College of Engineering
Department of Industrial Engineering
Case 2: Choco Candy Company
Chua, John Emmanuel F.
Cruz, Anton L.
Santiago, Michelle Victoria V.
Tan, Marvin Nathaniel L.
Dr. Eppie Clark
October 12, 2010
The target market specified by the company is within the following specifications: * 18 to 35 years old
* National Capital Region
* College students and young professionals
* Alcoholic drinkers
* Classes A, B and C (at least Php50,000 monthly income of the family) * “Gimickeros”
The population which Choco-Tipsee would be marketed to is the population of 18 – 35 year old people. From the data gathered by Andre and Chubby, this amounts to a total of 3,444,093 people out of 9,454,040 living in the National Capital Region.
Income Bracket Factor
Specified by the company is that their target market would be the A, B and C classes. From the data gathered, we can see that A (109), B (89) and C (97) classes together make up 295 of the 448 people in the survey who are part of the target income bracket.
The company has specified that 42% of the market would purchase Choco-Tipsee from any of its distribution channels.
Alcohol Consumer Factor
It is noted by Mr. Aberya that in the region, there are only 6% of the population who are non-alcoholic.
Demand Factor=Population Factor ×Income Bracket Factor ×Channels Factor ×Alcohol Consumer Factor
Demand Factor=3,444,0939,454,040×109+89+97448×0.42×(1- .06)
Target Market Size for 1995
Target Market=Population ×Alcohol Factor ×Income Bracket Factor 3,444,093×(1-0.06)×109+89+97448
Target Market1995= 2,131,801
Projected Target Market Size and Demand for 2001-2005
Table 1: Projected Target Market 01 - 05
Year| Given Population| Demand| Target Market|
2001| 10,582,160 | 997,742 | 2,375,577 |
2002| 10,758,840 | 1,014,401 | 2,415,240 |
2003| 10,935,524 | 1,031,059 | 2,454,903 |
2004| 11,112,687 | 1,047,763 | 2,494,674 |
2005| 11,289,368 | 1,064,422 | 2,534,337 |
The demand projections were computed using the demand factor calculated in the former sections of the paper. The computations are listed as follow:
Demandn=Demand Factor× Given Population
Demand2005=.0943× 11,289,368= 1,064,422
For the target market, the computations were not taken by multiplying by the demand factor. Rather, the channels factor was taken out of the equation. The computations for the values are as follows:
Target Marketn=Population ×Alcohol Factor ×Income Bracket Factor
Target Market2001=10,582,160 ×1-0.06×109+89+97448=2,375,577 Target Market2002=10,758,840 ×1-0.06×109+89+97448=2,415,240 Target Market2003=10,935,524 ×1-0.06×109+89+97448=2,454,903 Target Market2004=11,112,687 ×1-0.06×109+89+97448=2,494,674 Target Market2005=11,289,368 ×1-0.06×109+89+97448=2,534,337
2001 – 2005 demand with buyer frequency
The survey provides details of how many pieces of the candy is the target market is more or less going to purchase.
An example of the computation is below:
Table 2: 2001 Demand Frequency Projections
2001| 8 Pieces| 12 Pieces| 16 Pieces| 20 Pieces|
Twice a week| 5,659| 4,484| 1,744| 3,950|
Once a week| 99,970| 79,221| 79,221| 79,221|
Twice a month| 272,044| 272,044| 105,795| 239,657|
Table 3: 2002 Demand Frequency Projections
2002| 8 Pieces| 12 Pieces| 16 Pieces| 20 Pieces|
Twice a week| 5,753| 4,559| 1,773| 4,016|
Once a week| 101,639| 80,544| 80,544| 80,544|
Twice a month| 276,586|...