Chapter 3

MARKET ASPECTS

BUSINESS DESCRIPTION

Rayman Machine Shop is an entity that provides a wide range of service as well

as products related to machineries from small machines that are being used by

tricycles, and farmers up to large and heavy equipment commonly used in construction

and even in fishing. It is one of the existing manufacturers and repair shops in General

Santos City where the need of suppliers in this industry is continually growing.

Benchmarking to other existing entities in General Santos offers a variety yet

quality of repair services, and fabrication of machines and equipment according to

specifications customers who are dwelling not only in Barangay Lagao but also to other

neighboring barangays and municipalities in General Santos and Sarangani province.

One of the common services offered is the conversion of transmission and rim;

manufacturing, reconditioning, and repair of ice cream maker, and agricultural

equipment such as torque of a turtle; bolts, nuts, and pins of machines both large and

small.

In line with its objective is to capture the needs of the customers, Rayman

Machine Shop accepts clients even if beyond the operating hours as long as it does not

require any massive noise in doing the srvices, aside from its regular operating hours

which starts from 7 am up to 5 pm. It has been more than half a decade in the industry
they have maintain their popularity because of their good services which the clients

vouched through feedbacks and referrals.

The continuing growth of demands in machine and equipment whether in

transportation, fishing, and construction motivates the entity to innovate services and

products that would address these problems. In addition, it also delivers other related

services that would cater upon the request of the client.

In line with this, Rayman Machine Shop has very skilled workers because they

undergone rigid training which given to old and new employees. The owner himself

personally trains them; and really ensures that the outputs of every workers are properly

done before it tendered to their clients. Thus, customers are really secured that they are

receiving a quality service. Further, the Rayman Machine Shop is willing to entertain or

accepts any back job just to satisfy the customers.

TARGET MARKET

Rayman Machine Shop provides services to construction companies such as

Jargon Construction, Inc. and Greeco Construction, Inc. They also supply services to

any government agencies such as Water District.

DEMAND ANALYSIS

The demand for machine services is from motor repairs and maintenance

requirement of heavy equipment and motor vehicles.

Region 12 is composed of urban and rural areas where the used of

transportation vehicles are highly needed. Vehicles are present in the province like
motorcycles, jeepneys, van, tricycles and trailers in order to accelerate the transport

activities within the area. Also, every municipally in Region 12 including General Santos

City and Polomolok possess heavy equipment such as dump trucks and buck hoe

which are the market of the business.

Based on the data presented by the Department of Transportation, the number of

registered land transportation vehicles in all types shows a significant average increase

of nine percent (9%). This information provides an expansive glimpse with regards to

the demand of the business viewing the fact that mobile objects definitely require proper

repair and maintenance.

Moreover, in region 12, there are about 285,330 registered vehichle, 8% of the

total number of vehicles are trucks and 27% of the total numbers are cars.

SUPPLY ANALYSIS

According to the Office of the City Business Permits and Licenses Division there are 33

existing competitors in the city which provides various services like what the Rayman

Machine Shop offers. (See table below)

However, these existing competitors cannot surpass the performance of Rayman

Machine Shop because the fact that it already establish the market linkages and strong

relationships with its valued customers are strong within the five years of existence.

Also, the proponent is confident with the set of skills and expertise he has which are

certainly suitable for the nature of the business being handled.

 Machine Shops in General Santos City
Business Name Location

United Fabricators and Designers Producers Coop. Door #4, AVB Bldg., Purok Sta. Cruz, Barangay Calumpang

Nalagon Machine Shop Upper Banualan, Barangay Tambler

MB Rafols IV Machine Shop Lote, Barangay Calumpang

Jacres Machine Shop Purok Lower Acharon, Natl. Highway, Brgy. Calumpang

Daculan's Vulcanizing Shop Lower Acharon, Brgy. Calumpang

Metallic Pisces Engineering Works Lote, Natl. Highway, Barangay Calumpang

Jeremiah Auto Machine Shop B'laan Village Corner, Natl. Highway, Brgy. Labangal

Alentajan Machine Shop P. Acharon Blvd. Extension, Purok Maguindanao, Brgy. Labangal

Kienviren Machine Shop and Calibration Center Purok Maguindanao, Brgy. Labangal

Clark Machine Shop Lot 4, Block 6, Paglasan Bldg., Purok Maguindanao, Brgy. Labangal

PMJJ Purok Maguindanao, Brgy. Labangal

Argie Jone Machine Shop Natl. Highway, Brgy. Labangal, GSC

Figuracion Machine shop Purok Kulasi, Brgy. Labangal

Jazul Machine Shop Purok Kulasi, Brgy. Labangal

Gensan Welshine Builders Purok Acharon, Brgy. Labangal

Carmeljohn Machine Shop Purok Acharon, Brgy. Labangal

Panlaque Machine Shop Lot E-2, Makar, Barangay Labangal

Alexandy Engineering Works Espina Indutrial Site, Nat'l Highway, Brgy. Labangal

Dyan Mechanic Machine Shop and Engine Rebuilder Natl. Highway, Brgy. Labangal, GSC

A.T. Cuizon Machine Shop Purok Balunto, Brgy. Labangal, GSC

O-RRR Enginerring Works Lower Puting Bato, Brgy. Calumpang

Aparente Machine Shop, Inc. Purok Palen, Natl. Highway, Baranagay Apopong

AJ-Jonoy Machine Shop AEB Compound, National Highway, Brgy. Apopong

Gascon Machine Shop Calumpaang Avenue, Brgy. Calumpang

Hermie Machine Shop Room 6, Acharon Bldg., Labangal Road, Brgy. Labangal

Edwin-Ian Machine Shop and Engineering Services Makar Junction, Purok Malipayon, Brgy. Labangal

Binas Machine Shop and Engineering Services Purok San Vicente, Natl. Highway, Brgy. Labangal, GSC
 Sultanate Compound, Prk. San Lorenzo, Makar Junction, Brgy.
Ramirez Proworks, Inc.
Labangal

Eltagonde Engineering Services Purok Saeg, Brgy. Calumpang

Edmel Engine Rebuilding Services & Trading Co. Purok Malinawon, Barangay Calumpang

Signal Marine Shipyard Corporation Purok Cabu, Barangay Tambler

AMS Philkor Entech Inc. Purok Bagong Silang, Makar National Highway, Brgy, Labangal

Gensan Rafols Industrial Machine Shop, Inc National Highway, Barangay Apopong

DEMAND-SUPPLY ANALYSIS

Based on the data gathered by the researchers, there is a perceived large

demand of the machine shop services in the area. In fact there are numbers of motor

vehicles in Barangay Lagao including the neighboring barangays of General Santos

City. This entails a huge demand in a market. Besides, the entity offers a wider range of

services such as catering spot services aside from the regular customers that they have

that contribute a large amount of its revenue. It does not only focus on its services but

also in fabricating different types of machines, bolts, and pins which are quite expensive

to be purchased in regular store. With regards to its competitors, the current supply in

the city comprises of thirty-three (33) machine shops which is actually favorable on the

part of the entity since 55.88% (19 out of 34 according from BPLO data) of the

competitors are located in barangay Labangal.

The entity occupies wider space compared to their competitors; it can actually

accept big equipment and machine without compromising the safety of other products

and services generated in the area. They also fabricate, and repair equipment and

machine that are being done by its competitors. In spite of 5 years of existence in the
industry, the owner itself really double checks the output of the entity before releasing to

the customers which has been leading them to capture large contracts. In case of rush

orders, the entity has an advantage over their competitors due to the fact that their

workers are in-housed within the vicinity of the establishment. On the other hand, their

competitors close at 5:00 pm as per survey, while the entity works until the work is

done.

SERVICE PRICE

Although to the constant increase in terms of the costs of the raw materials,

direct labor, and factory overhead in the market, the entity gives varied price or beyond

the set price to their client who wants to request a fabrication of a certain machine. On

the other hand, they also have established fixed prices for some repairs and fabrication

(see table). For purpose of establishing selling prices and as a basis for the Financial

Aspects, it is also be noted that they are using negotiable price method for special

order jobs. It is up to the concurrence between the entity and the client on how much

would be the charged for such job.

PARTICULARS UNIT AMOUNT

CONVERSION OF TRANSMISSION 1 12000

BUILD UP MACHINING OF TRINION BASE 1 9000

FABRICATION OF ICE CREAM MAKER 1 80000

CONVERTION OF RIM 1 450

FAFRICATION OF HUB 1 1800

BUILD UP MACHINING OF HUB (PER SIDE) 1 350

WELDING ALUMINUM 1 500

ALIGNMENT OF PROPELLER 1 600

REFACE OF ROTOR DISC 1 600

REFACE OF BREAK DRUM 1 600

PRESS OUT/IN OF TORQUE ROD BUSHING 1 200

FABRICATE ROLLER OF SLIDING GATE 1 350

REPAIR OF TIE ROD END 1 700

FABRICATION OF BOLT (PER PIECE) 1 350

FABRICATION OF NUT (PER PIECE) 1 300

FABRICATION OF PIN (PER PIECE) 1 500

FABRICATION OF BUSHING (PER PIECE) 1 500

RIM REPLATE 1 650

FABRICATION OF BRONZE AND BUSHING 1 750

GENERAL RECONDITIONING OF EXCAVATOR 1 160000

GENERAL RECONDITIONING OF LOADER 1 120000

GENERAL RECONDITIONING OF GRADER 1 120000

GENERAL RECONDITIONING OF BULLDOZER 1 160000

REPAIR OF EXCAVATOR BUCKET 1 35000

REPAIR OF LOADER BUCKET 1 45000

REPAIR OF GRADER BUCKET 1 45000

REPAIR OF BULLDOZER BUCKET 1 45000

MARKET FACTORS

 The general audience and specific target market demographics will have different

preferences and reactions to price thus playing a great role in determining

marketing strategy.
  It is also wise to consider the population as big part of market considerations.

Increasing population means an increase in target market thus an opportunity to

increase sales.

 Another big market element is the competitors. The services offered among

competitors are very much similar. The competition will likely focus on price and

promotional strategies the different players of the industry will make.

 The geographical location of the business.

MARKETING PROGRAM

This section discusses the pricing strategy, promotional strategy, and service

strategy of Rayman Machine Shop. Basically, the marketing strategy is influenced by

the price, promotions, availability and quality of services that the proposed study offers.

PRICING STRATEGY

SWOT ANALYSIS

Strength

Rayman Machine Shop is already in an advantageous position being the only machine

shop situated in Lagao. Their strengths include customer satisfaction and loyalty.

Customers say they like the services provided by the shop and they give positive word

of mouth by recommending Rayman Machine Shop to others because of excellent

services.

Weaknesses
Rayman Machine Shop doesn’t have marketing strategy but instead they depend on

referrals. The business doesn’t have an established marketing plan and consequently

does not provide much for their marketing budget.

Machine shops in has high operating costs. Typically, a stand-alone facility is needed to

house all of the equipment needed by these companies. Also, the revenues of machine

shops are subject to mild fluctuations in the economy. If manufacturing or housing

construction industries experience a decline in their revenues, so do most machine

shops. However, the gross margins generated by these businesses often ensure that

they are to remain profitable at all times. Competition among machine shops is usually

moderate.

Opportunities

Lately, one of the ways that machine shops have expanded their operations is by

providing services to their customers that have unique fabrication needs. The high gross

margins from model fabrications can be significant. This can be provided through

acquisition of new technologies. Also, Rayman's present location provides for expansion

opportunities since its land area is able to cater such plan. Additionally, Rayman

Machine Shop can drastically expand its market reach by alloting a consderable amount

of marketing budget to carry out innovative marketing plans to take advantage its

position being the only machine shop situated in Lagao.

Threats

The primary threat faced by Rayman Machine Shop is competitive issues. This includes

marketing strategy, and promotional activities.