Feasibility Marketing Plan – Lumber Business

MARKETING PLAN OF MADERA SAN JOSE Marketing Tools Madera San Jose, from the name itself, will offer wood products specifically hardwoods or lumber that would be further used for production of different products such as wood furniture, residential or commercial structures, and etc. Madera is the Spanish word for â€Å"wood†. Madera San Jose’s hardwood products will be expounded on in the next part of the study – the marketing plan of the proposed business. This part of the feasibility study determines the different types marketing programs prevalent in the lumber industry that can help the Madera.Given that the proposed business is a medium-scale lumber business in the province of Pampanga, the province of Muebles San Jose and also the proposed province for the location of Madera San Jose, the group gathered few and simple but still effective marketing programs that are implemented by owners there to make their business known. They can also be considered as more of marketing tools. Firstly, the bu sinesses give free merchandise such as calendars, face towels and shirts. These materials bear the logo or name of the business as well as its location.Mostly the merchandise is given to both potential and loyal patrons for them to maintain and spread awareness of the business. This practice has been done not just in Pampanga but in other places, too, and not just by lumber business owners but by other business owners, too. Except for the calendars, that are given just once a year, other merchandises are given depending on the owners disposal or whenever the owners want to, and how frequently they want to. It is proven effective because most businesses that have done it are the long-running ones compared to others that have not.The costs associated with these merchandises are as follows: Merchandise| Price & Quantity| Calendars| Php 10. 00 per 1 pc. for 30 pcs. (in a bulk)| Face towel| Php 15. 00 per 1 pc. for pcs. (in a bulk)| Shirts| Php 80. 00 per 1 pc. for 100 pcs. (in a bulk)| Secondly, businesses in Pampanga sponsor basketball teams in town leagues. Lumber businesses there have done it, too. In exchange, their logos are seen on the basketball players’ jerseys. Basketball leagues are held more than once annually, sometimes at very frequent intervals. In these events, usually many people come to watch.Aside from basketball jerseys, there are also banners portraying the businesses’ logos and locations. These are seen by owners as opportunities for the business to be recognized so they sponsor. Lumber businesses in Pampanga have done so, too. In Pampanga, the total cost for sponsoring a team is Php 10,000. 00. Following is the breakdown of said amount that will be paid in case Madera sponsors a basketball team. Expenses| Price| Basketball jerseys| Php7,200. 00 (Php 600. 00 x 12 jersey sets)| Banners or Posters| Php 2,000. 00 | Miscellaneous| Php 800. 00|The third and the last marketing tool used by most business owners in the area as well as gi ving one peso discounts. This practice has long been used by business owners – from large department stores to local lumber business owners. The practice gives customers the mentality that they get to save more while at the same time, not affecting much the costs of incurred by the business for that certain item – considering that there were mark-ups added. Marketing Mix (4 Ps) The marketing plan mainly elaborates on the 4 Ps of a business: the Product, Place, Price, and Promotion.These 4 Ps are also considered the â€Å"marketing mix† of the business that determine what the business has to offer and what are the channels for this offer to reach the consumers. In this part of the study, the said principles are expounded on in the context of Madera San Jose. Product Usually, the first principle of the 4 Ps tackled in marketing plans is the Product. Madera San Jose will offer lumber – to be specific, hardwood products. In the simplest sense, lumber is †Å"wood in any stage from the time it is cut from a tree through its use in construction or paper,† (What is Lumber Homepage, 2013).Lumber is cut from a tree through a process called felling. After it is cut and shipped, it is supplied either â€Å"rough† or â€Å"finished†. Finished lumber is primarily used in the construction industry. Most finished lumber is cut from softwood trees such as pine, fir, or cedar. Some rough lumber includes hardwoods for use in high-grade wood floors (What is Lumber Homepage, 2013). Rough lumber is raw and uncut to standardized measurements. It is used for furniture or specialty manufacturing where custom cutting and shaping is required.Given that Muebles San Jose concentrates on furniture making – custom-made or otherwise – Madera San Jose will mainly sell rough lumber in the form of hardwoods. The hardwood lumber products to be offered by Madera are: Lauan, Yakal, Teak, Gmelina, Malabuaya, Narra, Mahogany, Apitong, and Antipolo. Like the competitors, Top Lumber and Angeles LCM Construction Supply, Madera San Jose will get most of its woods from the suppliers in Tarlac. Below are the illustrations of the different hardwood products to be sold by Madera San Jose. Lauan YakalTeak Gmelina MalabuayaNarraMahoganyApitongAntipolo These lumber products, as mentioned, are to be processed further for production of more products such as trimmings for structures and more especially, furniture. Place The second P stands for Place. Madera San Jose’s wood warehouse and store itself is to be established in Angeles City, Pampanga. Pampanga is the home of Muebles San Jose. However, be that as it is, Muebles is in Mabalacat, not Angeles City. Angeles City was chosen due to its close proximity to Mabalacat – Mabalacat borders Angeles City in the latter’s northern part.Secondly, it is considered as a first-class highly urbanized city in the country, with its numerous residential areas as well a s commercial ones such as restaturants, malls, universities and even tourist spots such as ancestral mansions and houses. These structures require a lot of wood – both for the building itself as well as the furniture. Since the site is a highly industrial part of Pampanga, it is accessible to its suppliers from both Tarlac and Manila; MARSSE Timber Suppliers, Tarlac and Mango and Timber Plantation, Manila – the latter’s office is located in Taguig.Each supplier supplies 3,000 board feet of wood monthly. The exact location of Madera San Jose in Angeles City will be in Brgy. Pandan. The proposed business will actually be located at Pandan Road, Brgy. Pandan, Angeles City, Pampanga. There are about nine puroks situated in Barangay Pandan. These are: Old Pandan, Land Tenure, San Ignacio Subdivision, Springside Subdivision, Citicenter A, Citicenter B, Magalang Avenue Extension, Jaovil Compound, and Saint Ignatius Subdivision.There are also several establishments â₠¬â€œ furniture shops, schools (public and private), barangay hall (of Pandan and of other nearby barangays) – that are relevant to the business. The exact location where the proposed business will be launched is noticeably located on a main road and is situated in a commercial-residential area. This is intended such that the business will be highly accessible to the chance buyers and to the greater market, specifically businesses within the vicinity and residents living in the area, who may have probably become the clients of Madera San Jose.The lot measures 300sq. m. and the lumber business is expected to occupy 280sq. m. Originally, the location was a bare land. It was acquired it years before by Mr. Manabat for the purpose of expanding his first business. Price The price for the lumber of Madera San Jose was also gathered from the standard prices of woods per board foot in Pampanga. Following are the prices: Hardwood| Price Per Board Foot| Lauan| Php30. 00| Yakal| Php40. 0 0| Teak| Php60. 00| Gmelina| Php26. 00| Malabuaya| Php30. 00| Narra| Php85. 00|Mahogany| Php30. 00| Apitong| Php30. 00| Antipolo| Php35. 00| One will notice that these prices are also the same as those of the competitors’. This is because of the fact that the owners want to use competition-based pricing. Competition-based pricing is the strategy used when a firm uses the competitor’s prices as benchmarks. In Madera’s case, since there are only two (2) competitors nearby that also offer hardwood lumber; Top Lumber and Angeles LCM Construction Supply, and both have the same prices, Madera used their prices.Same prices are used to get more people from the competitors’ pool of patrons, and no decreases are made either, so that Madera an establish stability since the business is new and so that there will be allowance for possible future discounts. Also, other lumber dealers sell at the same prices and the customers are used to the standard. Since Madera San J ose will be a new addition, the business will also use the same prices to establish its place in the market. Promotion Promotional tools used by lumber businesses in Pampanga have been mentioned already in the first part of this portion of the study.Going back, the three tools are: 1) giving of printed merchandise, 2) sponsorship of basketball leagues, and 3) one-peso discounts. `The group recommends Madera San Jose to use the first and second tools – printed merchandise and basketball league sponsorships. Giving printed merchandise such as calendars, face towel, and shirts is not something new in the small to medium industries but they are helpful in spreading knowledge of the business. For instance, buildings – whether private of public, large or small – that display the calendars will help in making the new business known.It is also an ideal way because calendars are displayed and looked at all year round. As for shirts and towels, people who wear or use them are mostly people from the manual labor sector. These people tend to move and work a lot in the local community. Without spreading information on the business verbally, these people â€Å"display† the business just by moving around. It will help that the printed information not just contains the business logo and name but the business address as well. The second tool is the team sponsorship in basketball leagues.As mentioned, basketball leagues are hugely-crowded events. Some people from other towns even visit to watch. In the basketball leagues, aside from banners that can be displayed around the court, Madera can gain exposure through basketball jerseys with the business logo printed on them. Aside from having huge crowds to whom Madera can be exposed to, basketball leagues are held more than once a year – even more frequently if the area has many playing teams. Madera will have more exposure time. One might wonder why the third tool was not applied.This tool is the one-peso discount strategy. It would be good for the business. However, it is also deemed ideal if this strategy will not be applied in at present – when the business is still new in the industry. Customers should be accustomed first with the actual prices before being given the discounts. Marketing Plan Conclusion In sum, unlike other industries, the lumber businesses in Pampanga do not highly focus on marketing. If one will notice in this study, this marketing part does not comprise much information compared to other aspects such as the operational plan and financials.This is so because first and foremost, the lumber industry in Pampanga mainly relies on word-of-mouth as the major marketing agenda. Owners, aside from giving free merchandise and some basketball leagues do not use famous media such as the television, radios and magazines. Some even do not have a marketing strategy at all, or if they do, they do not practice it for the long run. They just rely on word-of-mout h. In short, the most reliable and fool-proof way of gaining more customers for Madera San Jose is based on its products and how these will make the customers satisfied enough to spread information about them.