceries Schools Company Others 38.91%

1.95%

In Figure 1, it is shown that the largest customers of Green Leaf Eco Manufacturing are the groceries and company which both obtained 78% of the total production. The second largest customers are the modern outlets with 19.45% share in the produced bags. This was followed by the schools other customers that doesnt fall in the category given with 1.95% and 0.78% respectively.

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The data in the figure will be very useful for Mundo Eco bags Company to determine the group of customers that must be given focus in introducing the products. The most of the customers of Green Leaf Eco Manufacturing came from groceries and companies. Hence, Mundo Eco Bags Company will likewise intensify its campaign on these potential customers. It shall also concentrate on other customers like modern outlets and schools.

Production of Green Leaf Bags Sorted by Type Types of Bag Tote bag Promotional bag Shopping bag Canvas bag Figure 3 Production per month 2,000 10,000 10,000 10,000

31.25%

6.25% 31.25%

Typesof Bag
Tote bag Promotional bag Schools Company

31.25%

Since the Mundo Eco Bags Company will produce tote bags and shopping bags, its main target of prospective customers will be the small shopping malls or tiange or grocery stores that

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cater to the larger population of consumers. Most lucrative areas that can be tapped as possible market places are the Carriedo, Baclaran, Divisoria, Bambang and Greenhills in San Juan. These areas sell cheap yet quality products which use bags. Likewise, these are popular places often visited by many people within the metro and even the nearby provinces and cities. Figure 3 shows that the Green Leaf Eco Manufacturing Companys largest number of bags produced are the promotional bags, school bag and bags for company use with 31.25% production. The smallest produced are tote bags with 6.25% production. The data on Figure 3 is basically a reaction on the data gleaned in Figure 2. Since the companys largest group of customers are companies and groceries, so the produced bags are company bags for that matter. With the help of the data above, the Mundo Eco Bags Company will produced the kind of bags after it has identified the target customers and necessary demands were made between the company and the customers. Hence, identification of the potential customers for the companys bags must top the list of priorities before the kind of bags that needed to be produced could be identified. On the hand, Table 8 shows the supply of non-woven Polypropylene bags in the Philippines. It must be noted that the data for local supply is based on the information given by Green Leaf Eco Company while the importation data are provided by the National Statistics Office.

Table 8 Supply of Non-Woven Polypropylene Bags in the Philippines

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Year 2004 2005 2006 2007 2008 (August) Local ---40,000 80,000 Import 15,202 415,126 143,246 807,224 74,645 Total 15,202 415,126 143,246 847,224 154,645

It can be gleaned from the table that no entries for local supply were provided by the Green Leaf Eco Company from 2004 to 2006. On the other hand, data from National Statistics Office ranges from 2004 to 2008 (as of August 2008). To graphically present the supply of non-woven Polypropylene bags in the Philippines, Figure 4 shows that graph: Figure 4 Supply of Non-Woven Polypropylene Bags in the Philippines

1000000 800000 600000 400000 200000 0 Import Local

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Data from Table 8 and Figure 4 shows that the supply of non-woven Polypropylene bags in the Philippines is unstable. The see-saw number of non-woven Polypropylene bags imported from 2004 to 2008 is due to the increasing and decreasing demand of bags from the consuming public. This is due to the potential changes of consumption that causes major impact in the industry. Table 8 Forecasted Demand and Supply of Non-Woven Polypropylene Bags in the Philippines Year 2009 2010 2011 2012 2013 Demand 2,187,608 2,220,953 2,254,298 2,287,643 2,321,865 Supply 527,695 612,738 697,780 782,823 867,866

Table 8 shows the forecasted demand and supply of non-woven Polypropylene bags in the Philippines from 2009 to 2013. As to demand, there will be 2,187,608 bags needed in 2009. When 2010 comes, 2,220,953 bags will be needed. In 2012, there will be 2,287,643 bags that are expected to be demanded. Finally in 2013, a total of 2,321,865 will be needed. As to the supply of the bags, 527,695 bags will be produced in 2009. On the other hand, 612,738 bags will be generated in 2010. When 2011 comes, there will be 697,780 bags needed. By 2012 and 2013, there will be 782,823 and 867,866 bags respectively that will be generated.

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According to the trends in the plastic industry, there is an increasing demand of 10% every year due to the increasing number of business establishments that needed bags in selling their products. On the other hand, in projection of the unstable supply of bags from the past 5 years as revealed in Table 8, the supply will somehow increase by the annual production of the proposed company. Table 9 shows the market share of the Mundo Eco Bags Company in reference to the projected demand and projected supply of non-woven Polypropylene bags in the Philippines from 2009 to 2013. Table 9 Market Share Projected Projected Demand Supply 527,695 2,187,608 2,220,953 2,254,298 2,287,643 2,321,865 612,738 697,780 782,823 867,866

Year 2009 2010 2011 2012 2013

Target Market Share 10% 11% 12% 13% 14%

It can be gleaned from the table that there is an 1% increase in every year from 2009 to 2013. For the year 2009, the approximate percentage of available supply of non-woven Polypropylene bags is pegged at 10%. In analysis of the gap between the projected demand and projected supply, there is a positive difference for the next five years. The positive difference between the demand and the

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supply gap indicates an affirmative market share of non--woven Polypropylene bags in the market. This is a clear indication that the company being proposed will thrive. Moreover, the approximate percentage of available supply of non-woven Polypropylene bags for the next five years is increasing. This is projected because the supply of bags will increase by the companys production.

Table 10 shows the projected sales volume of Mundo Eco Bags Company from 2009 to 2013. Table 10 Projected Sales Volume of Mundo Eco Bags Company from 2009 to 2013 Year 2009 2010 2011 2012 2013 Projected Sales Volume
168,000 178,000 188,000 197,000 205,000

It can be seen from the tables that in 2009 the projected sales volume was 168,000 bags. At 2010, 178,000 bags will be produced. For 2011, the production of bag will increase up to 188,000 bags. By 2012 and 2013, there will be 197,000 and 205,000 bags respectively that will be produced.

Table 11 shows the monthly production of non-woven polypropylene bags for the year 2009.

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Table 11 Monthly Production of Non-Woven Polypropylene Bags for the Year 2009 Year January February March April May June July August September October November December TOTAL Volume of Sales (PCS) 14,000 14,000 14,000 14,000 14,000 14,000 14,000 14,000 14,000 14,000 14,000 14,000 168,000

It can be gleaned for the table that 14,000 bags will be produced per month for the whole year or a total of 168,000 bags in the first year. The basis for monthly productions was from the smallest yearly target production.

MARKETING PROGRAMS The company will start the product promotions in advertising in a free ads website. As a new player, it will start the marketing program to the medium scale supermarkets within NCR through translating to them the advocacy of the company and telling them the benefits they will get from the product. Moreover, the company will also post advertisements in newspapers to promote the design and uses of the product. Print media which houses a larger number of readers can have a full knowledge of the company and its products. The name of the commissioned news paper

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company will be the Philippine Daily Inquirer. The dimension of ads will be 4 x 30 ccm which cost Php 63,360.00 for twice appearance. Furthermore, the company will also adopt the market penetration strategy, that is, it will introduce the product through direct or personal selling to different prospective custnmers in order to capture the increase in the expected market share. The company will proviude sample products for trial and conduct presentation of product to prospective customers. Presentation will be done after all necessary permission and appointments were set and properly arrange by the prospective clients. To do this, the company will hire sales representative who will be responsible in negotiating our product to potential customers.