UNIVERSITY OF CALOOCAN CITY

COLLEGE OF BUSINESS AND ACCOUNTANCY

FINANCIAL MANAGEMENT

CHAPTER 3

MARKET STUDY

Objectives of Market Study:

The objective of this chapter is to know determine the demand, supply and
marketing strategies of the business.

Methodology:

The method used in this study is descriptive research. It is a study

designed to depict the participants in an accurate way.

Literature research methodology is another method used in this

research. Its significant difference from other methodologies is that it does not
directly deal with the object under study, but to indirectly access to information
from a variety of literatures, which is generally referred to as "non-contact
method." Literature materials are the ocean of knowledge, have important
values for the development of human society, history, culture and research
scholars. These materials includes internal company information, relevant
trade publication, newspapers, magazines, annual reports, company
literature, online data bases, and any other published materials.

Demand:

The Philippine's total fish demand equals total fish supply, which is allocated for
three main uses:

Domestic human consumption;

 UNIVERSITY OF CALOOCAN CITY
COLLEGE OF BUSINESS AND ACCOUNTANCY
FINANCIAL MANAGEMENT

Exports;

Non-food use.

Most of the total demand for fish is allocated for domestic consumption, followed
by export and non-food use. Total demand for fish grew moderately from 1979-97 at
a yearly rate of 3.53%. On the average, total demand for fish increased considerably
from 2.04 million t in 1979-88 to 2.87 million t in 1989-97. However, the share of
domestic human consumption declined from 77% to 71% during those periods,
whereas the share of export to total demand for fish increased substantially from
14% in 1979-88 to 25% in 1989-97; and non-food use share stabilized at 9%. These
figures point to a growing competition between fish demand for export versus
domestic human consumption. If this trend in demand for fish continues, Filipinos
can expect to have fewer fish available in the near future.

Among the fish species in demand, the ten most consumed species, in order of
importance, were milkfish, roundscad, sardines, frigate tuna, anchovies, mackerel,
tilapia, slipmouth, big eye scad and carps/other freshwater fish. Of these ten
species, three were products of aquaculture, one from brackish-water (milkfish) and
two from freshwater cultures (tilapia and carps/other freshwater fish). The survey
implies that fish products from freshwater aquaculture play a crucial role in meeting
the demand for fish in the country. Per caput consumption of products from
freshwater aquaculture increased substantially, whereas consumption of those from
brackish-water aquaculture and most from capture fisheries declined considerably.
On average, per caput consumption of tilapia, carps and other freshwater fish
increased from a mere 0.66 kg and 0.49 kg in 1979-88 to 1.61 kg and 0.80 kg in
1989-97, posting a substantial increase of about 145% and 64%, respectively.
Meanwhile, per caput consumption of milkfish, frigate tuna, anchovies, big eye scad
and slipmouth fell considerably by 13%, 10%, 26%, 7% and 22%, respectively.
Again, these results illustrate an increasing demand for products from freshwater
aquaculture. The data may also indicate increased access by consumers to products
 UNIVERSITY OF CALOOCAN CITY
COLLEGE OF BUSINESS AND ACCOUNTANCY
FINANCIAL MANAGEMENT

from freshwater aquaculture, as supplies of these products are substantially growing

as discussed earlier.

A recent study on consumption patterns for fish compared three levels of

consumption: consumption of fish producers, of non-producers (rural) and of those in
urban centres (Regaspi et al., 1997). The results show that households of tilapia
producers consumed more fish per annum compared to non-producers in rural and
urban areas (Table 17). This is no surprise, since tilapia producers have direct
access to fish in contrast to non-producers. Because the survey sampled more
people from rural areas involved in tilapia farming, estimated per caput fish
consumption was somewhat higher than the national average. It is also interesting to
note that tilapia is slowly replacing milkfish as the major species consumed in the
Philippines. Earlier studies had detected the substitutability of tilapia for milkfish
(Gonzales, 1985). Milkfish accounted for only about 12% of total fish consumed,
whereas tilapia accounted for about 40%. Again, these results are only useful as
indicators of a trend, rather than indicators of absolute proportions of tilapia or
milkfish to total consumption of fish, because samples were taken from tilapia-
producing areas. Nevertheless, current dietary patterns clearly suggest that tilapia
producers tend to consume more fish than non-fish producers, since they have
direct access to fish and thus, presumably, enjoy a healthier diet.

SUPPLY

Total fish supply in the Philippines originates from four general sources:

Production from aquaculture;

Commercial fisheries;

Municipal fisheries;
 UNIVERSITY OF CALOOCAN CITY
COLLEGE OF BUSINESS AND ACCOUNTANCY
FINANCIAL MANAGEMENT

Imports (for food use, non-food use and re-exports).

Average fish supply from 1979-88 and 1989-97 was about 2.04 and 2.87 million
t, respectively. Despite a higher average fish supply in recent years, the annual rate
of growth slowed from 3.93% in 1979-88 to 2.11% in 1979-97. This relative drop in
the supply of fish in recent years can be attributed to the decline in production from
municipal fisheries. Although municipal fisheries remain the greatest contributor to
total fish production, their share declined from about 50% in 1979-88 to 36% in
1979-97. As domestic production has generated almost 90% of total fish supply in
recent years, its declining share indicates a rapid depletion of natural stocks of
municipal fisheries. Average shares to total supply from sources of fish other than
municipal fisheries increased substantially from 1979-88 to 1989-1997. While
imports contributed only about 10%, supply from aquaculture accounted for an
average of about 21% in 1979-88 and 25% in 1979-1987. It posted the highest rate
of growth per annum for these two periods compared to municipal and commercial
fisheries. This clearly shows that aquaculture has a real potential for narrowing the
supply gap in fish production in the country.

A part of total fish supply in the country is used for export and re-export to
generate foreign exchange income, for human consumption and as a major
component of feeds for animals (Tables 10-13). Except for imports and products
from aquaculture, a high percentage share of the supply of fish from commercial and
municipal fisheries is used for human consumption; however, figures for 1979-97
were slightly lower than for 1978-88. Average shares for export in 1989-97 increased
slightly over the 1979-88 period. Overall, there was a reduction in the supply of fish
for human consumption. If this trend continues, consumers will have limited access
to fishery products in the near future. In fact, the average share of products from
aquaculture to exports substantially increased from 39% in 1979-88 to 54% in 1979-
97. Subsequent average share of aquatic products for human consumption declined
from 61% to 46% for the same periods. This comes as no surprise, since
 UNIVERSITY OF CALOOCAN CITY
COLLEGE OF BUSINESS AND ACCOUNTANCY
FINANCIAL MANAGEMENT

aquaculture is promoted as a vehicle for generating foreign exchange earnings,

rather than for meeting domestic requirements for fish. Currently, cultures of
seaweed, shrimps/prawns are earmarked mainly for export. Among products from
finfish aquaculture, it is only tilapia that has increased its share for human
consumption. This is understandable, as the country has not yet developed export
markets for this species. Thus, promoting the culture of tilapia will likely make protein
from fish more accessible for consumers.

Municipal fisheries were the biggest contributor to total fish supply (Table 14).
Consequently, they had the highest percentage share of per caput fish supply for
consumption. However, the percentage-share contribution of municipal fisheries to
total fish supply declined from 52% in 1979-88 to 47% in 1989-97, whereas
percentage-shares from commercial fisheries, aquaculture sub-sectors and imports
increased from 30%, 17% and 1% to 33%, 18% and 2%, respectively for the same
periods. At the species level, milkfish, mainly from the brackish-water aquaculture,
showed the highest percentage-share contribution to total per caput fish supply for
consumption. However, average share of milkfish declined from 13% in 1979-88 to
12% in 1989-97. In absolute terms, milkfish share to per caput fish supply declined
by about 13% from 3.81 kg in 1979-88 to 3.33 kg in 1989-97, while quantities of
tilapia from aquaculture and sardines from commercial fisheries increased
substantially from 0.66 kg and 0.80 kg to 1.66 kg and 2.17 kg, respectively. As
species-level data clearly indicates, freshwater aquaculture has a great potential for
increasing consumers' access to fish protein. Nevertheless, the government must
not lose sight of resources from municipal and commercial fisheries, as they remain
the country's major sources of fish.

MARKETING STRATEGY:

The best way to attract costumer is to provide highest quality product in a well
valued price. So us, has been concentrating in this two main factors to achieve
 UNIVERSITY OF CALOOCAN CITY
COLLEGE OF BUSINESS AND ACCOUNTANCY
FINANCIAL MANAGEMENT

customer satisfaction. And in order to do that we've consider some measures. First,
since fish was perishable good the travel time to ports up to market is very important
so we've decided to invest in organic fish ponds which not only expedite the freight
hours but also reduces the cost. Furthermore, fresh fish can be sold at a high cost
unlike to frozen. Second, we are socially offering a open relationship the customers
by providing some services like fishing. "A fish park- fishing" For customers wants to
try fishing or for those who wants doing some extra curilrucular with family and
friends. Third, we offer fresh fish in a meal. A fish park food park.