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Marketing Plan
for
Dielles Apiary and Meadery
Enterprises
This Market Study on Dielles Apiary and Meadery Enterprises was submitted on
September 12, 2010 as part of the Requirements in TM 206
Technology Marketing and Commercialization
This Industry Study was conducted by

JOSIE D. ALBAO
DANILO M. GACUSAN
MARIA JUDITH L. SABLAN
HECTOR M. TIBO

under the supervision of Prof. Edison D. Cruz

Masters in Technology Management


Technology Management Center
University of the Philippines, Diliman, Quezon City

TABLE OF CONTENTS

Page
Cover Page
Table of Contents
List of Acronyms
List of Tables
List of Figures

2
3
4
5
6

I.

Executive Summary

II.

Introduction

III.

Current Market Situation


A.
Market Overview
B.
SWOT Analysis
C.
Competitive and Industry Analysis
D.
Product Overview
E.
Keys to Success and Critical Issues

13
13
17
18
20
22

IV.

Environmental Analysis
A.
Macro Environmental Factors
B.
Micro Environmental Factors
C.
Competitive Strategy

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23
26
28

V.

Marketing Strategy
A.
Marketing Objectives
B.. Financial Objectives
C.
Positioning
D.
Strategy Summary

28
29
29
29
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VI.

Marketing Mix
A.
Product
B.
Pricing
C.
Promotion
D.
Channel
E.
Service
F.
Internal Marketing

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30
31
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VII.

Marketing Research

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VIII. Financials
A.
Sales/Revenue Forecast(s)
B.
Marketing Expense Budget(s)
C.
Break Even Analysis
D.
Profit and Loss Analysis

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33
34
35
35

IX.

Controls
A.
Implementation
B.
Marketing Organization
C.
Contingency Planning

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36
44
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X.

Bibliography

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LIST OF ACRONYMS

DA Department of Agriculture
DOST Department of Science and Technology
DOST SETUP - Department of Science and Technology Small and Medium
Enterprises Technology Upgrading Program
DOT Department of Tourism
DTI - Department of Trade and Industry
FIES - Family Income and Expenditure Survey
IFEX International Food Exhibition
ISO International Organization for Standardization
MSME Micro, Small and Medium Enterprises
NSTW National Science and Technology Week
PAGASA Philippine Atmospheric Geophysical and Astronomical Services
Administration
PIFBEX Philippine International Food and Beverage Expo
SM Shoemart
STII Science and Technology Information Institute
TAPI Technology Application and Promotion Institute
UPLB University of the Philippines Los Banos
URC Universal Robina Corporations
USCB United States Census Bureau
WSAP Wine and Spirits Association of the Philippines

LIST OF TABLES

Table 1. Prices of Some Locally Produced Wines in the Philippines


Table 2. Sales Forecast from 2011 to 2013
Table 3. Marketing Expense Budget
Table 4. Break-Even Analysis
Table 5. Profit and Loss Analysis
Table 6. Marketing Strategy Implementation Plan

LIST OF FIGURES
Figure 1. Philippine Imports of Wine in 2008 by Volume Percentage

Figure 2. Growth of Philippine Imports of Wine by Value


Figure 3. Porters Five Forces Model in Dielles Apiary and Meadery
Figure 4. Different Variants of Dielles Honey Wine
Figure 5. Honey Wine Value Chain Analysis

I.

EXECUTIVE SUMMARY

This marketing plan for Dielles Apiary and Meadery honey wines was
prepared using the key ingredients of the marketing management process that
can guide marketing activities. The first part involved scanning the current

marketing situation. This was done by analyzing market demographics, trends,


and needs; conduct of SWOT analysis; a Philippine wine industry study;
overview of the product; and identification of keys to success and critical issues.
It was presented that the Philippines was able to establish a local wine industry
despite being a non-grower of grapes utilizing the abundance of local fruits and
other indigenous agricultural resources such as coconut, rice, and others. An
Australian analysis of the Philippine wine market revealed a growing wine
demand at a rate of 10 percent from 2003-2008 with 14 percent of its 91 million
population consuming wine at a per capita of a tablespoon (7.3 mL). The
consumers of wine in the country are mostly working men and women belonging
to the middle to high income bracket and many of whom are young urban
professionals. This market segment is the target consumers of honey wine. The
products can be better alternative to imported wines and other indigenous wines.
The second part centered on the analysis of the environment - macro and
micro - and discussion of the competitive strategy to be used. The highlights of
the environmental analysis showed that the principal drivers of wine consumption
in the world are tradition, culture, lifestyle and health, and economic status. Also,
it showed that a direct relationship exists between population and wine
consumption. Financial capability was also shown to be a factor in wine
consumption. A recent technological breakthrough that uses immobilized cells of
Hansenula anomala in the production of mead capable of shortening mead
production cycle was identified.
There are also two key Philippine legislations that presented that directly
affect the wine industry - the Revised Sin Tax Bill or Republic Act 9334 and the
Retail Liberalization Bill. RA 9334 imposes a PhP17.47 tax per liter for wines with
14% alcohol by volume and below (where Dielles wines are categorized). The
latter law enabled foreign retailers to enter the wine industry resulting in the
increase of wine retail outlets in the country and encouraged the entry of more
imported wines in the country. Consequently, indigenous Philippine wines face
stiff competition from these imported wine brands.
The Philippines being a typhoon-prone country is identified as a critical
factor that can affect production of honey wine. Fruits and honey supply are
highly vulnerable to adverse weather changes.
Next, a marketing strategy was laid down consistent with the firms goal to
make a strong and successful business of honey wine production in the
Philippines and eventually establish an export market for another quality product
that is proudly Pinoy. The marketing objectives include the following:

popularizing honey wine consumption in the Philippines,


increasing its local market penetration, and
positioning the product as mid-priced exotic health wine that is fit to
working men and women and young urban professionals.

Financial objective on the other hand is geared towards the increase of sales and
profit of the firm by 200% in 2011. The marketing strategy crafted will be a lowcost strategy at the onset based on the projected fiscal position of the firm but will
gradually shift to better-funded activities as the firm establishes its foothold in the
industry. Such strategies will emphasize launching a significant presence in the
world wide web through the various media available such as social networking
that are basically free advertisement. It will also include publication of product
brochures; participation in local exhibit, trade fairs, and food expositions;
sponsorship of wine appreciation events for media people; appearances in
national tv programs; product tours; product visibility in bartending competitions;
and networking with private companies.
A marketing mix was developed utilizing the 5Ps strategy. The product will
be presented as a better alternative to imported and indigenous wines.
Packaging and labelling should suit the products image and should appeal to the
target market segment, mostly comprised by discriminating and intelligent
consumers. Derivation of price is based on the products high value due to the
presence of honey- its main ingredient that distinguishes it from its competitors.
The price should not be established within the range of its nearest competitorlocal fruit wines but within the mid-priced wines offered by imported brands. The
channel of distribution was carefully evaluated based on the positioning of the
product, hence, it is deemed proper to market them initially in three major cities:
Metro Manila, Cebu, and Davao and leading tourist destinations like Boracay and
Camarines Sur. The wines will be sold in major wine stores like Ralphs Wine and
Spirits, selected 3-5 star hotels and restaurants, and big malls like SM. In
support of all this identified marketing mix, Dielles should strive to firm up its
organization by building a working environment that would allow its workers and
staff to partake in the creative process of producing honey wine and in putting up
a good image within that can be translated to consistent quality products.
Marketing research was done using secondary data. Studies showed that
Filipino wine consumers are partial to drinking white wine, but has shown
increasing patronage of red wine echoing the so-called French Paradox. Also,
price is the main consideration of Filipinos wine buying decision. These
considerations are weighed in the light of honey wine being an exotic health wine
and a novelty product being its competitive advantage.

A financial analysis was presented that included a sales forecast, profit


and loss analysis, marketing expense budget, and break-even analysis. The
average budget computed for marketing expense is 14 percent, which is
expected to provide an average contribution margin of PhP5.3 Million over a
period of three years. Dielles average projected profit in three years is computed
at PhP2.7 Million giving it sufficient leeway to fund implementation of a modest
but effective marketing plan. The computation showed that an effective marketing
plan is essential to the realization of the financial objectives of the firm.
Controls is the last section of the marketing plan. It involves the
implementation plan, identification of the need for a marketing organization inside
the firm to undertake the plan, and the contingency measures that should be in
place to ensure that the plan is on track to meet the marketing objectives of
Dielles. The marketing milestones were shown to be highly possible through the
conduct of the various activities as embodied in the action plan.

II.

INTRODUCTION

Why Dielles?
This paper analyzes Dielles Apiary and Meadery Enterprises in the context of the
marketing concepts in TM 206 (Technology Marketing and Commercialization). The
group selected Dielles Apiary and Meadery Enterprises for the market study because of
the uniqueness of its products, having big potential to gain local market leadership and
global competitiveness. Dielles does not have a concrete marketing strategy at present,

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making it an ideal firm for the market study. The market plan developed can be adopted
and used by the firm to realize its goals and objectives.
The firm
Dielles is currently the only producer of honey wine in the Philippines. It is
owned by Mr. Luke Macababbad and located in Lavender Street, Barangay Tunasan,
Muntinlupa City. The business was started in 2001, but was only registered in 2007.
Dielles has been producing four variants of honey wine, namely: traditional, mango,
duhat, and bignay. The main product of the firm is honey, derived from Dielles own
apiary.
Incremental innovation through DOST
The owner wanted to increase its production capacity in order to supply the
increasing demand and later, able to export the product to other countries like Japan and
Korea. It is for this reason that the owner applied for assistance from the Department of
Science and Technology-Small and Medium Enterprises Technology Upgrading Program
(SETUP) in 2009. Incremental innovation was provided in the form of the 20 units
ageing tanks and packaging and labelling assistance through the Packaging Research and
Development Center (PRDC) under the Industrial Technology and Development Institute.
This will hasten and increase the production volume of the firm and also spice up the
products overall look.
Purpose, goals, and objectives of the market plan
The purpose of the paper is to steer Dielles towards a more active and aggressive
concrete marketing strategy that will enable it to strengthen its position in the local wine
industry and achieve greater levels of profitability for the next three years. Increase in
sales and profit of the firm by 200% in 2011 is desired. It will eventually enable the
Dielles to compete in the market that is dominated by foreign brands. The ultimate goal
is to make a strong and successful business of honey wine production in the Philippines
and eventually establish a global market of a product that is proudly Pinoy. The paper
focused on the following specific objectives:

To introduce and popularize honey wine consumption in the Philippines;


To increase local market penetration of honey wine;
To enter the export market; and,
To expand the business.

Sections of the market plan


The Marketing Plan is organized into several sections. The first section deals with
scanning the current market situation. A detailed SWOT analysis is presented to evaluate

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Dielles capability as a firm and weigh its readiness, particularly in competing in the wine
industry that is currently dominated by foreign brands. Primary data were obtained
through the conduct of interview with the owner and physical visit to the production site.
Porters Value Chain model was highly effective in our analysis and in the preparation of
the market plan. The major market segment identified for honey wine includes working
men and women belonging to the middle to high income bracket and many of whom are
young urban professionals. Tourists and balikbayans are also target markets.
The second section analyzes the macro- and micro-environment affecting the firm
and the recommended marketing strategy. Several factors were in play that affects
Dielles - either in a positive or negative way. Legal issues, policies, technology, and
conditions were discussed. There were several methods used in order to provide a
thorough analysis of the situation. Data were gathered and obtained from various
references including books, journal articles, related market studies, direct connections,
and the internet. The identified best competitive strategy for Dielles is to be a niche
marketer because it will achieve high margin. A low-cost strategy was crafted based on
the projected fiscal position of the firm, but the strategy will gradually shift to more the
firm establishes its foothold in the industry.
Section three presents the marketing mix, which was developed utilizing the 5Ps
strategy. Secondary data were obtained, analyzed, and used to come up with the plan and
recommendations. Dielles honey wine was presented as a better alternative to imported
and indigenous wines. This is somewhat one of the most difficult sections of the plan
because it will essentially determine and dictate how the product will be positioned in the
market to in order to achieve the desired objectives. Secondary research data were studied
and methods and strategies applicable to Dielles were adopted for the plan.

In the fourth section, financial analysis was presented wherein sales and profit
were calculated based from assumptions resulting from the marketing implementation.
The computation showed that an effective marketing plan is essential to the realization of
the financial objectives of the firm.
The last section of the plan is the Controls wherein the implementation and the
control mechanisms were presented aimed at ensuring that the desired results are
achieved including the contingency measures to ensure success. Milestones were likewise
tabled to guide the firm.
Limitations and Recommendations
The market plan presented in this paper is basically an analysis of Dielles Apiary
and Meadery Enterprises and solely applicable for the said firm. The plan does not

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provide a thorough review of the channels such as penetration in supermarkets due to


limited time to gather or interview managers or high ranking official from SM
hypermarket or Robinsons grocery. A supporting document on how to penetrate big
supermarkets or how to attract new retailers can be added to the plan. This market plan
deals only with direct marketing programs, but does not discuss indirect issues that affect
product retail or other issues like infrastructure improvement and technology acquisition
as consequence of expansion.

III.

CURRENT MARKETING SITUATION


A. Market Overview
1. Market Demographics and Needs

The Philippines, with a population of 91 million, has been a beerconsuming country by tradition, due to existence of domestic breweries such as
San Miguel Brewery Inc., Asia Brewery, Tanduay Distillers, and Distileria
Limtuaco. According to the 2006 Family Income and Expenditure Survey (FIES)
an average Filipino family spends 0.7 percent of its income on alcoholic
beverages.

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Local consumers of wine generally comprise 12-15 percent of the


population, mostly the upper and middle income classes from Metro Manila, and
the other key provincial cities like Cebu and Davao and tourist areas like
Boracay. The legal age for drinking alcoholic beverages in the Philippines is 18
years old.
However manufacturers of wine and alcoholic beverages are now
expanding their market to women and young urban professionals as they
increasingly have the predisposition the money and the inclination to spend on
alcoholic drinks. The rising number of young consumers and women joining the
workforce makes the wine market promising in the Philippines.
This same market segment will also be the target of Dielles.
Alcoholic drinking is a big part of the Filipino merry-making activities. In
the Philippines drinking is more acceptable among girls than smoking.
Nevertheless it is still the case that it is considered more appropriate for men
than for women to drink. Generally the local consumers of wine comprise 12-15
percent of the population, mostly the upper and middle income classes from
Metro Manila, and the other key provincial cities (Cebu and Davao) and tourist
areas (Boracay).
The country relies heavily on imported wines from USA, Australia Spain,
Australia, France, Chile and South Africa to name a few. In 2008, total wine
imports of the Philippines grew to 6,552,758 liters, worth over $12.3 million in
value - a leap of 16.7 percent in volume and 30.9 percent in dollar value from that
of 2007. (Figure1.)

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Philippine Imports of Wine in 2008


By Volume Percentage

38%

33%

12% 17%

United States
Spain
Australia
Others

Figure 1. Philippine Imports of Wine in 2008 by Volume Percentage


(Source: Global Agricultural Information Network Report 9028, USDA)

Eighty percent of imported wines are marketed in Metro Manila. The


remaining twenty percent are consumed in high-end restaurants in Cebu,
Boracay and Davao, these are highly populated tourist areas, while local
producers and manufacturers concentrate on their hometowns for distribution of
their product.
There are no domestically produced grape wines in the Philippines.
Despite the lack of ability to grow grapes Filipinos still can use various local fruits
in making wines. Given that fruits are abundant readily available and inexpensive
securing consistent and low-cost supply to the Philippine fruit wine industry is
highly feasible.
The local wine industry, when developed fully, can be a better substitute
for imported wines and it can save the country a lot of dollars.
2. Market Trends and Target Market Growth

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Global wine industry has become increasingly internationalized and


sophisticated over the past twenty years. At the same time, the market has also
become more fragmented, multilingual, and information-intensive. Global wine
showed solid growth in terms of volume in recent years reaching nearly 25.066
million liters. (Florian Cecil Torres How Flows the Wine Industry October 2007).
The two leading countries in international wine production and
consumption are France and Italy. More than three-quarters of the volume of
world wine production consumption and trade involve Europe and the rest
involves just a handful of New World countries like United States and Australia.
The Asian market is also competing in the wine industry. In Southeast
Asia, the principal growth countries are Singapore, Indonesia, Malaysia,
Thailand, and the Philippines with growth rate ranging from 10 to 20 percent for
the next five years.
While the total wine market in the Philippines is small in comparison to
other Asian countries, demand is continually growing. Budget to mid-range priced
wines are the most popular as price is an issue for the majority of the consumers.
The emerging Philippine wine market continues to expand, with sales
reaching $15.6 million and a volume of 14 million liters in 2008, up by 20 percent
from the year before. This represents a 100 percent increase over sales in 2002
and a 200 percent increase over sales in 1998. The U.S. overtook France in
2000 as the largest exporter of wines to the Philippines and still holds that title
today. Valued at $5.4 million in 2008, U.S. wine exports to the Philippines marked
a significant 25 percent increase over the previous year, with volumes accounting
for 4.6 million liters. The United States is the top supplier, accounting for onethird of total volume, followed by Spain (2.3 million liters) and Australia (1.6
million liters). (Figure 2)

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Figure 2. Growth of Philippine Imports of Wine by Value


(Source: Global Agricultural Information Network Report 9028, USDA)
There has been a noticeable shift to wine in the past few years, as there is
an increase in wine appreciation and consumption. The health benefits of wine
was first discovered and spread in the 1990s after studies on the French
Paradox was reported. Studies revealed that mortality levels provoked by
coronary artery disease are much lower in France than in other industrialized
countries even though the consumption of fats is much the same and blood
cholesterol levels are generally higher. Justifiably, this is because French
considered red wines staple in their diet.
Being a tropical country, Filipinos preferred chilled white wine over red
wine. However red wines popularity surged following its low introductory prices
compared to white wines. The Philippines total red and white still wines
importation is 98% of total wines imported. (www.austrade.gov.au/ Wine to the
Philippines)
Principal drivers of growth in Philippine wine consumption are lifestyle and
health - making brandy, gin, and beer the major competitors of wine. The health
conscious for instance are switching from brandy to wines. Women are also an
important market as they find wine to be more acceptable alcoholic beverage
than beers.
The growth of the local tourism industry in the past years triggered
increase in wine demand. Tourists consume wine in some fine dining restaurants
and high-end drinking establishments, including wine bars, bars and
entertainment outlets. Nightclubs can be a key distribution channel for imported

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wines. These outlets commonly sell house wines (pouring wines) and bottles
ranging from standard wines through premium quality Old World and New World
wines.
The Philippines started on shipping small quantities of fruit wines to Japan
and other Asian countries, according to the Department of Agriculture (DA).
Philippine tropical fruit wine has a better chance of gaining patronage if it is
marketed as an exotic product. Currently, there is a number of tropical fruit wines
readily available in the country, such as duhat, guyabano, and mango.
According to a study from Euromonitor International, the total volume of
wine sales in 2008 in the Philippines increased by eight percent, which translates
to around 11 million litres. In terms of volume, forecasts for wine sales from
Euromonitor indicate a positive growth of between 11.8 percent to 15.1 percent
litres from 2009 to 2013.

B.

SWOT Analysis

Honey wine is new and unpopular in the Philippines and in most Asian
countries. Honey wine is more popular in China, Greece, Spain, Germany,
Ethiopia, and the Balkan countries. Dielles Apiary and Meadery Enterprises is
therefore faced with many challenges in producing and marketing the honey wine
in the Philippines. Below is the summary of the SWOT analysis:
1. Strengths

Local competition is not tight since Dielles is the only honey wine and
honey-flavoured wine producer in the country
Product has world-class packaging materials
The owner produces its own honey which is the most important raw
material of the product
As member of the Bee Keepers Association of the Philippines firm is
assured of steady supply of honey
Strong technical support from government (DOST, DA, UPLB)
including product development

2. Weaknesses

Honey wine is new in the Philippines hence, marketing could be


difficult

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Technology problem specifically on the lack of suitable storage system


that could regulate temperature to ensure that the wine will not turn to
vinegar.
Packaging materials like bottles, corks, and shrink caps are imported
from other country
The firms products are priced higher due to the high price of honey
The firm does not have a concrete marketing plan

3. Opportunities

Provide additional livelihood due to possible increase of local honey


producers and farmer-suppliers of bignay, duhat, and other fruits
Possibility of exporting the products since there are only few honey
wine producers in the world
Growing local tourism industry will likely increase the demand for wine
International recognition of our home-grown fruit wines could also
boost the marketability of honey wine and honey-flavored fruit wines
Honey farm owners can venture to production of honey wine once an
export established market
Growing number of women in the workforce and urban young
professionals
Growing number of health-conscious people

4. Threats

C.

Philippines is a typhoon-prone country and apiaries where honey are


produced are highly vulnerable
Decrease in local tourism growth due to the hostage-taking incident in
August 23, 2010
Prolonged world economic recession

Competitive and Industry Analysis


1. Competitive Environment

Mead is difficult to find commercially. It is in this backdrop that Dielles


Apiary and Meadery developed the product. Dielles is presently the lone
producer of mead or honey wine and its fruit variants in the Philippines.

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For the purpose of coming up with this marketing plan, Dielles product
will be compared with fruit wines produced in the Philippines. Among the known
fruit wine producers in the country are Mijiah Tropical Fruit Wines, Federicos
Bignay Wine, and UPLB Food Science Cluster. Mijiah is now a wine exporter.
Wines from these producers are generally priced PhP250.00 to PhP300.00 per
750 mL bottle. Table 1 shows the prices of other locally-produced fruits wines in
the Philippines.

Table 1. Some Locally Produced Wines in the Philippines


Region/Province
Quezon & Laguna

Cordilleras
Ilocos Region

Cagayan
Benguet
Cavite

Wine Type
Lambanog (700mL)
Mango wine (700mL)
Duhat wine (700mL)
Bignay wine (700mL)
Tapuy or rice wine
(750mL)
Basi or sugar cane
wine (750mL)
Duhat wine (750mL)
Layaw (corn spirit)
Tomato wine
Strawberry
wine
cherry wine
Brewed coffee wine
(750mL)

Existing or new firms can easily enter into the competition of honey wine
production. Being the pioneer however, Dielles has a distinct advantage because
it has already perfected the technology of honey wine production in seven years.
Moreover, Dielles is producing its own honey. Fruits like mango, duhat, and
bignay are abundant when they are in season. Dielles could choose to introduce
fruit flavours to their mead in accordance with the seasonal availability of these
fruits. Introducing other variants such as guyabano, jackfruit, and exotic herbs
can be made the subject of further product development.

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Using Porters Five Forces model, Figure 3 below shows a summary of


the competitive environment of Dielles.

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BARGAI
NING
POWER
OF
CUSTOM
ERS
Compa
nys
Harvest
bee
of
farm
is
Bottle,
duhat,
the
shrink
bignay ,
main
caps,
and
BARGAI
source
cork
mango
NING
of
and
is
POWER
honey
labels
seasona
OF
are
lSUPPLIE
importe
RS
d from
US

Dielle
s
Apiary
&
Mead
ery is
the
lone
produ
cer of
honey
COMPETI
wines
TIVE
in the
RIVALRY
countr
WITHIN
y
AN
INDUSTR
Y

THREAT
OF NEW
ENTRAN
TS

Consid
ering
the
perceiv
ed
THREAT
health
OF
benefit
SUBSTIT
s of
UTE
fruit
PRODUC
wine,
TS
there
are
lots of
substit
utes
like
fruit
juices,
fruit
teas,
etc.

Figure 3. Porters Five Forces Model in Dielles Apiary and Meadery

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D.

Product Overview

Mead or honey wine produced by Dielles is an alcoholic beverage made


from honey and water with fruit flavours via fermentation of yeast. There are four
product variants namely: traditional mead which is made from premium honey,
mango mead, duhat mead, and bignay mead. The products are categorized as
fruit wines because it has 12% alcohol content. The wines are bottled in 400mL
elegant bottles. Price ranges from PhP270 to PhP280 per bottle. The wines are
registered on BFAD (Bureau of Food and Drugs) on 2007. The quality of honey
depends on the viscosity of the plants surrounding the honey farm. The wines
composed 30% to 40% of honey as sweetener. At present all the firms produce
are marketed locally.

Tradi Ma Big Duh


tiona ngo nay at
l
Me Me
ad Mea
Mea ad
d
d
Figure 4. Different Variants of Dielles Honey Wine

1. Traditional Mead
It is made from the finest honey available (mostly from mango
flowering season harvest). It has gemlike clarity in a consistent bright

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golden color. It is the bestseller among the four variants during tasting
sessions. Undertone of honey is pungently noticeable. It is acomplex
voluptuous mead in every sense. Moderately sweet and should be served
chilled.
2. Mango Mead
It is made from Philippine ripe mango (carabao variety) and honey.
It has gemlike clarity in a consistent yellowish golden color. Mango fruit
taste is mildly strong. Undertone of honey is moderately noticeable.
Moderately sweet and should be served chilled.
3. Bignay Mead
It is made from Philippine wild berry (locally know as bignay). Color
is red and it is slightly darker than the duhat mead. Equally intense fruity
aroma with refreshing acidity and the undertone of honey cannot be
missed. Moderately sweet and should be served chilled.
4. Duhat Mead
It is made from Philippine plum (locally known as duhat) and honey.
Color is ruby red with tinges of purple when held to a white light evocative
to the color of the flesh of the duhat fruit. Initial aroma is strongly fruity with
undertone of honey. It is moderately sweet and should be served chilled.
The raw materials in making honey wine are honey, water, and fruit
extracts. Fermentation takes 45 days and the ageing is at least 6 months. The
bottles, shrink caps, and cork are imported from the US and purchased in bulk.
The labels are made European style to make a world-class impression to the
wine. Figure 5 shows the Value Chain Analysis for honey wine.

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Figure 5. Honey Wine Value Chain Analysis

E.

Keys to Success and Critical Issues

The top management of Dielles believe that they have a good quality
product in their honey wine. Communicating this belief to their intended market is
the main key to success. In addition, Dielles must also ensure total customer
satisfaction by warranting the consistent production of quality honey wines
through its strict adherence to production and packaging standards. Continuous
product innovation could also be an important factor to develop customer loyalty
and expand market reach.
As a start up firm in honey wine production, Dielles should watch for the
following critical issues:
1. Maintaining its standing as the pioneer honey wine producer in the
country.

2. Increasing its revenue base by expanding its production capability and


reaching new market.
3. Monitoring regularly of customer satisfaction through a regular mechanism
of customer feedback so that the growth strategy will not compromise
quality and level of satisfaction.
All these can be achieved through continuous product development and
process innovation that are in accordance with the demands of the market.
Harmonizing the entire supply chain will also ensure the availability of supplies
when needed so as to keep up with eventual business growth.

IV. ENVIRONMENTAL ANALYSIS


A. Macroenvironmental factors
Demographics strongly influence wine consumption. World population is
currently estimated at 6,868,000,000 (United States Census Bureau). Although
there was a continuous growth in the past, current projections show a steady
decline in the population growth rate, with the population expected to reach

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between 8 and 10.5 billion


(http://www.wikipedia.com).

between

the

year

2040

and

2050

There is however a global increase in wine consumption. In the US, wine


per capita consumption increases with age, with early consumers drinking only
6.6 bottles per year. Consumption peaks annually at 16.4 bottles. The country
with the highest wine per capita consumption is Luxembourg with over 6.1 liters.
Philippines wine per capita consumption, however, is still just below a
tablespoon or only 7.3 mL.
The principal drivers of wine consumption in the world are tradition,
culture, lifestyle and health, and economic status.
Target consumers of wine comprise 12-15% of the population, mostly the
upper and middle income classes from Metro Manila, and other key provincial
cities like Cebu and Davao, and tourist areas like Boracay. Also, wine market is
expanding to women and young urban professionals as they have the
predisposition, the money, and the inclination to spend on alcoholic drinks. In
addition, there is a small but active expatriate community that seek wine for their
own consumption. The Philippine population is projected to increase up to 94
million by 2010 (NSO 2010). Because of the increasing population including a
growing number of urban workforce, particularly the professionals, and an
increasing appreciation for wine, there will be a consequent increase in potential
market for Dielles honey wines.
Changing lifestyles may affect the marketing strategy. World Health
Organization reported that coronary heart disease is the 2 nd leading cause of
death in the world. Obesity has also reached epidemic proportions globally, with
more than 1 billion adults overweight (WHO 2008). People are also getting
conscious of the alarming diseases brought by smoking, pollution, and stress.
Thus, people are now getting more health conscious.
Red wines are perceived to be healthy drink because of its good for the
heart qualities. This is known as the French Paradox. A study published in the
Journal of Food Quality and Preference reveals that more humans prefer sweet
wine than dry or any other kind of wine. This is because preference for
sweetness develops early in humans. Aside from the fact that Dielles wine is
based from honey, and not sugar, it is flavoured with natural fruit extracts
resulting in the sweet flavour in wine. All these will influence the marketing plan in
a positive way and will give better opportunities for Dielles in keeping and
expanding its markets.

26

Wine, however, is sometimes equated to alcohol; and alcohol can


influence a tendency for addiction. This mixed appeal can also impact Dielles
marketing plan. In case there is an increased advocacy for this notion, there will
be a decrease in potential consumption of the product.
The recent hostage crisis last August 23, 2010 that took the lives of some
Hong Kong tourists may affect Philippine tourism industry. There can be a decline
in the volume of tourists coming in the country. Although many are saying that the
incident is localized. Based from the 2008 NSO report, there were a total of
2,944,135 tourists who visited the country. If indeed the international community
looked at the incident as localized, there will be no dramatic effect in the volume
of tourists in the country. More or less, it will remain the same. If change will
indeed happen, only a small volume change will be realized. As such, major
tourist destinations such as Boracay, Cebu, Palawan, and Davao will still be
frequented by foreign and local tourists. Therefore, there is still a market for
Dielles honey wines in these particular places.
A total of 195,287 balikbayans visited the country in 2008 (NSO 2010).
Assuming a conservative 10-20% of the total volume of balikbayans as the target
market, it is a big number of potential buyers. Dielles honey wines are
considered good novelty items. With the number of balikbayans, there is a
positive market of people buying Dielles as pasalubong item for their loved
ones when they go back to their respective countries.
Mead production dates back to as early as 7,000 B.C. Archaeological
findings of pottery vessels containing mixtures of mead, rice and other fruits
along with organic compounds of fermentation were found in Northern China.
Other findings were likewise found in Europe. On the other hand, wine has been
part of Western history since the Neolithic Period (8,500 4,000 B.C.) and has
spread throughout the world. It has since been ingrained and became an integral
part of Christian tradition.The technology of mead production is actually very
simple and does not involve complex processes. It is basically the fermentation
of a mixture of honey and water through the action of yeast. It remained
unchanged over several periods of time.
However, there are recent technologies that may affect Dielles marketing
plan. In a study conducted by Qureshi and Tamhane and published in the Journal
of Applied Microbiology and Biotechnology Volume 23, the process of
immobilization, use of dual cultures and series reactors reduced the time period
of mead production and eliminated the costlier aging process. Also published in
the journal Volume 27 by the same authors, the use of immobilized cells of
Hansenula anomala in calcium alginate gels enables the quick production of

27

matured mead by a single culture and the elimination of the traditionally used
long aging periods. These technologies, if soon commercialized and adopted,
may affect Dielles marketing plan. It will affect Dielles in a positive way if the firm
will eventually adopt the technology in its production in order to increase and
speed up its production to supply the growing demand. Or it can be negative if
competitors will adopt the technology sooner and will be the first.
Dielles is also currently packaging the wine manually, from dispensing of
the wine in the individual bottles, to placing the corks, and shrinkage caps.
Automating the packaging process or any other part of the production will bring
positive effect to the marketing plan as it will hasten and increase Dielles
production.
There are existing government laws and regulations that affect the firm. In
January 2005, the revised Sin Tax Bill or Republic Act 9334 was implemented in
the Philippines. This imposed excised taxes on alcohols and tobacco products.
For spirits and wines, taxes were collected on per liter volume capacity. For
wines, a PhP17.47 tax will be collected per liter for wines with 14% alcohol by
volume and below, and PhP34.94 tax per liter will be collected for wines with
above 14% but below 25% alcohol. Because Dielles honey wine is 12% alcohol,
a PhP17.47/liter tax should be collected. Presently, Dielles is not yet affected by
this specific law because the firm is considered as MSME. However, once the
firm expand it will be covered by this law, therefore it can affect the marketing
plan because production price will be affected. In 2000, the Philippines passed a
Retail Liberalization Bill, enabling foreign retailers to enter the wine industry. This
move is expected to encourage growth in retail outlets. This will have a negative
impact on Dielles marketing plan as it has to compete with many foreign brands,
which are already established brands and more familiar to the Philippine market.
Philippines is a tropical country. An average of 20 typhoons visits the
country within a year period (PAGASA). The occasional occurrence of typhoons
in the Philippines may indirectly affect Dielles marketing plan because its
production may be altered and affected. The main raw material for Dielles wine
variants is honey harvested from the bee colonies. Once there is a typhoon,
there is always the risk that the bee colonies producing honey for wine
production can be destroyed. In effect, once the source of raw material is
destroyed, the production process will likewise be affected.

B. Microenvironmental factors

28

The raw materials for honey wine production are basically honey, water,
and yeast. Dielles produces its own honey from its bee farm located in
Muntinlupa and Las Pinas cities in Metro Manila, and Lipa and Tanauan cities in
Batangas. Dielles processes 10% of the total honey harvest into wine. Thus, it
has assurance of supply of raw material. Dielles also buys some of the raw
honey from co-members of the Philippine Bee Keepers Association to augment
their raw honey requirement. Presently, Dielles sources of raw honey are enough
for the current production.
Should there be other firms or co-members of the Bee Keepers
Association who will also venture into the same business, Dielles would have to
compete with the source of their additional raw material especially if Dielles has
to expand its market. Otherwise, it has to put up its own additional bee colonies
to produce enough honey for its wine production.
Honey is marketed as a pure honey product. Price ranges from P60 to
P150 per 350 mL bottle for local brands and P200 to P350 for imported brands.
Honey is commonly consumed as pure substance because of its health benefits.
Sometimes it is used as additive in infant and growing up milk formulas such as
in Nestle products like Nido, in food and beverages, cakes and pastries,
pharmaceuticals like burn ointments, , and in vitamins. Should these industries
demand more supply of honey and offer a more competitive price, it will pose a
problem for Dielles. Naturally, if Dielles have to buy raw honey from an outside
supplier, it be at a much higher price. And this can subsequently affect Dielles
production process and overall marketing plan.
Source of bottles, corks, and shinkage caps will be the main problem for
Dielles as these materials are sourced out abroad and by volume. Therefore, big
capital is needed for bulk importation. Should suppliers of these specific
materials would have a shortage or if suppliers prioritize other buyers, Dielles
production will be highly affected. Therefore, Dielles must build a strong
partnership with its suppliers if it plans to order from them continuously. Custom
duties and other importation procedures may cause slight problems, too.
Dielles can also try to source for domestic bottle producers. This can be
possible as Dielles is using generic 400 mL-capacity bottles; it is not customdesigned for them. Dielles can build business alliance with other companies or
MSMEs that use the same bottle to be able to come up with the minimum order
required by the local bottling maker like San Miguel Bottling Corporation or Right
Pak. This will lower the capital cost required because the bottle will be
transported locally.

29

Dielles has a strong leverage in terms of package label because Dielles


label is elegant-looking and comparative to other imported brands. The firm has
to maintain this standing.
Dielles does not have any competitor if we based the wines in the current
market in terms of raw materials. Dielles is the lone producer of fruit wines using
honey in the fermentation process. . Other Philippine producers of fruit wines use
sugar instead, which is the most common raw material. There are already a
number of fruit wine producers in the Philippines coming from seven provinces
Ilocos, Laguna, Cavite, Cagayan de Oro, Cordilleras, Nueva Ecija, Quezon and
Benguet. They use almost the same fruits like mango, bignay, duhat, pineapple,
and rice. Dielles has its own mango plantation. Therefore, supply of mango for
Dielles mango-flavored wine will not be a problem. However, for other fruits like
bignay and duhat, Dielles has to establish a strong partnership with its supplier
to ensure a steady supply of these fruits especially during lean months because
these fruits are seasonal.
There are no existing defined channels for Dielles at present. Dielles four
variant products are not sold in formal business establishments but only
networking and occasional participation in trade fairs and exhibits. The former is
done through its link with UPLB Food Science Sector, personal connections, and
corporate networks. The present networks only provide Dielles a limited
presence only in Laguna, Metro Manila, and Zamboanga.

C. Competitive strategy
Firms with low shares of the total market can become highly profitable
through smart niching. Such companies tend to offer high value, charge a
premium price,achieve lower manufacturing costs, and shape a strong corporate
culture and vision. (Kotler 2003) Dielles will follow a competitive strategy as a
niche marketer because it can achieve high margin. It can attack initially small
local and regional firms that are not doing a good marketing job. It is not yet in a
financial position to launch an attack to the market leaders, which in this case,
are the imported wines. It has to innovate continuously so that when it begins to
weaken, it will have the capability to offer a new product which may not be
necessarily sticking to its niching strategy.
Dielles can do well also to strengthen its supply chain through the
constant monitoring and scouting of additional sources for quality raw materials
especially the suppliers of fruits. Bignay for example can be sourced out from

30

sources outside its present network. It needs to build up its own apiary to prepare
for the increased demand for honey- its major ingredient.
Constant product and process innovation should be pursued. Aside from
doing product development on other fruit variations it may also venture into
infusion of abundant local herbs and spices like lemongrass, libas, batuan,
and indigenous plants since mead is traditionally complemented with herbs in its
ancient brewing. Process innovation on the other hand could be in automating
critical portions in the production process like packaging.

V.

MARKETING STRATEGY

A Philippine wine company needs to have a clear marketing strategy in


order to be able to effectively compete in todays wine market, which is currently
dominated by imported brands. Only with a clear understanding of the market
can a company work seamlessly towards achieving a profitable sales and
establishing itself as a successful producer of wine, particularly of honey wine,
which is not very much familiar to the Philippine consumers.

A. Mission
Currently, Dielles Apiary and Meadery Enterpises does not have a definite
marketing strategy. There is no existing Mission, Vision, and Objectives, but the
owner of the family-owned company is very clear about what they want to
achieve: to make a strong and successful business of honey wine production in
the Philippines and eventually establish a global market of a product that is
proudly Pinoy. It is therefore the main mission of the marketing plan. Dielle is
already practicing the 5 S as shared by a Canadian bee keeper, which is already
a good start towards attaining international standard and ISO accreditation.
B. Marketing Objectives

A concrete marketing strategy is laid down and discussed in this paper in


order to achieve the following objectives:
a.
b.
c.
d.

To introduce and popularize honey wine consumption in the Philippines;


To increase local market penetration of honey wine;
To enter the export market; and,
To expand the business.

C. Financial Objectives

31

The main financial objective is to increase revenue and profit of the firm by
200%
D. Positioning
The product will be positioned as a mid-priced exotic health wine.
E. Strategy Summary
Marketing is obviously done to generate sales profit in order to make
Dielle an established producer of honey wine. In summary, the first year of the
marketing plan will concentrate more in the introduction of the product and educating
more consumers regarding honey wine because based from the admission from Dielles
owner, it is not easy to introduce honey wine in the Philippines because consumers are
more familiar with sugar-based wines, be it imported or locally-produced fruit wines. The
first year of the marketing strategy will obviously involve a lot of coordination and
networking to gain partnerships and strengthen business ties. It will involve more
financial investment from the firm for publication of information materials and
promotional activities. However, all these will provide a strong groundwork for the
succeeding activities to ensure sales profit generation that will eventually lead to
business expansion. Only a minimal sales input can be expected from the

promotional activities. Dielle will invest in marketing and not expect too much
sales generation during the first year. The marketing activities during the first
year will provide the groundwork for an aggressive marketing during the
succeeding years, which should coincide with the expansion program as sales is
expected to increase.

VI. MARKETING MIX


The marketing mix involves how the product line of honey wines will be
priced, promoted and distributed, and other such factors that may affect the
overall impact of the product to the customers. The following marketing mix is
attuned to the choice of market segment for the product.
A. Product
Honey is mans oldest sweetener. It is composed of glucose and fructose,
and minerals like magnesium, potassium, calcium, sodium, chloride, sulphur,
iron, and phosphate. It contains vitamins B1, B2, C, B6, B5, and B3, all of which
change according to the quality of the nectar and pollen. Copper, iodine, and zinc
exist also in small quantities. Several kinds of hormones are also present.

32

Approximately, one-half of the human diet is derived directly or indirectly from


crops pollinated by bees. Dielles can take advantage of the fact that the main
ingredient of Dielles wine is honey because this is essence of its competitive
advantage.
The honey wines that come in four variants (premium, bignay, duhat, and
mango) should be well differentiated in the minds of the target market. It should
be well packaged with an excellent artwork. Design on the labels should be
simple yet should very well articulate the brand name and brand reputation. It is
also highly essential that the right color and logo are used. The firm needs to
review its present packaging against those of its competitors - the local fruit
wines and mid-priced imported wines and see where the packaging can be
further improved. The size of the bottle shall be maintained at 400 mL.
B. Pricing
The honey wine should be perceived as having high value due to the
presence of honey. It is main ingredient that distinguishes it from its competitors.
Therefore, the price should not be established within the range of its nearest
competitor- fruit wines. Looking at the break-even cost of the product the price
per 400 mL bottle for the four honey wine variants can be established as follows:
Premium Honey Wine

- PhP 280.00

Mango, Duhat, Bignay Honey Wines

- PhP 270.00

Bulk purchase will be given discount. Honey wines can be bundled with
the firms original product- honey, which is sold at PhP 150 per 250mL.

C. Promotion
This will be carried out using advertisement, public relations, publicity,
promotions, and events, product marketing materials, and sales force. This will
also include website, and visibility in social networking.
D. Channel
The present channel of distribution of Dielles is through direct selling and
network with other sellers. The marketing strategy should however shift to a
different plane while maintaining these existing channels in order to live up to the
rightful positioning for the product.

33

By 2012, the products will have presence in three major cities: Metro
Manila, Cebu, and Davao and leading tourist destinations like Boracay and
Camarines Sur. The wines will be sold in major wine stores like Ralphs Wine and
Spirits, in selected 3-5 star hotels and restaurants, and big supermarkets like
SM.
E. Service
After sales service will only be limited to providing warranty for the product
in case customers find physical defects in the bottle or when unwanted impurities
are found in the wine. A mechanism should be employed for the total refund to
the customer at the point of sale.
Dielles should indicate its website in the wine label to facilitate product
orders, customer feedbacks, and interaction.
F. Internal Marketing
All the employees and staff of Dielles should be aware of the goals of the
firm. They should internalize the core values of the firm, be motivated to have
their own initiative, and contribute to the making of creative solutions to internal
problems. Continuous training and learning should be encouraged among the
firms employees and staff. Top management could set aside an emergency fund
to its workers in case they have financial problems.

VII.

MARKETING RESEARCH

According to an article from Cheche Moral of The Philippine Daily Inquirer


published October 8, 2008, Filipino wine consumers are partial to drinking white
wine but have shown increasing patronage of red wine echoing the so-called
French Paradox. Also, that price is the main consideration of Filipinos wine
buying decision.
Based on Wine and Spirits Association of the Philippines, best sellers in
local wine stores are imported brands from Australia, specifically grape wines,
which ranges in price from PhP 150.00 to PhP 500.00 per 750 ml bottle.
However, more Filipino consumers are shifting to fruit wines that are
perceived to provide more health benefits than ordinary wines. Local fruit like
bignay are known to possess flavonoids which act as antioxidants that prevent
cancer. Its reddish to purplish color is induced by its anthocyanin which is also an
antioxidant and possess potential health effects against cancer, aging,

34

neurological disease, inflammation, diabetes, and bacterial infections. Bignay


wine is the bestseller among fruit wines in the country.

VIII.

FINANCIALS

A. Sales/Revenue Forecast
At present the firm has an average monthly production capacity of 250
liters per month or roughly 600 bottles. This is equivalent to about PhP 96,600.00
gross sales per month. The provision of SET-UP assistance will maximize the
production capacity of the firm to 400% of its present level provided however that
the sourcing of raw materials i.e. honey and fruits will be efficient to match the
demand.
Table 2 shows that the revenue is expected to increase by 40% in 2011 at
PhP 2.87 Million assuming that the firm will operate at 200% production capacity.
By 2012 it is assumed that 400% maximum production will be met and will
generate revenue of PhP 5.5 Million. On the third year Dielles is expected to
acquire additional equipment to meet increased demand and gross revenue is
forecast at almost PhP 11 Million.
Table 2. Sales Forecast

Particulars
Total Sales
Direct Cost of Sales

2011

Sales
Forecast
2012

2013

2,868,750.00

5,488,000.00

11,020,000.00

1,807,988

3,347,800.00

6,701,500.00

Dielles will continue to sell their products to their present network in


addition to the new markets that will be penetrated as a result of the

35

implementation of the marketing plan. In the case of new markets (i.e. malls,
hotel, restaurants and wine stores), Dielles will initially allow a maximum of 30%
discount.
The sales forecast shows that Dielles could be ready for direct exporting
by 2014. Direct export requires a minimum of 10,000 bottles per order.

B. Marketing Expense Budget


Based on the marketing strategy presented in section IV the firm is
capable of funding its marketing plan. On its first advertising year, the firm will
incur PhP 303,500. The expense is expected to increase as the firm becomes
more aggressive in its marketing activities targeting its niche market. The bulk of
the marketing expense goes to printed materials and participation in local fairs.
This is to make the product known to prospective exporters. Also, significant
budget is allocated to participation in bartending exhibitions where the wine can
be introduced as mix with other known brands. Cooking exhibitions can also be
done and funded as well as sponsorship of wine appreciation events.
Table 3. Marketing Expense Budget
Particulars
Devt. of Marketing Concept
Website Enhancement &
Subscription (Globe Bus.
Solns.)
Media Event
Printed Materials
Participation in Local Trade
Fairs & Expo
Participation in Bartending
Exhibitions
Total Sales & Marketing
expenses
Percent of sales
Contribution Margin

Q1

Period
Q2
Q3

Q4

50,000

10,000

TOTAL
50,000

4,500
25,00
0

4,500

4,500

150,00
0

10,00
0

23,500

150000.00

25,000

25,000

50,000.00

10,000

10,000

30,000.00
303,500.00
10.58%
1,060,762.0

36

0
40%

Contribution Margin/sales

C. Break-Even Analysis
The break-even analysis in Table 4 indicates that the firm will break-even
at the production level of 6,696 bottles. The firm should operate above this
capacity in order to break-even.
Table 4. Break-Even Analysis (2011)
Break-Even Sales

1,807,988.00
6,696 bottles

Assumptions:
Total Revenue
Total Variable Cost
Total Fixed Cost

2,868,750
1,171,000.00
636,988.00

D. Profit and Loss Analysis


The firm is expected to generate profit consistently within the next three
years. In 2011 it is projected to generate PhP 0.9 Million profit. The next year
when it is expected to reach 400% maximum production capacity PhP 1.1 Million
profit will be realized. It is on this year that the firm will have to acquire additional
equipment for expansion of its production. In 2013 the maximum profit will hit
PhP 2.5 Million since the volume of production will reach a record high of 50,000
bottles. This is already the signal that it is capable of supplying the export market
directly. By 2014 the firm is expected to penetrate the export market as direct
supplier hence profit is expected to climb.
Table 5. Profit and Loss Analysis

37

Particulars
2011
Gross Sales
Direct Sales
Sales from hotels, indirect
exporters, wine stores
Less:
Variable Costs
Materials
Labor
Water & Electricity
Repair & Maintenance
Fixed Costs
Administrative Cost
Marketing Expense
Depreciation
Purchase of equipment for
Expansion
SET-UP Amortization
Total
Net Income before tax
Tax
Net Income

Year
2012

2013

2,868,750
1,687,500
1,181,250

5,488,000
1,960,000
3,528,000

11,020,000
2,900,000
8,120,000

781,000
300,000
60,000
30,000

1,874,400
491,400
150,000
45,000

3,514,500
1,404,000
220,000
75,000

210,000
303,500
35,000

252,000
500,000
35,000
750,000

378,000
1,000,000
110,000
1,500,000

88,488
1,807,988
1,060,762
86,063

88,488
1327.20
4,186,288 8,202,827.20
1,301,712 2,817,172.80
164,640
330,600.00

972,282.00 1,137,072.00 2,486,572.80

The marketing activities is expected to pay off more after 2013 when the
product is expected to be already widely known in the market segment selected,
and the products are made available to wider market networks.
IX.

Controls
A. Implementation

Following is a detailed presentation of the specific marketing activities that will


be implemented.
1. Product promotion through the world wide web
In todays digital age, web presence is a must. The target market segment
is seen as active users of this medium. Dielles has an official website in the past

38

(http://www.diellesmeadery.com) but was not maintained and updated. The first


thing to do therefore is re-establish the website and should be done in the first
month of the marketing plan implementation. If the company does not have an inhouse IT capability, a programmer/website developer can be contracted.
Another key element is to be able to find a less expensive web hosting
provider or domain that can host the website. Dielles can try the commercial
portal such as Globe Business Solutions. Subscription may cost about PhP
1,500.00 per month. Updating and maintenance of the content can already be
done by the owner or staff or a hired IT personnel.
Dielles can also expand its presence online through the use of social
networking sites like Facebook, Twitter, and Multiply, which are very popular
nowadays and are for free. All that is required is an internet connection. These
sites are frequently visited by the targeted market which includes young urban
professionals (both men and women), expatriates and foreigners, and company
executives, among others. It will be helpful in the promotion of the wine products.
Dielles has to create its own account on Facebook, Twitter, and Multiply and post
product photos and information and continually update the account. Through this
strategy, there will be a two-way interaction between the firm and consumers
because people can be a fan and post their comments outright. Product orders
can also be facilitated in these media.
Market connections and customers can likewise be gained by uploading
products in the Alibaba website which is available for free. Alibaba is widely used
abroad by companies seeking foreign suppliers. Even local companies
sometimes visit the Alibaba website in search for local suppliers whenever they
are short of supply for their own products.
Uploading of video in Youtube such as a cooking demonstration using
honey wine and wine mixing will be a good strategy so that more people will
know about Dielles and its products. Youtube has been an effective medium in
the search for new excellent products.
2. Production of brochures and leaflets
Brochures and leaflets are very important source of information for
customers during the firms participation in local trade fairs, exhibits and tours.
Normally, people visiting trade fairs and exhibits want to explore and it will be
helpful if Dielles has a ready information material to give away to prospective
customers especially those who wont be spending too much time knowing the

39

product during the exhibit. People can read the material even when they leave
the exhibit areas.
The brochures and leaflets should contain important information such as
brief history, description, advantages of using the product, the different variants,
contact information, among other important information. A featured article on the
benefits of honey should always be included. Colored and glossy material should
be used for the production of these reading materials. A quality, high-resolution
photo of the product must be used so that readers can see the actual
appearance and color of the product and also to make the reading material
attractive and able convey a tempting appeal so that people will buy honey wine.
Initially, one thousand copies of brochures and leaflets will be enough for
distribution during trade fairs and exhibits for the first year. Updating of the
brochure will be done in subsequent years.
3. Participation in local exhibits, trade fairs, and food expositions
Trade fairs and exhibits are effective venues for advertising and marketing
a product. Consumers get to know more the brand and the product during trade
fairs because of direct interaction. People who visit trade fairs and exhibits
usually want to discover new products and are curious regarding new
innovations. There is also an immediate sales input during trade shows because
people dropping by the exhibit booth will probably be buying a product as well.
Although Dielles already participated in a number of trade fairs in the
past, it needs to continue to tap this promotion medium. There are many locally
organized fairs such as the DOST National Science and Technology Week
(NSTW) exhibit where participation requires only minimal fee due to subsidy. The
only expense to be incurred will be the transportation expense during ingress and
egress and other incidental expenses. Dielles must assign a regular staff to man
the exhibit who should be knowledgeable about the firm and the product and
answer queries from clients and prospective customers.
Other trade fairs and exhibits that Dielles can join are Asia Food Expo,
Philippine International Food and Beverage Expo (PIFBEX), Food and Drinks
Asia, WOW Philippines Fairs, International Food Exhibition (IFEX), and trade
fairs organized by government agencies such as Department of Agriculture (DA),
Department of Trade and Industry (DTI), and Department of Tourism (DOT).
However, participation in these trade fairs will require registration fees. The firm
must select and prioritize which trade fair will provide greater benefit. To lower

40

cost, Dielles can coordinate with another MSMEs and co-share with booth rental
and other expenses.
During the trade fairs and exhibits, Dielles can conduct an on-site product
demo or wine tasting to convince customers to try out the product. This is a good
strategy to make the audience excited and encourage them to actually buy the
product. On-site wine tasting and demo could spell the difference between
someone buying the product or someone just walking away during trade fairs and
exhibits.
Participation in trade fairs and exhibits can also be a good opportunity for
Dielles to scout its competitors in the market because most likely, similar
businesses will be invited to participate in the same event. Dielles can have an
idea about why people bought certain items and what people love about the
competitors brand. Dielles can take mental notes about what people and clients
look for in a product and Dielles can use these information and insights in future
promotion and product development. Dielles can also know the latest
breakthroughs and products that are taking the market in storm by joining trade
fairs and exhibits.
4. Sponsor a wine drinking appreciation event for media people
Dielles can coordinate closely with Science and Technology Information
Institute of the Department of Science and Technology (STII-DOST) to organize a
wine drinking appreciation for science writers, editors, and broadcast
practitioners. These include science writers from regular partners like Manila
Bulletin, Manila Times, Philippine Star, and broadcast practitioners from regular
radio partners such as RMN, etc. Writers and editors of food magazines like
Yum, Flavor, and Good Housekeeping can likewise be invited to the event. STII
is the information arm of the DOST. It can provide assistance to Dielles, being a
SETUP-assisted project under DOST.
The main objective of the wine drinking appreciation event is to promote
the Dielles honey wines among writers and media practitioners by having them
taste the variants and how it is compatible with other foods such as cheese,
bread, etc. Media people are highly effective channels of information.
A spin-off of this activity would be the promotion of Dielles honey wine
because the writers and editors will naturally write about the product or the DOST
technology intervention in the firm and published it in their respective
newspapers and magazines. In this manner, Dielles will be featured in the

41

newspaper/magazine without spending too much. The cost for the wine drinking
appreciation will be much lower compared to the cost if Dielles have to directly
pay a writer or the publisher for the publication of an article in the newspaper
and/or magazine. In addition, the story will have more media value because
Dielles will not spend a single centavo for the publication, but only for the wine
appreciation event. Dielles will only need to spend for the wines, breads,
cheeses, and other food to accompany the honey wines.
Dielles should provide a good quality, high-resolution, colored photo of
their product for inclusion in the article write-up. The photo will convey an exciting
imagery to the readers, thus will encourage people to buy honey wine. One key
element in this event is for Dielles owner or marketing manager to be able to
keep good conversation with guests and have sense of humor to keep the event
lively and for guests to remain interested. Otherwise, they can hire a person to
facilitate the event, someone who is very conversant and has a load of topics to
share with the guests. Normally, it is the firm that will provide transportation for
the writers and editors who do not have their own cars.
Furthermore, the story of technology intervention in Dielles business can
also be featured in the regular DOST newsletter, S&T Post and the monthly
DOST Digest. Publication in these newsletters is for free.
5. Appearance in TV Programs and Business shows
Mr. Luke Macababbad, Dielles owner has already appeared in various TV
programs in the past. However, these shows were not actually part of a planned,
aggressive strategic marketing as the firm does not have a concrete marketing
strategy.
TV is a highly effective medium for image advertising. The visual action
and audio allow viewers to feel involved with television. In addition, television has
national reach. However, it can also be costly. Because TV ad is costly and Dielle
still can not afford to pay for it, coordination and negotiation can be made with
program producers and hosts such that, Dielles honey wine can be used as an
ingredient or additive in cooking programs such as Quickfire, Spoon, or feature in
Business shows like Go Negosyo and Moms. It will not necessarily entail the
appearance of the firms owner in the TV program, nor does it requires
production of a concrete advertisement specific for Dielle because this will be
costly and still can not be afforded because it will require hiring of production
director or talents aside from the cost of the TV spot. Dielles can co-sponsor with

42

major sponsors of the program so that the product can be featured during the
show.
Local cable stations are also an emerging medium for a target small, local
marketplace. This is normally less expensive than advertisements in the national
TV. Dielles can tap local cable stations for a selected market such as in the
Visayas or Mindanao.
6. Tour and product wine tasting
As a continued effort to promote the product, Dielles can tour selected
establishments and places and conduct wine tasting. These can be fun and
educational, both for Dielles and the public consumers. Dielles product testing
will basically be a public wine appreciation event where customers will have the
opportunity to drink and taste a small portion of Dielles wine giving them the
opportunity to understand the difference of honey wine from other wines. It will
basically highlight the uniqueness of Dielles honey wines. Although it is a
commercial wine tasting, theres no need for pushy salesman or boring sales
pitches that sometimes drive away customers instead of encouraging them. It will
be a real life experience because people will actually be able to taste the product,
unlike giving out brochures and info materials where people only gain idea about
the product without the opportunity of tasting the real material.
Customers can be asked to fill up a questionnaire or feedback form to
indicate their most preferred variant and/or rate the wines according to basic
wine parameters such as quality, odor, authenticity, packaging, and image.
The objective is that, participants should leave the event knowing more
about Dielles honey wine. Tour and wine tasting events will be conducted in the
following areas:
5.1. In Malls

Malls are often frequented by the target market. Dielles can coordinate
and negotiate with the management of SM hypermarkets or Robinsons
groceries, to conduct wine tasting. This strategy is often done by food companies
like Nestle. Dielles should try to avoid distributing questionnaire or survey forms
during this event because it can tend to repel customers. The main focus should
be to have more people taste the product and sell the product on site.

43

5.2. In major local tourist destinations (Boracay and Camarines Sur)


The products can be promoted in major tourist destinations in the
Philippines since these places are frequented mostly by foreigners, balikbayans,
and local tourists. It is a good opportunity for Dielles to introduce and promote
honey wine through wine tasting. Night life is very much alive in these areas and
people will most likely drink wine. Balikbayans and foreigners can buy the
product as their pasalubong upon returning to their respective countries.
This activity will require Dielles to send a staff to the different tourism
areas to conduct the wine tasting. The staff should also be knowledgeable and
should have the capability to capture the perspectives of the customers regarding
the product.
5.3. In restaurants and 3-5 star hotels
Fine dining restaurants often include wines in their menu offerings. Threeto 5-star hotels are likewise frequented by foreigners, tourists, and even
socialites and urban young professionals and businessmen. By coordinating with
restaurant owners and hotel managers to conduct wine tasting event, with
Dielles providing complementary wines.
7. Product Visibility in Bartending competitions
Hotels and bars held annual bartending competitions which Dielles can
also tap by supplying some bartenders with their wine.
8. Networking with private companies
Dielles can reach out to more big private companies that often give
corporate giveaways and Christmas grocery package to its clients and
employees. Dielles should write to the company president to introduce the
product and provide a competitive offering (discounted price) for bulk purchase of
the honey wine as corporate giveaway in events like Christmas party, team
building, or sports competitions.
However, minimum financial gain is expected because the first year of
marketing strategy will concentrate more in introducing and educating as many
consumers as possible regarding the product because honey wine is not yet

44

popular in the Philippine market today. Only a minimal sales input can be
expected from the promotional activities. Dielles will invest in marketing and not
expect too much sales generation during the first year. The marketing activities
during the first year will provide the groundwork for an aggressive marketing
during the succeeding years, which should coincide with the expansion program
as sales is expected to increase.
Shown below are the specific milestones in the implementation of the
Marketing Strategy:
Milestones

Date

Budget

Approval of the Marketing Plan by


top management and allocation of
budget
Launching of revitalized website
Opening of accounts in social
networks like facebook and
multiply
Marketing concept development

Jan.
2011

March
2011

10,000

Owner/Manager
Marketing Officer

March
2011

50,000

Owner/Manager
Marketing officer
Ads Specialist
Owner/Manager
Marketing officer
Feature Writer
and Photographer
Owner/Manager
Marketing officer
Owner/Manager
Marketing officer
Hired promo staff

First print ad (Product feature with


write-up)

2011

Production of product brochures

Sept.
2011
Aug.
2011
onwar
d
2013
onwar
d
2011
onwar
d
2012
onwar
d

Participation in local trade fair


exhibits food exposition

Participation in foreign trade fair


(w/ government sponsorship)
Tour of 3-5 star hotels
restaurants in Metro Manila
Tour of Major
Destinations

Local

&

Tourism

150,000
25,000 per
event

Responsible
Dept./In-Charge
Owner/Manager
Marketing Officer

300,000 per Owner/Manager


fair
Marketing officer
Hired Promo Staff
5,000 per
Owner/Manager
tour
Marketing Officer
Hired Promo staff
50,000 per Owner/Manager
tour
Marketing Officer
Hired Promo Staff

45

Major Mall tours in Cebu, Baguio


& Davao

Review of Marketing Plan

April &
Nov.
2011
onwar
d
Every
end of
year

25000 per
tour

20,000

Owner/Manager
Marketing Officer
Hired Promo Staff

Owner/Manager
Marketing Officer
Finance Officer
Marketing consultant

B. Marketing Organization
The execution of the marketing strategy is the job of the marketing
manager in a firm. Dielles will therefore need to hire a marketing manager to
implement this plan. However, since it is still new in the business, the
owner/manager can designate himself as the primary person responsible
provided that he has the competence and the time.
Most of the activities that are beyond the competence of the firms present
staff like promo tours, marketing concept development, etc. will be outsourced
from advertising firms or competent agencies. Dielles can hire an advertising
firm to prepare the concept and have a local talented artist execute it.
C. Contingency Planning
The marketing plan will be reviewed every year. However in case of new
significant developments such as the offshoot of local competitors, market shift,
market opportunities and others, the plan will be revisited as they occur.
Since Dielles is expected to invest on new equipment for expansion, the
Return on Investment (ROI) and Payback Periods were computed. ROI for the
2011 equipment investment is 0.70 while the investment will be recouped in 8
months. The 2012 expansion will have an ROI of 1.66 and payback period is
computed at 7 months.

46

X.

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