I.

EXECUTIVE SUMMARY
RCRM Enterprises, a hardware shop is planning to expand their business through targetting a
branch in suburb places. Our product offers a wide range of construction materias to those who
benefit it more. Our primary objective is to establish a new branch and have the latest equipments
in order to improve our services to our customers and to meet their needs. Secondary objective is
to expand our marketing segment

II. CURRENT MARKETING SITUATION

RCRM Enterprises was established in April 28, 2002 followed by their second branch
Marjoshane Enterprises in the year 2008 and Vaño Construction in January 2015. The business is under
the construction industry specifically providing construction hardware materials. Based on the annual
survey of Philippine business and industry, there were 1,464 establishments in the formal sector of the
economy engage in construction activities. This resulted to a forecasted 9.22% CAGR (Compound Annual
Growth Rate) from 2016-2020 and a $47 billion growth in 2020 driven by the residential and
infrastructure markets based on a report of Timetric’s Construction Intelligence Center.

Therefore, there will be an increase in the demand of construction hardware

materials especially from the construction of roads and railways that compose of 46% in the total
establishments of 1,464 and residential activities that has a 33.9% of the industry’s total value by 2020
and thus will be the largest contributor to the Philippine construction industry in the next 4 years due
the expanding middle-class population, urbanization of underprivileged areas, as well as housing
projects for low-and middle-income groups. Competition will become more intense as pricing of hardware
materials increase based on a 1.5% increase construction materials wholesale and retail price index last July
2016. In Cebu, Vic Enterprises dominated the local scene as they are currently supplying

A. MARKET DESCRIPTION

RCRM’s market consist of consumers that directly purchase hardware goods like contractors,
construction companies, school resort, carpenters and households.

TARGETED SEGMENT CUSTOMER NEED USUAL PRODUCTS REQUIRED

CONSTRUCTION COMPANIES/ -construction materials for  Sand and Gravel
CONTRACTORS building different establishments  Cement
 Steel Rod
 Paint
 Angle bars
 Hardiflex
 Nails
 Corrugated Sheets

SCHOOL -construction materials for the  Paint

maintenance of school property  Plywood
 Plastic Varnish
 Door knob
 Padlock
  Hinges
 Safety Hasp
 Cement

RESORT -construction materials for  Sand and Gravel

maintenance of resort (e.g. sea  Hollow blocks
wall, huts and rooms)  Steel Rod
 Lipak
 Paint

CARPENTERS / REPAIRMAN -construction materials  PVC Pipe

necessary for building houses,  Paint
fixing and repairing damages in  Plywood
the house itself  Sand and Gravel
 Cement
 Nails

HOUSEHOLDS -construction materials for  Bulb

maintenance and beautification  Fancy door
of house  Decorative hollow blocks
 Tiles
 Paint


B. PRODUCT REVIEW

 Steel Rods- use to reinforce concrete or hold concrete in place through tension

currently the most profitable product in the store.

 Sand & Gravel- used to make concrete, for road construction, for mixing with asphalt, as
construction fill, and in the production of construction materials like concrete
blocks, bricks, and pipes.

highest capital expenditure and greater number of requirements that’s needed to comply.

 Paint- is the general term for liquid that is used to add colour to the surface of an object
by covering it with a pigmented (coloured) coating.

The highest price increase due to the expiration date of the product.

 Cement- the use of cement is in mortar and concrete in which the cement is mixed with
inert material known as aggregate.

One of the profitable products in the store.

  Hollow Blocks- is a large rectangular block used in building construction.

Two types of hollow block sold available for sale are machine-made or hand- made
HBW.

C. COMPETITIVE REVIEW

 L-IONIC ENTERPRISES –Newly establish hardware store that already dominated the
market of Poblacion
 ELVIC ENTERPRISES- one of the first hardware store in the area.
 PAROLA ENTERPRISES- dominated the market in Catarman specifically the Parola area
 ROMDES ENTERPRISES- garnered the market in Tayud.
 D.R.M ENTERPRISES- compromise the market in Capulay, Tayud
 E. CAGASAN ENTERPRISES- caters the customers from Calero.

III. THREATS AND OPPORTUNITIES ANALYSIS

A. STRENGTHS
1. Strong customer base. RCRM throughout the years has already established a group of
customers that patronize the products in the enterprise.
2. Up-to-date machinery. The company is the only hardware store that is in possession of a
backhoe machine that fastens the loading of sand and gravel thus efficiency in store’s
operations.
3. Security. The store is equipped with 24-hours CCTV camera that assures the customers
of the safety of the area while they are purchasing.
4. Experienced staff. The enterprise has vendors that have an experience of more than 10
years working in hardware stores.
B. WEAKNESSES
1. Lack of internal control. Due to the expansion of business, there is more difficulty in
handling store transactions thus forcing the owners to establish a computerized system
last February.
2. Too much sales credit. Most of the customers in RCRM Enterprises purchase goods on
account without corresponding credit terms given by the owners.
C. OPPORTUNITIES
1. Increasing demand on construction materials. With the continuous industrialization of
Liloan, many establishments, properties and buildings are being built within the
municipality.
D. THREATS
1. Increasing competition. Many hardware stores are being constructed due to the great
potential and profit that can be garnered from this industry.
2. Increased cost in construction materials. A not so subtle increase in most of the
construction materials especially those that are in-demand like steel rods, sand & gravel,
 cement and etc., has driven to the increase in price of the products. Customers may
want to purchase from another store due to expensive products.

IV. OBJECTIVES AND ISSUES

Primary objective is to expand our business through establishing branches, not located in highways or
main roads where most hardware stores are located, but instead build these branches in suburb regions
in the municipality.

Secondary objective, during the preceding year the business aims to establish a stronger marketing
segment especially and improving the delivery of the goods through purchase of additional heavy
equipments.

Final objective is to increase the sales of the business by 10% for the next 3 years.

ISSUES

The business’ primary issue is its difficulty on establishing a strong market segment
that will brought in greater profits for the business. Also, a suburb area in the municipality is currently
underdeveloped and only offers middle-class domestic households that can only attribute for a small
percentage in the total sales as of the case of our third branch. Also, the emergence of numerous
hardware stores in Liloan has narrowed our market of consumers that has reduced the sales of our main
branch to a 50% decrease in sales from year 2008 up to date.

V. MARKETING STRATEGY
RCRM’s marketing strategy is based on its store differentiation from any other stores
in the area. This is in terms of customer service, quality of products and price negotiation. The
primary consumer targets of the company are the contractors that bring in large amount of
revenues through projects that requires a budget no less than P50,000. The secondary consumer
targets are carpenters and repairmen, who regularly buy construction materials for building and
repairing a house, plumbing & electrical wiring installation and etc. Lastly, the tertiary consumer
target is the common households that purchase a variety of construction materials for the
maintenance and improvement of their homes.
The primary business target of RCRM is the construction companies that regularly
orders construction materials to use for their existing projects. The secondary business targets are
resorts and other businesses, like restaurants, catering services and events reservation business
that often order from the enterprise for the maintenance of their establishments, stores and
lands. Lastly, the tertiary target markets are the schools specifically elementary and high school
that purchase construction materials during school breaks for the maintenance and improvement
of school properties. They sometimes purchase construction materials for construction of new
buildings and facilities.
POSITIONING
Using business differentiation, we are positioning the business that offers high-quality products at
a lower price possible depending on the bulk of you purchase. We are also emphasizing that we
are a business that provides quick and satisfactory customer service through our up-to-date
machinery and our constant search for improvements in the service of our company.

PRODUCT STRATEGY
RCRM Enterprises alongside with its other branches are providing a wide variety of construction
materials product in high-quality in the lowest cost possible. The business will constantly bring-in
new construction products and materials that will be useful for all of its target market to make the
business as a one-shop stop where consumers can buy everything they need. All products are
displayed in a way that customers, especially those who don’t know the technical term or don’t
actually know the proportions of what they are going to buy, will be able to see and them. We also
let our customers talk with experienced staff to help decide what appropriate construction
materials should they use. The business also provides free delivery.

PRICING STRATEGY
In terms of price, RCRM enterprises with its other branches provide discounts to its regular
customers and customers that buy in bulk. The customer can also negotiate with price of the
products. We also provide the customers with a price list of all the products in the store.

PLACE
RCRM Enterprises is planning to expand their business through establishing other branches in
suburb areas where there will be a greater common household target as well as lesser
competition. Aside from direct purchase where customers go directly to our stores, we are also
catering to orders via telephone or landline.

PROMOTION
The company usually promote through reference from its customers to other consumers. The
enterprise is starting to post advertisements through means of posters in public places to
advertise, emphasizing customer service due to up-to-date equipments and free-of-charge
delivery and stating that our stores are one-stop shops where you can buy everything you need in
high-quality and smallest price possible.

MARKETING ORGANIZATION
 ROBERTO CAGASAN
Owner

CHRISTINE CAGASAN
Manager

CHRISTINE CAGASAN TONYA CAGASAN VIVENCIA VAÑO

RCRM Store Manager/Cashier Marjoshane Store Manager/Cashier Vaño Store Manager/Cashier

Storekeeper Storekeeper Storekeeper Driver Storekeeper Driver

Driver Driver Truck boy Truck boy

Truck boy Truck boy

VI. ACTION PROGRAMS

This action program will start in the year 2017.

 January. Expanding the business’ market segmentation through establishing a deal among
schools that they will purchase from our stores for the materials needed for school
improvement. Also, contact other businesses in the area that are interested in purchasing
construction materials from our stores.
 February. Map potential locations for the next branch, highlighting the best location where
there are current subdivisions or ongoing real estate developments in the area.
 March. Canvass from different stores offered price, features and condition of second-hand
lift trucks that will be useful for transferring and loading cement, hollow blocks and etc.
 April. Purchase the lift truck by this time. Launch a new advertisement featuring a more
improved service by showing the additional lift truck with the same array of product plus new
set of construction materials needed.
 May. Hire additional staff to facilitate the surge of transactions during the most profitable
period in the business.
 June. At this period, this is at its lowest profit performance for the business. The stores will
now purchase and stack inventory for at this time, products and construction materials can be
purchase at a low cost.
  July-September. Conduct repairs and improvements in all branches. Routine check-up, repairs of
delivery trucks as well as the heavy equipment, finally, determining the final location for fourth
branch of the business.
 October. Start of the construction of the new branch. At this time, sales of the store are
increasing due to semestral break.
 November-December. Conduct the yearly survey of customer satisfaction and rating for the
business and doing the canvassing for schools. Also during Christmas, promos and freebies will
be given to our loyal customers.

VII. BUDGETS
The allotment of this budget is for the whole year. The basis for this is due to the amount of
capital required to purchase the following construction materials. The budget is estimated to be
range from P300,000 and above. Actual figures were not disclosed by the owner.

BUDGET FOR PURCHASE OF CONSTRUCTION

MATERIALS
SAND AND GRAVEL
5%
5%
STEEL RODS AND OTHER STEEL
10% BARS
35%
CEMENT

20% HOLLOW BLOCKS

PAINTS
25%
OTHER CONSTRUCTION MATERIALS

VIII. CONTROLS
We are tightly looking at our marketing controls such as; how will we know if we’re running out of
inventory, how are we going to monitor our employees and how are we managing the credit
balances of our customers. As of the first marketing control, we will know when to order another
stocks from our suppliers when our product inventory is running low (e.g 5 more stocks are left,
this only applies to highly saleable products with low prices), on the 2nd marketing control, we
monitor our employees by having a daily attendance and of course with the help of today’s
technology we places CCTV cameras around the shop in order for us to see what they are doing.
And or the last marketing control, we asked our debtors to pay their liabilities weekly. Although
there are really people who don’t pay their debts properly but we are making sure those debts will
not affect the overall sales of the business.