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MARKETING STUDY
I. Introduction
The market study is the lifeblood of virtually every project feasibility study.
While profitability is generally the focal point of the project study, the question of
demand is the most basic issue. Obviously, there can be no discussion of
profitability or the other aspect of the feasibility study if there is no demand. It is
imperative, therefore, that the market study be given the first consideration.
The travel agency business is possible because of certain recruitment
agencies, thus the study at hand does not need to be much worried about the
market because there is a regular or assured numbers of clients.
Service Features
The travel agency offers a quality service to customers who are in need of
assistance regarding their travels. The customers will be entertained by a
hospitable reservation officer in the receiving area concerning their inquiries.
Their reservations will be processed in the database to find out its availability.
Once the transaction is validated, it will be stored and the necessary information
will be given to the client (i.e. schedule, mode of payment, and etc.). The place
has an accommodating ambiance where customers wont feel anxious to express
their thoughts.
18 and above
Gender
Occupation
Socio-Economic
Class A to E
Status
Location
Description
V. Demand Situation
Some people go into different places to find things that they really want
and make them feel contented for a while. In order for travelling into places be
possible, one must need to ask for the assistance of travel agency, which can
suggest and recommend places that are really relaxing.
So those people who are in need of assistance for that matter we are
pleased to help them. Theyre our prospect clients and we want them to
experience our service with so much pleasure.
To develop Safe and Sound Travel Agency targeting strategies and
marketing efforts, demand analysis helps the business in order to measure the
current demand as well as project the future demand. The location of our
proposed business is at General Romulo Street, Araneta Center, Cubao, Quezon
City, Philippines. For these reasons, the proponents conducted a survey around
the area of Araneta Center with an estimated number of 1 million visitors daily. A
sample of respondents is derived from the total population. The number of the
respondents in the survey is computed through Slovins Formula:
Where:
n
number of respondents
population
Survey Result
The results of the survey are presented below. It is patterned from the
survey questionnaire answered by the respondents.
1. Segregation of Respondents According to Age
Table 2.1
Segregation of Respondents According to Age
Age
Respondents
Percentages (%)
173
43
120
30
27
27
53
13
Total
400
100
Chart 2.1
Segregation of Respondents According to Age
Age
7%
13%
43%
7%
30%
26-30 years old
Table 2.1 and Chart 2.1 show the segregation of respondents according to
age. Much of the respondents are 20 years old and below, while the brackets
with the least frequency are 26-30 years old and 31-35 years old.
Respondents
Percentages (%)
Male
173
43
Female
227
57
Total
400
100
Chart 2.2
Segregation of Respondents According to Sex
Sex
43%
57%
Male
Female
Table 2.2 and Chart 2.2 show the segregation of respondents according to
sex. Majority of the respondents are female, while minority of the respondents
are male.
Respondents
Percentages (%)
Student
160
40
Employee
186
46
Self employed
27
Others
27
Total
400
100
Chart 2.3
Segregation of Respondents According to Occupation
Occupation
7%
7%
40%
Student
Employee
46%
Self employed
Others
Table 2.3 and Chart 2.3 show the segregation of respondents according to
occupation. Majority of the respondents are employee, while the brackets with
the least frequency are self-employed and others.
Respondents
Percentages (%)
133
33
2,001- 5,001
27
5,001- 10,000
107
27
10,001-30,000
66
16
30,001-50,000
40
10
27
Total
400
100
income
Chart 2.4
Segregation of Respondents According to Monthly Allowance / Income
Monthly Allowance/Income
10%
7%
2,001- 5,001
17%
5,001- 10,000
10,001-30,000
27%
30,001-50,000
6%
Table 2.4 and Chart 2.4 show the segregation of respondents according to
monthly
allowance/income.
Much
of
the
respondents
have
monthly
income/allowance of P2,000 and below, while the brackets with the least
frequency have P2,000-P5,000 and P50,000 and above.
5.
Table 2.5
Segregation of respondents whether they use travelling agency
Whether they use travel
Respondents
Percentages (%)
Yes
284
71
No
116
29
Total
400
100
agency
Chart 2.5
Segregation of respondents whether they use travelling agency
No
Table 2.5 and Chart 2.5 show the segregation of respondents according to
whether they use travelling agency. Majority of the respondents doesnt use
travelling agency, minority of the respondents doesnt use travelling agency.
Respondents
Percentages (%)
Once in a year
173
43
Once in 6 months
93
23
Once in 3 months
53
13
Every month
66
17
Every week
15
Total
400
100
Chart 2.6
Segregation of respondents according to how often they travel using the
services of travel agency
Once in a year
44%
Once in 6 months
Once in 3 months
23%
Every month
Every week
Table 2.6 and Chart 2.6 show the segregation of respondents according to
how often they travel using the services of travel agency. Much of the
respondents travel once in a year, while the bracket with the least frequency
travel every week.
7. Segregation of respondents according to their experience of not being
accommodated by a travel agency
Table 2.7
Segregation of respondents according to their experience of not being
accommodated by a travel agency
Have experience
Respondents
Percentages (%)
Yes
76
19
No
324
81
Total
400
100
Chart 2.7
Segregation of respondents according to their experience of not being
accommodated by a travel agency
Have experienced
19%
yes
81%
no
Table 2.7 and Chart 2.7 show the segregation of respondents according to
their experience of not being accommodated by a travel agency. Most of the
respondents have experienced not being accommodated by a travel agency.
Respondents
Percentages (%)
Family
198
49
Friends
91
23
Colleague
47
12
Alone
64
16
Total
400
100
most often
Chart 2.8
Segregation of respondents according to with whom they travel most often
12%
Family
Friends
23%
Colleague
Alone
Table 2.8 and Chart 2.8 show the segregation of respondents according to
with whom they travel with most often. Half of the respondents travel with their
family, while the brackets with the least frequency travel with colleagues.
Table 2.9
Segregation of respondents according to preferred travel
Preferred travel
Respondents
Percentages (%)
Domestic
146
36
International
254
64
Total
400
100
Chart 2.9
Segregation of respondents according to preferred travel
Preferred travel
36%
Domestic
64%
International
Table 2.9 and Chart 2.9 show the segregation of respondents according to
their travel preference. Two-thirds of the respondents prefer to travel
internationally, while the one-third prefer to travel domestically
Respondents
Percentages (%)
Philippine Airlines
238
60
Cebu Pacific
121
30
Air Philippines
27
Others
14
Total
400
100
Chart 2.10
Segregation of respondents according to preferred airline
Preferred airline
7%
3%
Philippine Airlines
30%
60%
Cebu Pacific
Air Philippines
Others
Table 2.10 and Chart 2.10 show the segregation of respondents according
to their preferred airline. Majority of the respondents prefer to travel by Philippine
Airlines, while the brackets with the lowest frequency prefer to travel by Air
Philippines and other airlines.
Respondents
Percentages (%)
Expensive hotel
38
Economy hotel
154
39
Resort
144
36
Others
64
16
Total
400
100
to stay
Chart 2.11
Segregation of respondents according to places where they want to stay
Expensive hotel
39%
Economy hotel
Resort
Others
Table 2.11 and Chart 2.11 show the segregation of respondents according
to the places they want to stay. Much of the respondents prefer to stay in
economy hotels, while the bracket with the lowest frequency prefers to stay in
expensive hotels.
Respondents
Percentages (%)
One way
147
36
Round trip
256
64
Total
400
100
Chart 2.12
Segregation of respondents according to preferred way of travel
Round trip
Table 2.12 and Chart 2.12 show the segregation of respondents according
to their preferred way of travel. Two-thirds of the respondents prefer round-trip,
while one-third prefers one-way.
Respondents
Percentages (%)
159
40
5,001-10,000
106
26
10,001-20,000
57
14
78
20
Total
400
100
Chart 2.13
Segregation of respondents according to the amount they spend on a trip
40%
26%
10,001-20,000
20,000 and above
Table 2.13 and Chart 2.13 show the segregation of respondents according
to the amount they spend on a trip. Much of the respondents spend 5,000 and
below, while the bracket with the lowest frequency spend 10,001-20,000.
Respondents
Percentages (%)
Yes
160
40
No
240
60
Total
400
100
Services
Chart 2.14
Segregation of respondents according to the International clients who will
avail passporting sevices
Yes
No
Table 2.14 and Chart 2.14 show the segregation of respondents according
to the International clients who will avail passporting sevices. 60% of the
respondents will not avail while 40 % of the respondents will not avail.
Respondents
Percentages (%)
Rush
56
35
Regular
104
65
Total
160
100
Services
Chart 2.15
Segregation of respondents according to the International clients who will
avail passporting sevices whether rush or regular
Rush
Regular
Table 2.15 and Chart 2.15 show the segregation of respondents according
to the International clients who will avail passporting sevices whether regular or
rush. 65% of the respondents will avail regular while 35% of the respondents will
avail rush.
Respondents
Percentages (%)
Yes
60
15
No
340
85
Total
400
100
Chart 2.16
Segregation of respondents according to the International clients who will
avail visa assistance
No
Table 2.16 and Chart 2.16 show the segregation of respondents according
to the International clients who will avail visa assistancee. 15% of the
respondents will avail while 85 % of the respondents will not avail.
Respondents
Percentages (%)
Price
98
24
Security
107
27
Service
195
49
Total
400
100
Chart 2.17
Segregation of respondents according to factors considered in choosing
travel agency
Price
27%
Security
Service
Table 2.17 and Chart 2.17 show the segregation of respondents according
to the factors considered in choosing travel agency. Half of the respondents
consider service as main factor in choosing travel agency, while the bracket with
the lowest frequency considers service as main factor in choosing travel agency.
Past Demand
There is no available data about the demand of travel agency for the past
years. Therefore, the proponents assumed that the demand determined from the
survey is the same as what the demand was for the last four years. To compute
the annual demand, the total population will be multiplied by the market
acceptability rate and frequency of availing. From the survey, the market
acceptability rate computed by dividing the number of respondents who in need
of travel agency is equal to 71% and frequency of availing is once a year.
The proponents assumed a 1.7% growth rate in the population of the
visitors in Araneta center which represents the Philippine population annual
growth rate.
Table 2.18
Historical Demand
Year
Population
Market
Frequency
Acceptability of
Rate
Annual
Availing Demand
Annually
2010
934795
71%
663704
2011
950686
71%
674987
2012
966848
71%
686462
2013
983284
71%
698132
Projected Demand
In this study, the proponents used the historical demand data and used
the least square method in getting the estimated projected demand.
Table 2.19
Projected Demand
Year
Y1-1
Yc
2014
11476
698132
709608
2015
11476
709608
721084
2016
11476
721084
732560
2017
11476
732560
744036
2018
11476
744036
755512
To compute for the estimated projected demand, least square method was
used. The formula for the least square method is shown below:
Least Square Method:
Formula : Yc = a + Yi -1
a=
Where:
Yc = initial value (1st year)
Yn = final value (last year)
N = number of years
Yi = value for the year past
Table 2.19 shows the projected demand of the proponents business for
five (5) years. The projected demand for year 2014 was computed using the
Least Square method in which the initial value was subtracted from the final
value then dived by the number of years minus one. After the computation, the
computed increase every year will be added to the final value.
Computation reveals that every year the demand for travel agency will
increase for at least 11476 customers.
Main Competitors
The following is the list of travel agencies near Araneta Center, Quezon
City.
Table 2.20
List of Travel Agencies
Business Name
Quicklines Travel
International, Inc.
Cubao
Address
Distance
Approximately
0.03 KM away
Manila
G/F Genesis Transport Building,
Approximately
0.50 KM away
Manila
Radio Communications
Of The Philippines
Consultancy
Manila
Main Office
Approximately
0.75 KM away
Approximately
0.87 KM away
Approximately
0.94 KM away
Mosconi
Approximately
1.00 KM away
Source: http://nearbyph.com/travel-agencies/all/14.622799/121.052902/lrt-2araneta-center-cubao-station-general-aguinaldo-avenue-quezon-city-1109philippines
Past Supply
There is no available data on the supply of travel and tour business for the
past years. In order to estimate the past supply, the proponents used the past
annual demand. The portion of demand that was met by the supplier will be
considered as the supply provided by the travel and tour businesses. The
proponents used the data based on the number of respondents that are not
immediately accommodated by a travel agency.
Table 2.21
Historical Supply
Supply
Annual
Situation Rate
Supply
663704
81%
537600
2011
674987
81%
546739
2012
686462
81%
2013
698132
81%
Year
Demand
2010
556180
565487
Projected Supply
The proponents assumed the same supply situation rate of 81% for the
next five years. The annual supply for the next five years is as follows.
Table 2.22
Projected Supply
Supply
Annual
Situation Rate
Supply
709608
81%
574782
2015
721084
81%
584078
2016
732560
81%
2017
744036
81%
602669
2018
755512
81%
611965
Year
Demand
2014
593374
Table 2.23
Demand-Supply Gap for Five Years
Year
Population
Annual
Annual
Demand
Demand
Supply
Gap
2014
1,000,000
709608
574782
134826
2015
1,050,000
721084
584078
137006
2016
1,102,500
732560
593374
139186
2017
1,157,625
744036
602669
141367
2018
1,215,506
755512
611965
143547
Table 2.24
Market Share for Five Years
Academic Population
Year
Annual
Demand
Target
Target Annual
Demand
Gap
Percentage
Market Share
2014
35,054
709608
134826
12.50%
16,853
2015
36,077
721084
137006
14.00%
19,181
2016
37,131
732560
139186
15.50%
21,574
2017
38,215
744036
141367
17.00%
24,032
2018
39,331
755512
143547
18.50%
26,556
The chart below shows the market share situation of the travel agency
business before the introduction of Safe and Sound Travel Agency.
Chart 2.18
Sales
Quicklines Travel
International, Inc. Cubao
Manila Genesis Charters and
Tours Inc
19%
22%
Radio Communications Of
The Philippines
7%
16%
11%
9%
16%
The next chart below portrays the projected market situation of the travel
agency business after the introduction of Safe and Sound.
Chart 2.19
Quicklines Travel
International, Inc. Cubao
Manila Genesis Charters and
Tours Inc
6.5%
12.5%
Radio Communications Of
The Philippines
22%
7%
16%
11%
9%
16%
Quality of Service
The proponents must assure that our clients will gratify with our utmost
services. Thus, Safe and Sound Travel Agency offers quality and exceptional
services, values and advices with the affordable prices to its clients to show the
agencys experience and passion for travel. They may reach the agency through
visiting the office, which is open Monday to Saturday from 8 a.m. to 4 p.m., or on
its website. Furthermore, we have available and competent employees who will
serve and assist them to their travelling needs. We also guarantee to our clients
that our agency is accredited by the Department of Tourism showing that we
followed and passed their standards.
Presented on table 2.25 is a brief SWOT analysis of the service:
Table 2.25
SWOT Analysis
Strengths
Weaknesses
Extensive
advertising
in
developing
brand
awareness
and
marketing
Difficulty
Opportunities
Current
drive
towards
participation
entrepreneurs
by
Threats
government
encouraging
of
the
indigenous
in
tourism
Pricing
For the services rendered by the agency to our clients, we charge fees to
them as form of payment. Based on the research conducted, we have concluded
that the following charges are appropriate for our services:
Domestic
Mark-up of P300 + service fee of P100 + insurance tax
International
Mark-up of P500 for walk-in clients + service fee of P100 + other taxes
Mark-up of P250 for recruitment agencies + service fee of P100 + other
taxes
Assistance
a) Passport Documentation
1. Rush- P1200 cost of processing + P300 mark-up
2. Regular- P900 cost of processing + P300 mark-up
b) Visa assistance- P800 of service fee
Place
The business will be at the Ground Floor of Manila COD IT Building,
located at the General Romulo Street, Araneta Center, Cubao, Quezon City,
Philippines. We chose this place because Cubao is known for its commercial
area and at its heart is the well-known Araneta Center. The Araneta Center is
already a major transport hub, with almost a million of people passing by the area
every day. We see it as an advantage that the building itself is situated at a
known avenue where it is also identified as one of the financial and business
core in the Metropolitan area.
Department stores and retail centers can also be found in Araneta Center,
such as Gateway Mall, Plaza Fair, Rustan's, Shopwise Supercenter, SM Cubao,
Ali Mall, and Farmer's Plaza. At the center is Smart Araneta Coliseum, often
called the Big Dome. Many musical concerts, ice shows, circus shows, religious
crusades, wrestling, cockfighting, and basketball games are held in this 20,000capacity coliseum. In the outskirts of Araneta Center is the Cubao Expo, an
artists' colony and site of weekend flea markets. It is also a home to call centers
like APAC, Telus, and Stellar. There are also hotels like Eurohotel and Novotel
situated around the area where our foreign customers can reside.
Promotional Strategies
For our business to be successful, the service that we are offering must
be known to potential customers. Since the company is just going to start a
business, a detailed promotional strategy should be planned to create product
awareness. This is composed of different tools like advertisement and sales
promotions. The proponents intend to implement the following promotion tools for
the first year of its operations:
2. Advertisements
For the consumer to be aware of our service, we decided that to reach
them directly is one of the most effective way to promote our business. All the
successful businesses are built by heavy advertising techniques such as the
following:
Online Advertisements
The proponents consider social media such as Facebook and
Twitter to be an effective way of reaching the target customers who are
now getting fond of using this site almost the entire day. The proponents
decided to set up Facebook page as well as a Twitter account in order for
the company to widen their horizon. These social media accounts will be
updated daily and will be accepting questions from prospective customers.
It will possess transparency wherein all customers complaints will be
entertained and accommodated.
Newspaper
The proponents will advertise their agency in newspapers like
Philippine Daily Inquirer and Manila Bulletin to reach potential customers
in the comfort of their homes or even in their workplace. The
advertisement will be shown every Saturday and Sunday for the first
month of operation and for the succeeding months, it will be shown every
Sunday only.
Marketing Budget
Quantity
Cost/ Unit
Total Cost
20
P 50.00
P 1,000.00
10
P 300.00
P 3,000.00
Leaflets (3X8)
5000
P 2.00
P 10,000.00
Foldable Fans
2000
P 10.00
P 20,000.00
Newspaper Advertisement
Minimum
P 66,000.00
P 66,000.00
size
TOTAL
P 100,000.00
Leaflets (4X6)
3000
P 3.00
5000
P 1.00
Newspaper Advertisement
Minimum
P 66,000 .00
P 9,000.00
P 5,000.00
P 66,000.00
size
TOTAL
P 80,000.00