Case 12. CASE 11. BUGTAG CHEMICAL CORPORATION: HELP
Samuel
Bugarin
and
Antonio
Tagorda
were
classmates
at
the
Chemical Engineering Department of De la Salle University. After passing the
board examinations in 1981, Engineer Bugarin applied for a job in a chemical
manufacturing company. He first worked as an assistant in the quality control unit.
Later, he became chief of the unit. He handled various jobs in the production
department. Because of his good performance, he was promoted to production
manager in 1993.
Engineer Tagorda got a job in 1982 as production planner of Reliance Chemical
Company. In 1990, he was assigned as assistant production manager. When the
company's marketing manager resigned in 1991, he was transferred to the marketing
department and was named as the new marketing manager. His main function was
to market the company's products consisting of synthetic resins, aluminum paste,
adhesives, plasticizers, calcium sulfate, etc. When he assumed his post as marketing
manager, the company is already serving a group of loyal customers. The increasing
requirements of these customers also meant additional orders for the company's
products. The company's sales increased even if the number of its customers did not.
In a class reunion held in April 1997, Samuel and Antonio met and they
conversed for more than three hours. Samuel mentioned that he had started organizing
his own chemical manufacturing firm and he wanted Antonio to join him. Antonio agreed
and in a subsequent meeting decided to divide the work between the two of them.
Samuel was to take care of production and Antonio would handle marketing. They
decided to invite an experienced finance officer and a high school classmate, Edgardo
Abuan. He became the company's finance manager.
The company was registered as a stock corporation and the capital
contribution of the stockholders were as follows:
Name of Stockholder
Amount of Capital Contribution
1. Samuel Bugarin
₱
2. Antonio Tagorda
3. Edgardo Abuan
4. Jesus Ualat
5. Rosario Mariano
6. Ausberto Taguinod
7. Francisco Bundoc
8. Amparo Paragas
9. Andres Nicolas
Total
30, 000, 000
15, 000, 000
3, 000, 000
1, 000, 000
1, 000, 000
1, 000, 000
1, 000, 000
1, 000, 000
1, 000, 000
₱ 54, 000, 000
The three agreed to produce caustic soda liquid, hydrochloric acid, soda
ash, sodium sulphate, sodium tripolyphospate, and sulfuric acid. The construction of
the company’s plant has already begun in Dasmariñas, Cavite. The company has
been named the Bugtag Chemical Corporation.
Samuel has already started organizing the production department by hiring a
production planner. Antonio is still considering what steps to take in organizing his
department. One of his problems is the lack of information regarding the nature of the
market the company must tap. Also, Antonio is aware of the utmost importance of
providing the production department with a demand forecast for the company’s
products.
Solution:
After graduating in chemical engineering, Engr. Tagorda worked as a marketing
manager at the Reliance Chemical Company. Despite having a background and a
considerable amount of experience in the field, working with Engr. Bugarin at a new
company with new products posed a challenge to him. It was mentioned in the case that
one of his concerns is the lack of information regarding the nature of the market the
company must tap into. This hindered the preparation of his department because
without that information, their department will not be able to push forward to their
responsibilities in marketing.
Engr. Tagorda’s main concern is his lack of knowledge of the nature of the
market that they will and should be tapping into. Having said this, he should look into
the factors that make up the nature of this certain market. The first factor should be the
product itself. The product is the center of all marketing activities. Without proper
knowledge about the product, they will not be able to continue working on the other
factors. In Bugtag Chemical Corporation’s case, these are the caustic soda liquid,
hydrochloric
acid, soda ash, sodium sulphate, sodium tripolyphospate, and sulfuric
acid. Engr. Tagorda and its department should be able to understand these products,
the process of producing them, their uses, etc. Having done this, they will be able to set
the prices for each product. They can also proceed with analyzing the possible effect of
their location on their business. These pieces of information will help them to gather
potential markets and make segments out of them. The segmentation can either be
based on demographic, psychographic, geographic, or behavioral aspects. Having
decided the target market, they can then proceed to analyze this certain market and
produce whatever it is that the production and other managements will demand
including the demand forecast. With all the information that they could gather, they can
now devise strategies on how they are going to promote the business.
The Bugtag Chemical Corporation is not too different with the Reliance Chemical
Company where Engr. Tagorda came from so I believe not be too difficult for him to
adjust in the his new workplace. Aside from his experience, being able to build a
department with competent and trustworthy people will also him in his concerns.