A Marketing Analaysis on the Production Performance Of
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Global Journal of Management and Business Research: E Marketing Volume 14 Issue 4 Version 1.0 Year 2014 Type: Double Blind Peer Reviewed International Research Journal Publisher: Global Journals Inc. (USA) Online ISSN: 2249-4588 & Print ISSN: 0975-5853 A Marketing Analaysis on the Production Performance of Emerald Durian Palace, Tagum City, Davao Del Norte, Philippines By Alexander Ken Paulo Libranza & Hazelle Kaye Abaro University of the Philippines Mindanao, Philippines Abstract- Food and beverage processing is considered as the most dominant manufacturing sector in the country. However, due to the seasonal nature of agricultural commodities several products lose their value during the marketing process. These products are either sold at a very low price or considered as a production waste. This study was conducted to evaluate the production performance of Emerald Durian Palace, to identify the profit maximizing production quantity to decrease surplus-associated costs, and recommend strategies to increase sales. The current production of the company is at the optimal level, but it could still improve by 16% to attain maximum revenue. Results suggest that the company is also loosing 27% of its production associated with over-production wastes and not being able to meet the demand of the market. Keywords: marketing analysis, profit maximization, supply chain, technical, allocative and economic efficiency. GJMBR-E Classification: EL Code: M00, M11 A MarketingAnalaysisontheProductionPerformanceofEmeraldDurianPalaceTagumCityDavaoDelNortePhilippines Strictly as per the compliance and regulations of: © 2014. Alexander Ken Paulo Libranza & Hazelle Kaye Abaro. This is a research/review paper, distributed under the terms of the Creative Commons Attribution-Noncommercial 3.0 Unported License http://creativecommons.org/licenses/by-nc/3.0/), permitting all non-commercial use, distribution, and reproduction in any medium, provided the original work is properly cited. A Marketing Analaysis on the Production Performance of Emerald Durian Palace, Tagum City, Davao Del Norte, Philippines Alexander Ken Paulo Libranza α & Hazelle Kaye Abaro σ Abstract- Food and beverage processing is considered as the Exporter (PHILEXPORT, 2012) of fresh fruits and most dominant manufacturing sector in the country. However, vegetables in Southeast Asia. However, due to the basic due to the seasonal nature of agricultural commodities several nature of agricultural commodities like perishability, 2014 products lose their value during the marketing process. These bulkiness, seasonality and difference between raw and products are either sold at a very low price or considered as a ear final form, several products lose their value during the Y production waste. This study was conducted to evaluate the production performance of Emerald Durian Palace, to identify marketing process. These products are either sold at a the profit maximizing production quantity to decrease surplus- very low price or considered as a production waste. 25 associated costs, and recommend strategies to increase Fruit preservation and processing emanate as a sales. The current production of the company is at the optimal solution to this dilemma. Driven by the need to increase level, but it could still improve by 16% to attain maximum the usable life of fruits and extracting all of its economic revenue. Results suggest that the company is also loosing potential, this industry has evolved from a micro/home- 27% of its production associated with over-production wastes based enterprise into a key player in the country’s and not being able to meet the demand of the market. The agribusiness system. Fruits can be preserved by either researchers recommend to decrease the cost of production freezing and drying the fruit, or processing its meat into associated with unsold inventories and increase their sales revenue by following the recommended production level. various final forms like candies, pastries, jams, and a Several marketing strategies were also formulated to provide a variety of beverages. sure market for products and a fast-moving inventory. II. Background of the Company and the Keywords: marketing analysis, profit maximization, supply chain, technical, allocative and economic efficiency. Industry ) Among the most popular processed products E I. Introduction from Mindanao are banana chips and dried mango, as ( ood and beverage processing is an important well as purees of mango, papaya and pineapple. These aspect of the country’s economy. It is considered products has been drawing buyers for market exchange F as the most dominant manufacturing sector all over the world, according to an article in contributing 58 percent of the total manufacturing PhilStar.com. Durian however, as a known commodity output, and 20 percent of the country’s gross domestic from Mindanao, is not in the list since durian is more product (Macabasco, 2011 and Roache, 2009). In 2010, popularly consumed fresh from its husk (DTI, 2009). In processed fruit and vegetable exports amounted to addition, this situation can also be associated with the US$386.76 Million with an average yearly growth of limited supply of the fruit due to the declining number of about 7% for the period 2006 to 2010 (Philippine Food local durian growers in Davao Region (SunStar Davao, Processors and Exporters Organization, 2011). Major 2013), the very high cost of the fruit itself, and the lack of processed fruit export includes prepared and preserved information and support system for the specific fruit fruits accounting for 53% of total fruit exports, while processing sector. Still, the durian processing industry is concentrates and dried fruits represent roughly 47% of an important driver of local economic development. The export demand. Export projection requires an additional industry provides employment for Micro/ Home-based production of US$ 129 million worth of processed fruits production, while large scale production contributes to and vegetables by the year 2015 (PHILFOODEX, 2011). the country’s GDP. One of the Philippine’s advantage in the Two of the leading cities that popularized durian industry is the abundance of different variety of fruits and durian processing are Davao and Tagum City. Global Journal of Management and Business Research Volume XIV Issue IV Version I and vegetables. The country ranked as the second Davao City is considered as the durian republic of the largest producer (HortiASIA, 2007) and third largest region (SunStar Davao, 2013), while Tagum City has Durian Festival celebrating the bountiful harvest of durian each year. Author α σ : Marketing Management for Agribusiness Enterprise School of Management University of the Philippines Mindanao. Emerald Durian Palace, located in Tagum City, e-mail: [email protected] Davao del Norte, is the leading durian processor in ©2014 Global Journals Inc. (US) A Marketing Analaysis on the Production Performance of Emerald Durian Palace, Tagum City, Davao Del Norte, Philippines Tagum City. Established in 2006 making only durian 6000 durian trees. This assures the quality of their inputs jams, the company now has over ten homemade durian to production, and also gives them comparative goods such as tarts, pastitlas, empanada, hopia, advantage than other processors. Occasionally, they polvoron, yema, cookies, cake, Brazo de Mercedes, roll, buy durian fruit from other farmers but this only amounts pie, pudding and buns. Their products has been up to 10 percent of their production. This is done to distributed all over the city, through their very own plant utilize the surplus of the farmers, and those that are and distribution center, in the malls, schools and several slightly damaged and over-ripe which are considered commercial and business centers. These products are unmarketable to consumers. The durian fruit is also being sold in department stores and outlets in processed in their own plant that has acquired new Tagum City, Davao City, Cebu City, Zamboanga City, technologies and techniques to assure the quality and and Cotabato City. efficiency of production. In the plant, the product is Emerald Durian Palace stands in the production graded, labeled and packed accordingly. The concept of “real durian” – which is processing raw assurance of the Halal certification makes all of their 2014 durian meat into various products but keeping the products accessible for Muslim consumers. Also, their quality and satisfaction consumers get from the actual plant serves as their distribution center that is located ear durian fruit. In this type of production, durian meat is along the high way which is accessible to consumers Y processed into various final products with least, or none passing-by the city. 262 at all, flavoring, extenders, and preservatives. The processed products are distributed in Emerald Durian Palace was also given Award of department stores and outlets, which includes schools, Excellence from Davao City’s Chamber of Commerce & airports, and ‘pasalubong’ centers all over Mindanao. Industry, Inc. for their durian jam being one of the The company also hosts a Durian Pastry-making contest accredited brands that has achieved the minimum as part of the celebration of the city-wide Durian criteria and qualifications for quality and safety Festival. The pricing of the products are categorized into standards. plant price, dealer price (stall price), and standard retail The main source of the company’s raw durian price (department store price). came from its own farms