BUSINESS PLAN PROPOSAL On CASSAVA CHIPS PRODUCING ENTERPRISE

Submitted by: Nilo Barmiro Jovert Vias BSBA ECONOMICS 4th Year

Submitted to: Prof. Czarina S. Saikol

ACKNOWLEDGMENT

The researchers would like to express their sincere and heartfelt gratitude to the following people who became a part on the success of this business plan. First and foremost, to the loving parents of the researchers, Mr. and Mrs.Vias, Mr. and Mrs. Barmiro. Particularly to Mr. and Mrs. Chan for giving us their support emotionally, socially and of course financially. To the adviser, Mrs. Czarinah Saikol, for challenging and guiding them with their business plan. To the following offices, the Department of Trade and Industry for allowing the researchers to get the information needed to conduct such business plan proposal. To the management of Sarangani Cassava Chips Producing Enterprise, for letting the researchers conduct an interview and for giving them the much needed information on the different aspect of their enterprise. To the authors other business plan proposals for being the researchers bases on creating this feasibility study. To our classmates and friends, for the support and understanding they have given to the researchers. And most especially to our loving Almighty God, for giving the researchers the knowledge and wisdom they needed in conducting the research and also for the guidance and the blessings that was brought to them.

Table of Contents

Page Title Page ...........1 Acknowledgement2 Table of Contents....6

CHAPTER I- EXECUTIVE SUMMARY OF THE PROJECT 1.1 Name of the Firm.7 1.2 Location.8 1.3 Major Objectives of the Business Proposal.8 1.4 Description of the Business ...9 1.4.1 Marketing Plan...10 1.4.2 Production Plan.10 1.4.3 Organizational and Manpower Plan11 1.4.4 Financial Plan..12 1.4.5 Critical Risk Analysis.....12 1.4.6 Social significance.12 CHAPTER II- THE BUSINESS The Product .13 Brand Name ...13 Product Fashion ....13 Product Quality...13 Product Packaging and Labeling ....14

CHAPTER III-ORGANIZATIONAL PLAN .. Manpower Plan....15 Organizational Chart .....15 Temporary Organizational Chart.. ....16 Ideal Organizational Chart.....16 Personnel Qualification .18 Personnel Duties and Responsibilities .......19 Human Resource Control Policies ......19 Strategic Management(Pre-operating Activities)21 Gantt Chart of Activities..23

CHAPTER IV- PRODUCTION PLAN . Production Forecast For Five Years ....25

Location Strategy ....26 Location Map or Vicinity Map.27 Process and Design Strategy........27

Process Flow ...27

Production or Services Procedures .28

Plant and Shop Layout ...29 .Inputs and Management...29 Raw Materials.......29 Facilities and Equipments......29. Utilities Waste Disposal...30
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Technology Requirement.31 Manufacturing Cost / Production Cost31

CHAPTER V- MARKETING PLAN. Market Research Analysis...31 Target Market.31. Demographic Profile ....32 Psychographic and Behavioral Profile..32 Market Size and Trends ..33 Estimate Market Share.....34 Pricing Strategy.....35 Pricing Structure....35 3.6 Introduction or Launch Stage.....35 3.3 Growth and Maturity Stage....35

. Sales and Distribution Strategy..35 Order and Processing....36 Order Quantity.36 Order Lead Time.....37 Volume of Safety Stocks ....37

Warehousing and Storage.37 Distribution Channel..41

 Growth and Maturity Stage..43 Marketing Control Policies...44 Similarities and Differences with Other Competitors.44

Similarites..44. Differences.44

CHAPTER VII- CRITICAL RISK ANALYSIS Potential Problems.45 Obstacle and Risk....45 External Risks...45 Competition...45 Peace and Order...45 Rapid Change in Technology.....46

Internal Risks.47 Objectives ..47 Areas and Consideration 47 Alternative Courses of Actions ...47 Contigency Plans ....48 Exit Strategies ..49

F. CONCLUSIONS AND RECOMMENDATIONS..51

I.

EXECUTIVE SUMMARY

a. Brief summary of the plan This chapter presents the brief outline of the proposed project of cassava chips producing enterprise type of business. The chapter also contains the name of the firm, its location, brief description of the project, and the project summary.

i.

Name of the Firm A firms name is defined as a brand, term, sign, symbol, or design, or a

combination of these, intended to identify the goods and services of one seller or group of sellers and to differentiate then from those of the competitors (Ilaro, M., 2001). JN CASSAVA CHIPS PRODUCING ENTERPRISE INC. is the name chosen by the two aspiring entrepreneurs whom they based on their first name Jovert C. Vias and Nilo A. Barmiro. The name was chosen it is because they want to strengthen their relationship this time as a businesspersons.

ii.

Location Jose Catolico Boulevard, General Santos City which is in front of KCC

Mall is the strategic location that the partners have chosen. The location is situated in the city where other establishment, schools, and potential consumers

are also to be found. The products and services offered by the proposed entity will become more accessible to the market. b. Major Objectives of the Business Proposal The main aim of the business is to produce good quality cassava chips for secondary processors of High Quality Cassava Flour based in the urban centers. The processing of fresh cassava into chips will increase the income of cassava farmers in the area, reduce post-harvest losses and create employment for the people in the area. Also it aims to tap existing producers and encourage potential investors in the region to venture into cassava (tapioca) chips production to supply the needed demand of the Philippine International Trader Corporation (PITC). Thus, it will catalyze investment in the region, facilitate financing and create job opportunity and livelihood in the region. c. Description of the Business Cassava and sweet potato are two roots crops that are cultivated in many parts of the Philippines. In some areas of the country, it is eaten as substitute for rice. Cassava, locally known as kamoteng kahoy or balinghoy (scientific name: Manihot esculenta) ranks as second in terms of volume of production among all the root crops in the country. Cassava is an edible tropical plant that yields tuberous roots from which cassava flour, tapioca (laundry starch), or even alcoholic beverages can be derived. Cassava is commercially traded as raw materials for various food and non-food industrial products. About eighty percent

(80%) of cassava supply is used as feed formulation while twenty percent (20%) is used as food consumption. Most of the snack items popular in the market do not have much nutritional value; hence it is termed as junk foods. In fact, most contains food preservatives to enhance their flavor and lengthen its shelf life. Root crops like cassava can be made into nutritional and affordable snacks, cassava (Tapioca) chips is one such nutritional and inexpensive snacks. Cassava root is very rich in starch and contains significant amounts of dietary fiber, calcium, iron, manganese, phosphorous, potassium, vitamin B6 and vitamin C. Dietary fiber has been associated in lowering the risk of cardiovascular disease, colon cancer, and helping control diabetes. A study also shows that cassava significantly decreases total cholesterol levels, low density lipoprotein (LDL) cholesterol (considered as bad cholesterol), and may help lower triglyceride levels due to its high total dietary fiber content. Consumers eat snacks, but with the growing number of diseases and ailment today, consumers need to be very selective with the food that they eat. With that, cassava (tapioca) is a very good substitute to the regular snacks that are found in the grocery store. It just does not give a very tasty treat but a nutritive and affordable snacks that all can afford to buy. Given the potential of the project, entrepreneurs will have a sure market and great opportunity for their products.

d. Marketing Plan

The business will market its product to its target customers which is composed of students, tourists, and all other people that may be a source of profit on the side of the business.

e. Production Plan

Our production system shall strive to attain service excellence in addition to manufacturing safe, quality products. This shall be undertaken through the engagement of modern production techniques using up-to-date assembly

technology. This will also result in low production costs being attained by the business. We also intend to ensure that the suppliers we engage are committed and reliable so as not to let down the final consumer in terms of the quality of the product and time of delivery.

In order to improve productivity in our plants we intend to reduce waste and duplication in our production of cassava chips by streamlining administrative functions and promoting and instilling a business culture that focuses on the teamwork rather than individual productivity. By the undertaking the above we will optimize our productivity given our available resources.

f. Organizational and Manpower Plan

Personnel management is productive exploitation of manpower resources. This is also termed as Manpower Management. Manpower Management is

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choosing the proper type of people as and when required. It also takes into account the upgrading in existing people. Manpower Management starts with manpower planning. Every manager in an organization is a personnel man, dealing with people.

Planning is nothing but using the available assets for the effective implementation of the production plans. After the preparing the plans, people are grouped together to achieve organizational objectives. Planning is concerned with coordinating, motivating and controlling of the various activities within the organization. Time required for acquiring the material, capital and machinery should be taken into account. Manager has to reasonably predict future events and plan out the production. The basic purpose of the management is to increase the production, so that the profit margin can be increased. Manager has to guess the future business and to take timely and correct decisions in respect of company objectives, policies and cost performances. The plans need to be supported by all the members of the organization. Planning is making a decision in advance what is to be done. It is the willpower of course of action to achieve the desired results. It is a kind of future picture where events are sketched. It can be defined as a mental process requiring the use of intellectual faculty, imagination, foresight and sound judgment. It involves problem solving and decision making. Management has to prepare for short term strategy and measure the achievements, while the long term plans are prepared to develop the better and new products, services, expansion to keep the interest of the owners.

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g. Financial Plan The business will assure that it will maximize the use of the cassava crops in order to lessen the cost and also to minimize the used of the scarce resources. Also the business will assure that the capital that they have invested in the business will be gain back after 3 years of its operation in the market.

h. Critical Risk Analysis The business critical risk analysis is that it may encourage a healthy competition in the market sector, promotes peace and order in the community, and the introduction of the high-technology equipments that may faster the production of the products. i. Social Significance The social significance of the business is that it will help the economy of the Philippines to boost and also it will create more employment that may lesser the large unemployed person here in the country.

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II.

THE BUSINESS a. The Product i. Brand Name

The brand name of the product is simply Cassava Chips with a tag line of Irresistibly Delicious. ii. Product Fashion

The product is unique especially here in the Philippines because it can easily suites to the taste of every possible consumer. Also it can be a substitute for rice and it is rich in nutritional benefits such as Vitamin A, Vitamin B1, Thiamin, Vitamin B2, Riboflavin, Vitamin B3, Niacin, Vitamin B5, Pantothenic Acid, Vitamin B6, Pyridoxine, Vitamin B9, Folate, Folic Acid, Vitamin C (Large Amount), Vitamin E, Vitamin K, Protein and Choline. iii. Product Quality

The product quality of cassava chips is 100% safe and is suitable for exporting to the other countries. JN CASSAVA CHIPS PRODUCING ENTERPRISE INC. ensures that the cassava chips being produced and distributed in different parts of the world have undergone to quality control inspections. iv. Product Packaging and Labeling

JN CASSAVA CHIPS PRODUCING ENTERPRISE INC. ensures that the packaging of the cassava chips is duly sealed in plastics or in sacks and transported for sale in the market. More decent and portable packaging could be explored.
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Cassava chips should be stored in sacks in an airy store. Damp and hot environment should be avoided in order to prevent moisture in the product that may affect the quality of the cassava chips. In order to be creative and to attract the customers from buying the product we created our own logo for the product;

III. ORGANIZATIONAL PLAN a. Manpower Plan Manpower Management is choosing the proper type of people as and when required. It also takes into account the upgrading in existing people. Manpower Management starts with manpower planning. Every manager in an organization is a personnel man, dealing with people.

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i.

Organizational Chart

An organizational chart -is a diagram that represents and defines the structure of an organization in terms of rank. The organizational chart generally plots the relationships between staff, showing directors, managers and general workers. An organizational chart is a graphic representation that only shows formal relationships, lines of authority and responsibility. What an organizational chart does not reveal is social relationships or the type of managerial style an organization has adopted. An organizational chart is also referred to as an org chart. In addition to businesses, government agencies and school districts also utilize the organizational chart concept. When looking at large conglomerates, the organizational chart can become confusing and highly complicated. Therefore, a main organizational chart is often broken down into smaller, more functional charts. The organizational chart is usually one of three types: hierarchical, matrix or flat. Most business plans contain an organizational chart to describe the make-up of an organization.

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1. Temporary Organizational Chart

Managers/Owners

Worker 1

Worker 2

Worker 3

Worker 4

Worker 5

The workforce of the temporary organizational chart for the business will be six (6). It will be made up of the owner/manager and 5 skilled workers.

2. Ideal Organizational Chart

Managers/Owners Supervisor

Worker 1

Worker 2

Worker 3

Worker 4

Worker 5

The workforce of the ideal organizational chart for the business will be seven (7). It will be made up of the owner/manager, a supervisor and 5 skilled workers.

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i.

Personnel Qualification

The personnel to be hired in the company may depend on the type of the job that he may apply to. Bookkeeper Must be 20-25 years of age male or female. Must be a graduate of BS in Accountancy. Must be a Certified Public Accountant or has taken a CPA Board Examination. Cassava Chips Cook Must be 20-25 years of age male or female. Must be a graduate of any four year course.

Service Crew Must be 20-25 years of age. Must be a graduate of any four year course. Must be polite and courteous to customers.

Cashier/Information Clerk Must be 25 years of age, preferably a female. Must be a graduate of four year course. Preferably a Bachelor of Science major in Business Administration. Must be honest to its work and accurate in giving change to the customers.

Technician Must be 25-30 years old, preferably a male.

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Must be a graduate of BS Electronic Engineering. Must have passed Board Examination for Electronic Engineers.

Security Guard Must be 30-35 years old, preferably a male. Must be polite and courteous to the customers. Must be a graduate of any four year course.

Janitor Must be 20 years and above. Preferably male. No educational attainment is required.

ii.

Personnel Duties and Responsibilities The personnel duties and responsibilities are very important in an

organization in order to maintain unity and to avoid misunderstanding among employees. Here are the list of their duties and responsibilities respectively: a. The duties and responsibilities of a bookkeeper are that he is responsible for keeping financial records for a company or a business. A bookkeeper must be able to balance the books, making sure that all income and money spent is accounted for. He must be meticulous and honest, paying close attention to details. b. The duties and responsibilities of a cassava chips cook is that he is responsible for cooking the cassava crops into chips. He must assure that all

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the cassava are cook in a clean way and free from harmful substances. He must also secure the quality control of the products. c. The duties and responsibilities of a service crew is that he is the one who will cater the orders of the customers. He must be polite and courteous all the time. d. The duties and responsibilities of a Cashier/Information Clerk is that to keep a record of how much money they had when they opened the store, how much money is earned when they closed the store, and the amount of change in a register drawer for the purpose of finding out when they are required to restock the change. e. The duties and responsibilities of a Technician is that he should be the one to look up into the equipments. He must assure that the facilities and equipments are working properly in order to avoid accidents. f. The duties and responsibilities of a Security Guard is to assure the safety of the customers and the building as well. g. The duties and responsibilities of a Janitor is to maintain the cleanliness of the shop and orderliness of the products. iii. Human Resource Control Policies The policies imposed to employees in order to maintain peacefulness within the organization and to assure that the organization will be successful are as follows:

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a. Courtesy and Human Relations The employees must observe courtesy especially in working hours. They should respect those officials that have higher rank than them. Also, they should mingle with other employees in the organization in order to promote unity in the working place. b. Punctuality and Attendance The employees should be on time during working days. All employees shall work 8 hours a week.

c. Initiative and Resourcefulness The employees shall have initiative to tell the other officials when one of the equipments is not properly working and also they should tell those employees whom does not working properly in the plant. They also should be resourceful in making the part of the product which is not used by making them fertilizers or as a feeds for animal consumption in a way that it will not bring harm to the society as well as to the environment.

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D. Strategic Management (Pre-operating Activities) 1. Pre-Operating Activities These are the projects to be considered before the formal operation of the business. This part discusses the different pre-operating activities of the business:

a. Project Feasibility study

This is the period where the potential owners will have enough time to know if the study is feasible and will become revenue-generating.

b. Preparation of Business Plan The preparation of the business plan starts with the identification of the following: the kind of services and products offered; availability of the materials needed; sources of funds; personnel to be involved in the operation of the business; suitable location for the business.

c. Sourcing of Business License and Permit The business license and permit will be obtained to make the business operation legal.

d. Construction of building and facilities

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The construction of building is done through the help of experts like engineers and architects to secure the safety and good foundation of the building. This is to prevent unexpected circumstances that may occur in the operation of the business.

e. Acquisition of Equipments, furniture and fixtures The equipments, furniture and fixtures will be acquired by negotiating from established suppliers of the market. This is to secure the quality of the machineries to mitigate expenses to be incurred from repairs and maintenance.

f. Hiring of employees The employment of the personnel needed for the business operation should be taken carefully into consideration. The company should look into every aspect that could affect the labor force. This will be done through posting of job vacancies, and then acceptance and selection of component workers follow.

g. Start of Business Operation The JN CASSAVA CHIPS PRODUCING ENTERPRISE INC. will be opened formally to the public after the pre-operating activities have been completed.

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GANTT CHART OF ACTIVITIES

a. Time Table The time table plots the different activities under the pre-operating stage. It gives a clearer picture on how the pre-operating activities should be done. The activities are arranged in accordance to the duration of the accomplishment. Below is the Gantt chart of the activities of the JN Enterprise Inc.

Table 12. GANTT CHART of the Pre-operating activities of JN Enterprise. Pre-Operating Activities a. Project study b. Preparation of Business Plan c. Sourcing of Business License and Permit d. Construction of Building and facilities e. Acquisition of Equipments, Furniture and Fixtures f. Hiring of Employees g. Start of Business Operation Months of Completion 3 4 5 6

The Gantt chart illustrates the pre-operating activities of JN CASSAVA CHIPS PRODUCING ENTERPRISE INC. The pre-operating activities are necessary in guiding the proponents of the study. This supports the proponents in putting up the business.
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IV.

PRODUCTION PLAN a. Monthly Production Forecast Moving average is used in the production forecast of the JN Enterprise of its

Cassava Chips Products.

It is also called rolling average, rolling mean or running

average, is a type of filter used to analyze a set of data points by creating a series of averages of different subsets of the full data set. PRODUCTION FORECAST FOR FIVE YEARS

PRODUCTION FORECASTS YEAR 1 JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER EXPECTED SALES 14 40 32 46 44 56 60 42 35 38 58 62 MOVING TOTAL 86 118 122 146 160 158 137 115 131 158 MA3 FORECAST 28.67 % 39.33 % 40.67 % 48.67 % 53.33 % 52.67% 45.67% 38.38% 43.67% 52.67%

PRODUCTION FORECASTS YEAR 2 JANUARY FEBRUARY MARCH APRIL EXPECTED SALES 10 16 20 21 MOVING TOTAL 46 57 77
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MA3 FORECAST 15.33% 19% 25.67%

MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER

36 30 19 27 42 48 50 30

87 85 76 88 117 140 128

29% 28.33% 25.33% 29.38% 39% 46.67% 42.67%

PRODUCTION FORECASTS FOR YEAR 3 JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER EXPECTED SALES 20 20 19 30 47 50 55 61 25 28 29 80 MOVING TOTAL 50 60 87 127 152 166 141 114 82 137 MA3 FORECAST 16.67% 20% 29% 42.33% 50.67% 55.33% 47% 38% 27.33% 45.67%

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A. Location Strategy Location strategy is the process of choosing where to locate a unit producing goods or services. This must take account of a range of variables to achieve the minimum cost that optimizes the overall strategy of the particular organization. There are three basic strategies. In a product-based strategy, independent facilities are used to produce each product in a company's range.

i.

Weighted Alternative and Criteria LOCATIONS PIONEER SCHOOLS (example MSU,RMMC NDDU,HTC,GFI)

CRITERIA

PUBLIC MARKET (particularl y Gensan Market) 2 1 4 3

1. Customer Traffic 2. Market Accessibility 3. Competitors in the market place 4. Target Customers 5. LEGENDS:

1 1 4 3

1 1 4 3

NEAR MALLS (particularly KCC MALL OF GENSAN) 1 1 4 3

1 Accessible 2 Not Accessible 3 Many 4 Less

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ii.

Location Map or Vicinity Map

STALLS

STALLS

JN ENTERPRISE INC.

J. Catolico Boulevard
STALLS STALLS KCC MALL OF GENSAN

The location map of the business is located in front of the KCC Mall of Gensan, where many of its target customers are present. A. Process and Design Strategy A. Process Flow A business process flow is a way of visualizing and documenting the steps in a business process. Business process flows are flow charts that document inputs or requests for information, products or any other deliverable; the procedural steps to satisfy that request; and the output, or deliverable that is generated by the input.

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B. Production or Services Procedures Here are the production procedures of the business: 1. Buying of Cassava Crops in the market. 2. Washing of Cassava Crops. 3. Peeling of Cassava Crops. 4. Cutting of Cassava Crops into Chips 5. Preparation of Cassava Chips and its ingredients for frying. 6. Frying of Cassava Chips. 7. Packaging of Cassava Chips. (Cellophane container and plastic cans). 8. Inspection of Cassava Chips for quality control. 9. Placing the product into the shop racks for display. 10. Selling it to the customers.

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i.

Plant and Shop layout

Here is the blueprint of the shop layout of the JN Enterprise Inc.

6m
KITCHEN

SHELVES S H E L V E S

Kit
COMPUTER DESK

S H E L V E S

5m

CASHIERS TABLE

ENTRANCE

SHELVES

B. Inputs and Management i. Raw Materials The main raw material used is fresh cassava. The fresh cassava must be fully matured between 10-12 months. This is processed under clean and hygienic conditions into high quality cassava chips. ii. Facilities and Equipments The facilities and equipments used in the production of Cassava Chips are just simple equipments such as weighing scale and sealer machine.

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iii.

Utilities and Waste Disposal

It is essential for every business to have a proper waste disposal. This secures the cleanliness as well as the health awareness that may affect the customers and the personnel of the business.

The waste of the JN CASSAVA CHIPS PRODUCING ENTERPRISE INC will be properly disposed of by following the local governments way of disposing.

The JN CASSAVA CHIPS PRODUCING ENTERPRISE INC. waste will be gathered and segregated according to biodegradability and non-biodegradability. Afterwards, these will be delivered to the proper waste disposal site of the city. As for the production plant, the equipments shall be replaced every 5 years.

Clean water will be also readily available which is needed in cleaning fresh harvested cassava crops. Also, a drainage system will be build up by the company that will serve as a storage for the waste out of the peeled cassava crops. The company assures the people within its community that they will be safe from harmful chemicals that might affect their health.

On the other hand, utilities are important in the business since it supports the operation of the business. This includes services, such as water, sewer, gas, electricity, and telephones that are generally required to operate a building.

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iv.

Technology Requirement When the business is in its maturity stage the company will acquire high-

technology equipments to meet the production requirement of the business. Examples of high-technology equipments are those machines that have the capacity to produce high quality cassava chips in less than an hour. v. V. Manufacturing Cost / Production Cost

Marketing Plan a. Market Research Analysis This chapter presents the marketing aspect of the study of the proposed

enterprise to ascertain potential demand and consumer preferences. This contains the target market, market size and trends, demand, supply, and the demand and supply analysis. i. Target Market The target markets of the proposed cassava chips producing enterprise are all those people who live in General Santos City. Especially, those

individuals who are health conscious whom wants to eat nutritious foods such as cassava chips.

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ii.

Demographic Profile The demographic profile includes the target markets of the proposed cassava chips business are those in the reasonably productive ages of General Santos Citys population. Included in the spotted target market are those in the working age group (15 to 64 years old) with 329,856 or 62.5 percent of the total household population of 529,542. Within the said age group are 165,666,

High school students, 18,801, Post secondary, 44,633, College undergraduates, 42,804, Academic degree holders and 763 Post baccalaureate. iii. Psychographic and Behavioral Profile Demand, sometimes called effective demand, is the amount purchasers are willing to buy at a specified price. The need of many to satisfy their hunger is the impelling cause in the steady increase of the proposed business ventures demand. According to the gathered data, the consumers identified by the competition are families, students, employees and friends. They were considered as clients mainly because they are people that the establishments intended to offer their products and services. Shown in Table below are the estimated demand of the proposed ventures competitors, other cassava chips producing enterprise for the years 2009 and 2010.
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Demands 2009 Couch Potato Inc. 100 2010 150

iv.

Market Size and Trends The market size and trends refer to the total population of this industrys

enthusiasts that may be obtained with this proposed venture. This will determine the actual number of target market or consumers in every business market. It also estimates the possible customers that will primarily serve as basis for possible sales and provide definite market segmentation for the venture itself. Based on the data gathered by the researchers from the Census of Population, the market size of the industry is 329,856 or 62.5 percent of the total population. These are economically viable citizens and are capable of compensating for the products and services that the business enterprise would be offering. GenSan, being one of the fastest growing cities of the Philippines, with an annual population growth rate of 3.53 percent which indicates that there is also an increasing effect in the demand trend of the proposed business venture. v. Estimated Market Share The market share of the business venture realistically is in the range of 11% which has the total of 36,000 out of 329,856 individuals of the working age
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group in General Santos City. The following graph shows the estimated market share of JN CASSAVA CHIPS PRODUCING ENTERPRISE INC. with respect to some of its competitors.

Estimated Market Shares

JN CASSSAVA CHIPS PRODUCING ENTERPRISE INC. Couch Potato Inc. Others

11%

22% 67%

Figure 2. Estimated Market Share A. Pricing Strategy The price is one of the components of the marketing aspect which contributes to a large extent in the attainment of the firms sales and profit goals. The pricing strategy will help the company achieve its objectives. JN CASSAVA CHIPS PRODUCING ENTERPRISE INC. will use the marketing penetration strategy. This type of pricing strategy sets its price at the lowest possible price range to penetrate

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the market as rapidly as possible, attracting many customers and winning a large market share.

i.

Pricing Structure Pricing of the products are one of the important part that must be included

in the marketing plan. It is because it is one of the factors that will determine if the product will be suitable for the market for sales. 1. Introduction or Launch Stage During the introduction or launch stage, the price of the cassava chips will be at a low cost. 2. Growth and Maturity Stage During the growth or maturity stage, the pricing strategy that the proposed business will implement on its products will be doubled. b. Sales and Distribution Strategy The movement of goods and services from a source through distribution channel, right up to the final customer, consumer, or user, and the movement of payment in the opposite direction, right up to the original producer or supplier.

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i.

Order and Processing

Order processing primarily refers to the steps undertaken from the time the customer makes an order up to the time the ordered goods are delivered to them. In order for a customer to acquire his/her order, the business will use the pay as you order system, wherein the customers will directly address his/her order to the staff assigned in the counter. The customer will then pay for the goods ordered, after that he/she could wait in one of the tables for the goods to be delivered to him/her. For the JN CASSAVA CHIPS PRODUCING ENTERPRISE INC., customers will go directly to the staff assigned in the information desk of the store. Customers will then choose what type of the cassava chips flavour they want to buy and they will immediately pay the required payment before they can take the products with them. The customers will be treated with much respect. Each service crew will serve the customers with a smile. The process will be done in routine and will be improved for the wellness of the customers. 1. Order Quantity In JN CASSAVA CHIPS PRODUCING ENTERPRISE INC., a customer order quantity depends on the customers choice and his/ her financial capability as long as he/she can afford the goods and services offered by the business and the goods are readily available to be served.

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2. Order Lead Time The customers in the JN CASSAVA CHIPS PRODUCING ENTERPRISE INC. will only be waiting for a maximum of 2 minutes before he/she could fully receive the order.

3. Volume of Safety Stocks The volume of safety stocks is 200 per day in order to meet the demand of the target customers ii. Warehousing and Storage

Warehousing is an important component of physical distribution. Due to some reason, some products are not distributed immediately to the customers after they have come out from the production line. Nevertheless, these products should be properly kept in good condition until they are finally distributed to the customers. The business enterprise will use the FIFO method in which the first products entered in the inventory will also be the first to be used and distributed to the customers. The storage of the finished products is stored at the small compartment located at the back of the shop. It is free from any moist and it is well a ventilated area in order to keep the product in its fresh and crisp form.

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iii.

Distribution Channel

Distribution channel plays an important role in the marketing of the goods and services of the proposed business. This distribution channel is a set of interdependent organizations and individuals that facilitate the movement and the transfer of the ownership of commodities from the producer to the ultimate consumer (Medina, 2007). The distribution channel which will be used by the business enterprise would be a direct distribution channel. This is an arrangement wherein the company will directly sell its product to the customers. This is the most appropriate distribution channel to use since the company offers consumer goods intended for final consumption. SELLER c. Promotion and Sales Strategy Promoting a product consist of four alternative channels. These are personal selling, advertising, publicity, and sales promotion (Medina, 2007). These strategies would help build and improve consumer demand. It involves encouraging the customers to patronize the goods and services offered by the proposed venture. i. Advertising Strategy CUSTOMERS

This is done to effectively inform and persuade the target market. Advertisements are any paid form of non-personal presentation and promotion of ideas, goods, or services, by an identified sponsor. The business would be
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advertised through the help of the advertising media in the locality such as leaflets, posters and tarpaulins. 1. Launch or Introduction Stage a. Advertising Strategy Mix Here is some of the Advertising Strategy Mix that the Business will do:

Publicity Publicity is a form of promotion, not paid for, and whose

sponsor is not identified. Publicity is used to make its target market be aware of the business products, services, and activities. It is also used to maintain a certain level of positive, public visibility; to protect a particular image; and to overcome negative images. The business would plant commercially significant news about its product and services in a published medium or even on radio. Also, the business would rely on the testimonies of the customers who have experienced and was satisfied with the products and services offered by the venture. Personal Selling

This refers to the direct face-to-face communication between the business enterprise and its prospective customers. This is an attempt to communicate with the objective of making sales. The cahiers, waiters, front-desk, and all other workers who could directly
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communicate to the customers will also act as salesperson of the business. They would convince the prospective buyers to buy and the present buyers to buy some more of the business goods and services. b. Sample Advertising Mix Here is the sample script that the proposed business that will be placed on tarpaulins, pamphlets and in tv commercials.

Sick of potato chips? No? Of course, it is kind of difficult to get bored with munching on those salty tasty fried potato chips. They are so delicious that sometimes you cant even stop yourself once you start eating those potato chips they are everyones favorite snack. It is actually very nice to consume potato chips while you are watching a movie. I would highly recommend everything to enjoy the experience. But come on, dont you want to eat something different for a change? And we are talking about a snack which tastes a lot like potato chip but slightly meatier and crunchier due to the extra starch. If you have eaten Cassava Chips, its texture is very close. The reason why I like having a bigger crunch is that it feels more filling to me, so you wont over consume, like what we usually would if we were eating potato chip. Oh by the way, Cassava chips are made from the Cassava root.

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It is 0g of Trans Fat and 0g of Cholesterol. Note that the zero is probably a run-down and is different from having absolutely no Trans Fat and having no Cholesterol. Finally, this is gluten and GM free.

It comes with six flavors that you will surely enjoy! Cassava Chips (Regular Flavor) Cassava Chips Bacon Flavor) Cassava Chips (Cheese Flavor) Cassava Chips (Barbeque Flavor) Cassava Chips (Sweet & Sour Flavor) Cassava Chips (Spicy Flavor). So what are you waiting for? Grab this once in a lifetime chance it is 100% irresistibly delicious!

Anyway, you should try Cassava Chips for a change. You might even like it.

2. Growth and Maturity Stage

ii.

Promotion Strategy

Promotion is one of the four elements of marketing mix (product, price, promotion, and place). It is the communication link between sellers and buyers for the purpose of influencing, informing, or persuading a potential buyer's purchasing decision.

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1. Introductory and Launch Stage Launching is an essential part of promoting a particular business venture. It is the time when the establishment will be open to meet its perspective customers. Every business establishment should prepare well for its grand opening. To attract the potential buyers, the proponents proposed to give different promotions to them. For the launch stage of JN CASSAVA CHIPS PRODUCING ENTERPRISE INC., the business will be giving free samples of Cassava Chips per order on the launching date Customers are entitled for a 10% discount on the launching day. 2. Growth and Maturity Stage The Growth and Maturity Stage are characterized by rapid growth in sales and profits. Profits arise due to an increase in output (economies of scale) and possibly better prices. At this stage, it is cheaper for businesses to invest in increasing their market share as well as enjoying the overall growth of the market. Accordingly, significant promotional resources are traditionally invested in products that are firmly in the Growth Stage.

When the business is in its growth and maturity stage the owners are more focused on product modification and improvement and to improve production efficiency and quality.

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iii.

Pricing Strategy

The price is one of the components of the marketing aspect which contributes to a large extent in the attainment of the firms sales and profit goals. The pricing strategy will help the company achieve its objectives. JN CASSAVA CHIPS PRODUCING ENTERPRISE INC. will use the marketing penetration strategy. This type of pricing strategy sets its price at the lowest possible price range to penetrate the market as rapidly as possible, attracting many customers and winning a large market share. Below is the pricing structure of the company. 1. Price Structure

PRODUCTS
Cellophane Packs small

PRICES Plastic Tubes small large

large

Cassava Chips (Regular Flavour) Cassava Chips Bacon Flavour) Cassava Chips (Cheese Flavour) Cassava Chips (Barbeque Flavour) Cassava Chips (Sweet & Sour Flavour) Cassava Chips (Spicy Flavour)

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d. Marketing Control Policies Marketing control is the process of measuring and evaluating the results of marketing strategies and plans and taking corrective actions to ensure that marketing objectives are attained. i. Policies Imposed to Customers

The policies imposed to customers is that when the product that has been purchased by the customers has a defect then it shall be replaced by a new products. Also if they have complaints in our service or products offered they can contact us or text us in our contact numbers which are placed in the front of the store. ii. Similarities The similarities of the business from the other competitors is that the product that is sold in the market which is the cassava chips. Differences The difference is that the way that we price our products and the way we treat our valued customers as they were our boss. And also, we assured our customers that our products undergo a series of test by the BFAD to assure that it is free from any bacterias and to assure that it is halal food. Similarities and Differences with Other Competitors.

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VII.

CRITICAL RISK ANALYSIS This chapter presents the external and internal risks, the contingency plans and

the exit strategies of the business enterprise. a. Potential Problems b. Obstacle and Risk The following are the external and internal risk that the business will face during in its existence in the market. External Risks Risk is an unwanted situation that an entity may experience during its operation. There are two types of risk, the external and internal risk. These risks are not avoidable in businesses especially to new enterprises. Some of the possible risks to businesses are: Competition Every business always has threats for new entrant. This intensity of competition affects the business beginners in the industry. The venture can find difficulties to penetrate the market and attract customers. It also takes time for the business to make it much better than the competitors. Peace and Order The location of the business is one of its key success factors. The peace and order of the locality would greatly contribute to the increase in demand and to attract customers. This is considered as risk because if

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there is no peace and order, investors and customers demand would decrease due to fear. Rapid Change in Technology Technological advancements can bring better facilities which will attract customers. But the rapid change can cause risk to businesses since it can render present equipments used to be outdated or obsolete.

Internal Risks Capitalization Large amount of capital is required in the operation of a business. It is needed to put up unique and high quality of facilities which could attract customers. Insufficient funds to finance the business will also be considered as risk. Mismatch of employees skills Hiring an employee through personal judgment can be inconsistent. This can result to mismatch of the employees skills to the job. This factor is considered a risk as the employees will have insufficient knowledge towards the work which could reduce the productivity. Management The expertise and experience of the entrepreneur are needed to have a competent management. The management should have enough knowledge to operate the business profitably. This factor is considered a

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risk if the management has no experience and expertise in the nature of the business. Inefficient and Ineffective use of resources The productivity and profitability of the enterprise is affected by the efficient and effective use of resources. Being not resourceful can result to greater expenses and lower income. This factor is a risk as the continuity of the operation of the business entity depends upon the productivity of the business venture. c. Objectives The objective of the proposed business is to eliminate the unwanted risks that may arise in the business that may later affect the growth of the business. d. Areas and Consideration The areas to be considered in this analysis are the following: the competitors, product development, and the way the product is introduced into the market. e. Alternative Courses of Actions Here are the alternative courses of actions that the business will do in order to prevent the problems that may arise in the business. Contingency Plans Contingency plan is a plan designed to deal with a particular problem, emergency, or state of affairs if it should occur. The Couch
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Potato enterprise formulated steps to counter effects of possible risks that the venture might experience. Availment of an Insurance Policy Insurance befits society by allowing individuals to share the risks faced by many people. Businesses also insure property, including technology used in production against damage and theft. Because it makes business operations safer, insurance encourages businesses to make an economic transaction which benefits the economies of countries. Creation a Contingency Fund Inefficient and ineffective management of capital and resources can drive a business to the brink of bankruptcy. Having a contingency fund can help the business in times of financial emergencies. Opening communication with proper Authorities Having an open communication with the proper authorities such as the Police and Fire Department can help prevent unwanted accidents. Exit Strategies Exit Strategies are the methodologies by which a business owner can exit his or her business. The JN CASSAVA CHIPS PRODUCING ENTERPRISE INC. formulated strategies in case of the dissolution of the business. Transitioning the business to family members or management. Sell the business to a third party.
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Cancel any permits or licenses issued by the state or county. Notify the creditors ahead of time and pay the final bills on time. Payments of debts outstanding. Notify the customers in a timely fashion. Save the necessary business records and keep it carefully organized in case it will be used in the future.

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CONCLUSIONS AND RECOMMENDATIONS

Conclusions

The marketing of cassava dried cassava chips is a fairly new practice for farmers and also wholesalers. Cassava are important sources of in the tropical areas, dried chips are mainly used for home consumption, but the market orientation of farmers suggests that they would be willing to produce more if an increase in the agricultural production of cassava and land area were possible and more attractive prices were paid. Already cassava production has increased due to soil fertility problems and costly inputs for other agricultural crops. Future market possibilities for chips might increase the production potential of cassava. Through their production increases the business willl started to export to the other country and expected demand will for their nutritious and good to our health. As the contain vitamins of the cassava having an important ingredient to reduce diseases like the cancer, also to control the diabetes and etc. This enterprise are already introducing quality standard such as minimum 70% starch, and composition free of pests, extraneous materila and aflatoxin..All this could lead to a more commercial attitude of farmers and perhaps also to a year-round availability of cassava chips. The market could also help to change some storage practices in able to offer smaller chips that dry faster, store better and keep for a longer time

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Recommendations

Having drawn these conclusions, it is now possible to make a number of useful recommendations. It is not necessary to develop more methods but to elaborate relevant loss-assessment methods to incorporate other valid indicators to consider qualitative and economic aspects of the chip, such as texture, colour, nutritive quality, organoleptic criteria or economic value. But, it should also be noted that quality issues are less relevant in situations of limited financial and nutritional resources.

Usage of pheromone traps and relating infestation pressure to a possible damage of chips is another option to measure weight losses; however, these relationships are influenced by intra- and interspecific competition of insect species, threat of predator and micro-organism damage and climatic conditions.

The socio-economic environment of the farmer and farmers' active participation should be emphasised. The incorporation of indicators on the socioeconomic and socio-cultural environment of post-harvest systems is urgently needed, as is gender-specific analysis. The understanding of the separate roles and responsibilities of men and women is necessary because both might evaluate the same constraints differently. Furthermore, the already existing and future marketing possibilities of cassava and cassava chips should be considered in future studies, because the commercial value of chips decides in the end whether farmers adopt certain protective storage procedures.

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CASSAVA PRODUCTION
Rationale Cassava (Manihot esculenta Crantz), locally known as kamoteng kahoy, is a basic staple food among Filipinos. It has a potential to reduce hunger because it is a cheap substitute to rice. Cassava roots can be processed into various products and can replace various associated raw materials like molasses and maize because cassava can be locally outsourced and it is much cheaper than the two. In the region, one of the industries that use cassava as its raw material is feeds manufacturer present in the area of Polomolok, South Cotabato, the San Miguel Foods, Inc (SMFI). About 80% of cassava production, excluding the human consumption, goes to feed formulation by feed millers for animal and aqua feeds. Further, new investors also wanted to locate their proposed manufacturing firm to produce cassava starch in the region. With the presence of institutional buyer of cassava in the region, huge supply is needed to fill the growing demand of the crop. Aside from cassava as raw materials for feed formulation, cassava is now also used as a substitute in alcoholic beverages and even bio-ethanol for fuel formulation. Such an instance by the Eastern Petroleum is now formulating bio-fuel that will contribute to lessen the fossil fuel dependence of the country. As a start of their program, they are now planting cassava and piloting test with the acceptability of the product. The proposed ethanol plant will have an initial of 200, 000 liters per day and will be sited in Sarangani Province. With the proposed plan of Eastern Petroleum, it can generate more employment and investment in the area. As of 2008 the production of cassava in the region and country-wide reaches at 31,857 metric tons and 1,941,575 metric tons respectively (FAO-RAP Regional Data Exchange System on Food and Agricultural Statistics in Asia and in the Pacific). This is too low as compared with the needed supply requirements of the starch industry and other industry of which cassava is used as raw material. With the increasing demand of the crop and the increasing economic uses of cassava, thus the production of such must also increase.

With the opportunities present in the area of region 12, it is practical to increase and expand the current production of cassava plantation to meet the increasing demand of the crop. With these, this may able to increase more the investment in the area and the job opportunity in the community.

Objective

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The project aims to increase the production of cassava in the region. This will able to cope up the increasing demand of the crop locally and internationally and to encourage more farmers to engage in crop production. Thus, this will increase investment in the region and may help to uplift the livelihood of the farmers in the region.

Project Description Cassava is a perennial shrub which sometimes reaches the sizes of a small tree. Cassava can be used as raw materials of various products such as animal feeds, flour and ethanol and bio-ethanol. In a one (1) hectare cassava plantation based with the one cropping cycle can yield a total of 40 tons of fresh harvest tuber of which it can generate total sales of Php 100, 000.00. Cassava, with its various uses and potential substitution to many raw materials requires huge production to meet the growing demand of the crop. San Miguel Foods Inc. (SMFI) for instance, targets a total of 7,500 hectares of cassava plantation in Southern Mindanao. Aside from SMFI, there are also feed mills in the area of Polomolok that also operate that needs cassava as its raw materials to process into finish products. With the many institutional buyers of cassava in the region and for it to sustain the operations, it needs to expand the production of cassava in the region. Cassava can be best planted with sandy loam, silt loam or clay loam soil. It can be planted region-wide, specifically in General Santos City, South Cotabato, Sultan Kudarat, and Sarangani. The production includes activities such as clearing, trashing, plowing, harrowing, planting, application of fertilizer and weed cultivation. A hectare land can be planted with varieties like Golden Yellow, Lakan 1, KU-50 and a planting distance of .50 meters apart. Fresh tuber can be harvested after 8-12 months after planting with a total yield of 40 tons.

The project will need a total project cost of Php 35,898.75 excluding the land cost. The project is expected to yield a gross profit and net income of Php 67,475.25 and Php 64,101.25 respectively. The gross profit rate and the net profit rate are 67% and 64% respectively. The return on investment is 179%. The cost will be recovered approximately in 6 months and 22 days. Thus, this undertaking is worthwhile to invest with.
Current Market Trends and Opportunities Cassava is one of the alternative ingredients for animal feed, but in the Philippines is used primarily for flour, cassava chips for snacks and also used for biofuel. Cassava production in thePhilippines increased 7% during the first quarter of 2010. Data

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gathered from the Bureau of Agricultural Statistics (BAS) showed that cassava production reached 434,320 tons from January- March 2010. As its target market, cassava will be sold to San Miguel Foods, Inc. (SMFI) for its feed mills present in the area. Aside from the SMFI, there are also other feed mills present in the region that uses cassava as raw materials for further processing. Department of Agriculture (DA-12) also initiated a program to lure more farmers to venture into cassava production in the region. The agency are currently offering local cassava producers the opportunity of availing cassava chippers and cassava granulator equipment as they embark into commercial production of cassava. Thru the aide of Department of Trade and Industry (DTI-Reg.12) under its Supply Management thru Large Enterprise (SMILE) Program, they have identified enterprises and projects of which are locally available and need only to be linked with the small entrepreneurs and farmers so that they can supply the needed raw materials. As a result, this may able to decrease the outsourcing of such materials to other region and able to increase the investment in the area and may help the farmers to uplift their lives. FINANCIAL REQUIREMENT

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Cassava Production Total Project Cost

Particulars Working Capital (1 Year) Farm Inputs Planting materials (184 Bundles @ Php 20.00/Bundle) Fertilizers (8 Bags @Php 1,090.00/Bag) Direct Labor Trash Clearing (2 laborer @ Php225.00 @ 1 day) First Plowing (2 laborer @ Php225.00 @ 1 day) Second Plowing (2 laborer @ Php225.00 @ 1 day) Third Plowing (2 laborer @ Php225.00 @ 1 day) Harrowing (2 laborer @ Php225.00 @ 1 day) Planting (2 laborer @ Php225.00 @ 1 day) Fertilization (2 laborer @ Php225.00 @ 1 day) Cultivation and Weed Control (2 laborer @ Php225.00 @ 2 days) Caretaker (10% from the Gross Sales)
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Amount

3,680.00 8,720.00

1,125.00 1,125.00 1,125.00 1,125.00 1,125.00 1,125.00 1,125.00 2,250.00 10,000.00

Sub-total Operating Expenses Total Project Cost * Note: TPC excludes the land cost. UNDERLYING ASSUMPTIONS:

32,525.00 3,373.75 35,898.75

No. of planting materials in one (1) hectare is 20,000 with a planting distance of .50X.50 meter. 10% allowance for planting materials is alloted for mortality rate. Average yield per hill is 2 kilos. Average yield in one (1) hectare is 40,000 kilos. Selling price of fresh tuber is Php 2.50 per kilo. PROJECTED SALES AND INCOME (1 CROPPING CYCLE = 1 YEAR) Cassava Production Projected Sales and Income Particulars No. of hills per hectare Average yield per hill(kg.) Total yield per hectare(kg.) Selling price per kilo Amount 20,000 2 40,000 2.50

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Total Sales Less: Production Cost Farm Inputs Planting materials (184 Bundles @ Php 20.00/Bundle) Fertilizers (8 Bags @Php 1,090.00/Bag) Direct Labor Trash Clearing (2 laborer @ Php225.00 @ 1 day) First Plowing (2 laborer @ Php225.00 @ 1 day) Second Plowing (2 laborer @ Php225.00 @ 1 day) Third Plowing (2 laborer @ Php225.00 @ 1 day) Harrowing (2 laborer @ Php225.00 @ 1 day) Planting (2 laborer @ Php225.00 @ 1 day) Fertilization (2 laborer @ Php225.00 @ 1 day) Cultivation and Weed Control (2 laborer @ Php225.00 @ 2 days) Caretaker (10% from the Gross Sales) Sub-total Gross Profit
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100,000.00

3,680.00 8,720.00

1,125.00 1,125.00 1,125.00 1,125.00 1,125.00 1,125.00 1,125.00 2,250.00 10,000.00 32,525.00 67,475.00

Less: Operating Expenses (5% from the Gross Profit) Net Income Return on Investment (Ave. Net Income/ TPC) Payback Period (TPC/ Ave. Net Income + Dep'n. + Amort'n.) Gross Profit Ratio (Gross Profit/ Total Sales) Net Margin Ratio (Net Income/ Total Sales) *EUL - Estimated Useful Life *note: Cultivation and weed control is done twice (2) per cycle.

3,373.75 64,101.25 179% 6 Months and 22 Days 67% 64%

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