MARKETING PROGRAM

The marketing program consists of the companys description, mission and goals,
competencies, target market, and its schedule. The company produces cellulose acetate
butyrate obtained by anhydric esterification of peanut shells. Cellulose acetate butyrate or
CAB is commonly used as a binder to paints. With the aid of the program, the company aims
to carry out specific actions to interest potential consumers and clients and persuade them
to buy the product and/or services offered.

Company Description

The company was established to produce a high quality cellulose acetate butyrate,
which conforms to its standard properties, that can be used as one of the raw materials to
other manufacturing industries. The product is obtained from peanut shells since it is known
to have aflatoxin, a cancer causing fungal contaminant. To separate the cellulose from the
other components of the raw material, the peanut shell is subjected to alkali digestion. The
obtained cellulose is then esterified to link the acetyl and butyryl esters via anhydric
esterification to produce cellulose acetate butyrate.

The companys production will have ____ market share and will have the plant rated
capacity of kg/year? that will produce kg/day.

Marketing Program Objectives

The company set the following objectives as a guide in constructing and outlining the
marketing program

1. To enter the local cellulose acetate butyrate market acquiring ____ share as a sign
that the manufacturing company is producing a profitable product.
2. To advertise the qualities of the product and compete in the market complying the
needs of the consumers resulting to gain regular customers; and
3. To have regular industrial consumers of cellulose acetate butyrate as a sign of quality
services to different consumers.

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Mission and Goals

The company sets its goals to be the leading producer and marketer of cellulose
acetate butyrate from biomass derived raw material which are the peanut shells. In a global
scale, the company wants to be known for its designed process for producing cellulose
acetate butyrate.

During the next five years, the company seeks to achieve the following financial and
non financial goals:

Financial Goals

1. To earn finances to pay the invested capital;

2. Fully return the invested capital; and
3. Boosting sales by market share growth.

Non financial Goals

1. Increase the number of consumers through promotional strategies;

2. Advancement and development of the product; and
3. To be recognized as one of the trusted manufacturers of cellulose acetate
butyrate in the country.

Core Competencies

The company aims to use its core competencies to achieve a sustainable competitive
advantage in which competitors cannot provide the same value to consumers in comparison
to the way the company does. The company has developed three points for core
competencies in which (1) the company offers technical grade cellulose acetate butyrate
whose properties conform to the standards and is recognizable among consumers; (2)
creates a sense of community among consumers who purchase the product; and (3)
developing a reputation among retailers as a reliable manufacturer, delivering the requested
quantity of product on schedule. The company aims to build on these competencies through
marketing efforts that increase the number of products offered as well as distribution
outlets.

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 By forming strong relationships with consumers, retailers and suppliers of derivative
products through a well defined marketing strategy, the company believes that it can
create a sustainable competitive advantage over its competitors.

Competitors in the Outdoor Market

The company will be competing outside the country. There are no local producers of
cellulose acetate butyrate in the Philippines. The country only imports the supply of the
chemical. By 2022, on a global market, it is expected that the market for this commodity is
estimated to grow from 672.8 million USD in 2016 to 997.8 million USD. In 2016, Asia
Pacific dominated the market with a volume share of 48.8%. The rising consumption of fast
moving consumer goods with the developing textile and electronics sector in the majority of
the countries are some of the key reasons which have resulted in a rising use of cellulose
acetate butyrate over the past few years. This trend is likely to continue over the forecast
period. China led the cellulose acetate butyrate market in Asia Pacific generating revenues
worth USD 133.4 million in 2016. The increasing use of print inks and coatings in the textile
industry is expected to result in influencing the growth of cellulose acetate butyrate market
positively.

Eastman Chemical Company dominated the production of cellulose acetate butyrate

creating a monopolistic nature in the global market. Other key players with a global
presence include Mitsubishi Rayon, Diacel, and Celanese. These companies distribute their
products through tie-ups with authorized dealers to ensure quality and seamless supply
demand.

TARGET MARKET

The main target market of the company is the paint and coating industry. The
industry uses cellulose acetate butyrate as a binder and an additive to paints and coatings.
The company also sets its eyes on the manufacturers of printing inks, and lacquers.

In the Philippines, there are 23 paint manufacturers that possibly consumes

cellulose acetate butyrate in their product. Other industries such as inks, lacquers, and

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cosmetics can be a huge market for the company and will surely give way for the company to
enlarge the scope of the target market.

Marketing Program Flowchart

The following illustration outlines the details of the proposed marketing mix for the
marketing strategy of the company.

Packaging Delivery
Product Schedule
Label/MSDS Transportation
Methods

Prouct Distribution
Strategy Strategy

Pricing Promotional
Strategy Strategy

Price Advertisements
Discounts Online Websites

Figure
Product Strategy

The company will offer technical grade cellulose acetate butyrate to industrial consumers
that use cellulose acetate butyrate as raw material for their production. The companys
product strategy revolves around the packaging design of the product that will be delivered
to the customers. It will also contain the Material Safety Data Sheet (MSDS) and other safety
labels of the product.

Distribution Strategy

The distribution strategy of the company will be based on the order information of the
consumers. There are two ways on how to order the product: (1) the first is by phone or fax

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which will be entertained by the customer service representative; (2) and the other one is
through online by visiting the companys website. After all orders have been settled, the next
step is the payment method. The payment can be in the mode of cash, cheque, or credit
card. One can pay directly to the companys bank account or can proceed to the companys
accounting office. After the production, the product will be checked for quality assurance to
make sure that the product conforms to the standards. Then, the product will be packed and
stored. The stored products will be checked for inventory and delivery schedules, and after
checking, the product is now ready to be shipped to the consumers.

Promotional Strategy

Communications between the consumers and the company about its products have various
ways. Information about the company is available via the companys website, direct
mailings, and in person. Differentiating the companys products from its competitors is one
of the promotional agenda of the firm. Sales promotion and public relations will make up the
majority of the companys promotional strategy. The staff works with retailers to offer short
term sales promotion tied to events.

Pricing Strategy

The price of the companys product aims to compete with other players in the market. The
company practices Value Pricing so that customers feel comfortable, and can choose
freely the right amount or quantity of the product they want. The company will price
competitively, but offers a good value against its competitors.

CONSUMING AND COMPETING INDUSTRIES

Consuming Industries

ADMS Chemical Inc. manufactures and offers Cellulose Acetate Butyrate to supply
the needs of paint and coating, lacquer, printing ink, nail cosmetics and other industries.
These vast applications of the product conform to the existing standard and comparable to
the commercial grade.

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 The companies listed in Table are some of the manufacturing industries that use
Cellulose Acetate Butyrate in their products. Their consumption of Cellulose Acetate Butyrate
serves as marketing revenue to promote and sell the companys product.

Table: List of Several Consuming Companies

Cellulose Acetate Butyrate

Company and Contact Details Industry
Application
Cellulose acetate butyrate
combines the good resistance to
ultraviolet light and the heat
Asian Coatings, Phils., Inc. stability of cellulose acetate with
Locations:48 Amang Rodriguez the good moisture resistance and
Ave., Santolan,
Pasig City, Metro Manila 1610 the dimensional stability of
Tel. Nos.: (632) 682 8888 Paint and Coating cellulose butyrate. The presence of
(632) 645 0807
(632) 645 8750 butyrate chains in the ester also
(632) 645 8744 results in a higher degree of
Fax: (632) 645 0801
Email: info@asiancoatings.com flexibility, wider solubility, and a
much broader range of resin
compatibility than is obtainable
with cellulose acetate alone.

The butyrate or the cellulose

ADD Research Paints &
Chemicals Inc. acetate butyrate (CAB) lacquer is
Head Office:
the non yellowing lacquer. It is a
167 A. Bonfacio Avenue
Taong, Marikina City 1803 special lacquer that is developed to
Metro Manila, Philippines
answer the problem of yellowing in
Telephone: Lacquer
(632) 997-3206 the nitrocellulose system finish. It
(632) 997-3208
is formulated by using the cellulose
(632) 997-3210
(632) 997-3212 to 14 acetate butyrate resin as the main
Telefax:
ingredient. Cellulose acetate
(632) 997-3178
Website: butyrate resin is cellulose (wood
www.addpaints.com

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 Email: fibers) that is processed by acetic
acid and butyric acid. The cellulose
customerservice@addpaints.com
acetate butyrate coating has high
resistant to the UV light. It is
simple, one component and quite
easy in application as the nc
coating, but its film won,t be
yellowing.
Chic Centre
Location:137 CFC Commercial
Building Cellulose Acetate Butyrate acts as
Pasig Boulevard, Pasig City
1600 Philippines Cosmetics an emulsion stabilizer, film former,
Contact Number: 671-50-72 and viscosity increasing agent
Telefax: 6715046
Email:
chic.marketing@chiccentre.com

Competing Industries

There are no local companies/manufacturers that produce cellulose acetate butyrate

in the Philippines, however there is a possible competitor. This company imports cellulose
acetate butyrate and sells it in the country. Industries in the Philippines who uses cellulose
acetate butyrate mostly imports the product from other countries. Presented in Table are
properties of ADMS Chemicals Inc. compared to other leading company in terms of the
products grade, appearance, and applications.

Table: Competitors vs ADMS Chemicals Inc.

COMPANY GRADE APPEARANCE APPLICATIONS

Cellulose acetate
Butyrate is used as a
ADMS Chemical Inc. Technical Grade precursor, or raw
material for other
industries

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 Chemrez
Cellulose Acetate
Technologies, Inc.
Address: CHEMREZ Butyrate is used in
TECHNOLOGIES, INC.
coatings, inks,
65 Industria Street
Bagumbayan, lacquers, nail care,
Quezon City Technical Grade
osmotic drug
1110 Metro Manila,
Philippines. delivery, tableting,
Telephone: (+63-2)
pharmaceutical
635-0680
Facsimile: (+63-2) excipient.
637-6099

In a global perspective, there is a monopolistic competition in producing the cellulose

acetate butyrate, wherein Eastman Chemical Company leads its production. With this, it is
not difficult to penetrate the market.

In the Philippines, with this as the only supplier of cellulose acetate butyrate in the
country, the cost of starting the business is high because the number of entering firms is
low, that is why there will be a monopolistic nature for which the demand for the product will
be supplied by 2 sellers. Thus, ADMS Chemical Inc. may have little or no difficulty of
competing in the market.

PRODUCT DISTRIBUTION

Cellulose Acetate Butyrate is one of the important industrial chemical as it is a

chemical intermediate that is employed in the production processes of many industrial and
consumer products. This commodity has many applications and this is distributed to
different industries.

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 Cellulose Acetate Butyrate Markets (%)

20%
Paint and Coating

45% Lacquer
10%
Ink
Others

25%

SOURCE: HEXARESEARCH

From the figure above, 45% of the commodity goes to the paint and coating industry
where it is used as a binder and additive to the product. 20% goes to Other different
industries such as cosmetics industry, and plastic industry. The lowest percentage of
consumer industry goes to the ink industry where only 10% of the market is consumed by
them.

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