Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines CHAPTER I INTRODUCTION Background of the Study In cities of developed nations, a good transportation mix usually exists – the presence of private motor vehicles and public transportation system such as buses in different sizes as well as choices in trains and monorails. On the other hand, especially with that of public transportation, the opposite seems to be happening in most cities of developing countries, particularly in Southeast Asia. The lack of common or traditional forms of a public transport network and infrastructure such as mass public transportation is usually substituted with other innovative modes of public transportation. The case of the Philippines in Southeast Asia is not an exception. Aside from the usual buses and taxis, it is a country where all modes of imaginable means of motorized public transport seem to ply the roads as exemplified by the presence of jeepneys, multicabs, megataxis, tricycles and “habal-habal”. The latter two, is another innovation out of the motorcycle in the late fifties and nineties, respectively. Interestingly, this mode has been, since then, part of the Philippine’s urban landscape(Guillen&Ishida, 2004). A motorcycle is defined as a two- and three-wheeled motor vehicle powered by an internal combustion engine and is rated by the cubic inch displacement of its engine. In the Philippines, motorcycles are mainly appended with sidecars and used for public transport (tricycles), particularly in the rural 1 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines areas .This constitutes about 80-85 percent of the demand for motorcycles. In early 1990’s, an additional market was provided by food establishments, which use such types of vehicles for their food delivery services. In recent years, the market of motorcycles purchased for personal use raised especially those in the provinces; still find using two-wheeled motorized vehicles more convenient than large vehicles (V. Pineda, 2009). The global motorcycle market is expected to grow and will remain stable in the coming years. Consumer’s preferences to adopt electric and hybrid vehicles were anticipated to act as a prominent driver for the global motorcycle market. Persistence Market Research (PMR) study on global industry analysis on motorcycle (2012-2016) and forecast (2017-2025) found out that the global motorcycle market is expected to witness a compound annual growth rate (CAGR) of 4.6% over the course of the forecast period. In Southeast Asia, Philippines is the hottest motorcycle market in year 2016 as reported by Motorcycle Development Program Participants Association (MDPPA), an organization formed by Honda, Yamaha, Suzuki, Kawasaki and KYMCO. This is likely to continue(R. Pablo, 2017). With the fast growing industry, marketing remains an effective strategy for organizations to gain competitive advantage. Marketing is all about satisfying customer needs. For a motorcycle business, this means satisfying the needs of a unique, niche market segment. Motorcycle enthusiasts are to select group of consumers and your marketing messages need: to promote your motorcycle 2 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines business in a way that resonates with your customers. Know your customers and their demographic information so you can figure out what will work for your business (S. Christ, 2017). According to Clint Lawrence, the founder of Motor Cycle Shippers, millennial is the most aggressive market of the motorcycle industry today. A welldefined marketing strategy must be made for them to notice the motorcycle products. Some key points emphasized when marketing to millennial includes stressing the inherent ease of use, highlighting key features in tandem with their benefits to stress real value; emphasizing the ongoing cost-savings; the minimalist design; appealing to their desire for living the cool and potentially ecofriendlier lifestyle rather than focusing on performance alone; creating trust before and after buying the products and establishing your presence online (motorcycle.shippers.com). SKYGO Marketing Corporation is the company who wants to empower Filipinos with the mobility they need to become productive and be able to contribute towards nation building by providing them with affordable world-class motorcycles. The Cebu-based motorcycle brand registered in Securities on Exchange Commission on June 2003 and established their Koronadal Branch at Citra Mina Bldg., Gensan Drive on May 2008. This branch is one of the twentythree motorcycle dealers that actively operate in Koronadal City. The SMC branch was compose of two supervisors vested the power to plan, manage, 3 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines direct and control their office area including the formulation of marketing strategies for the benefit of the company. This research paper intends to recommend appropriate marketing strategies in line with the data gathered throughout the research period. This paper will help the SMC Koronadal branch identify the brand awareness and factors affecting customer’s choices in buying the product. In the Philippines, consumers are hesitant to purchase products from China because of the belief that products from the country are substandard (SUNSTAR 2016 issue). This creates a challenge to SKYGO to gain trust from the customer. They have to be different from other China brands and they have to erase the notion that all China brands do nothing for their customers. SKYGO must formulate an aggressive campaign to promote affordability and practicability in the Philippine market. Rationale of the Study Skygo Marketing Corporation(SMC) is one of the companies that believe in the potentials of motorcycle industry – they saw a big opportunity in this trade. With this, they put up branches in different parts of the country including Koronadal City. However, the competition is rigid in both global and local markets. In Koronadal city, Japanese brands such as Honda, Kawasaki, Suzuki, Yamaha and Taiwanese brand Kymco actively marketed their products. Chinese brands are also gaining reputation among motorcycle users. From the five pioneer businesses in the place, participation has increased to 23 businesses, including Chinese, Taiwanese, Thai, Malaysian and Indian brands. Still, 4 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines Japanese brands, which have a huge investment, continue to hold the dominant market position with 80% of market share. The Skygo Marketing Corporation-Koronadal is now facing a big challenge to be competitive and to be able to remain in the industry. This challenge creates an opportunity for the researcher to conduct a corporate analysis and create marketing strategies in order to help Skygo Marketing Corporation- Koronadalincrease the number of customers as well as business level strategies to sustain a competitive advantage even in times of crisis and tough situations faced by the organization. Objectives of the Study The study aimed to identify the current strategies of Skygo Marketing Corporation and will recommend strategies for improvement/development of the organization in Koronadal City, South Cotabato. Specifically, it aimed to: 1. Describe the profile of Skygo Marketing Corporation-Koronadal. 2. Present the major players in the industry in the following aspects: a. Organizational b. Operational c. Marketing d. Financial 3. Present the internal analysis of Skygo Marketing Corporation- Koronadal in the following aspects: a. Organizational 5 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines b. Operational c. Marketing d. Financial 4. Developed and recommend strategies for Skygo Marketing CorporationKoronadal in the following aspects: a. Organizational b. Operational c. Marketing d. Financial Scope and Limitations The study centered on the marketing aspects of Skygo Marketing Corporation- Koronadal Branch only. Strategies developed and recommended aimed to examine the business’s organizational, operational, marketing and financial aspects.This concentration of study ensures easy access to information given the time constraint. Due to the business secrets and the sensitive nature of some information especially concerning clients, some respondents were reluctant to give the information required. This could affect the validity of the findings. Research Methodology This section presents the locale of the study respondents of the study, sample size, research instrumentsanddata gathering procedure. 6 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines Respondents of the Study There are two hundred (200) external and eighteen (18) internal respondents who participated in the survey. The 200 external respondents were the current and potential customersof Skygo Marketing Corporation.They were selected based on the proponent’s judgment using the convenience sampling method while the 18 internal respondents are the census of personnel of Skygo Marketing Corporation. The internal and external respondents were given a separate survey questionnaires in line with the information’s needed in the study. Sample Size The proponent used convenience sampling in identifying the 200 external respondents. This method is done based on the proponent’s judgmentto select people in a relatively fast and inexpensive way. The risks in applying this method will be compensated by properly selecting interested respondents. On the other hand, census or survey of total population was used to internal respondents since Skygo Marketing Corporation-Koronadal is composed of 18 employees only. Research Instruments The studyused survey questionnaires and personal interview.The questionnaires given to both internal and external respondents contained checklists of questions with responses assigned with weights based on their level of agreement. Internal survey questionnaires were designed to assess 7 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines employee’s orientation on internal aspects of the organization. The questions include personal information, the length of stay in the business as employee, the availability of marketing seminars and its sustainability and level of satisfaction with regard to organization’s environment. The questionnaire also provided an open ended question to gather employee’s insights about the company. On the other hand, the external survey questionnaires were designed to assess the preferences of the current and potential markets of Skygo Marketing Corporation. The questions intended to ask the demographic profile of the respondents, their level of income, their brand awareness, buying preferences and customer’s satisfaction scale. The questionnaire also provides a space for comment and suggestion of customers regarding the products and service of the company. The proponent also conducted a one-on-one interview with the store supervisor with the use of interview guide questions to be acquainted on the company backgrounds, culture, operation and organizational aspects. The interview wasan unstructured interview. It is a less formal type in which although sets of questions were used, the interviewer freely modified the sequence of questions, changed the wording and sometimes explained or added suggestions. Data Gathering Procedure The study used both primary and secondary data. Primary data include information gathered from company manuals, personal interviews and 8 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines survey questionnaires. The proponent sent a proposal letter addressed to the store and field supervisor and conducted a one-on-one interview using an interview guide questions during their normal business operations. Internal survey questionnaires were given to employees during their 3:00 pm break time to avoid disturbance of their daily tasks. The proponent assisted them and ensured the relevance of information they provided. External survey questionnaires wereaccomplished by Skygo users and potential customers – both with and without existing motorcycle. It was given to selected vulcanizing shops and other places within Koronadal City. Secondary data wereobtained through online research, government agencies and libraries. Significance of the Study This study is significant to the management ofSkygo Marketing Corporation in order to evaluatethe effectiveness of their current strategiesto take advantage of the growing industry of motorcycle vehicle. The data gathered in this study may be used as reference in formulating applicable strategies for the organization. The outcome of the study could also provide valuable recommendations to address the organization’s issues in maintaining good customer relationship. The study will also benefit the following users: Other existing motorcycle companies may gather selected information in this study that could provide facts needed in their company. 9 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines Potential investors may gather additional knowledge essential in starting a motorcycle business. Other researcherswith similar study may be encouraged in pursuing their research and helping them to collect additional information to support their study. Studentscan use this study for academic and classroom discussion purposes. Other interested persons may be made aware of the ideas presented in this study. Definition of Terms Motorcycle is defined as a two and three-wheeled motor vehicle powered by an internal combustion engine and is rated by the cubic inch displacement of its engine. Motorcycle Industry isdefined as the sectors engaged in manufacturing, distribution and retail, servicing and maintenance, sports and leisure and other support services of motorcycle products. Marketing Strategy is an organization’s strategy that combines all of its marketing goals into one comprehensive plan. 10 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines Chapter II THE INDUSTRY Description of the Industry The global motorcycle market is expected to grow and to remain stable in the coming years. Consumer’s preferences to adopt electric and hybrid vehicles were anticipated to act as a prominent driver for the global motorcycle market. The trend of racing motorcycles with air cooled engines is likely to strengthen in the years ahead with demand from consumers increasing at a rapid step. In Southeast Asia, Philippines is the hottest motorcycle market in the year 2016 as reported by Motorcycle Development Program Participants Association (MDPPA), an organization formed by Honda, Yamaha, Suzuki, Kawasaki and KYMCO.The organization sees sales expanding to 2.5 million units in the next five years, due to the need for increased mobility and the availability of more affordable financing in the country, as well as the worsening traffic situation in the metro areas The Land Transportation Office of the Philipines reported an aggregate of 5, 329, 770 records of issued licenses and permits both new and renewal on motorcycles with side car, without side car and nonconventional in all regions in 2016. The LTO however believed that the motorcycle market in the Philippines is not saturated. With the promising growth of motorcycle market globally as well as in the local market, manufacturers to retailers are expected to perform even 11 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines better. Competition is also fast increasing and there is no way for the industry players to be lax in their actions. Services/Goods Motorcycle, often called a bike, motorbike, or cycle is a two or three-wheeled motor vehicle. It is designed to suit a range of different purposes such as long distance travel, commuting, cruising and sports. Industry Players The industry players of motorcycle industry in Koronadal City include sole proprietorship, partnerships and corporations.Land Transportation office categorized motorcycle businesses as manufacturer, assembler, importers, rebuilders, dealers and other entities (MAIRDOE).In Koronadal City, only the three are present – manufacturer, assemblers, dealers and rebuilders. Manufacturer is a type of business that makes motorcycle units through a process involving raw materials, components usually on a large scale with different operations divided among different workers. Assembler is a category which buys parts of other entity and assembles them to come up with a motorcycle product. While dealers are those firms that buy goods for wholesale and/or retail reselling, rebuilders on the other hand are those entities that purchased/ trade-ins product, perform reconditioning and offer it to the public.The following figure summarizes the types of motorcycle businesses in the area: 12 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines Motorcycle Industry Players Dealers Assemblers Manufacturer Rebuilders 4% 26% 48% 22% Figure 1.Motorcycle Industry Players in Koronadal City Figure 1 indicates that dealers constitute 48% of the total industry players, followed by manufacturers and assemblers with 26% and 22% respectively. The 4% rebuilders are composed of pawnshops that sell second hand motorcycle through auctions sales. Actual and Potential Markets Actual and potential motorcycle markets today includestudents that are 18 years old and above, professionals, tricycle drivers and businesses. Students and professionals use motorcycle products mainly for personal service. Racers use these products to satisfy their hobbies and driving skills; tricycle drivers used these products as public utility vehicle that generates income while businesses used motorcycles for delivery of their products, collections and various business activities. At present, males are the current market of motorcycle businesses. 13 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines Therefore, the potential markets of motorcycle are women of different occupations. Market Characteristics Market Size The population development of KoronadalCity as well as related information and services were as follows: Тысячи No. of Population Koronadal City Population Census 200 150 100 50 0 Jan. 5, 1990 Jan. 5, 2000 Jan. 5, 2010 Jan. 5, 2015 Sources: National Statistics Office of the Philippines (web), National Statistical Coordination Board (web) Figure 2.Koronadal City Population Census (1990-2015) Figure 2 indicates Koronadal City’s population from year 1990 with 108,708; year 2000 with 133,786; year 2010 with 158,273 and year 2015 with 174,942 persons. There is a year to year increase of 23.07%, 18,30% and 10.53% respectively; which is a sign of a growing potential market. 14 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines Further Population Figures: Gender 49.5% Males 50.5% Females Figure 3.Gender Statistics of Koronadal City. Figure 3 indicates the gender statistics of Koronadal City in which 49.50% of it were female while 50.40% were male or anequivalent of 88,303 and 86,639 respectively. The data can be used to identify the free market in terms of gender knowing that common majority of motorcycle users were male individuals. Age Distribution 40 000 35 000 30 000 25 000 20 000 15 000 10 000 5 000 0 0-9 yo 10-19 yo 20-29 yo 30-39 yo 40-49 yo 50-59 yo 60-69 yo 70-79 yo Age Figure 4.Age Distribution Statistics in Koronadal City. 15 80 & above Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines Figure 4 indicates the age distribution among Koronadaleños. Ages 0-9 were 36,691; ages 10-19 were 33,885; ages 20-29 were 32,023; ages 30-39 were 25,286; ages 40-49 were 19,780; ages 50-59 were 14,443; ages 60-69 were 8,107 ages 70-79 were 3,416 and ages 80 and above were 1,311. This information will be used to estimate the potential market of motorcycle industry in terms of ages. In the Philippines, driving without license is strictly prohibited and such licenses were granted only to 18 years old and above. More likely, the market of motorcycle will fall into 20 years old and above category for these segments have the capacity to buy the product. Actual Demand As of 2016, there are 65, 835 new licenses issued by Land Transportation Office XII. The issuances were broken down as follows: Table 1. The Actual Motorcycle Market Industry in Koronadal City Motorcycle With Sidecar New 60,235 Without sidecar New 5,533 Non-conventional New 67 Source: Land Transportation Office – 2016Statistics Section The table shows the actual demand of motorcycle industry for a total of 65,835 units. The table indicated that the largest demand was the motorcycle with sidecar with 91.50% of the actual demand as of 2016. Market Share The estimated sales volume of the motorcycle dealers in Koronadal City follows: 16 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines Table 2. Monthly Sales Volume of Koronadal Motorcycle Industry Players Business Name Monthly Sales Volume Rank Muti& Honda Socsargen 150 - 230 units 1 Skygo 150 - 200 units 2 Trumph 60-80 units 3 Motortrade 30-50 units 4 Desmark 20 - 30 units 5 Yamaha 3s Shop Marbel 20-30 units 6 Others 0 - 100 units 7 Out of 23 motorcycle dealers in Koronadal, 6 major players were identified. These 6 businesses gave their monthly ranges of sales volume. Total demand was estimated to be 600 to 820 per month on the average in which 150200 units were captured by Skygo. Market Share 4% Desmark 16% 7% Motortrade 4% Muti & Honda Socsargen 11% Skygo 30% Trumph Yamaha 3s Shop Marbel 28% Others Figure 5.Market Share. The market share based on sale volume indicated that the industry leader was Muti and Honda Socsargen with 30% share followed by Skygo with 28% andother businesses, Trumph, Motortrade, Desmark, Yamaha 3s and other businesses for 16%, 11%, 7%, 4% and 4% respectively. 17 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines Market Industry Capacity Actual Players The demand for motorcycle vehicle increases year after year. As a result, the entry of motorcycle dealers also increases. Honda, Kawasaki, Yamaha, and Kymco were identified to be the major brands patronized in Koronadal City. In Koronadal City, there are twenty-three actual motorcycle dealers that actively operate, namely: Yamaha 3s Shop Marbel, Honda Socsargen Incorporated, Motortrade, MUTI 3s, DHCI Cyclehaus (Suzuki), EMCOR Marbel, Marbel Universal Trading Inc. (MUTI ), Kawasaki Service Center Koronadal, RCL Direct Marketing, Motorworld, Motorace Philippines Inc., Motor Kee Trading, Marbel E.L Enterprise, Desmark, Transcycle Mart, Kymco, Suzuki Motorcycle-Melec, Ropali Corporation, LYR-Yamaha Service Center, HBU Cycle World, Inc., Crown City Customs, Rusco Motors and Skygo Marketing Corp. Table3. Supply Capacity Monthly Sales Business Name Muti& Honda Socsargen Skygo Trumph Motortrade Desmark Yamaha 3s Shop Marbel Others Total Annual Sales Volume Midpoint Volume 150 - 230 units 150 - 200 units 60-80 units 30-50 units 20 - 30 units 20-30 units 0 - 100 units 190 175 70 40 25 25 50 2280 2100 840 480 300 300 2,400 7,500 Thetable indicates that the estimated supply capacity of motorcycle dealers in Koronadal City was around 7,500 units. 18 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines Distribution System The distribution process of motorcycle business in Koronadal City includes the following: Table 4. Distribution System of Motorcycle Industry Manufacturer Wholesaler Dealer End-user Manufacturer Assembler Dealer End-user Manufacturer Dealer End-user Manufacturer Assembler End-user Table 4 indicates that there are 4 distribution system identified in motorcycle industry in Koronadal City. The most common is the dealership system in which the products were obtained from the manufacturer and will be made available to the end-user through dealers. Major Players of the Industry The major players of the industry were identified to be Motortrade, MUTI & Honda Soc., Skygo, Trumph and Yamaha 3s Shop. MUTI Group of Companies Marbel Universal Trading.Inc. develop and supports motorcycles, real estate, and financing business in Mindanao since 1989. 19 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines Company Logo: Figure 6. MUTI Group of Companies Logo Mission: To provide quality products and services, conduct business fairly and responsibly, develop a highly-motivated and socially-responsible team, thus making life better to all stakeholders for God’s glory. Products: Motorcycles: Yamaha, Honda, Kawasaki, Suzuki Computer Technologies Real Estate Installment Plans Operational/Technical Aspects Business hour: Opens from Monday to Saturday at 8:00 am to 5:00 pm Number of employees: 80 – 100 persons Services Offered: Repair, Tune-up, change oil 20 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines Mode of payment: Cash and credit Equipment’s and Machineries: Computers with customized OS, Delivery Equipment, Generators, Repair equipment Employee Benefits: SSS, HDMF, Philhealth, Performance bonus, yearend bonus, sales commission, Marketing Aspects Table 5. MUTI Group of Companies Pricing Scheme Nature Installment Down Payment Cash Price Lowest P 3,000.00 P 45,000.00 Highest P10,000.00 P 150,000.00 Advertising and Promotional Campaign: Radio Advertising Anniversary sale and Holiday Discounts Trade Fairs Social Media Presence Premiums Rebates Motortrade Nationwide Corporation Organizational Aspect Motortrade Nationwide Corporation is a multi-brand motorcycle dealer that started operations in the late 1960’s. 21 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines Company Logo: Figure 7.Motortrade Nationwide Corporation Logo Vision: Be the first choice. Mission: To uplift life and living by bridging capital and needs. Products: Motorcycle units (Yamaha, Honda, Kawasaki, Suzuki) Motorcycle parts Operational/ Technical Aspect Business hour: Opens from Monday to Saturday at 8:00 am to 5:00 pm Number of employees: 10-15 persons Services Offered: Repair, Tune-up, change oil Mode of payment: Cash and credit Equipment’s and Machineries: Computers, Delivery Equipment, Repair equipment 22 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines Employee Benefits: SSS, HDMF, Philhealth, year-end bonus, sales commission Marketing Aspect Table 6.Motortrade Nationwide CorporationPricing Scheme: Nature Installment Down Payment Cash Price Lowest P3,000.00 P50,000.00 Highest P10,000.00 P150,000.00 Advertising and Promotional Campaign: Social media presence Websites Premiums and Rebates Anniversary promo Corporate Social Responsibility Trumph Motorcycle Corporation Organizational Aspect Trumph Motorcycle Corporation is one of the companies belonging to the Renewable Energy System (RES) Group of Companies – a company that provides innovative technical solutions to high-value scientific and engineering problems for leading companies around the world in energy and chemicals, automotive and fuels,, and pharmaceuticals.. At present, Trumph Motorcycle Corporation is carrying four Japanese products. 23 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines Company Logo: Figure8.Trumph Motorcycle Corporation Logo Mission: To be known to the SOCIETY as a company that provides equal opportunity and employment to the people in the areas where we operate in; lawabiding organization; dedicated to perform its social responsibility; and provide a healthy competition to competitors. Products: Motorcycle (Honda, Yamaha, Suzuki, Kawasaki) Motorcycle parts Operations/Technical Aspects Business hour: Opens from Monday to Saturday at 8:00 am to 5:00 pm Number of employees: 20-30 persons Services Offered: Repair, Tune-up, change oil Mode of payment: Cash and credit Equipment’s and Machineries: Computers, Delivery Equipment, Repair equipment 24 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines Employee Benefits: SSS, HDMF, Philhealth, Dental, Educational support, miscellaneous allowance Marketing Aspects Table7.Trumph Motorcycle Corporation Nature Installment Down Payment Cash Price Lowest P3,500.00 P35,000.00 Highest P8,800.00 P98,000.00 Advertising and Promotional Campaign: Social media presence Websites Rebates Anniversary promo Yamaha 3s Shop Marbel Organizational Aspects Yamaha 3s Shop is under DES Strong Motors, Inc. that offers different models of Yamaha Motorcycles, Yamaha Genuine Spare Parts/Accessories, and Shop services. Company Logo: Figure 9.Yamaha 3s Shop Logo 25 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines Products: Yamaha motorcycles Yamaha Genuine Spare Parts/Accessories Shop services Operational/ Technical Aspects Business hour: Opens from Monday to Saturday at 8:00 am to 5:00 pm Number of employees: 20-30 persons Services Offered: Repair, Tune-up, change oil Mode of payment: Cash and credit Equipment’s and Machineries: Computers, Delivery Equipment, Repair equipment Employee Benefits: SSS, HDMF, Philhealth, Sales Comissions, Yearend and performance bonuses. Marketing Aspects Table 8. Yamaha 3s Shop Pricing Scheme Nature Installment Down Payment Cash Price Lowest P3,500.00 P39,400.00 Highest P58,300.00 P250,500.00 Advertising and Promotional Campaign: Social media presence Websites Rebates Anniversary promo 26 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines Desmark Corporation Desmark Corporation is a dealer of Honda Products. Company Logo Figure 10.Deskmark Corporation Logo Products: Motorcycles (Honda) Motorcycle parts Desmark Company Business hour: Opens from Monday to Saturday at 8:00 am to 5:00 pm Number of employees: 5-10 persons Services Offered: Repair, Tune-up, change oil Table 9.Deskmark Corporation Pricing Scheme: Nature Installment Down Payment Cash Price Lowest P4,900.00 P42,200.00 Highest P60,000.00 P297,110.00 Advertising and Promotional Campaign: Social media presence 27 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines Websites Rebates Anniversary promo Financial Aspects Table 10. Estimated Annual Revenue of Industry Players in Koronadal City Estimated Annual Sales Average Estimated Annual Business Volume Price Revenue Muti& Honda Socsargen 2,280 172,500.00 393,300,000.00 Skygo 2,100 48,600.00 102,060,000.00 Trumph 840 65,000.00 54,600,000.00 Desmark 300 169,655.00 50,896,500.00 Motortrade 480 100,000.00 48,000,000.00 Yamaha 3s Shop Marbel 300 144,950.00 45,000,000.00 The table indicates that the highest sales among the industry players is MUTI and Honda Socsargen, followed by SKYGO, Trumph,Desmark,Motortrade, and Yamaha respectively. Porter’s Five Forces Analysis Bargaining Power of the Buyer Buyers of motorcycle in Koronadal City have the power to make purchases where they wish to buy since the industry is mature enough. It is possible for the consumer to switch between motorcycle players taking advantage of the value added activities on the product, such as discount, rebates and freebies. The buyers however cannot influence the price in 28 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines motorcycle industry because all of the motorcycle players have their fixed contract price. Bargaining Power of the Supplier Suppliers of the motorcycle dealers in Koronadal have lesser bargaining power towards the motorcycle dealers because there are many suppliers of motorcycle units and the dealers can opt to select suppliers with lesser price at a highest trade discounts. Rivalry of Existing Competitors There are 23 rivals in the industry – the strength of competitors is that they have strong marketing strategies, CSR and offer variety of products in which SKYGO do not look after. The quality of products of SKYGO is tested to be reliable. The prices of the competitors were quite high compared with the SKYGO prices. Threat of Substitution It is possible for the customers to substitute the product especially nowadays that the down payment of four-wheeled vehicles became affordable. This is a possible threat of the company. Another is the electric vehicles. These vehicles are more environmental friendly compare with the motorcycles. Threat of New Entrants The possible entry of motorcycle industry is hard because the industry is already mature. The biggest consideration to look for is the 29 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines capital investment needed to establish motorcycle business. Any person who is capable enough to finance this kind of business with the ability to do business could succeed. Key Factor Analysis Factors that unique to the industry that favorably contribute to industry success are as follows: Effective Marketing Campaign – this factor is very important to build brand awareness in Koronadal City due to rigid competition among the industry players. Product prices are almost the same hence, an effective marketing campaign is necessary in order to persuade the market. Effective Location – this factor also forms part of key success factors to be more visible in the market. Almost all of the players were located in the main road of Koronadal City. Strong Supplier Relationship – this factor is also significant to avoid lost sales. Motorcycle industry nowadays is very fast in innovation. It is very important that product should be available whenever it is needed. Government Policies Business Documents Needed to be Filed Before Starting Motorcycle Business 1. Business Name Registration can be obtained from the Department of Trade and Industry (DTI). DTI is the government’s hand in overseeing and facilitation of business and trade names in the Philippines. 30 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines 2. The Barangay Clearance under Section 152 of RA 7160 is issued for a specific purpose -- as a requirement before any business permit or license is issued by the Mayor's Office. The barangay issuing such clearance is the place wherein the business or activity is located. 3. LTO Accreditation – 3.1. New Applications Duly accomplished application form under oath Certified true copy/ies of the following: a. For Sole Proprietorships, Certificate of Business Name Registration b. For Corporations/Partnerships Securities and Exchange Commission Certificate of Registration Articles of Incorporation/Partnership and By-Laws, and Board Resolution issued by the Corporate Secretary, specifying the name of authorized representative who must be an officer of the corporation/partnership 3.2. Renewal Application Duly accomplished application form, under oath Original LTO Certificate of Accreditation Latest Certified true copy of Mayor’s Permit/s Duly notarized affidavit attesting to its continuing compliance with all the requirements 31 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines 4. A business permit or Mayor’s Permit is one of the important requirements for every business or company to operate in the Philippines. LGUs can be cities or municipalities, and procedures for obtaining a permit may vary depending on the ordinances the city or municipality will implement. Mayor’s Permit Requirements and Procedures a. Requirements for New Mayor’s Permit Application Form – you need to fill this out correctly Proof of Business Registration (DTI / SEC / Cooperative Development Authority (CDA) Community Tax Certificate Barangay Business Clearance Contract of Lease (if Lessee) Basis for computing taxes, fees and charges (e.g. Business Capitalization) Location Sketch of the Business b. Requirements for Renewal of Mayor’s Permit Community Tax Certificate Barangay Business Clearance Prior Year’s Print out of Mayor’s Permit / T. O. P. Basis for computing taxes, fees and charges (e.g. Income Tax Returns / Sworn Statement of Gross Sales) 32 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines Chapter III INTERNAL ANALYSIS Corporate Profile SKYGO Marketing Corporation-Koronadal is a Cebu-based motorcycle brand registered in Securities and Exchange Commission in June 2003. They assembled all their motorcycle in their plant in Mandaue, Cebu City. They established their Koronadal Branch at Citra Mina Bldg., Gensan Drive on May 2008. This branch is one of the twenty-three motorcycle dealers that actively operate in South Cotabato, and with fifty seven branches nationwide. The SMC – Koronadalwas composed of two supervisors vested with the power to plan, manage, direct and control their office area including the formulation of marketing strategies for the benefit of the company. The company wants to empower Filipinos with the mobility they need to become productive and be able to contribute towards nation building by providing them with affordable world-class motorcycles. Company Logo and Brand Name Company Logo Figure 11.Skygo Marketing Corporation Logo 33 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines Organizational Aspect Vision SKYGO MARKETING CORPORATION shall be the leading China Motorcycle Brand in the Philippines by 2020. Mission To carry high quality yet affordable motorcycle brands backed up with spare parts and services in order to attain customer satisfaction. To build a profitable and sustainable distribution network through the development of its people, partners and processes. To contribute to the economic development and upliftment of the quality of life of different communities in the Philippines where it operates. Core values Skygo Creed I am the member of Skygo Family I believe in the company, in my peers and in my self I believe in Integrity That doing the right thing is unconditional That my values will not be compromised That my humanity will not be shame 34 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines I believe in Excellence That anything less than 100% is unacceptable That my work reflects the kind of person that I am that it is not what I say, but what I do That defines me that I should be the model of Excellence everywhere I go, every day of my life I believe that lost time is never found; again that there is no better Place than here and there and that there is no better time than now I believe in my team and I will not allow myself to be a burden to the Team because my failure is my team’s failure. But my success is the Success of all We are members of Skygo Family Integrity is our treasure Excellence is our drive We all stand together; for Success is our destiny And God is our guide. 35 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines Organizational Culture In Skygo Marketing Corporation, employees were working for eight hours a day, possibly extended when needed. The day to day operation was overseen by supervisors of store and field. Towards employees Employees find every day of duty as challenging since there are always new experiences. The managers give every employee the opportunity to grow and to prove themselves. They also practice internal recruitment where a current employee might be reassigned to the new position by giving him/her either a promotion or an internal transfer. For lower level position vacancy, they encourage referrals of the existing employees for them to easily check the backgrounds of applicants.They also give rewards to those who showed exemplary effort and punish those rule breakers. The employees were given benefits such as performance bonuses, commissions, profit sharing and Christmas gifts and bonuses. The company has motivational programs to boost the employee’s teamwork including team building, anniversary and Christmas party. However, the company does not provide trainings and seminars for their employees except for supervisors. As a whole, the organization has a friendly environment. 36 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines Towards customers Skygo Marketing Corporations practices good consumer relationship management. They properly investigate their customer especially on credit purchases and maintain good relationship for them to be motivated and to encourage an updated payment. They also properly explain their product capacity and attributes to avoid miscommunications especially on cash purchases to inspire repeat buyers. Towards government Often, the business encounter’s delay in releasing the official receipt and Certificate of Registration to their customers commonly resulted to complain and arguments. However, this is beyond the control of the company for they cannot dictate the schedule of release of these documents for it rests on the Land Transportation Office’s prerogative. The best thing they could do is to explain ahead to the customers the situation and to warn them not to use the unit of highways and other places visible to government authorities until the OR CR is received to avoid charges and penalties. Towards community Corporate social responsibility nowadays becomes a trend to many businesses nowadays. It means doing business while doing good. For Skygo, they do not yet engage in external CSR activities. They focused on internal as of now, but they are looking forward to be engaged in such 37 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines activities in the future. What they can do now is to follow local ordinances for environment such as no plastic bags allowed and proper waste disposal. Organizational Chart Operation Manager Area Manager Store Supervisor Field Supervisor Branch Cashier Collectors Asst. Cashier Salesman Mechanic Figure 12. Organizational Structure of SMC The Organizational structure of Skygo Marketing Corporations is a Functional Type; employees are grouped hierarchically, managed through clear lines of authority and report ultimately to one top person. However, this structure has limitations including poor communications and lack of understanding across 38 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines functional units. They are more focused on their own goals and may neglect the overall company objectives and prohibits flexibility. Distribution The distribution system of the business starts from the supplier to assembler (Skygo- Cebu main office) to Skygo-Koronadal to end-user. Products were available only in the store of the business only for the customer who wishes to buy motorcycle or parts. The company is not responsible for the freight charges; it is barely shouldered by the customer. Operational and Technical Aspects The company operated from 8:00 am to 5:00 pm from Mondays to Saturdays. The store closes on regular holidays like New Year’s Day, Maundy Thursday, Good Friday, Labor Day, and Christmas Day and opens on special non-working holidays. Inventory Skygo Marketing Corporation-Koronadal offers China-made products only. The motorcycle units were delivered from main office in Cebu City at the latter’s option. However, motorcycle parts will be delivered upon request of the branch. This inventory system prohibits the Skygo-Koronadal to maintain the breadth and depth of their product assortment for they are not aware of the units that will be delivered to them. A problem could arise if a customer requests for an unavailable unit since the company can only offer what was displayed in the store. 39 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines Sales Skygo-Koronadal located at Gensandrive, Koronadal city possesses an accessible place to transact with customers. The company caters to both cash and credit sales. In the case of cash sales, the unit will be delivered after the payment and the proof of ownership will be available after three months. In the case of installment sales, the process will start upon the application of the customer, followed by credit investigation, then release of unit, collections per month and the issuance of ownership papers once the credit is settled. Marketing Aspect The company has not yet established a strong marketing campaign as of this moment. Aside from signage placed on their store, they promote their products through rebates and premium. Premium is the monetary deduction against the monthly payment that can be availed only if the customer paid within the specified date. Premiums include basic necessities of motorcycle such as helmet, jacket, gloves and oil. They also include insurances on every unit offered to compensate for risks brought by using the product, but are thinking of removing such insurance to lessen the price of the products due to increasing insurance costs. The company does not participate in trade fairs and exhibits; they do not have radio or printed ads and do not take advantage of the online advertisement. However, they have relatively low cash prices and installment plans. Their pricing strategy is a competitive advantage for them towards their competitors but setting price low also means low profit margin. 40 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines Table 11.Skygo Marketing Corp. pricing scheme Nature Installment Down Payment Cash Price Lowest P3,000.00 P32,500.00 Highest P5,500.00 P64,700.00 Financial Aspect Finances have never been a problem in SMC. Supervisors may request to the main office whenever funds are needed. They could request for funds if a new suitable location is discovered. The company does not have a bank loan to avoid finance costs. Installment sales were regularly collected and there is a minimal write-off of these receivables. The low profit margin of the company was compensated with large sales volume made by the company. The researcher tried to ask for financial statement of the company. The business agreed to provide the FS however refused to approve to publish the actual amounts due to confidentiality, and instead provided their common-sized financial statement only. The following are the common-sized financial statements of Skygo Marketing CorporationKoronadal Branch: 41 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines Skygo Marketing Corporation-Koronadal Branch Common-sized Income Statement For the Years Ended Dec. 31, 2017 and 2018 Sales Cost of Sales Gross Profit on Sales Realized Income on Installment Sales Other Income Gross Margin 2017 100.00% 80.58% 19.42% 0.24% 0.92% 20.58% 2016 100.00% 80.60% 19.40% 0.66% 0.83% 20.90% % Change 43.53% 43.50% 43.69% -48.43% 58.66% 41.37% Operating Expenses Compensation and Benefits Rental Commission Bad Debts Taxes and Licenses Sales Promotion Depreciation and Amortization Communication Supplies Light and Water Insurance Transportation and Travel Gasoline and Oil Other Expenses Total Expenses Net Income from Operations 4.68% 1.99% 1.82% 1.16% 0.64% 0.58% 0.51% 0.44% 0.08% 0.06% 0.05% 0.05% 0.05% 0.97% 13.06% 7.52% 5.00% 2.40% 0.75% 1.91% 0.67% 0.46% 0.47% 0.56% 0.17% 0.19% 0.08% 0.04% 0.04% 0.92% 13.66% 7.23% 34.21% 18.78% 248.93% -13.08% 36.65% 81.32% 57.32% 13.28% -31.40% -51.16% -17.98% 64.88% 69.44% 50.48% 37.25% 49.14% Common-sized Income Statement presents each item as percentage of total sales. The percentage change used to compare the percentage change from year 2016 to 2017 (eg. Y2-Y1/Y1).The income statement of Skygo Marketing Corporation indicated that the company’s net income before tax is 7.23% and 7.52% respectively for the years 2016 and 2017 respectively which has an increase of 49.14% from the prior year. 42 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines Skygo Marketing Corporation-Koronadal Branch Common-sized Balance Sheet As of The Years Dec. 31, 2017 and 2016 2017 2016 % Change ASSETS Current Assets Cash Receivables –net Inventories Other current assets Total Current Assets 11.70% 75.26% 11.40% 0.03% 98.40% 6.87% 73.72% 17.68% 0.05% 98.31% 139.22% 43.29% -9.47% -5.39% 40.48% Noncurrent Assets Property and Equipment-net Recoverable deposits Total Non-current Assets Total Assets 1.23% 0.38% 1.60% 100.00% 1.24% 0.44% 1.69% 100.00% 38.68% 18.67% 33.41% 40.36% Current Liabilities Accounts payable and accrued expenses 0.07% 0.07% 55.64% Noncurrent Liabilities Accrued rent payable Total Liabilities 0.09% 0.16% 0.14% 0.20% -9.45% 12.05% Equity Home Office Total Liabilities and Equity 99.84% 100.00% 99.80% 100.00% 40.42% 40.36% LIABILITIES AND EQUITY Common-sized Balance Sheet presents each item as percentage of total assets or total liability and equity. The percentage change is used to compare the percentage change from year 2016 to 2017 (eg. Y2-Y1/Y1).Common-sized balance sheet of Skygo Marketing Corporation indicated that the financial 43 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines position is in a conservative strategy. They have lower non-current assets and non-current liabilities. The items were also increasing which indicated a good financial position of the company. SWOT Analysis SWOT analysis is a useful technique for understanding the company’s strength and weaknesses, and both the opportunities open to the company and threat that the company faces. SWOT is powerful that, with a little thought, it can help the company to uncover opportunities that companies are well-placed to exploit. And by understanding the weaknesses of the business, one can manage and eliminate threats that would otherwise catch awareness. Table 12. SWOT Analysis of Skygo Marketing Corporation-Koronadal STRENGTHS WEAKNESSES S1. Accessible location. W1. Offered china made products. S2. Lower down payment options and installment plan. W2. Lack of marketing strategies. S3. Competitive employee incentives & benefits package. W3. Weak employee trainings and seminars. S4. Strong employee teamwork. W4. Offers single brand product. S5. Ability to develop additional stores. W5. Low Profit Margin OPPORTUNITIES THREATS O1. Increase numbers of graduates in business programs. T1. Increase of accident & motor napping cases. O2. Fast-paced economic development of Koronadal City. T2. Insurance cost is continually increasing. O3. Complex requirements needed for new entrants. T3. Rigid competition. O4. Numerous events held in Koronadal City. T4. Rival can offer similar products quickly. O5. Tricycle is the primary mode of transportation in Koronadal. T5. Delayed registration certificate issuance. Based on the internal analysis presented, the above SWOT was derived. The researcher identified five major strengths that include accessible location, lower down payment options and installment plan compared with the majority of 44 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines competitors, competitive employee incentives and benefits packagefor aside from their above minimum salaries, they were entitled to a monthly profit sharing of bonus if they hit the monthly target sales, strong employee teamwork since they were helping each other to boost their sales and the ability to put up additional stores if the location pass the qualification to be a new branch. Weaknesses were also identified. These include offering single-brand product – the China made products – a product known to have poor quality with low prices. Others find it cheap to buy these goods. Also, the company lacks marketing strategy in promoting their products as well as their business. They do not put an emphasis on conventional marketing campaigns to respond to competitor’s tactics. Another important weakness identified is the weak employee trainings and seminars. The researcher believes that this is an important employee motivation and empowerment. And due to the desire to lower their product prices, the company sets lower profit margin which forces them to strive for a larger sale volume. Opportunities available for the company includes increased numbers of graduates in business education programs – company can take advantage of this by hiring fresh graduates with fresh knowledge to incorporate with the company especially on marketing aspects; the fast-paced economic development of Koronadal City is a sign that the citizens will be capable of buying motorcycle units; complex requirements needed for new entrants could prevent the increasing competition of motorcycle industry in Koronadal City; numerous 45 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines events held in Koronadal City could help the company to showcase their products through trade fairs and exhibits and the tricycle as primary mode of transportation of Koronadal City giving them the increase of demand of their products. Threats identified in the study include increase of accident and motor napping accidents cases in Koronadal City. This could draw fears and doubts to potential consumers to buy motorcycle products. To compensate this, the company incudes insurance packages on sold products but insurance premiums of insurance companies nowadays continue to increase. The rigid competition of motorcycle industry in Koronadal City is a serious threat to every player especially that this industry is mature enough. Players could initiate and is responded immediately with other players. They could offer similar products quickly making the industry more mature and the delayed issuance of certificate of registration to customers causes dissatisfaction and arguments between the business and the customer. TOWS Analysis The TOWS Matrix is derived from the SWOT Analysis model, which stands for the internal strengths and weaknesses of an organization and the external opportunities and threats that the business is confronted with. It aimed at developing strategy options from an external-internal analysis and is a practical tool, particularly in the field of business, administration and marketing. 46 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines Table 13. TOWS Analysis of Skygo Marketing Corporation SO STRATEGIES WO STRATEGIES Maximax Minimax S2,O5. Offer special discounts tricycle drivers. on W1, O2. Establish a campaign that aims to boost china brands. S3, O1. Hire competitive graduates for W2, O4. Participate in fair displays in every marketing team. S5,O2. Put event. up additional stores W5, O5. Attract more tricycle drivers by taking inKoronadal City. advantage of price offers. ST STRATEGIES WT STRATEGIES Maximin Minimin S1, T3. Improve product display to W4, T4. Differentiate product through addvisually attract customers. ons. S1, T3. Set up inducing ads in front of W3, the store. T3. Strengthen product awareness through radio ads. S2, T2. Collaborate with insurance W5, T3. Highlight in the ads the cheaper price companies to minimize costs. compared with competitors. Based on the SWOT Analysis presented, the following strategies were developed: To maximize the company’s strengths with the opportunities, the company may offer special discounts on tricycle drivers who wish to own motorcycle units since this is a larger market of motorcycle products. The company may also put up additional stores withinKoronadal City to stimulate more sales and the company may hire competitive graduates to establish new marketing team to focus on marketing campaigns necessary to be competitive in motorcycle industry. 47 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines To minimize weaknesses in taking advantage of opportunities the company may establish a campaign that aims to boost China brands and reinforce the consumer perception that China brands are cheap products; participate in fair displays in every event to be more visible to the public and penetrate more tricycle drivers taking advantage of price offers. To maximize strength to lessen threats, the company may improve product display to visually attract customers, set up inducing ads in front of the store and to collaborate with insurance companies to minimize costs. The company may partner with a trusted inexpensive insurance company and engage in contractual engagement for a win-win agreement. To minimize weaknesses to lessen threats,the company may differentiate products through add-ons such as GPS-installed motorcycle, free grocery products and side-car ready units for tricycle driver customers; strengthened product awareness through radio ads such as Brigada News FM and BomboRadyo – the leading radio stations in Koronadal City and highlighting in every ad the cheaper price compared with competitors. Strategic Tools Internal Factor Evaluation (IFE) Matrix IFE is a strategic management tool often used for assessment of current business condition. The EFE matrix is a good tool to visualize and prioritize the strengths and weaknesses that the business possesses. 48 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines Table 14. IFE Matrix of Skygo Marketing Corporation Key Internal Factors Weight Rating Weighted Score S1. Accessible location. 0.2 4 0.8 2. Lower down payment options and installment plan. 0.2 4 0.8 3. Competitive employee incentives and benefits package. 0.04 3 0.12 4. Strong employee teamwork. 0.05 3 0.15 5. Ability to develop additional stores. Weaknesses 0.06 3 0.18 1. Offered china made products. 0.1 1 0.1 2. Lack of marketing strategies. 0.2 1 0.2 3. Weak employee trainings and seminars. 0.04 2 0.08 4. Offers single brand product. 0.05 2 0.1 5. Low Profit Margin Total 0.06 2 0.12 Strengths 1 2.65 IFE Matrix showed an overall weighted score of 2.65 which is .15 above the limit of 2.50. This indicates that the organization has a strong internal position in terms of location, lower pricing scheme, ability to develop additional stores, strong employee teamwork and competitive employee incentive and salary package which means that these strengths are relatively important to business success. Suggested strategies includes Market Penetration by adding stores within Koronadal City area, offering special discounts to tricycle drivers and intensifying marketing campaign and Product Development by putting additional add-ons of the products offered. External Factor Evaluation (EFE) Matrix EFE is a strategic management tool often used for assessment of current business condition. The EFE matrix is a good tool to visualize and prioritize the opportunities and threats that the business is facing. 49 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines Table 15. EFE Matrix of Skygo Marketing Corporation-Koronadal Branch Key External Factors Weight Rating Weighted Score 1. Increase numbers of graduates in business programs. 0.02 1 0.02 2. Fast-pace economic development of Koronadal City. 0.15 3 0.45 3. Complex requirements needed for new entrants. 0.10 1 0.10 4. Numerous events held in Koronadal City. 0.09 1 0.09 5. Tricycle is the primary mode of transportation in Koronadal City. 0.10 3 0.30 Opportunities Threats 1. Increase numbers of accident and motor napping cases. 0.05 2 0.10 2. Insurance cost is continually increasing. 0.04 1 0.04 3. Rigid competition. 0.20 3 0.60 4. Competitor can offer similar products quickly. 0.15 2 0.30 5. Delayed driver's license issuance. 0.10 2 0.20 Total 1.00 2.20 EFE Matrix showed weighted score of 2.20 which is .30 below than the average limit of 2.50. This means that the business’s strategies do not capitalize on opportunities or avoiding threats. The company operated and made decisions without taking into account the opportunities and threats that may affect their operations in the future. What they focused on is to make larger sales in their own accustomed strategies. Suggested strategies includeproduct development, market penetration and forward integration. Market Penetration strategies can be done by adding stores within Koronadal City area, offering special discounts to tricycle drivers and intensifying marketing campaign. Product Development strategies can be done by putting additional add-ons of the products offered such as GPS-installed motorcycle, free grocery products and side-car ready units for 50 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines tricycle driver customers and Forward Integration strategies available to SkygoKoronadal Branch which includes collaboration and partnerships to insurance companies with lessen insurance costs. Strategic Position and Action Evaluation (Space Matrix) SPACE matrix is based on four important elements. The first two elements are called internal dimensions which are financial strength and competitive advantage, and the other two are called external dimensions namely environmental stability and industry strength. The following are the steps to develop SPACE MATRIX: 1. A set of variables should be selected to define financial strength, competitive advantage, environmental stability, and industry strengths. 2. Assign a numerical value ranging from +1(worst) to +6(best) to each of the variable that comprises the financial stability and industry strength dimensions. On the other hand, assign a numerical value ranging from -1(best) to -6(worst) to each of the variables that consist of environmental stability and competitive advantage dimensions. It is noted that on the financial stability and competitive side, comparison is made to competitors whereas on the environmental stability and industry strength side comparison is made to other large industries. 51 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines 3. The average of the value assigned to each variable above is computed by adding the values and dividing by the number of variable included in the analysis. This average is calculated for each dimension. 4. Plot the average values calculated on the appropriate axis. 5. Add the two values on x-axis (competitive advantage and industry strength) and plot the resultant value on x-axis. 6. Add the two values on y-axis (financial strength and environmental stability) and plot the resultant value on y-axis. An intersection of the new xy points is to be drawn in the next step. 7. A directional vector should be drawn from the origin of the SPACE matrix. This directional vector represents the strategies to be pursued i.e. aggressive, conservative, defensive, or competitive. 52 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines Table 16.SPACE Matrix of Skygo Marketing Corporation Koronadal Branch Financial Position (FP) Ratings The company's net income increased 49.14% from prior years. 5.00 Installment sales are collected regularly. 4.00 The company uses conservative financing. 2.00 11.00 Industry Position (IP) The trend of low downpayment options and monthly installment plans. 6.00 Relax implementation of authorities resulted to delay of releasing certificate of registration. 4.00 Complex requirement needed for new entrants. 3.00 Rigid competition of motorcycle industry in Koronadal City 6.00 19.00 Stability Position (SP) Intense product development strategy among players. (2.00) Philippines is experiencing high inflation and political instability. (5.00) The price range and marketing campaigns of industry creates competitive pressure. (1.00) (8.00) Competitive Position (CP) The business has 28% market share and 93% relative market value. (1.00) China-made products were viewed as low-quality products. (2.00) The business has control over distributions (3.00) (6.00) Conclusion: SP Average is - 8/3 = - 2.67 IP Average is 19/4 = 4.75 CP Average is - 8/3 = - 2.00 FP Average is 11/3 = 3.67 Directional vector coordinates: x - axis (-2.67) + 4.75 = 2.08 y - axis (-2.00) + 3.67 = 1.67 53 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines Conservative Aggressive 2.0 1.5 Market Penetration Market Development Product Development Related Diversification -2.0 -1.5 Defensive Retrenchment Divestiture Liquidatio (2.08,1.67) Backward, forward, horizontal integration Market Penetration Market Development Product Development Related Diversification 1.0 -1.0 1.0 -1.0 1.5 2.0 Competitive -1.5 -2.0 Market Penetration Market Development Product Development Backward, forward, horizontal integration Figure 13. SPACE Matrix of Skygo Marketing Corporation Koronadal Branch The SPACE Matrix indicated that Skygo Marketing Corporation Koronadal Branchis a financially strong business that has achieved major competitive advantages in a growing and stable economy. Accordingly, the company shall pursue aggressive strategies such as Forward Integration by collaborating and partnering with insurance companies to lessen insurance costs; Market Penetration by adding stores within Koronadal City area, offering special discounts of tricycle drivers and intensifying marketing campaign; Market Development by offering existing product to new market segment such as female and businesses and Product Development by putting additional add-ons of the products offered such as GPS-installed motorcycle, free grocery products and side-car ready units for tricycle driver customers. 54 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines Internal-External Matrix The Internal-External Matrix is another strategic management tool used to analyze the working conditions and strategic position of a business. It is based on an analysis of internal and external business factors which are combined into one suggestive model. Strong 3.0 - 4.0 Medium 2.0 2.99 Low 1.0 1.99 Weak 1.0 - 1.99 2.0 3.0 4.0 High 3.0 - 4.0 Average 2.0 - 2.99 1.0 I II III IV V VI VII VIII IX 3.0 EFE 2.2 2.0 1.0 IFE 2.6 Figure 14.Internal-External Matrix of Skygo Marketing Corporation. Internal-External Matrix result falls at the fifth quadrant. This means thatSkygo should hold and maintain its current position – take advantage of their accessible location, assessed the long-term effectiveness of low down payment option and installment plans, motivating and maintaining strong employee teamwork through competitive incentives and benefits package and evaluating 55 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines possible additional stores. Suggested strategies include Market Penetration and Product Development. Market Penetration strategies can be done by adding stores within Koronadal City area, offering special discounts to tricycle drivers and intensifying marketing campaign; Product Development strategies can be done by putting additional add-ons of the products offered such as GPS-installed motorcycle, free grocery products and side-car ready units for tricycle driver customers. Grand Strategy Matrix Grand Strategy Matrix is a comprehensive, long-term plan of essential actions by which a firm plans to achieve its major objectives. The key factor of this strategy includes market, product and/or organizational development through acquisition, divestiture, diversification, joint ventures or strategic alliances. Rapid Market Growth Quadrant II 1. Offer existing products to new market. 2. Intensify marketing campaign to improve brand awareness. 3. Put up additional stores in other municipalities of Koronadal. 4. Establish a campaign that aims to boost china brands. 5. Differentiate product through add-ons. Strong6. Hire competitive graduates for marketing team. Competitive Position Quadrant III 1. Cost cutting of expenses. 2. Lay-off some employees. Quadrant I 1. Offer special discounts on tricycle drivers. 2. Attract more tricycle drivers by taking advantage of price offers. 3. Strengthened the product awareness through radio ads. 4. Improve product display to visually attract customers. 5. Set up inducing ads in front of the store. 6. Highlights in the ads the cheaper price compared with competitors. Quadrant IV 1. Participate in fair displays in every event. 2. Collaboration with insurance companies to minimize costs. Weak Competitive Position Slow Market Growth Figure 15. Grand Strategy Matrix of Skygo Marketing Corporation Koronadal Branch Considering the school's score in IFE being 2.65, the organization is internally strong, and falls on the second quadrant – the quadrant that represents 56 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines strategies for maintaining strong competitive advantage in a rapid growth market.Strategies available on the second quadrant include Market Penetration, Product Development, Horizontal Integration, Divestiture and Liquidation. Market Penetration strategies can be done by adding stores within Koronadal City area, offering special discounts to tricycle drivers and intensifying marketing campaign; Product Development strategies can be done by putting additional add-ons of the products offered such as GPS-installed motorcycle, free grocery products and side-car ready units for tricycle driver customers and Horizontal Integration strategies available toSkygoKoronadal Branch include acquisition of competitors to be able to acquire more customers. BCG Matrix Boston Consulting Group’s product portfolio matrix(BCG matrix) is designed to help with-long term strategic planning, to help a business consider growth opportunities by reviewing its portfolio of products to decide where to invest, to discontinue or develop products. Relative Market Share was derived by dividing the market share of Skygo Marketing Corporation over the player withthe highest market share in motorcycle industry in Koronadal City which is the MUTI Group of Companies (eg. .28/.30 = .93.33) while Industry Growth rate of 4.6% was taken from Motorcycle Development Program Participants Association (MDPPA) report. Relative Market Share Industry Growth Rate + 0.93.33 +.046 57 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines (.93, .046) Figure 16. BCG Matrix of Skygo Mktg. Corporation Koronadal Branch The organization falls in the quadrant of question mark. This means that the organization has a low relative market share in a high-growth industry. This is due to the presence of competitors inKoronadal City. Strategies should be designed to improve/develop services and increase market share. Among strategic options include Strategies available on second quadrant that include Market Development, Market Penetration, Product Development and Divestiture. Market Development can be done by offering existing products to new market segment such as female and businesses; Market Penetration strategies can be done by adding stores within Koronadal City area, offering special discounts to tricycle drivers and intensifying marketing campaign; Product Development strategies can be done by putting additional add-ons of the products offered such 58 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines as GPS-installed motorcycle, free grocery products and side-car-ready units for tricycle driver customers and Horizontal Integration strategies available toSkygoKoronadal Branch include acquisition of competitors to be able to acquire more customers. Matrix Evaluation The above matrices considered the following information: IFE Matrix showed an overall weighted score of 2.65 which is .15 above the limit of 2.50. This indicates that the organization has strong internal position which is necessary in every organization. However, a room for improvement is still desirable since 0.15 is not a significant measure above the mean. SPACE MATRIX indicated that the company has major competitive advantages in a high-growth industry. Accordingly, the business shall pursue competitive strategies which include:Backward, Forward and Horizontal Integration – gaining/ seeking ownership or increase control over the firm's supplier, retailers and distributors and competitors; market penetration – seeking increased market share for present products or services in present markets through greater marketing efforts; market development – introducing existing products or services in new geographic areas and product development. – seeking increased sales by improving present products or services or developing new ones. 59 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines Internal-External Matrix result falls at the fifth quadrant. This means that the Skygo should hold and maintain its current position. Suggested strategies include market penetration and product development. Grand Strategy Matrix considers the school's score in IFE being 2.65, the organization is internally strong, and falls to the second quadrant. This means that the organization will use strategies for maintaining rapid growth when strong competitive positions exist. Strategies include offering special discounts and lower prices on tricycle drivers and strengthening of marketing activities. In BCG Matrix, the result falls in the quadrant of question mark. This means that the organization has low relative market share in a high-growth industry. This is due to the presence of competitors inKoronadal City. Strategies should be designed to improve/develop services and increase market share. Among strategic options include: Market Penetration – increasing the market share by offering differentiated existing product to present market; Market Development – increasing the total market by entering new segments of the market; Product Development – creating new product offering by increasing additional product add-ons and Diversification – entering in an industry/market different from the current line of business. Summary of results follows: 60 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines Table 17. Summary of Matrix Evaluation Strategies IFE EFE SPACE IE Market Penetration X X X Market Development Product Development X X X X X 6 X X 3 X X 6 X X X X 2 Backward Integration X 1 Horizontal Integration X Diversification X Forward Integration X GRAND BCG TOTAL X 2 1 Divestiture X Liquidation X X 2 1 Based on the matrix evaluation,the applicable strategy that Skygo Marketing Corporation needs to adopt is Market Penetration, Product Development and Forward Integration since these are the top three strategies recommended by the matrices presented. Market Penetration combines existing products and existing markets. The growth strategy of market penetration aims to maintain or increase the market share of existing products, secure dominance, restructure a mature market, and increase usage by existing customers. Market penetration is considered to be a low risk strategy as it utilizes existing products in existing markets.Skygo Marketing Corporation Koronadal Branch may adopt Market Penetration by adding stores within Koronadal City area, offering special discounts of tricycle drivers and intensifying marketing campaign. Product Development is the strategy that focuses on offering new products in existing markets. This can be achieved either through offering entirely 61 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines new products or modified products that appeal to an existing market. A company can choose to engage in product development for several reasons including: exploit new technology, use excess production capacity, and to protect market share. This strategy is considered to have a moderate risk associated with the time and money needed to develop new products.Skygo Marketing Corporation Koronadal Branch may adopt Product Development by putting additional add-ons of the products offered such as GPS-installed motorcycle, free grocery products and side-car ready units for tricycle driver customers. Market Development is the strategy that focuses on offering existing products in new markets. This strategy can be achieved through several different options including: new geographical markets, new distribution channels, different pricing policies, or new product dimensions. The goal of this strategy is to attract new customers for existing products. This strategy is seen as having moderate risk due to the fact that a company will be trying to enter into new markets.Skygo Marketing CorporationKoronadal Branch may adopt Market Development by offering existing product to new market segment such as female and businesses. Quantitative Strategic Planning Matrix(QSPM) QSPM evaluate alternative set of strategies. It incorporates earlier stage details in an organized way to calculate the score of multiple strategies in order to find the best match strategy for the organization. 62 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines Table 18. QSPM of Skygo Marketing Corporation Koronadal City STRATEGIC ALTERNATIVES Key Factors Weight Market Penetration Product Developmet Market Development AS TS AS AS TS TS Strengths S1. Accessible location. 2. Lower down payment options and installment plan. 3. Competitive employee incentives and benefits package. 4. Strong employee teamwork. 5. Ability to develop additional stores. 0.20 0.20 0.04 0.05 0.06 3.00 4.00 1.00 1.00 4.00 0.60 0.80 0.04 0.05 0.24 1.00 2.00 1.00 1.00 1.00 0.20 0.40 0.04 0.05 0.06 2.00 2.00 1.00 1.00 1.00 0.40 0.40 0.04 0.05 0.06 Weaknesses 1. Offered china made products. 2. Lack of marketing strategies. 3. Weak employee trainings and seminars. 4. Offers single brand product. 5. Low Profit Margin 0.10 0.20 0.04 0.05 0.06 2.00 4.00 1.00 1.00 2.00 0.20 0.80 0.04 0.05 0.12 3.00 2.00 1.00 4.00 2.00 0.30 0.40 0.04 0.20 0.12 1.00 2.00 1.00 1.00 1.00 0.10 0.40 0.04 0.05 0.06 Total 1.00 Opportunities 1. Increase numbers of graduates in business programs. 2. Fast-pace economic development of Koronadal City. 3. Complex requirements needed for new entrants. 4. Numerous events held in Koronadal City. 5. Tricycle is the primary mode of transportation in Koronadal City. 0.20 0.20 0.04 0.05 0.06 2.00 4.00 1.00 4.00 2.00 0.40 0.80 0.04 0.20 0.12 1.00 3.00 1.00 1.00 3.00 0.20 0.60 0.04 0.05 0.18 1.00 3.00 1.00 1.00 4.00 0.20 0.60 0.04 0.05 0.24 Threats 1. Increase numbers of accident and motor napping cases. 2. Insurance cost are continually increasing. 3. Rigid competition. 4. Competitor can offer similar products quickly. 5. Delayed driver's license issuance. 0.10 0.20 0.04 0.05 0.06 1.00 1.00 4.00 1.00 1.00 0.10 0.20 0.16 0.05 0.06 1.00 1.00 4.00 2.00 2.00 0.10 0.20 0.16 0.10 0.12 1.00 1.00 4.00 2.00 1.00 0.10 0.20 0.16 0.10 0.06 Total 1.00 Aggregate Atrractiveness Score (TAS) 2.94 1.81 1.60 2.13 1.75 1.75 5.07 3.56 3.35 There are four main columns in QSPM. The left column lists down the key internal and external key factors, while the adjacent column to key factor is weight which holds the numerical value obtained from EFE and IFE matrix with column. The nextto weight column is AS standards for attractive score assign priority to key factors using the numeric value 4 for most important and 1 for least 63 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines importance and the last column. TAS is the value calculated by multiplying weight by AS. One thing important to note for each strategy separate AS and TAS value added in the table, the weight remains the same for all set of strategies mentioned in QSPM. The topmost shows the strategies are compared in the QSPM matrix. From among the three (3) strategic alternatives, the result showed the following ranking, 1 being the most attractive strategy and 3 the least: (1) Market Penetration (2) Product Development (3) Market Development Market penetration is considered to be a low risk strategy as it utilizes existing products in existing markets.Skygo Marketing Corporation Koronadal Branch may adopt Market Penetration by adding stores within Koronadal City area, offering special discounts to tricycle drivers and intensifying marketing campaign. 64 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines Chapter IV RESULTS, FINDINGS AND RECOMMENDED STRATEGIES This chapter presents the results of the survey conducted, the findings of the study, recommended strategies in line with the findings and the estimated budget per alternative strategy identified. Results Eighteen (18) survey questionnaires were distributed to eighteen (18) employees of Skygo Marketing Corporation with five (5) females and thirteen (13) males including the two (2) supervisors. There are 16 full-time employees and two (2) part time employees in which majority of them are on their first to second year of stay in the company. It was also found out that only the store and field supervisors had undergone seminars once a year. The following evaluation summarized the information gathered based on employees’ perspective: Table 19. Employee’s perception of internal factors of Skygo Marketing Corporation Internal Marketing Factors Ave. Weight Legend The organization has a clear vision that gives 1.88 Fair employees a mental framework to evaluate the best way to interact with customers. The organization allows open communication 3.81 Satisfactory that unites all departments to work as one. The organization allocates resources to 2.13 Fair educate the employees to promote strong culture and values. The organization encourages employees to 3.63 Satisfactory express their opinions/sentiments to promote higher employee engagements. 65 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines Table 20. Demographic Profile of External Respondents Particulars Gender Male Female Total Age Brackets 18-20 yrs. Old 21-25 yrs. Old 26-30 yrs. Old 31-35 yrs. Old 36-40 yrs. Old 41-45 yrs. Old 46-50 yrs. Old 51 yrs and above Total Client Category Student Working Individual Household Self-employed Total Respondent's Residence City Proper Municipality Proper Barangay Sitio Total Total Monthly Income P10,000 Below P10,001 - P15,000 P15,001 - P20,000 P20,001 - P25,000 P25,001 - P30,000 P30,001 - P35,000 P35,001 - P40,000 P40,001 - P45,000 P45,001 and above Total Number of Respondents Percentage 150 50 200 75% 25% 100% 15 25 30 30 15 25 30 30 200 8% 13% 15% 15% 8% 13% 15% 15% 100% 50 95 20 35 200 25% 48% 10% 18% 100% 50 100 40 10 200 25% 50% 20% 5% 100% 57 60 33 22 13 12 3 0 0 200 29% 30% 17% 11% 7% 6% 2% 0% 0% 100% There are 200 survey questionnaires distributed to external respondents which include fifty (50) students, ninety-five (95) employees, twenty (20) households and thirty-five (35) self- employed individuals. The respondents 66 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines ranged from eighteen (18) to fifty-eight (58) years of age in which one hundred fifty (150) were males and fifty (50) were females, 50% of them reside in Baranggays, 25% in City of Koronadal, 20% in municipality and 5% were in sitios. About 80% of them earn monthly income of P0.00 to P25,00.26% of them were Skygo users and were influenced mainly by Sky go employees, Skygo users and personal research. On the other hand, 64% of them were non-users but are aware that Skygo Marketing Corporation exists through their personal research, Skygo users and employees. Out of 200 respondents, 73% were interested to buy motorcycle where87% prefers Japanese brand while 27% were not interested. The survey also revealed the rank of customer’s preferences in buying motorcycle on both users and non-users: Table 21. Factors influencing customer’s choice in buying motorcycle vehicles Non- Skygo users Skygo users Attributes Ave. Weight Rank Ave. Weight Rank Brand Image 10 5 9.56 4.88 Product Quality 9 6 9.41 6.03 Product Price 8 10 8.31 9.65 Less Fuel Consumption 7 1 7.12 1.43 Less Maintenance Cost 6 2 5.58 1.96 Availability of Spare Parts 5 7 5.35 7.41 Approachability of Dealer 4 9 4.22 8.57 Store Location 3 3 2.98 2.87 Better Mileage/Serviceability 2 8 2.13 8.33 Product Style 1 4 1.12 3.61 67 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines The table indicated that the top three (3) influencers of Skygo Marketing Corporation Koronadal Branch users were product price, approachability of the dealer and better mileage/serviceability while non-users prefer to buy productswith good image, product quality and lower price. Findings and Recommended Strategies This section presents the findings about the internal analysis conducted, the corresponding strategies for implementation that would address these findings and the estimated budget allocated to materialize such strategies. Organizational Aspects Findings 1: Skygo Marketing Corporation’s vision statement has become outdated. A. Recommended Strategy Revisit/revise company’s vision statement. B. Recommended strategy’s contribution to successful implementation of market penetration strategy Vision statement is an aspirational description of what an organization would like to achieve in the long run. It is intended to serve as a clear guide for choosing current and future courses of action. The current company’s vision statement, “Skygo Marketing Corporation shall be the leading China motorcycle brand in the Philippines by 2020”, has nearly become outdated for a good vision statement reflects the company’s visualization for at least five years.It is highly recommended that the company needs to evaluate if the vision was attained 68 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines andtoperform necessary courses of actions. Updating vision statement contributes to successful implementation of market penetration strategy by giving the company the guide on what it wants to be in the future so that whatever the decision they will be making it will always be aligned with the vision. A company that knows its specific purpose will be effective in whatever strategies it wishes to implement. In updating the vision statement, the following concepts are considered as suggested by David’s Framework: a good vision statement must be future casting; audacious; motivating; purpose-driven; inspiring and capitalizes on unique competencies. C. Plan of Action for the Recommended Strategy 1. Update the vision statement. 2. Debrief the employees about the vision statement. 3. Display copies of vision statement that is noticeable to everyone. 4. Regularly revisit the effectiveness of the vision statement. D. Estimated Budget Table 22.Estimated Budget in Updating Vision Statement Particulars Amount 3 pcs. Tarpaulins (30x40) (P650.00x3) = P1,950.00 Nails P50.00 Total P2,000.00 Operational Aspects Finding 2:Skygo Marketing Corporation-Koronadaldoes not provide trainings and development for employees. 69 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines Trainings present a prime opportunity to expand the knowledge base of all employees. Most of the employees have their weaknesses in their workplace skills. A training program allows the company to strengthen those skills that each employee needs to improve. A development program brings all employees to a higher level so they all have similar skills and knowledge. This helps reduce any weak links within the company that relies heavily on others to complete basic work tasks.Providing the necessary training creates an overall knowledgeable staff with employees who can take over for one another as needed, work on teams or work independently without constant help and supervision from others. (P.Sarvadi; May 2005) A. Recommended Strategy Implement trainings and development at least once a year. B. Recommended Strategy’s contribution to successful implementation of market penetration strategy Employees who receive the necessary training are better able to perform their job. They become more aware of safety practices and proper procedures for basic tasks. The training may also build the employee’s confidence because they have stronger understanding of the industry and the responsibilities of their job. This confidence may push them to perform even better and think of new ideas that help them excel. Aside from those, they will be able to communicate better with customers which is an important factor to satisfy and gain their loyalty. Giving them enough trainings and seminars will contribute to the successful 70 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines implementation of market penetration strategy through a knowledgeable and competent workforce. An employee with enough knowledge on the product could endorse it confidently to the customers and could perform good salesmanship with them especially if they were equipped with necessary trainings and seminars. C. Plan of Action for the Recommended Strategy 1. Assign the supervisors to individually appraise every employee to know their strengths and weaknesses. 2. Schedule the dates and topics to be in line with the employees’ weaknesses. 3. Hire speakers for the seminar or use internal employees capable to be speakers of the seminar 4. Evaluate the effectiveness of the seminar conducted. D. Estimated Budget Table 23.Estimated Budget development. Particulars to implement employee seminar and Estimated Amount Performance appraisal forms and printing P 80.00 Speaker’s honorarium and token 3,000.00 Certificates and garland 300.00 Food and venue 20,000.00 Total P23,380.00 71 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines Marketing Aspects Finding 3:Skygo Marketing Corporation-Koronadal has a weak marketing strategy. A. Recommended Strategy Create a marketing team to focus on formulating marketing campaigns. B. Recommended Strategy’s contribution to successful implementation of market penetration strategy Marketing campaigns are the efforts of a company to increase awareness for a particular product or service to increase consumer awareness of a business.Skygo Marketing Corporation’s greatest weakness falls on marketing aspects. As discussed in chapter 3, the internal analysis, the company doesn’t focus on marketing aspect which the researcher believes would be effective when implemented. Intensifying marketing campaign will contribute to the successful implementation of market penetration strategy primarily through informing, persuading and reminding the customers to patronizeSkygo products.Suggested marketing campaigns includetrade fair participation, display ads, radio ads, community giving, anniversary promos and sponsorships. C. Plan of Action for the Recommended Strategy 1. Create marketing team composed of two to three persons. These persons could be newly hired or existing employees appropriate for the job. 2. Let them brainstorm to come up with marketing campaign suitable for the business tailored with the season, current trend and other factors. 72 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines 3. Schedule an accomplishment report after every conduct of a marketing campaign. D. Estimated Budget Table 24. Estimated budget of formulating marketing campaign Particulars Estimated Amount Trades fairs participation P20,000.00 Display Ads 5,000.00 Radio Ads 50,000.00 Community giving 25,000.00 Anniversary promotions 50,000.00 Events sponsorships 50,000.00 Total P200,000.00 Financial Aspect Finding 4:SkygoMarketing Corporation-Koronadal’s demand increases. Sales demand of Skygo Marketing Corporation increases per year as presented in their financial statements. There is a 43.53% increase in sales from prior years as reflected in the condensed income statement of the company. As this will eventually increase in the long-run, the company will need larger space to store more units and for the convenience of the customer. However, the space rented cannot be renovated since the space is limited only. A. Recommended Strategy Put up additional store within the Koronadal City. 73 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines B. Recommended Strategy’s contribution to successful implementation of market penetration strategy Putting up an additional store within Koronadal City would benefit the company to be able to expand its operations and avoid lost sales. Having two stores could help them prevent stock outs, store more units and defeat competitors with one available store only. Costumers could also choose between any of the two stores that is more convenient for them to transact business with. C. Plan of Action for the Recommended Strategy 1. Find appropriate place to put up a store in Koronadal City. 2. Hire additional employees and reassign existing employees to new stores. 3. Order initial motorcycle units and spare parts from main office. 4. Assess the effectiveness of the new store. D. Estimated Budget Table 25.Estimated budget in putting up additional store. Particulars Estimated Amount Two months advance rental P100,000.00 Renovation 20,000.00 Signage, Tarpaulins and store supplies 10,000.00 Recruitment expenses 500.00 Furniture and fixtures 10,000.00 Freight for inventory orders 10,000.00 Machineries and Equipment 50,000.00 Taxes and Licenses 16,000.00 Petty cash fund 15,000.00 Total P231,500.00 74 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines Skygo Marketing Corporation should maintain open communications among employees and motivate them to preserve the good relationship inside the organization. They should establish employee motivational programs such as trainings and seminars for them to grow professionally. Trainings and seminars should primarily include marketing aspects and customer relations management to reinforce their internal weaknesses when it comes to employees. The company was also suggested to revisit their vision and mission to review its effectiveness. Recommended vision statement is “SKYGO MARKETING CORPORATION shall be the leading China Motorcycle Brand in the Philippines by 2020 committed to quality products and services” to highlight that the company is capitalizing on unique competencies as suggested by David’s framework model Recommended additional mission statement is “Adopt corporate social responsibility and environmental stewardship” to stress that the company is environmentally responsible in response to Koronadal City Ordinance No.5 series of 2016. Skygo Marketing Corporation operated in a mature industry in which competition is crucial and marketing plays a big role. The company is weak in this aspect. Most of the respondents become aware of Skygo products through Skygo employees, product users and personal research. As suggested by Quantitative Strategic Planning Matrix (QSPM), they may consider forming a marketing team to focus on marketing activities to which the company is fragile; 75 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines they may hire additional potential graduates to be supervised by an expert within the company, however; this may entail additional working capital; they may also temporarily form the team through job enlargement or broadening the employee’s scope of work, however, this could affect the employee’s performance and job focus. 76 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines Chapter V CONCLUSION This chapter presents the conclusion drawn by the researcher as a result of the interviews, surveys and analyses made. The conclusion was divided in four parts – organizational, operational/ technical, marketing and financial aspects. The internal analysis of Skygo Marketing Corporation reveals that the company did not fully utilize their strengths to have a competitive advantage in the industry. The successful implementation of market penetration strategy will yield the following results. Organizational Aspect Updating the Skygo Marketing Corporation’s vision statement will help the company work as one. This will serve as a guiding light for the company to move forward in taking the same direction. This will eventually reduce conflicts into acceptable level within the organization for in every decision they will be making it will be in accordance to their vision statement. Operational/Technical Aspect Providing trainings and seminars to employees will motivate them and reinforce them to be an inspired worker of the organization. Trainings and seminars will help them to be more competent in their field of assignments, selfrespect and respect with their co-employees and for them to be more acquainted 77 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines with customer relationship management. Happy employees means happy work environment; happy environment means happy customers and happy customers lead to more sales. Marketing Aspect Intensifying marketing campaign will increase brand awareness and will probably increase sales. Assigning marketing team in marketing activities will encourage work focus on reaching out to prospects, customers, investors, and the community while creating an overarching image that represents the company in a positive light. Financial Aspect Investing in additional store will help the company penetrate the market for customers may select best location at their convenience. Stock-outs could also be avoided since unavailable products may be available in other stores. Lastly, adding stores will enable the customer to have more options that will suit their own preferences. 78 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines References Christ, P.,(2017). Marketing ideas for motorcycle business. Retrieve from https://bizfluent.com/list-7462868-marketing-ideas-motorcyclebusiness.html. Clint, L., (2018). Winning marketing strategies for motorcycle dealers. Retrieve from https://motorcycleshippers.com/2018/01/marketing-strategismotorcycle-dealers/ Guillen, M. D. & Ishida, H., (2004). Motorcycle-propelled public transport and local policy development. IATSS Research Vol.28 No.1, 2004.Retrieved from https://www.sciencedirect.com/science/article/pii/S03861112146009. Land Transportation Office, (2007). Anti-Red Tape Act: Citizen’s Charter. Statistics Section. Land Transportation Office, (2016). Number of motor vehicles registered, newrenewal, by region, by type of mv annual. Statistics Section. Pablo, R., (2017). Study on global industry analysis on motorcycle and forecast. Persistence Market Research (PMR). Retrieved from https://www.giiresearch.com/report/pmrs674865-global-market-study-onmotorcycles-standard.html. Philippine Statistics Authority RSSO-xii, (2017). SOCSARGEN’s monthly updates of PSA’s most requested statistics – QUICKSTAT. Pineda, V., (1994). Motorcycle and parts industry: Impact of Trade Policies on Performance, Competitiveness and Structure.PIBS Research Paper Series no. 94-02, 2. SUNSTAR, (2016 issue). China-made motorcycles just as good as Japanese brands. Retrieve from https://www.sunstar.com.ph/article/8724. 79 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines Appendices INTERNAL SURVEY QUESTIONNAIRE “CORPORATE STRATEGY FOR SKYGO MARKETING CORPORATION” Citra Mina Bldg. Gensan Drive, Koronadal City, South Cotabato QUESTIONNAIRES FOR EMPLOYEES Name (optional): Position/Title: _____________________________________ _____________________________________ Kindly Check ( / ) your selected answer Personal Information Sex : Male Marital Status : Single Separated Female Married Widowed What is your employment status? Fulltime Part time How long did you serve the company? Less than 1 year 3-4 years 1-2 years 5 years and above Have the company conducted trainings and workshops on marketing matters? Yes No If yes, how many times in a year? 1-2 times 6-5 times 3-4 times 7 or more times 80 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines Select the number that match with the level of your agreement in each of the following items in relation with your experience as employee of Skygo Marketing Corporation. Indicate your answer as follows: 5 – Excellent; 4 – Satisfactory; 3 – Neutral; 2 – Fair; 1 – Poor. Internal Marketing Factors The organization has a clear vision that gives employees a mental framework to evaluate the best way to interact with customers. The organization allows open communication that unites all departments to work as one. The organization allocates resources to educate the employees to promote strong culture and values. The organization encourages employees to express their opinions/sentiments to promote higher employee engagements. Weight (5,4,3,2,1) Comments/Suggestions: Give other internal marketing strategies not mention above you think will be effective when applied by the company: Date of the Survey: ________________________ Your participation is very much appreciated! Thank you! 81 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines CUSTOMER SURVEY QUESTIONNAIRE Good day! I am Rose Ann M. Templado, a student from the Masters in Business Administration program of Notre Dame of Marbel University. I would like to conduct a survey on customer’s preferences in buying motorcycle vehicle in Koronadal City. To be used on corporate strategy of Skygo Marketing Corporation. Kindly indicate your preference among alternative answers for each question by ticking in the appropriate box. Where alternative answers are not provided, fill in the gaps provided. Thank you for your contribution. Respondents are assured of confidentiality of this exercise because it will be solely used for academic purpose. Direction: Please check the appropriate box or write the exact answers on the space provided. A. Personal Information 1. Name (optional): _________________________________________ 2. Age : __________________________________________________ 3. Sex: Male Female 4. Client Category Student Working Individual Household Self- employed 5. Respondent’s residence City proper Barangay Municipality proper Sitio 6. Total monthly income P10,000 below P10,001 – P15,000 If Yes, P20,001 – P25,000 P25,001 – P30,000 P35,001 – P40,000 P40,001 – P45,000 P15,001 – P20,000 If No, P30,001 – P35,000 P45,001 and above B. Respondent’s Awareness of Skygo Marketing Corporation. 1. Are you a Skygo Motor user? Yes No If Yes, If No, How did you know Skygo Mktg. Did you know that there is Skygo Corp? Mktg. Corp. in Koronadal City? Because of a Skygo employee Yes No Because of a Skygo user Because of their advertisement Because of my personal research If yes, how? _____________________________ Others: Specify________________ C. Respondent Preferences in Buying Motorcycle Vehicle 82 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines 1. Do you have a plan to buy new motorcycle vehicle if ever? Yes No 2. What brand you are particular of in buying a motorcycle vehicle? Japanese Taiwanese Thai Chinese Indian Others, specify:__________ 4. For customer’s only. Rate your experience on the Skygo Marketing Corporation in a scale of 1-10; 10 for excellent; 1 for poor. 3. Indicate your preferences in buying motorcycle vehicle by ranking the factors below into 110; as 10 to be the highest and 1 to be the lowest preference. Factors Influencing Customer’s Choice In Scale Buying Motorcycle Vehicles (1-10) Brand Image Product Quality Product Price Product Style Store Location Availability of Spare Parts Less Fuel Consumption Better Mileage/Serviceability Less Maintenance Cost Approachability of Dealer Factors Influencing Customer’s Choice In Rank Buying Motorcycle Vehicles (1-10) Brand Image Product Quality Product Price Product Style Store Location Availability of Spare Parts Less Fuel Consumption Better Mileage/Serviceability Less Maintenance Cost Approachability of Dealer Comment/Suggestions ______________________________________________________________ ______________________________________________________________ Your participation is very much appreciated! Thank you! 83 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines Curriculum Vitae Rose Ann M. Templado Purok Riverside, Brgy. Sto. Nino, Koronadal City South Cotabato 9506 Cell #: 09197764933 roseanntemplado24@gmail.com Personal Data Age: 29years old Date of birth: April 24, 1989 Place of birth: Sta. Maria Davao del Sur Gender: Female Civil status: Single Citizenship: Filipino Religion: Roman Catholic Weight: 45kgs. Height: 5’1” Father’s name: Raul C. Templado Sr. Occupation: Farmer Mother’s name: RosalindaM.Templado Occupation: Farmer/House wife 84 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines Educational Background Graduate Studies: Master in Business Administration Notre Dame of Marbel University Alunan Ave., Koronadal City, South Cotabato College: Bachelor of Science in Accountancy Korbel Foundation College Inc., Brgy.Sto Niño,Koronadal City, South Cotabato Secondary: Heracleo Casco Memorial National High School Poblacion, Sta. Maria, Davao del Sur Primary: Jose Timbol Sr. Central Elem. School Pob. Sta. Maria, Davao del Sur Work Experiences College Instructor (June 2017- to present) Ramon Magsaysay Memorial Colleges – Marbel, Inc. Alunan Avenue, Koronadal City College Instructor (Nov. 2015 – Mar. 31, 2017) Korbel Foundation College, Inc. Brgy. Morales, Koronadal City Affiliation PICPA (Philippine Institute of Certified Public Accountants) NACPAE (National Associations of Certified Public Accountant in Education) 85 Graduate School NOTRE DAME OF MARBEL UNIVERSITY Alunan Avenue, City of Koronadal 9506 South Cotabato, Philippines JPIA member (Junior Phil. Institute of Accountants 2010) Bookkeeping NCIII (March, 2017) Certified Public Accountant (October,2015) Eligibility 86