Marketing

Only available on StudyMode
  • Download(s) : 122
  • Published : April 26, 2013
Open Document
Text Preview
I. EXECUTIVE SUMMARY

The shoe industry of Marikina is a cottage industry that traces its roots to more than a century ago. The shoe industry in Marikina was started by Laureano Guevarra, popularly known as Kapitan Moy in the 1887. What then seems to be a very small livelihood business had become a municipal industry allowing the local families of Marikina earn their livelihood.

Over the years, the Marikina shoes has been only concentrated on the local market, centrally it is distributed in the Greater Manila Area, since by geography it is the nearest market. The Marikina Shoes though patronized by many Filipinos remain to earn only a very meager portion of the shoe market in the country and even in the National Capital Region where it concentrates its distribution. The lowering of tariff in the late 90’s had hurt the industry too much that it has drastically decline in terms of production as well as the number of shoe factory has decreased as well from a total of 513 in 1994 to only 248 in 2004 (AJ Scott, The Shoe Industry of Marikina City, Philippines: A Developing-Country Cluster in Crisis, 2005). Besides the tariff decrease, a number of reasons were also enumerated by AJ Scott in his report among others are the poor quality of shoes that is produced by the Marikina shoemakers.

TRADE LIBERALIZATION AND THE DEMISE OF THE LOCAL SHOE INDUSTRY

The demise of Philippine-made shoes is a result of decades of government neglect and intensified by just a few years of aggressive liberalization under the World Trade Organization.

Based on the study conducted by JP Andaquig of IBON which features a 40 year old shoemaker Mr. Johnny Gaudia from Marikina who have been witnessed of the prestige and fall of the Philippines Shoe Industry. It was disastrous; Gaudia's experience is neither new nor unique. Since the 1990s, footwear groups in Marikina and other areas have been warning against the influx of cheap goods from China, Korea, Taiwan and other countries due to liberalization, which intensified when the country became a member in 1995 of the World Trade Organization (WTO).  

True enough, shoe imports have been arriving in increasing volumes year after year. From 1997 to 1999, the country imported an average of 38.5 million pairs of shoes. By 2001-2003, the volume zoomed 56 percent to 60.2 million pairs.  

And this only covers legally imported shoes. Smuggling has also reportedly become rampant although government has yet to release actual figures of the extent of the problem.  
Nevertheless, the impact has been disastrous for local shoemakers, particularly in [pic]Marikina and Laguna. Almost a century of rich shoemaking tradition in Marikina was lost when many small manufacturing firms closed down, retrenched workers, sold Chinese imports themselves or entered into exploitative subcontracting arrangements with foreign corporations.  

From 513 registered manufacturers in 1994, there are only 145 remaining in the country's shoe capital. More than 600,000 shoe workers lose their jobs every year and average production has dwindled from 105,000 pairs of shoes a year in 1994 to 42,000 pairs in 2003.  

The downswing in demand for locally-made shoes is apparent as Filipinos continue to flock to flea markets and tiangges in Greenhills and other commercial centers, where an ordinary pair of counterfeit Nike shoes can go for as low as P300.  

Due to the cheap price, only a few would purchase more expensive locally-made leather shoes even if they are marketed as made in Marikina. Add to this Filipinos' continuing preference for foreign shoe brands such as Skechers, Nike, Adidas, and Converse, most of which are subcontracted by their mother companies to factories in China and other countries with low labor costs

LAKAD SHOE COMPANY: RESPONSE TO THE PHILIPPINES SHOE INDUSTRY DOWNFALL  
In response...
tracking img