De La Salle University

Ramon V. Del Rosario College of Business - Management and Organization

Department

Europe Book

In Partial Fulfillment of the Course Requirements in

MKT535M
Term 3, Academic Year 2019 - 2020

Submitted by:
Jucutan, Jennifer B.
Mahusay, Danish Bernadeth G.
Rivera, Chester Scott M.
Tayag, Irish June T.

Submitted to:

Patrick David Cenon

20 August 2020

GROUP 3
QUESTION

ASSUMPTION:
We will introduce the book to the Filipino readers.
CONDUCTING MARKET RESEARCH
By conducting the market research, we can see the audience of who are interested in
purchasing the printed book.

According to National Book Development Board (NBDB), the results of 2017

Readership Survey showed that a majority of Filipino respondents still read printed

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books. Out of the 1,200 adult respondents with ages 18 and above, there were 921 or
76.75% say they have read a printed book in the last twelve months while there 1,020
or 84.99% of youth respondents, with ages 6 to 17 years old, say they have read printed
books in the same time period.

The Top 5 Most Popular Books Filipinos Read could tell us that 47.92% of the Adult
Filipinos love reading related to geography and maps which can imply that they love
seeing places which includes travel books.

What Attracts Filipinos to Read could tell us that 63.14% of the adults love to read
interesting topics and if these topics were coupled with pictures or illustrations, there
could be possibility of more market share. In case of Europe Book, Peter Collantes can

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insert his interesting stories in his travel to Europe coupled with amazing and fascinating
places to make it attractive to young adult and mature adult readers.
Patterns of purchase of adults
About 72% of Filipinos say they are willing to spend only up to PhP199 for a book.
When it comes to willingness to spend for a printed foreign-published brand new book,
34.14% of Filipinos say they are willing to spend PhP99 and below while an almost
similar percentage of adults, 34.64%, say they are willing to spend PhP100-199.
Roughly 26.30% of adults say they are willing to spend PhP200-599 on a printed
foreign-published brand new book.
Patterns of purchase of young readers
Youth respondents were asked about their willingness to spend on a book and the
survey finds that their willingness to spend is the same with adult respondents’ answers.
About 38.86% of children and young adults say they are willing to spend PhP99 and
below for a book while 36.39% say they are willing to spend PhP100-199. Around
21.35% of respondents say they are willing to spend PhP200-599 for a book.
SEGMENT, MARKET AND POSITION ANALYSIS

Demographic - Age Groups
Demographic - Income Status
Behavioral - Patterns of
purchase
Psychographics – Lifestyle /
Hobby
Geographic - Local
SEGMENTATION
Youth
Young adult
Adult
Student
Middle income earners
Large income earners
Willing to spend P99 for a book
Willing to spend P100 – P199 for a book
Willing to spend P200 – P599 for a book
Willing to spend more than P600 for a book
Loves to travel and / or likes interesting travel stories
Loves photography 
Urban
Province

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 TARGETTING
Young adults and adults who love travels, maps, atlas
Europe Book Young adults and adults who likes interesting topics
Young adults and adults who are willing to spend more than P200 but
less than P1,000.

POSITION

The Fully Booked Store has Europe books with prices above P1,000. It will be worth
knowing to consider the current prices in store if Peter Collantes will resell to see where
to position the book. In this case, we assumed that the market is currently offering
hybrid print type books since this is a travel book and the images should be in coloured
to appreciate the reading activity.
The Positioning Matrix
Based on the pricing model we selected (Mark-up Pricing), below is the Peter Collantes’
Europe Books positioning in the Europe Books market.

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In this case, if we are to position our book in the existing market, after considering the
impact of costing, value added taxes and pricing below, the Europe Book is within the
Filipino reader’s appetite of willingness to buy a foreign book up to P599. The pricing
matrix is flexible, we only showed if the price per book is maximized up to more than
50% mark-up.
COSTING
The Group considers the printing and layout cost as variable costs

Original Variable cost

Quantity options
Print Type Options per unit

1,000 1,500 1,000 1,500

1. Black and White 74,000 85,000 74.00 56.67
2. Hybrid
(Black & White text + 76,000 98,000 76.00 65.33
Colored photos)
3. Colored 88,000 108,000 88.00 72.00

In addition to the original variable cost, the Group also added another variable cost -
bookbinding cost (hardbound).

Bookbinding cost per Total variable unit cost

Print Type Options unit (TVUC)

1,000 1,500 1,000 1,500

1. Black and White 70.00 60.00 144.00 116.67
2. Hybrid
(Black & White text + 80.00 75.00 156.00 140.33
Colored photos)
3. Colored 120.00 100.00 208.00 172.00

The Group also assumed certain provisions on incidental fixed costs, to wit:
Nature of fixed costs Amount
Registration cost which includes copyright, and
10,000
International Standard Book Number (ISBN)
Payment to Graphic Artist 10,000
Manuscript editing rates which also includes
proofreading, etc. (Lower rates were picked) but the 50,000
median editor salary scale is P300,000.

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 Promotional Expenses (Advertisements, Book launching) 20,000
Distribution Expenses 20,000
Other incidental fixed cost 10,000
Total 120,000

To answer Question #1, in this case, the Group will choose Hybrid (Black and White
text + coloured photos) since the book in the current market is assumed to be hybrid
as well. In today’s era where travel blogs, travel shows, travel magazines are readily
available, having black and white travel books would not attract readers, on the other
hand, having a colored travel book would be too costly and should be well differentiated
to its competitors who only used Hybrid.
For quantity, we choose 1,500 books to publish to have more cost savings since fixed
cost per unit declines when production increases.

TVUC Fixed unit cost Total unit cost

Print Type Options
1,000 1,500 1,000 1,500 1,000 1,500
1. Black and
144.00 166.67 120.00 80.00 264.00 196.67
White
2. Hybrid
(Black &
White text + 156.00 140.33 120.00 80.00 276.00 220.33
Colored
photos)
3. Colored 208.00 172.00 120.00 80.00 328.00 252.00

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 Unit cost with VAT
Print Type Options
1,000 1,500
1. Black and White 295.68 220.27
2. Hybrid
(Black & White text + Colored 309.12 246.77
photos)
3. Colored 367.36 282.24

To answer Question #2,

The group considered using cost-based pricing because of the predictability and
simplicity of this method. In a cost-based pricing, “markup” is added to the company's
estimated costs. Comparing this to a value-based pricing where Peter must know the
estimated value that a buyer would pay for his product, and thus would entail additional
costs for market research, cost-based pricing would be a cheaper alternative for Peter.
Using the Mark-up Pricing, the Group considered three mark-up percentage options for
sensitivities. In this case, even if we decided to maximize the mark up per book to 55%,
there will still be a market since in terms of affordability and willingness of the consumer
to buy a foreign book, the price ranges are still within the Filipino reader’s appetite up to
P599 per book.

Markup Pricing Model

25% 55%
Print Type Options
1,000 1,500 1,000 1,500
1. Black and White 394.24 293.69 657.03 489.48
2. Hybrid
(Black & White text + Colored 412.16 329.03 686.93 548.39
photos)
3. Colored 489.81 376.32 816.36 627.30

REFERENCE
National Book Development Board (n.d). Retrieved from:
https://booksphilippines.gov.ph/readership-survey-reading-behavior-and-patterns-of-
purchase/
https://www.payscale.com/research/PH/Job=Editor/Salary
Marquez, M. (2018) Retrieved from: https://www.signedmarco.com/publish-book-
philippines/

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