I. Marketing Background/ Situational/ Market Analysis
A. Overview of the Industry
1. Market size (volume and value)
The Philippine population according to the National Statistics Office (NSO), Philippine population is projected at 88.7 million for 2008 with an average growth rate of 2.32%. Over 90% of the population is below 60 years old, which means that the Philippine beverage market is at mass. And 13% of the consuming population of beverages is in Metro Manila.
Beverage Market
Total family expenditure on for the entire country amounted to P2,038 billion 2000 (NSCB), comprising 43.1% of the total family expenditure for food & beverage (includes consumed at home at outside).
2. Market trend in the last 5 years
The market for Soft Drinks in the Philippines increased between 2000-2005, growing at an average annual rate of 5.7%. Beverage Production gained, from 8.7% percent in 2007 to a 26.7% production in August 2008. The Beverage Industry also gained an increasing net sales from 2.3% in 2007 to 20.6% in 2008.
B. Market Profile
Limitless Options and Appealing Population
The carbonated drinks industry is more concentrated on teens to adults. Most drinkers would be teenagers, parents, employed persons & families. The approach is to make the product available for anyone, which means a reasonable or even a low price with of course great taste.
Retails Stores
Because of strong consumer spending, the number of retails stores has been increasing not just in Metro Manila but as well as in the key cities all over the country like Bulacan, Laguna, Cebu, and Davao. Production of the product has been doubled especially with the hot tropical climate these past months.
C. Environmental / Industry Analysis
a. Technological-information
Inter-connectivity
Currently, RC Cola uses a system that connects all its plants & satellite branches to the main office. This enables the head office to closely monitor the flow of goods in each area. This system is also used to check sales and production for several areas of target. RC Cola uses most of the available technology today except for a website.
3 Step System
Like its mother company, Zest-O, it has a 3 Step System - Booking, Ex-truck and Wet-market. People on the sales part use Booking Systems to pre-accommodate various orders then if payment is cleared then delivery will be done by logistics and then goes to the sellers (with added promotional materials or given volume discounts). Wholesaling RC Cola Products is one their strategies in the market.
b. Political-legal
Licenses and Instabilities
Acquiring licenses for various industrial or manufacturing plants from targeted provinces is rendered quite difficult due to overwhelming requirements and permits from the government. That’s why wholesaling is another step in delivering products to neighboring provinces. Also, in general, any political instability in the country affects the beverage industry. In times of uncertainties, consumers tend to have a tighter hold of their money in case of any economic difficulty, causing a significant decrease in sales.
2. OT Analysis
a. Opportunities
Foreign market and Plant Expansion
China has a large population and is now a target for RC Cola’s new plant. Asian market as penetrated by its mother company has been a success. Zest-O’s aim for global competitiveness also covers its franchise – RC Cola.
With its popularity increasing, demands have been going up also. Wholesaling was done to fully distribute the products to the whole NCR and some part of Luzon. With these demand new plants were put up to accommodate and expand the market share.
b. Threats
Effect of Economic Crisis
Any sector can feel the brunt of the economic crisis. And with this, beverage consumption takes a significant step down on a consumer’s expenditure. Buying the product would likely be on occasions or some social events, but on regular days it will depend.
News about hording of bottles has been a problem for RC Cola. Before when it was starting to grow sales, an investigative report says that Coca Cola warehouses hordes their bottles in Valenzuela. This will affect the production rate and would not meet the demand. Also the health issues regarding carbonated drinks which concerns our way of living, so vital health research must be done or promoting that the product is still a part of our lives.
Sources
http://www.census.gov/ipc/prod/ppt92-11.pdf
http://www.census.gov.ph/index.html
http://www.census.gov.ph/data/quickstat/index.html
http://www.nationmaster.com/country/rp-philippines
http://www.researchandmarkets.com/reportinfo.asp?report_id=239320
http://www.drinks-business-review.com/research.asp?guid=DMCM4004
http://www.zesto.com.ph/zesto_company_profile.php
http://www.nscb.gov.ph/secstat/d_income.asp
http://www.nscb.gov.ph/secstat/d_popn.asp
http://www.prlog.org/10077022-consumer-expenditure-on-fbt-to-shoot-7-5-in-philippines.html
http://findarticles.com/p/articles/mi_m0EIN/is_2008_Feb_13/ai_n24322939
http://www.businessmonitor.com/food/philippines.html
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