marketing aspect
TRANSCRIPT
Introduction Major Assumptions Definition of Ratings Knowledge of the Market Analysis of the Knowledge of the Market Methods of Projection Set of formula use in demand computation Demand Analysis Analysis of past and projected demand summary Analysis of Line-Fitting of Past and Projected demand
Supply analysis
Analysis of past and projected supply summary
Line-Fitting of past and projected supply Analysis
Past demand-supply gap analysis
Past demand-supply bar graph analysis
2009 market share analysis
2011 market share analysis
Product planning
Product planning analysis
Channel of Distribution
Channel of Distribution analysis
Sales Force and Management
Analysis of the Sales Force management
Customer relation and after sales
Customer relation and after sales analysis
Promotions and advertisement
Analysis of promotions and advertisement
Pricing
Competitor’s Pricing
Pricing Analysis
Packaging
Packaging Analysis
Marketing audit overall ratings
Marketing audit overall rating analysis
INTRODUCTION
"Marketing is the activity, set of institutions, and
processes for creating, communicating, delivering, and
exchanging offerings that have value for customers, clients,
partners, and society at large." 1 It generates the
strategy that underlies sales techniques, business
communication, and business development. 2 It is an
integrated process through which companies build strong
customer relationships and create value for their customers
and for themselves. It is used to identify the customer, to
keep the customer, and to satisfy the customer.
Marketing is a significant aspect of any business
organization in today’s highly competitive world. It is a
vey important aspect in business since it contributes
greatly to the success of the organization. Successful
marketing creates value for two or more parties so that each
is satisfied.
Satisfaction of both parties is an implicit aspect in
the exchange relationship. It must understand both the
needs and wants side of the parties and the product, ideas &
1
1. "Definition of Marketing". American Marketing Association. Retrieved 2009-10-30.
2 . aKotler, Philip; Gary Armstrong, Veronica Wong, John Saunders (2008). "Marketing defined". Principles of marketing (5th ed.). p. 7. . Retrieved 2009-10-23.
2
services side. It must also effectively communicate the
details of each in order to successfully bridge the gap
between the two.
The marketing functions helps to analyze and asses the
company’s knowledge of the market, product planning, sales
force management, distribution channel, building customer
relations, promotion, pricing and packaging, all of these
are considered in this audit valuable to the organization.
In this aspect, the proponents will determine the
marketing practices carried out by Khofeet’s Collections. An
assessment and evaluation are also given based on its
current situation in terms of marketing issues. Audited
items are shown here as well as their strengths and
weaknesses. Furthermore, proposed options and benefits are
also stated. These aims to help the company to come up with
a better plan and give them ideas to be competitive in the
immense Shoe Industry.
MAJOR ASSUMPTIONS
The basis for the projection of demand and supply for
the next five years is the Statistical Parabolic Curve.
The three (3) direct competitors of Khofeet’s
Collections are: Detasie, Sammyr’s shoes and Neikie’s
Sandals.
There were twenty-three (23) shoe-producing industries
that are considered as the competitors including the
three direct competitors.
The data for the supply of the competitors were based
on personal interviews.
The computation for the supply is based from the
twenty-three (23) registered shoe-producing industries
that are found in Carcar including the importers.
It is assumed that the frequency of purchase for
sandals that is considered in this study is only once
because of the known quality of products produced by
these industries.
DEFINITION OF RATINGS
Satisfactory (3.26 - 5.0)
These items represent the strong points of an
enterprise. Attention to these points is to be maintained as
long-term issue.
Reasonable (2.51 - 3.25)
Prevailing conditions are such that improvement cannot
be expected to lead immediately to tangible result as
compared to the effort to be made.
Improvement Desirable (1.76 - 2.50)
Improvements are expected to result in cost savings,
additional or tangible result.
Improvement Necessary (1.0 - 1.75)
An immediate action is considered urgent.
DEMAND
Demand refers to the amount of a particular economic
good or service that a consumer or group of consumers will
want to purchase at a given price. 3It is one of the bases
in determining the availability of the product or services
that the customers need. Therefore, demand is greatly
important in starting a business.
When a customer desire for something and willing to pay
for it, the demand will exist. Obviously when there is
demand, business will occur. Demand is one of the
considerations before a business or firm will operate.
In the case of , the proponents
have determined its demand through having the data of the
total population of Carcar City, Cebu City, Lapu-Lapu City,
Mandaue City and Cebu Provinces including local tourists
from the National Statistics Office. The data was used in
calculating the past and projected demand of the subject
company of this study.
PRODUCT DESCRIPTION
3 http://economics.about.com/cs/economicglossary/g/demand.html
Sandals are an open type of outdoor footwear,
consisting of a sole held to the wearer's foot by straps or
thongs passing over the instep and generally, but not
always, around the ankle.
It is a common understanding that a sandal leaves most
or all of the foot exposed. Aside from the fact that people
wear sandals in warmer climates or during warmer parts of
the year in order to keep their feet cool and dry, People
may choose to wear sandals for several reasons. Among them
economy (sandals tend to require less material than shoes),
comfort in warm weather, and as a fashion choice.
Table 16
DEMAND COMPUTATION
Table 17
TOTAL POPULATION DEMAND
Year Demand
2005 3,756,016
2006 4,084,664
2007 4,448,768
2008 4,851,508
2009 5,298,125
ANALYSIS OF DEMAND
Khofeet’s Collections demand is based on the total
number of population because their product caters to people
of all ages. Sandals are considered a thing almost everybody
possesses possibly. The data considered are the population
of Carcar City, Cebu City, Lapu-Lapu City, Mandaue City and
Cebu provinces. Data were gathered from the internet and
National Statistics Office. To get the actual demand,
potential demand is multiplied to the percentage of those
who are willing to avail the company’s products which is
sandals.
With the great fact that population is vastly
increasing, it is certain that the shoe industry would
remain to excel in the market and never lose its status as a
basic need.
METHODS OF PROJECTION
Forecasting is the process by which companies ponder
and prepare for the future. It involves predicting the
future outcome of various business decisions. 4 A forecast
is a prediction of what will occur in the future. It is the
basis for most important planning decisions. Accurate
forecasting is critical for managing and planning. Business
must understand and use forecasting in order to answer
important questions vital for the business success. This
helps the company prepare for the future. Thus, care should
be taken in choosing the right method of projection.
To forecast the demand and supply for the years 2005 to
2014, mathematical models were used for computation.
The methods of projection used are the following:
Arithmetic Straight Line (ASL)
Arithmetic Geometric Curve (AGC)
Statistical Straight Line (SSL)
Statistical Parabolic Curve (SPC)
4 http://www.associatedcontent.com/article/200360/why_is_forecasting_important_to_an.html
Computations were made on the four projections, and from
this the selection of the best method of projection was
made. The chosen method of projection will be used as the
data for demand and supply. Three factors considered in the
selection of the appropriate method of projection. It was
based on the following:
Standard Deviation
- The one which yields the smallest standard
deviation is most likely to give the most reliable
forecast.
Average Growth Rate
- The least average growth rate most likely to give
the most reliable forecast
Law of Conservatism
- The growth rate of the projection should be closer
or if possible lower to the growth rate of the
past demand of the target market.
COMPUTATION OF PAST AND PROJECTED DEMAND
Table 18
YEAR Y a Y-1 Yc Y-Yc (Y-YC)²2005 3,762,016 - - - - -2006 4,090,664 385527 3762016 4147543 -56879 3,235,249,0812007 4,454,768 385527 4147543 4533071 -78303 6,131,281,5062008 4,857,508 385527 4533071 4918598 -61090 3,731,957,5552009 5,304,125 385527 4918598 5304125 0 0Total 13,098,488,142
standard deviation 51182.98
Projected ValuesYear A Yi-1 Yc
2010 385527 5,304,125 56896522011 385527 5689652 60751802012 385527 6075180 64607072013 385527 6460707 68462342014 385527 6846234 7231761
Table 19
Arithmetic Straight Line Method(historical data)
Arithmetic Geometric Curve(historical data)
YEAR Y %inc (dec) Yi+1 1+r Yc Y-Yc (Y-Yc)²2005 3,762,016 - 4,295,194 1.09 3,941,704 -179,688 32,287,755,4882006 4,090,664 8.74 4,680,385 1.09 4,295,194 -204,530 41,832,603,0742007 4,454,768 8.90 5,100,120 1.09 4,680,385 -225,617 50,903,171,7172008 4,857,508 9.04 5,304,125 1.04 5,100,120 -242,612 58,860,675,8562009 5,304,125 9.19 - - - - -
Total 183,884,206,135standard deviation 191772.89
Projected Demand
YEAR Yi-1 1+r Yc2010 5,304,125 1.09 57797972011 5,779,797 1.09 62981262012 6,298,126 1.09 68629392013 6,862,939 1.09 74784052014 7,478,405 1.09 8149065
Table 20
Statistical Straight Line
(historical data)
YEAR Y X X² XY A b Yc Y-Yc (Y-Yc)²2005 3,762,016 1 1 3,762,016 3338498 385,106 3,723,604 38,412 1,475,497,1092006 4,090,664 2 4 8,181,328 3338498 385,106 4,108,710 -18,046 325,658,1162007 4,454,768 3 9 13,364,304 3338498 385,106 4,493,816 -39,048 1,524,761,9232008 4,857,508 4 16 19,430,032 3338498 385,106 4,878,922 -21,414 458,576,5272009 5,304,125 5 25 26,520,625 3338498 385,106 5,264,029 40,096 1,607,721,293Total 5,392,214,968
standard deviation 32839.66
Projected Demand
YEAR a b X Yc
2010 3,338,498 385,106 65,649,13
5
2011 3,338,498 385,106 76,034,24
1
2012 3,338,498 385,106 86,419,34
7
2013 3,338,498 385,106 96,804,45
3
2014 3,338,498 385,106 107,189,56
0
Table 21
Statistical Parabolic(historical data)
Projected Demand
YEAR a B X C X² Yc2010 4,454,591 385,106 3 19612 9 5,786,4222011 4,454,591 385,106 4 19612 16 6,308,8152012 4,454,591 385,106 5 19612 25 6,870,4332013 4,454,591 385,106 6 19612 36 7,471,2762014 4,454,591 385,106 7 19612 49 8,111,344
Table 22
Past and Projected Demand Summary
YEARPAST
DEMAND ASL AGC SSL SPC2005 3,762,016 2006 4,090,664
YEAR Y X X² X⁴ XY X²Y A B c Yc Y-Yc (Y-Yc)²2005 3,762,016 -2 4 16 -7,524,032 15,048,064 4,454,591 385,106 19612 3,762,828.66 -813 660,4122006 4,090,664 -1 1 1 -4,090,664 4,090,664 4,454,591 385,106 19612 4,089,097.57 1,566 2,453,6982007 4,454,768 0 0 0 0 0 4,454,591 385,106 19612 4,454,591.34 177 31,2082008 4,857,508 1 1 1 4,857,508 4,857,508 4,454,591 385,106 19612 4,859,309.97 -1,802 3,247,101
2009 5,304,125 2 4 1610,608,25
0 21,216,500 4,454,591 385,106 19612 5,303,253.46 872 759,587Total 7,152,006
standard deviation 1195.99
2007 4,454,768 2008 4,857,508 2009 5,304,125
2010 5689652.
3 5779797 5,649,135 5,786,421.80
2011 6075179.
5 6298126 6,034,241 6,308,815.00
2012 6460706.
8 6862939 6,419,347 6,870,433.062013 6846234 7,478,405 6,804,453 7,471,275.97
2014 7231761.
3 8149065 7,189,560 8,111,343.74Std. Dev. 51182.98 191772.89 32839.66 1195.99AGR (%) 8.97 6.18 8.97 6.21 8.81
ANALYSIS ON PAST AND PROJECTED DEMAND LINE FITTING
In the previous page, it gives a clear visualization to
the readers on the difference of the four methods being used
in projecting the supply for five years. The line fitting
using the line graph is one of the ways in choosing the best
method of projection. Different colors of the lines show the
distinction of the four projected methods while the past
supply is also being plotted in the same figure.
There are lines in the figure which cannot be
seen clearly due to the close difference of the four methods
with regards to the standard deviation. The BLUE-VIOLET
2005 2006 2007 2008 2009 2010 2011 2012 2013 0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
9,000,000
LINE FITTING PAST AND PROJECTED DEMAND
Past ASL AGC SSL SPC
YEAR
SU
PP
LY
color signifies the flow of the projected demand using the
Statistical Parabolic Curve (SPC) which is the best method
of projection.
Based on the figure above, using visual analysis,
by just following the trend of the past as well as the four
projections, the proponents come up with a conclusion that
SPC and AGC has the most similar trend as that of the past.
But with considering the average growth rate, the
standard deviation and the Law of Conservatism, it supports
the SPC as the best and most accurate method of projection.
SUPPLY
A fundamental economic concept that describes the total
amount of a specific good or service that is available to
consumers is called supply. In our economic system,
resources are allocated through the exchange of goods and
services between producers and consumers. Each good or
service command a price5.
To be able to determine the supply for this study, the
proponents gathered data from the different three major
direct competitors which are Detasie, Sammyr’s Shoes and
Neikie’s Sandals. The chosen direct competitors are those
having the same product line and are located within the
vicinity of the target market.
Also, a list of competitors is provided in the
succeeding page because these competitors are part of the
competition in the shoe industry’s market and could be a
threat to the existence of the subject company in study.
The data was obtained from the different competitor
companies and were used as the basis for supply computation.
These data are the supplies for the year 2005-2009 of the
chosen three competitors.
5 www.businessdictionary.com
Table 23
LIST OF COMPETITORS
Detasie
Sammyr shoes
Danny’s Shoes
J’ferson Shoes
Chudray shoes
Jebiley shoes
Ariel shoes
Mary Grace footwear
Lirus shoes
Lidebeth shoes
Lady Carol
Lynette’s shoes
Melenolls shoes
JRE footwear
Kevin’s Collection
Janray’s footwear
Footwer shoemaker
Coat world shoemaker
Charkeys Shoe making
Shoes and Sandals
Neikie’s Sandals
Gyro Basics
Importers
Table 24
SUPPLY TABLE
Company 2005 2006 2007 2008 2009
Detasie 199,367 239,141 286,850 344,080 412,724
Sammyr’s shoes
38,403 42,436 46,892 51,816 57,257
Neikie’s Sandals
49,730 55,325 61,550 68,475 76,179
Total 287,500 336,902 395,292 464,371 546,160
Table 25
Total Population Supply
Year Supply Others Total Supply
2005 287500 1365625 1653125
2006 336902 1600285 1937187
2007 395292 1877637 2272929
2008 464371 2205763 2670134
2009 546160 2594260 3140420
ANALYSIS OF SUPPLY
The supply was obtained using the three major,
competitors, Detasie, Sammyr’s Shoes and Neikie’s Sandals.
The three competitors supply were determined through the
market survey. The market surveys were given to the
company’s respective competitors for us to be able to know
their supply every year from 2010-2014. Among the twenty
three competitors, these three chosen three are located
within the vicinity map of Carcar.
Table 26Arithmetic Straight Line Method
(historical data)
Projected ValuesYear a Yi-1 Yc
2010371824 3,140,420 3512244
2011371824 3512244 3884068
2012371824 3884068 4255891
2013371824 4255891 4627715
2014371824 4627715 4999539
Table 27
YEAR Y%inc (dec) Yi+1 1+r Yc Y-Yc (Y-Yc)²
20051,653,125 - 2,190,850 1.17 1,866,129 -213,004 45,370,685,511
YEAR Y a Y-1 Yc Y-Yc (Y-YC)²
20051,653,125 - - - - -
20061,937,187 371824 1653125 2024949 -87762 7,702,124,763
20072,272,929 371824 2024949 2396773 -123844 15,337,212,492
20082,670,134 371824 2396773 2768596 -98462 9,694,814,675
20093,140,420 371824 2768596 3140420 0 0
Total 32,734,151,930
standard deviation180925.82
Arithmetic Geometric Curve(historical data)
20061,937,187 17.18 2,572,074 1.17 2,190,850 -253,663 64,344,718,921
20072,272,929 17.33 3,019,635 1.17 2,572,074 -299,145 89,487,807,004
20082,670,134 17.48 3,140,420 1.04 3,019,635 -349,501 122,150,680,154
20093,140,420 17.61 - - - - -
Total 321,353,891,589
standard deviation50.68
Table 28
Statistical Straight Line(historical data)
Projected Supply
Projected Supply
YEAR Yi-1 1+r Yc2010 3,140,420 1.17 36868772011 3,686,877 1.17 43284222012 4,328,422 1.17 50816002013 5,081,600 1.17 59658372014 5,965,837 1.17 7003938
YEAR Y X X² XY a b Yc Y-Yc (Y-Yc)²
20051,653,125 1 1 1,653,125 1222498 370,754 1,593,252 59,873 3,584,824,028
20061,937,187 2 4 3,874,374 1222498 370,754 1,964,005 -26,818 719,221,215
20072,272,929 3 9 6,818,787 1222498 370,754 2,334,759 -61,830 3,822,948,900
20082,670,134 4 16 10,680,536 1222498 370,754 2,705,513 -35,379 1,251,652,414
20093,140,420 5 25 15,702,100 1222498 370,754 3,076,266 64,154 4,115,684,393
Total 13,494,330,949standard deviation 128.42
YEAR a b X Yc2010 1,222,498 370,754 6 34470202011 1,222,498 370,754 7 38177742012 1,222,498 370,754 8 41885282013 1,222,498 370,754 9 45592812014 1,222,498 370,754 10 4930035
Table 29
Statistical Parabolic(historical data)
YEAR Y X X² X⁴ XY X²Y a B c Yc Y-Yc (Y-Yc)²
20051,653,125 -2 4 16 -
3,306,2506,612,500 2,272,772 370,754 30994 1,655,238.89 -2,114 4,468,513
20061,937,187 -1 1 1 -
1,937,1871,937,187 2,272,772 370,754 30994 1,933,011.66 4,175 17,433,488
2007 2,272,929 0 0 0 0 0 2,272,772 370,754 30994 2,272,771.71 157 24,739
2008 2,670,134 1 1 1 2,670,134 2,670,134 2,272,772 370,754 30994 2,674,519.06 -4,385 19,228,726
2009 3,140,420 2 4 16 6,280,840 12,561,680 2,272,772 370,754 30994 3,138,253.69 2,166 4,692,918
∑ 11,673,795 10 34 3,707,537 23,781,501 45,848,383
standard deviation 3.13
Projected Supply
YEAR a b X C X² Yc2010 2,272,772 370,754 3 30994 9 3,663,976
2011 2,272,772 370,754 4 30994 16 4,251,6852012 2,272,772 370,754 5 30994 25 4,901,3812013 2,272,772 370,754 6 30994 36 5,613,0652014 2,272,772 370,754 7 30994 49 6,386,736
Table 30
Past and Projected Supply Summary
YEARPAST
SUPPLY ASL AGC SSL SPC2005 1,653,1252006 1,937,1872007 2,272,9292008 2,670,1342009 3,140,4202010 3512243.75 3686877 3,447,020 3,663,975.602011 3884067.5 4328422 3,817,774 4,251,684.802012 4255891.25 5081600 4,188,528 4,901,381.292013 4627715 5,965,837 4,559,281 5,613,065.062014 4999538.75 7003938 4,930,035 6,386,736.11
Std. Dev. 80,912.49 253,516.82 51,950.61 3,028.15AGR (%) 17.40 9.23 17.40 9.36 14.91
PAST AND PROJECTED SUPPLY ANALYSIS
The summary of the past and projected supply of
Khofeet’s Collections is shown above. With the use of the
four methods of projections which are: Arithmetic Straight
Line (ASL), Arithmetic Geometric Curve (AGC), Statistical
Straight Line (SSL) and Statistical Parabolic Curve (SPC),
the supply for the next five years from 2010 to 2014 is
determined.
Based on the three conditions of selecting the best
method of projection, it shows that Statistical Parabolic
Curve (SPC) excel from the rest. Compared to the four
methods of projection, SPC ranks first in the least standard
deviation, third in terms of least average growth rate, and
it ranks the second with regards to its conformance to the
Law of Conservatism. SPC wins against all the three methods
of projection based on the three conditions.
Thus, comparing to all methods of projection, it is
Statistical Parabolic Curve which yields an ideal and
realistic forecast. From this, the proponents selected SPC
as the method of projecting the future supply of KHOfeet’s
Collections.
LINE FITTING OF PAST AND PROJECTED SUPPLY
2005 2006 2007 2008 2009 2010 2011 2012 2013 20140
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
LINE FITTING PAST AND PROJECTED DEMAND
Past ASL AGC SSL SPC
YEAR
SU
PP
LY
ANALYSIS ON PAST AND PROJECTED SUPPLY LINE FITTING GRAPH
In the previous page, it gives a clear visualization to
the readers on the difference of the four methods being used
in projecting the supply for five years. Different colors of
the lines show the distinction of the four projected methods
while the past supply is also being plotted in the same
figure.
There are lines in the figure that are
overlapping and cannot be distincted clearly due to the
close difference of the four methods with regards to the
standard deviation. The BLUE-VIOLET color signifies the flow
of the projected demand using the Statistical Parabolic
Curve (SPC) which is the best method of projection.
Based on the figure above, using visual analysis,
by just following the trend of the past as well as the four
projections, the proponents come up with a conclusion that
SPC has the most similar trend as that of the past.
Aside from considering the average growth rate,
the standard deviation, and the Law of Conservatism, the
line fitting using the line graph is one of the ways of
choosing the best method of projection in which supports the
SPC as the best and most accurate method of projection
as also being describe by the rest of the ways of
determining the right method of projection.
As shown above, SPC gives more realistic
approximation of the past supply trend. So therefore SPC is
the best method of supply projection.
2009 MARKET SHARE COMPUTATION
Demand = 5,304,125
Supply = 3,140,420
Formula:
Market Share = (Supply/Demand) x 100
Khofeet’s Collections
Market Share = (28,080/5,304,125) x 100
= 0.53%
Detasie
Market Share = (412724/5,304,125) x 100
= 7.78%
Sammyr’s shoes
Market Share = (57,257/5,304,125) x 100
= 1.08%
2005 2006 2007 2008 20090
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
PAST DEMAND AND SUPPLY BAR GRAPH
Demand Supply
YEAR
2010 2011 2012 2013 20140
1,000,0002,000,0003,000,0004,000,0005,000,0006,000,0007,000,0008,000,0009,000,000
PROJECTED DEMAND AND SUPPLY BAR GRAPH
Demand Supply
YEAR
Neikie’s sandals
Market Share = (76,179/5,304,125) x 100
= 1.44%
UNTAPPED MARKET
Untapped Market = (5,304,125-3,140,420) x 100
5,304,125
= 40.79%
OTHERS
= 100% - (40.79%+ 1.44%+1.08%+7.78%+0.53%)
= 48.38%
2009 MARKET SHARE PIE-CHART
2009 Market Share
Khofeet's CollectionsDetasieSammyr’s shoesNeikie’s sandalsOthersUntapped Market
ANALYSIS OF PRESENT MARKET SHARE
To have a better visualization on the percentages of
the market share Khofeet’s Collections, Detasie, Sammyr’s
shoes and Neikie’s Sandals the Untapped market, and other
competitors, the values are being plotted on the pie chart.
Based on above figure, Khofeet’s Collections got a
0.53% share in the market. While Detasie, Sammyr’s Shoes and
Neikie’s Sandals got 7.78%, 1.08% and 1.44% respectively.
There is 40.79% for the untapped market and 48.38% share of
the pie for the other competitors.
PROPOSED MARKET SHARE COMPUTATION FOR 2011
Demand = 6,308,815.00
Supply = 4,251,685
Formula:
Market Share = (Supply/Demand) x 100
Khofeet’s Collections
Market Share = (28923/6,308,815) x 100
= 0.46%
Detasie
Market Share = (593829/6,308,815) x 100
= 9.42%
Sammyr’s shoes
Market Share = (69913/6,308,815) x 100
= 1.11%
Neikie’s sandals
Market Share = (96145/6,308,815) x 100
= 1.52%
UNTAPPED MARKET
Untapped Market = ( 6,308,815 - 4,251,685 ) x 100 6,308,815
= 32.61%
OTHERS
= 100% - (32.61%+ 1.52%+1.11%+9.42%+0.46%)
= 54.88%
2011 MARKET SHARE PIE-CHART
2011 Market Share
Khofeet's CollectionsDetasieSammyr’s shoesNeikie’s sandalsOthersUntapped Market
ANALYSIS OF PROPOSED MARKET SHARE
To have a better visualization on the percentages of
the market share Khofeet’s Collections, Detasie, Sammyr’s
Shoes, Neikie’s Sandals, the Untapped market and other
competitors, the values are being plotted on the pie chart.
Based on above figure, Khofeet’s Collections got a
0.46% share in the market. While Detasie, Sammyr’s Shoes and
Neikie’s Sandals got 9.42%, 1.11% and 1.52% respectively.
There is 32.61% for the untapped market and 54.88% share of
the pie for the other competitors.
AUDIT AREA: Marketing
AUDIT ITEM: Knowledge of the Market
RATING: Improvement Desirable (1.96)
I. FINDINGS:
A. STRONG POINTS
The industry sales can be protected for
the next five years.
The companies maintain and keep their
customers files.
The company is updated with the new
fashion and style of sandals in our
society.
The company’s target market penetrates
in Carcar city and provinces.
They publicized their product through
their sales representatives by
personally showing sample products to
their market.
B. WEAK POINTS
The company does not monitor and follow
market trend.
The company does not keep track and way
of all the competitors’ promotional
activities.
Lack of sales representatives, which
could penetrate more in their market
sales.
C. OPPORTUNITY
Forecast the demand for the next five
years
There is market penetration through Cebu
City.
D. THREATS
The company should not be able to
achieve competitive advantages.
II. RECOMMENDATION:
The company should maintain and improve
strong points.
The company must study, evaluate and
monitor their standing in the market;
the market trend and their share in the
place.
III. BENEFITS:
Better planning in the utilization of
the marketing resources.
Increase sales, which could increase the
market share of the company.
KNOWLEDGE OF THE MARKET
ANALYSIS:
A market is place goods and services are offered for
sales, buyers those of offerings. However, the company of a
physical trading place is no longer enough to encompass
every area where a exchange is possible. There are lots of
points of contacts between the supplier and potential
customers and all of those are part of marketing. Therefore,
it is useful to broaden the idea of a market to include the
complete market space occupied by a group of suppliers and
their customers.
The proponents rated knowledge of the market as
reasonable based on the following findings: the industry
sales can be projected for the next 5 years, and the
companies maintain and keep their customers file. They are
updated with the new fashion and style of sandals in our
society. But still, the company does not monitor keep track
and way of all the competitors’ promotional activities.
In order for the company to increase sales, which would
increase the market share of the company and better
utilization of marketing resources, the company must
maintain and improve its strong point. The company must
always monitor the market and improve their share in the
market place by indulging in extensive promotional
activities.
Audit Area: Marketing
Audit Item: Product Planning
Rating: Improvement Desirable (1.83)
I. Findings
A. Strength (s)
The company is updated with new style
and fashion of their sandals.
They are often to customer suggestion
regarding on what style/design they
needs.
The company follows new trends in the
market regarding on the products with
high demand.
B. Weakness (es)
The company’s raw materials and finished
products are not properly arranged.
C. Opportunity (ies)
The company might gain their sales.
The company has the idea on what
products.
D. Threat (s)
Regarding to their products they might
have many competitors.
Workers will not be reminded and
acquainted of the company’s quality
standard procedure.
II. Recommendation (s)
Maintain and improve strong points.
The company must establish a written
procedure for quality.
III. Benefit (s)
The company might gain a good reputation
as top producer of sandal product with
quality standards that satisfies
customers need.
Can attract more customers.
IV. Cost (s)
PRODUCT PLANNING
ANALYSIS:
Product Planning involves all the decisions a business
makes in the production and sale of its goods and services.
Which product to carry is major decision other decisions
involve product packaging, labeling and branding. This
comprises to plan on how to improve the design of the
product and find a way to satisfy the customer’s wants and
needs.
The proponents rate the company’s product planning as
improvement desirable based on the findings their raw
materials and finish products are not in proper arrangement
and we suggest having their proper storage with regards to
their raw materials and finishing products.
Audit Area: Marketing
Audit Item: Channel of Distribution
Rating: Improvement Desirable (2.07)
I. Findings
A. Strong Points
The company has an efficient channel of
distribution.
The company was able to penetrate the market.
Provide a display center near their factory.
B. Weakness Points
Retailers are not available or used to
distribute the company’s product.
C. Opportunities
They are able to sale products and help
promote or distribute or ultimate consumer.
The gap between the company and the target
market will be connected.
D. Propose options
Maintain and improved the strong points.
Add more sales and representatives.
Engage in trade shows inside the malls.
Caravan’s sale during special occasions like
fiestas and festivals.
E. Cost-Benefits
Selling of goods makes more efficient.
There will be effective distribution
coverage for sandals.
Can directly distribute their items.
CHANNEL OF DISTRIBUTION
ANALYSIS:
The channel distribution consists of a chain of
intermediaries, each passing the product down the chain to
the next organization, before it finally reaches the
consumer or end-user. Each of the elements in these chains
will have their own specific needs, which the producer must
take into account, along with those of the all-important
end-user.
Khofeet’s company in channel of distribution has been
rated as improvement desirable due to the following
findings. It has efficient distribution channel because of
the nature of its product. It can sell to their ultimate
consumers. Because of these, Khofeet’s company was able to
distribute their sandals only at the vicinity area that’s
why the proponents proposed that the company should go
through retailers for the distribution so that they can
cater more customers.
CHANNEL OF DISTRIBUTION (PRESENT)
KHOfeet’s
collections
Wholesaler
Customer
CHANNEL OF DISTRIBUTION (PROPOSED)
KHOfeet’s
collections
Wholesaler
Retailer
Ultimate Customer
AUDIT AREA: Marketing Audit
AUDIT ITEM: Sales Force Management
RATING: Improvement Necessary (1.56)
I. Findings
A. Strength(s):
No cost is incurred in managing the business to
increase its sales.
They have a sales clerk in their display center.
B. Weakness (es):
The company only waits for their customers.
Their sales clerk was lack of training on how to
handle the customers.
Doesn’t have a sales representative to its
respective areas.
C. Opportunity (ies):
Hire a sales clerk which is effective enough.
D. Threat (s):
Lots of potential buyers
II. Recommendations
Company should provide a sales representative.
Conduct training to their sales clerk and sales
representative.
III. Cost-Benefit
Can cater more customers.
Increase of sales.
There will be a good relationship between the
company and their business consumer.
AUDIT AREA: Marketing Audit
AUDIT ITEM: Customer Relations and After Sales Service
RATING: Reasonable (2.66)
I. Findings
A. Strength(s):
Target date of finishing product usually met.
The company replaced those defect products.
The company has copy/files of their customers.
B. Weakness (es):
In case of return products, there are no agreement
between the company and the customer.
C. Opportunity (ies):
Attract more customers
D. Threat (s):
Doesn’t tend to promote their product and so the
market will not aware of the product they are
producing.
II. Recommendations
There should be promotional tools in order to have
a relation to their customers.
There should be written or documented policies on
returned defect products.
III. Cost-Benefit
Customers’ loyalty and trust of the company and
its products.
Good relation between customer and the company.
CUSTOMER RELATIONS AND AFTER SALES MANAGEMENT
ANALYSIS:
Customer relationship management (CRM) is a widely-
implemented strategy for managing a company’s interactions
with customers, clients and sales prospects. It involves
using technology to organize, automate, and synchronize
business processes—principally sales activities, but also
those for marketing, customer service, and technical
support. The overall goals are to find, attract, and win new
clients, nurture and retain those the company already has,
entice former clients back into the fold, and reduce the
costs of marketing and client service.[1] Customer
relationship management describes a company-wide business
strategy including customer-interface departments as well as
other departments.[2]
___________________
http://en.wikipedia.org/wiki/Customer_Relationship_Management
Audit Area: Marketing
Audit Item: Promotion and advertisement
Rating: Improvement Desirable (1.32)
I. Findings
A. Strength (s)
The company saves cost because they do not
engage in any promotional program.
The company gives discount for the customers
who would buy a large volume of their
products.
The company had their displayed center for
their products.
B. Weakness (es)
The company does not engage in any
promotional program.
C. Opportunity (ies)
The company might attract more customers.
They have great chances to be recognized in
the market.
D. Threat (s)
The company is not very recognized to the
customer.
The company might loss the opportunity to be
recognized in the market.
More customers will transfer to other
competitors.
II. Recommendation (s)
The company should engage in any promotional
strategies to be able that their products
will be recognized in the market.
The company can promote their products in
free websites or maybe they can create their
own.
Engage in the trade shoes inside malls.
III. Benefit (s)
Can attract more potential consumers/
customers.
May recognize in the market.
Sales will be increased.
IV. Cost (s)
FREE WEBSITES
Brochure
Signboards
Newspaper
PROMOTIONS AND ADVERTISEMENT
ANALYSIS:
Promotion and Advertising is any form of communications
use to inform, persuade, or remind people about a business
product. Promotion is also use to improve a firm’s public
image. The TV and Radio commercial you see and hear are form
of advertisement. Advertisement serves as an encouragement
towards the consumer that would lead to the growth and
development of the organization.
Since the Khofeet’s company does not engage in any
promotional program/ tools that could somehow promotes their
products and able to recognize in the market. The
proponent’s rate for promotion and advertisement is
improvement desirable. They must engage in promotional
program for them to be recognized and this would help them
to facilitate their customers about their product.
Audit Area: Marketing
Audit Item: Packaging and Product Identification
Rating: Improvement Desirable (2.09)
I. Findings
A. Strength (s)
The product maintains its good quality
because of packaging.
There is an identification of product
through its size, color and stock number.
The name of the company is placed on each
finished product.
B. Weakness (es)
The product was directly placed into a
carton or box.
C. Opportunity (ies)
Easily identification of the item or
product.
The quality still remains.
Protection of the product is present.
D. Threat (s)
The company doesn’t use cellophane for
wrapping the product before placing it in a
carton or box.
II. Recommendation (s)
Maintain and improve strengths
The product should be wrapped with
cellophane before placing it in a carton or
box.
III. Benefit (s)
Maintaining the quality of the product.
IV. Cost (s)
Cellophane=Php45.00/100 pieces
Figure
Existing Packaging of the Product
PACKAGING
ANALYSIS:
The packaging component of a product refers to any
container in which it is offered for sale and on which label
is an integral part of the package and typically identifies
the product or brand, who made it, where and when it was
made, how it is to be used, and package contents and
ingredients.
For the Khofeet Shoes’ packaging and identification
labeling of the product was done properly yet there are some
area of packaging needs to be improve. The proponents
recommend the company to use cellophane to wrap the item
before putting it into a carton or box for the purpose of
maintaining the quality of the product.
Audit Area: Marketing
Audit Item: Pricing Scheme
Rating: Reasonable (2.75)
I. Findings
A. Strength (s)
The company product price is less compared
to the competitors.
The price was based on the different soles.
The company gives discounts to their
business customers who have a large number
of orders.
B. Weakness (es)
The company doesn’t have a definite mark-up
for their pricing.
C. Opportunity (ies)
Their price are very competitive and in good
quality.
More customers will be interested in buying
their product.
D. Threat (s)
There is no definite mark-up will create
loss profit for the company.
II. Recommendation (s)
The company should have a definite mark-up
in order to gain profit through its pricing
scheme.
III. Benefit (s)
The company will have an increase of profit.
Based on price, product becomes competitive.
PRICING SCHEME
ANALYSIS:
Price is the amount of money charged for a product or
service or the sum of the values consumers exchange for the
benefits of having or using the product or service.
Khofeet Company has its good pricing scheme which is very
competitive enough to their competitor. Even though they are
competitive in terms of price, yet they are not using a
standard mark-up which could help the company. That’s why
the proponents recommend the company to use a standard mark-
up for the price so that the company will have an increase
of profit.
Table 31
Prices of Sandals in different Competitors(in Peso)
SUPPLIERS Men
Female Children
Detasie 595 295 150
Sammyr 300 160 100
Neikie’s sandals 220 160 130
Table 32
SUMMARY OF FINDINGS
Item Proposed Options Benefits Cost
Knowledge of the Market
The company should maintain and improve strong points.
The company must study, evaluate and monitor their standing in the market; the market trend and their share in the place.
Better planning in the utilization of the marketing resources.
Increase sales, which could increase the market share of the company.
Product Planning
Maintain and improve strong points.
The company must establish a written procedure for quality.
The company might gain a good reputation as top producer of sandal product with quality standards that satisfies customers need.
Can attract more customers.
Php.
Channel of Distribution
Maintain and improved the strong points.
Add more sales and representatives.
Engage in trade shows
Selling of goods makes more efficient.
There will be effective distribution coverage for sandals.
inside the malls.
Caravan’s sale during special occasions like fiestas and festivals.
Can directly distribute their items.
Sales Force Management
Company should provide a sales representative.
Conduct training to their sales clerk and sales representative.
Can cater more customers.
Increase of sales. There will be a good
relationship between the company and their business consumer.
Php.
Customer Relation and After Sales
There should be promotional tools in order to have a relation to their customers.
There should be written or documented policies on returned defect products.
Customers’ loyalty and trust of the company and its products.
Good relation between customer and the company.
Promotion and Advertisement
The company should engage in any promotional strategies to be able that their products will be recognized in the
Can attract more potential consumers/ customers.
May recognize in the market.
Sales will be
Php.
market. The company can promote
their products in free websites or maybe they can create their own.
Engage in the trade shoes inside malls.
increased.
Pricing The company should have a definite mark-up in order to gain profit through its pricing scheme.
The company will have an increase of profit.
Based on price, product becomes competitive.
Packaging and Product Identification
Maintain and improve strengths
The product should be wrapped with cellophane before placing it in a carton or box.
Maintaining the quality of the product.
Php45.00/100 pcs.
Table 33Individual Ratings
# Item Rated Considerations 1st 2nd 3rd 4th Average Individual
Rating
Ratings
1 Knowledge of the marketEfficiency 1.89 1.97 1.95 1.86 1.92 Improvement
Desirable (1.96)Effectiveness 2.0 1.76 1.90 2.3 2.0Average Group Rating
2 Product PlanningDocumentation 1.9 1.72 1.8 1.82 1.81 Improvement
Desirable (1.83)Appropriateness 1.8 1.89 1.9 1.79 1.85Average Group Rating
3 Channel of DistributionEffectiveness 2.2 2.08 2.02 2.1 2.1 Improvement
Desirable (2.07)Appropriateness 2.0 2.11 2.11 1.93 2.04Average Group Rating
4 Sales Force and ManagementEffectiveness 1.5 1.6 1.78 1.72 1.5 Improvement
Necessary (1.56)Efficiency 1.7 1.62 1.59 1.52 1.61Average Group Rating
5 Customer Relations and After-Sales ServicesCourtesy 2.6 2.59 2.57 3.0 2.69 Reasonable (2.66)Performance 2.7 2.54 2.6 2.51 2.59Responsiveness 2.8 2.67 2.65 2.64 2.69
Average Group Rating
6 Advertising and Promotions
Availability 1.6 1.53 1.43 1.35 1.48 Improvement Necessary (1.32)Appropriateness 1.4 1.34 1.29 1.24 1.32
Attractiveness 1.3 1.2 1.18 1.0 1.17Average Group Rating
7 Packaging
Durability 2.0 2.46 2.1 2.3 2.22 ImprovementDesirable (2.09)Attractiveness 1.9 1.79 1.76 1.8 1.84
Appropriateness 2.2 1.76 1.98 1.87 1.95Reliability 2.4 1.89 1.98 1.95 2.06Availability of Information 2.3 2.49 2.23 2.5 2.38
Average Group Rating
8 Pricing SchemeAffordability 3.1 2.58 2.77 3.25 2.93 Reasonable (2.75)Documentation 2.6 2.54 2.59 2.54 2.57
Average Group Rating