J & W Pawnshop

MARKET ASPECT

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A. Market Description

In observing the growth of micro enterprises in any Philippine cities and town areas are one of the sign that people nowadays wants to have additional income due to the rising prices of basic commodities and services, accompanying the implementation of Value Added Tax (VAT) and the unpredictable increase of crude oil in the world market to meet the needs of their families. Even the labor sector specifically the employees are in search for things to sell in their offices and work places to augment their income. So even the business and investment sector are now looking for crisis proof business which will entail them a good return on their investment. They dont want to risk their money to start up business due to ineffective operating systems and knowledge about the market.

But for the Pawnshop Industry, economic crisis is the reason why they are in the business. The people today are learning that they could get a better deal and a better buy in a pawnshop than in a regular retail store.

Nowadays, many people see pawnshops as legitimate businesses that pay taxes and hire people, just like other respectable businesses. In the past, the poor reputation was earned, but pawnbrokers have done a good job dispelling those old scenarios and running clean, respectable operations. If the pawnshop owner does not run a respectable pawnshop, most likely he will not make to walk in the ladder of success of pawnshop industry.

The number of pawn shops in the Philippines has reached 17,408 according to the Bangko Sentral ng Pilipinas (BSP). Pawn shops now outnumber all other financial institutions regulated by the BSP, including universal and commercial banks, rural banks, and savings and

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loan associations. Despite some issues with non-compliant pawn shops, the BSP considers pawn shops a vital part of the countrys financial sector. Pawn shops in the Philippines have long been helping people meet needs for short-term cash. The BSP reports it is tightening its policy requiring customers to show proper identification as well as including pawn shops in its Truth in Lending rules. http://pawntimes.com/banks-in-philippines-outnumbered-by-pawn-shops/#sthash.b67f1n3J.dpuf In Tarlac City, there are about 33 registered pawnshops (excluding their branches) currently operating and competing in the market just to get customer trust and loyalty. Out of 33 registered pawnshop, 7 of them are located in San Miguel, Tarlac City. That is according to the information that we gathered from the Municipality of Tarlac, Securities and Exchange Commission (SEC).

B. Competitive Situation In San Miguel, Tarlac City there are about 7 registered pawnshops currently operating in the market. J & W pawnshop major competitors in order of threat to the business are; 1. BHF pawnshop 2. Cebuana Lhuiller pawnshop 3. Tambunting pawnshop 4. JPA pawnshop

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Competitors Matrix A chart that compares your product or service to your competitor(s). A competitors matrix is an analysis tool that helps you establish your company's competitive advantage. It provides an easy-to-read portrait of your competitive landscape and your position in the marketplace.

Marketing Mix 4 Ps

Tambunting Pawnshop

JPA Pawnshop

CebuanaLhuiller Pawnshop

BHF Pawnshop

Products

-Pawnshop -Mortgage -Money Remittance -Money Exchange -Bill Payment -Airlines Ticketing

-Pawnshop -Loading center -Auctioned jewelry sales

-Pawn brokering -Money remittance, -Insurance -bills payment, -collections, -e-loading services

- Pawnshop - Money Remittance - Auctioned jewelry sales

Place

San Miguel, Tarlac City

San Miguel, Tarlac City

San Miguel, Tarlac Robinsons City Luisita

Promotion

Thru websites, print ads and brochures

Print ads and brochures

Thru websites, print ads and brochures 4% (advance interest rate)

Thru websites, print ads and brochures 3% (advance interest rate)

Price

3% (advance interest 4% (advance rate) interest rate)

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Market Competition

To determine the viability and competitiveness of a proposed business. It is very essential to find out if there are competitors within 100 meters away from our location. In analyzing competitors, they should be classified into two (2) groups, namely; Direct Competitors those activities are directly related to your proposed business. Indirect Competitors those activities may impact or affect the behaviour of your business. There are four (4) direct competitors operating within 100 meters from the intended area. They are as follows: Direct Competitors Business Name BHF Pawnshop Addresses Robinsons Luisita

CebuanaLhuiller Pawnshop

San Miguel, Tarlac City

Tambunting Pawnshop

San Miguel, Tarlac City

JPA Pawnshop

San Miguel, Tarlac City

Analysis of J & W Pawnshop Consumers reason why they patronize pawn shop: For immediate cash

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To accumulate funds To sell jewelries or convert non-cash asset into cash

SWOT Analysis Strengths Accessible location Low interest rate Process is fast and reliable Longer maturity period compared to others Highest degree of appraisal

Weaknesses The law limits the interest rate Some do not have jewelries or any item to pawn Many people cant pay their debts Offers limited services Gaining customers trust and loyalty New entry in the market

Opportunities Business extension (money order, etc.) Acquisition of collateral costs cheaply Branching of business

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Acquired collateral can be bargained

Threats Abundance of independent pawn brokers Prone to Robbery Fraud among employees Fast rate of depreciation of items pawned Widespread availability of credit cards which can provide loans without pawning any item C. Marketing Program Target Market Based on the 2010 Census of Population and Housing (CPH), Tarlac City has 318,332 total individual population of 76 brgys. as of May 01, 2010 (latest so far).168,000 of which are aged 18 years old and above and registered voters according to Commission on Election and the remaining 150,332 are aged 17 years old and below. Our target market will be the residents of the 13 barangays of Tarlac City aged 18 years old and above:

13 Barangays Armenia Atioc Balete

Total individual population 4,280 1,644 4,819

Total voters population (18 years old and above) 2,258 867 2,543

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Burot Capehan Central Maligaya Mapalacsiao Paraiso San Francisco San Miguel San Rafael Sapang Tagalog TOTAL 5,785 1,076 3,507 3,626 4,980 3,724 2,788 9,299 14,644 5,096 65,260 3,052 568 1,850 1,913 2,627 1,965 1,471 4,906 7,726 2,689 34,435

Marketing Mix The marketing mix is probably the most famous marketing term. Its elements are the basic, tactical components of a marketing plan. Furthermore, it is famously known as Four Ps, namely; Product, Place, Pricing and Promotion. Product, price, place and promotion are four equally important factors in determining the success of the marketing program. It is said that the success of the marketing department depends on the success of the companys plans as far as the marketing mix is concerned. J & W pawnshops acknowledges that the high quality, top performing services, at a reasonable interest rate and at convenient and accessible places backed up by massive promotion, spell marketing success.

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Product J & W pawnshop offers short term loans for those people who are immediately in need of

cash and dont have good credit or bank account but have an item of value that they can use as collateral. Acceptable items for pawning include jewelleries made of gold, white gold, platinum, diamond and scrap gold. Our pawnshop is specialized in pawn brokering services with highly trained and skilled pawn brokers and also quality service for clients to provide the highest possible appraisal for their items.

Price The J & W Pawnshop offers low interest rate of 2.5% which means that the borrowing of

money cost cheaply compared to other pawnshops. Also longer maturity period or extended due date and highest degree of appraisal that gives more cash for customers. Other competitors such as Tambunting Pawnshop and BHF Pawnshop both having 3% Interest Rate and 4% Interest Rate to Cebuana Lhuiller Pawnshop and JPA Pawnshop respectively.

Place This component is also called distribution, which refers to the process of making the product available for use or consumption by the consumer or business use. J & W pawnshop will be situated at San Miguel, Tarlac City, a site suitable for the business. The location is very accessible and ideal because it is in the heart of the city. The deployment of our service provider will be trouble free since it is located near highway.

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Promotion Promotion is an attempt to make a product or event popular or successful, especially by

advertising on how customers will hear about the product or proposed business. We promote our business thru websites, print ads, brochures and other social net working sites so that they can get an easy access and convenient information about our business.

D. Demand Analysis Pawnshops services are one of the important sources of funds of those people who are immediately in need of cash to pay their emergency expenses which are not part of their usual expenditures. To easily get the money they want, it is important to have an item of value particularly jewelleries that they can use as collateral to get the money or loan they need. To determine the market demand for pawnshops in San Miguel Tarlac City. They give us the privilege to know about the maximum number of their customers per day, week, month and year last 2012. The data shown as follows: 2012 Customers data Pawnshop Name BHF Cebuana lhuillier Tambunting Per Day 17 15 13 Per week 119 105 91 Per Month 476 420 364 Per Year 5,712 5,040 4,368

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JPA Total 12 84 336 4,032 19,152

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The table shows that out of 34,435 (18 years old and above/ voters population) of 13 barangays, 19,152 or 55.62% are from the top four competitors. Market Share Our potential customers are estimated to be 15,283 or 44.38% of the total voters population (18 years old and above) of 13 barangays. Figure 1: Market Share

TARGET MARKET: 13 Barangays of Tarlac City

44.38%

Competitors J & W Pawnshop 55.62%

The figure shows that out of 33,435 (18 yrs. Old and above) voters population of 13 barangays of Tarlac City, 19,153 or 55.62% are from the competitors and the remaining percent which is 44.38% or 15,282 are the possible customers of J & W pawnshop.

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E. Forecasted Service Demand The table shows the forecasted demand of pawnshop services to 13 barangays of Tarlac City which is the target market of the business. In 2010 the total population of 13 barangays is 60,430. The 31,883 (52.76%) of which are registered voters. Year Total Population 65,268 70,489 76,128 Total Voters Population 34,435 37,190 40,168 Competitors Share 19,153 20,685 22,340

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2013 2016 2019

J&W Pawnshop Share 15,282 16,505 17,825

In every 3 years, we assumed that there is an increase of population by 8%. The total population in 2010 is multiplied by 8% ([60,430 x .08 = 4,834] + 60,430 = 65,268) to get the total population for 2013 which is 65,268.