A WINNING AND COMPREHENSIVE MARKET STUDY FOR THE ESTABLISHMENT OF

MINI STOP CONVENIENCE STORE IN COMMONWEALTH, QUEZON CITY.

Prepared by: Jandel A. Gimeno

Form of Business

- Sole Proprietorship (Franchising)

Type of Business- Merchandising

Type of Acquisition- Franchise

Target Markets (Key Markets Served)

1. Resident/Residential Markets- These are the group of people who are residing in Tandang Sora,

Quezon City and nearby areas.

2. Working Professionals- These are the group of people who are working in Tandang Sora,

Quezon City and nearby areas.

3. Commuters- These are the group of people who are staying in the area waiting

for PUVs and/or people who recently dropped near the store location.

4. Students- These are young group of potential target markets who usually pass

or drop by near the store location.

5. Miscellaneous Target Markets- These are the other unspecified group of potential target markets

who might in turn be actual customers for the store.

Executive Summary

Mini Stop is known to be one of the largest and longest running chains of convenience stores in the Philippines which primarily offers wide variety of convenience goods additional services to its customers and operates twenty-four (24) hours a day. It has been known on its participation in the intensive distribution strategy performed by different local and multi-national manufacturing companies to deliver their products to the right customers at the right time, in the right place and with the right quantity and condition.

The store will be situated in Tandang Sora near bus/jeepney stops where the proprietor of the business looks forward on the large number of identified target markets who are present in the nearby area. As of May 2015, there are two (2) existing convenience stores and one (1) drugstore that offer exactly the same products near the proposed store location. The business will enter into competition by means of market penetration where the business will offer the same products as what the competitors offer to the present markets.

It will respond to the increased competition by means matching the competitors’ operations as it will also operate on a 24/7 store-schedule basis. Likewise, it will boost its sales through offering extra products which are distinct against what its customer traditionally offers to the local markets. As to existence awareness, it will conduct an intensive advertising campaign throughout the area by means of displaying signage and through other franchise’s existing sales promotion campaign.

On the first month of its operation, the business will focus more on customer acquisition and promotional activities. By the first quarter of its operation, the business desires to capture at least twelve (12) percent of the competitors’ actual market share and to increase its sales by at least six (6) percent based on the store’s acquired market share. Toward the end of the semi-annual period, the business desires to achieve high volume of market retention rate from its current and previous customers either via modified or straight re-buys purchase process. As it reach the first year of its operation, the store will conduct its annual evaluation so as to ensure that all marketing, operations and financial activities done are implemented according to its detailed plan and to determine the best course of action that will be most efficient toward achieving its established goals and objectives.

Store Location

The store is proposed to be situated at #637 Tandang Sora Avenue, Brgy. Culiat, Commonwealth, Quezon City having the following considerations as its advantages.

1. It will be situated beside the public national highway near PUV stops and tricycle terminals where large numbers of commuters are present.

2. It will be best accessed by the residents of Tierra Bella Subdivision and other nearby subdivisions and villages where large numbers of potential markets are present.

3. It will be situated in a very viable site where many commercial establishments are present.

General Market Overview

The proponent of the study conducted an on-site market survey to gather necessary market-related information. After initial surveillance, the following are the data gathered based on initial observation in a nearby convenience store.

1. Customers tend to make a purchase in a convenience store basically to satisfy their hunger.

2. Customers tend to purchase in a convenience store secondarily for refreshments purposes.

3. Customers tend to make a purchase in a convenience store for impulsive and emergency purposes.

4. Customers tend to make a purchase in a convenience store with an average budget for spending worth fifty (P50.00) pesos.

I. Marketing Objectives

1. To satisfy the demand of the target markets for the existence of a convenience store in Tandang Sora, Quezon City.

2. To execute market penetration by means of offering convenience goods to its customers.

3. To help the franchise in capturing and serving larger portion of target markets while increasing its market share against its competitors in the industry.

4. To help manufacturers and service providers reach their customers through its participation in the intensive distribution strategy performed by those companies.

Market Targeting and Segmentation

Age of the Respondents

The chart below shows the age ranges of the respondents based on actual field study who frequently make a purchase in a convenience store on a daily basis.

Total0

255075

100125150175200

Count of 15-17Count of 18-20Count of 21-23Count of 24-26Count of 27-29Count of 30-32Count of 33-35Count of 36-38Count of 39-41

The primary data shows that forty-eight (48) of the respondents of twenty-four (24) percent of the total sample size belong to age range of eighteen to twenty (18-20) which signifies that there is a large potential for the proposed business to serve late teens and early adult segment of target markets. As to age segment, this has been observed as the most active market segment in the said location.

Following this segment is the age range from twenty-four to twenty-six (24-26) which has recorded a total of 36 respondents or eighteen percent of the total sample size which signifies that these group of potential target markets are expected to be the second highest segment as to sales contribution.

Another significant age range which has been observed to be one of the most active segments is group of target markets who belong to age range of twenty-one to twenty-three which has total observation of thirty-one (31) respondents or 16.5% of the total sample size which signifies to be one of the most active market segments during the field study.

Other observed age segments which are considered to be active customer for a convenience store are those who belong to the range of fifteen to seventeen (15-17), ages twenty-seven to twenty-nine (27-29), ages thirty to thirty-two (30-32) and ages thirty-three to thirty-five (33-35) with

quantitative observations of twenty-four (24), twenty-one (21), sixteen (16) and twelve (12) respectively.

However, people whose ages range from thirty-six to thirty-eight (36-38) are observed to be the least active in terms of purchase in a convenience store with both six (6) respondents or three (3) percent of the total sample size only.

Gender of the Respondents

The chart below shows the gender of the respondents who was part of the total respondents during the field study.

The survey shows that one hundred twenty-six (126) respondents or sixty-three (63) percent of the total sample size are male while only seventy-four (74) or thirty-seven (37) percent of the total sample size are female.

Gender0

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Count of MaleCount of Female

Market Segment as to Type of Visit or Purchase

The chart below shows the market classification or segment according to type of visit or purchase in a convenience store.

The result of the survey shows that eighty (80) respondents or forty (40) percent of the total sample size belong to “Working People” category.

This data shows there is a high and dependable rate of market potential for the proposed business as it will be located near commercial establishments where large number of working professional are present and highly observable. It is followed by sixty-four (64) or thirty-two (32) percent of the respondents are students near the proposed location of the store.

This signifies that these groups of target markets are expected to be the second highest source of sales contribution as there are existing schools near the proposed site of the convenience store. This segment is hereby followed by the “Resident Markets” with thirty-one (31) or 16.5 percent of the total sample size. Least observed are the group of people under “Commuter” category with only twenty-five (25) respondents or 12.5 percent of the total sample size.

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75

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175

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Count of ResidentCount of StudentCount of Working PersonCount of Commuter

Competitors’ Analysis

The proposed business will enter the marketplace facing the existence of its competitors in the said location namely the 7-11 as its direct competitor, another branch of Mini Stop situated at the ground floor of the opposite building and the Mercury Drug Store as its indirect competitor. To further evaluate the details of its competitors’ market potential, the following

information listed based on initial ocular inspection and based on actual data gathering procedure.

7-11The existence of this convenience store is considered to be the most

serious threat in the establishment and operation of Mini Stop as it has dominated the market share in the said area serving wide coverage of target markets with its convenience goods and added services. It is estimated to be approximately 100 meters away from the proposed site and has a greater advantage as it situated at intersection beside the Tandang Sora Flyover where large numbers of commuters are present. As per May 2015 market survey, it was found out that eighty six (86) percent of the respondents prefer purchasing in this store over Mercury Drug Store as it is considered to be more accessible for the residents of Brgy. Culiat in Tandang Sora Ave., Quezon City.

Mercury Drug Store

The existence of this drug store is considered to a minor threat in the establishment and operation of Mini Stop as it offers primarily medicinal products and is located on the opposite lane of Commonwealth Avenue.

Savemore

This has been mentioned by the respondents as they prefer buying goods in a supermarket.

Watsons

This has been mentioned by the respondents as it was figured out that this is located near their offices.

The survey reveals that the 7-11 is the most threatening competitor as it was mentioned by one hundred twenty-eight (128) respondents or sixty-four (64) percent of the total sample size. This will definitely hit a serious impact to the proposed business due to its very strong market positioning, positive brand recognition and aggressive advertising activities while maintain high rate of customer acquisition and retention. Being situated near the footbridge and PUV stop, 7-11 holds on its competitive advantage against the potential existence of new competitors.

To show intense market competition, aggressiveness and to challenge 7-11 in terms of brand awareness, Mini-Stop has been figured out by one hundred twenty-four (124) respondents or sixty-two (62) percent of the total sample size which roughly matches the 7-11 as to preferred convenience store by the respondents. This data reveals that there is strong chance for the proposed convenience store to do business and to achieve high market potential rate.

Far behind these two store giants is the Family Mart. With less than five years of existence in the market, this store has shown its ability to compete against the two convenience stores through market penetration while establishing its market niche.

For some reasons, Mercury Drug Store has been considered to be part of its competitors as it offers the same product the proposed store will have to offer.

Total0

20406080

100120140160180200

Count of 7~11Count of Mini-StopCount of Family MartCount of Mercury Drug StoreCount of SavemoreCount of Watsons

Factors to Consider when Visiting or Purchasing in a Convenience Store

The chart below shows the respondents’ factors to consider when purchasing in a convenience store. To better determine the demands of the customers, the following figures are being extracted for a precise market targeting and segmentation.

The result of the survey shows that “Availability of the desired Product” is the top factor considered by customers as they ask for product availability and time utility. This has been figured out by one hundred thirty-

four (134) respondents or sixty-seven (67) percent of the total sample size. Next to it is the “Store Lay-out” having one hundred nineteen (119) respondents or roughly sixty (60) percent of the total sample size.

Another significant factor that the business owner must focus is the “Customer Service”. This might include the service pacing, courtesy to the customers and efficient customers’ time utility. Other considerations figured out are “Price” of the product, “Availability of an alternative”, and “distance” with eighty-three (83), sixty-eight (68) and seventeen (17) of the respondents or forty-two (42) percent, thirty-four (34) percent, and with roughly nine (9) percent respectively.

Other noted concerns are the availability of payment service and free internet access inside the convenience store.

Total0

20406080

100120140160180200

Count of Availability of the productCount of AlternativeCount of PriceCount of DistanceCount of Store lay-outCount of Customer ServiceCount of Payment ServiceCount of Wi-Fi

Frequently Purchased Product in a Convenience Store

The chart below shows the respondents’ frequently purchased products. The result of the survey shows that one hundred ninety-three (193) of the respondents or roughly ninety-seven percent of the total sample size prefer purchasing soda drinks/beverages in convenience stores. This data signifies that there is strong potential for the offering of these goods to the market in this area. It is followed by junk food category having one hundred thirty-six (136) respondents or sixty-eight (68) percent of the total sample size. This data suggests that offering wide variety of junk food in this area is highly viable and considered to be the second contributor as to sales forecast.

Following the two categories, hotdogs/sandwiches are claimed to be the third most frequently purchased product in a convenience store having one hundred seven (107) respondents or roughly fifty-four (54) percent of the total sample size. This product category is observed to be purchased together with beverages.

Product categories with the least observations are hygiene items and rice meals with sixty (60) and fifty-eight (58) respondents or thirty (30) and twenty-nine (29) percent of the total sample size respectively.

Other products mentioned include cell phone load, cigarettes, ice creams and other forms of payment services.

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Count of Rice MealCount of Hotdogs/SandwichCount of Junk FoodCount of Hygiene ItemsCount of Soda Drinks/Beverages

Respondents’ Frequency of Purchase in a Convenience Store

The chart below shows the respondents’ frequency of buying in a convenience store on a weekly basis to determine the possible customer traffic inside the store. The results of the survey are being extracted and the following are figured out.

One hundred eleven (111) of the respondents or roughly fifty-six (56) percent of the total sample size claimed that they purchase goods in a convenience store 3-4 times a week. This frequency has the highest observation which shows.

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Count of 1~2Count of 3~4Count of 5~6Count of 7

Respondents’ Preferred Budget When Purchasing in a Convenience Store

The chart below shows the respondents’ preferred budget when purchasing in a convenience store. The survey shows that eighty-nine (89) of the respondents or roughly forty-five (45) percent of the total sample size claimed that their preferred budget when purchasing in a convenience store range from P41.00 - P60.00 pesos. Next to it is the budget range of P21.00 – P40.00 which was claimed by forty-one (41) of the respondents or roughly twenty-one (21) percent of the total sample size.

Following the budget rages, thirty-two (32) of the respondents or sixteen (16) percent of the total sample size claimed that their preferred budget range from P61 – P80.00. However, the frequency with the least observations fall from the ranges of P1.00-P10.00 and P100- above with six (6) and seven (7) respondents or about three (3) percent each.

These numerical figures signify that every segment has their budget preference according to their socio-economic status, residence, age, lifestyle and to a name few.

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Count of P1-20Count of 21-24Count of 41-60Count of 81-100Count of 101 - above

Respondents’ Perception for the Establishment of a new Convenience Store

The chart below shows the response and perception of the respondents in case a new convenience store will operate near the location.

The survey shows that one hundred sixty-eight (168) respondents or eighty-four (84) percent of the total sample size have positive feedback on store operation and claimed that they will make a purchase in case a new convenience store will start to operate near the area.

However, twenty-nine (29) of the respondents or roughly fifteen (15) percent of the total sample size are undecided whether to make a purchase or not. Least observation was noted as three (3) respondents or roughly two (2) percent of the total respondents stressed out that they will not make a purchase in case a new convenience store sill start to operate near the area.

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Count of YESCount of NoCount of Undecided

Respondents’ Belief as to the Ability of the Convenience Store to Provide Customer Service to its Target Markets

The chart below shows the perception of the respondents on the store’s potential to meet customer satisfaction. The survey shows that seventy-five (75) respondents or roughly thirty-eight (38) percent of the total sample size “agree” that the establishment of a convenience store will create customer satisfaction. It is followed by seventy-four (74) respondents or thirty-seven (37) percent of the total sample size “strongly agree” that the establishment of a convenience store will create customer satisfaction. These figures are considered to be essential as this claim supports the feasibility of the study.

Noted also is the neutral belief as thirty-two (32) respondents or sixteen (16) percent of the total sample size stressed out that they “neither agree or disagree” with claim that the establishment of a convenience store will create customer satisfaction.

However, there are respondents who believe that there is no need for the establishment of a new convenience store and it will not create customer satisfaction as twelve (12) of the respondents or six (6) percent of the total sample size “disagree” and seven (7) respondents or roughly four (4) percent of the total sample size stressed out that they “strongly disagree” that the establishment of a convenience store will create customer satisfaction.

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Count of S ACount of ACount of N A or D ACount of D ACount of S D A

Respondents’ Response as to Store Referral

The chart below shows the respondents response as to whether they will refer the store or not.

The result of the survey shows that one hundred sixty-two (162) respondents or eighty-one (81) percent of the total sample size claimed that they will “refer” the store to their friends. This figure signifies strong potential for buzz marketing. However, there are respondents who are “undecided” whether they will refer the store or not as they cannot figure out the potential customer service of the proposed store. Least observation was gathered and twenty-two (22) of the respondents or eleven (11) percent of the total sample size claimed that they will “not refer” the store to their friends.