An Analysis on the Business Performance, Challenges, and Prospects of Animal Feed Retailing Microenterprises in NCR

Date

5-2024

Degree

Bachelor of Science in Agribusiness Management

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Jeanette Angeline B. Madamba

Committee Member

Dia Noelle F. Velasco, Renen Szilardo C. De Guzman, Maria Noriza Q. Herrera, Melodee Marciana E. De Castro

Abstract

Animal feeds are any edible materials, raw or processed, provided to domesticated animals, and are derived from plant- and animal-based ingredients by carefully selecting and blending these ingredients to provide nutritional diets for the health of the animals (Loosli, n.d.). These feeds cater to livestock such as poultry, hogs, and ruminants, as well as household pets like cats, dogs, birds, and fish. The Philippine Animal Feeds Industry is seeing rapid growth growing, driven by a rising population but reliant on imports to meet local demand (6WResearch, 2022). The global animal feed market size was estimated to be at US $570.72 billion in 2022, and the industry revenue of manufacture of animal feeds in the Philippines was valued at USD 2.54 billion in that same year. The Philippine animal feed market size is also expected to be large, as other parts of Asia, excluding Japan, India, Russia, and China, produce 114 million metric (9.6%) tons out of the 1,245 million metric tons in 2022. With this Animal Feed Enterprises (AFEs) are businesses involved in producing, reselling, or distributing animal feeds. In the National Capital Region, many AFEs focus on poultry feeds, often selling complementary products like animal vitamins and supplies.

Next, business performance is assessed using various quantitative and qualitative metrics to help businesses achieve goals, satisfy stakeholders, and improve operations. However, there are business performance indicators of Micro, Small, and Medium Enterprises that can be applicable for all, including for Animal Feed Retailing Microenterprises such as good managerial skills, stable line of products, and efficient marketing. Thus, this study analyzed the business performance of respondent shops in the four key functional areas of business --- marketing, operations, human resources, and finance. Understanding their operations can help enhance their contribution to economic development. These AFEs retail various feeds, vitamins, and equipment for livestock animals and household pets.

Moreover, the objectives of the study aimed to determine the demographic profile of the owners/managers and the business profile of their shops. As all shops have less than ten employees, these are all considered microenterprises. Another objective was to discuss practices and strategies in the four functional areas, to assess the status and business performance, to analyze their problems and opportunities, and to develop recommendations. This research gap of the paper is the lack of literature specific to the Animal Feed Retailing Industry, and so this paper provided new information on the industry. The area of the study is in the National Capital Region and included only retailing enterprises, not those producing or manufacturing animal feeds. An exploratory qualitative research design was used, collecting qualitative data on their practices and strategies. Using purposive and snowball sampling, respondents were selected based on specific characteristics as well as referrals. The data results were analyzed through descriptive analysis and thematic analysis to identify common patterns of answers.

Results showed no prevailing gender among owners/managers, most of whom are over 40, married, with a family size of at least three, and living in the same city as their shop. All work full-time in their business, and most have a bachelor's degree. The respondents hailed from cities of NCR in the Philippines. All are registered sole proprietorships, mostly family businesses, with many continuously operating for four years already. The organizational structures were found to be simple, with separate owners and managers overseeing employees like helpers and cashiers.

In terms of the practices and strategies under the four functional areas, the dominant operational practices include shops being open for at least eight hours, almost seven days a week, with no other branches, a manual inventory management practicing FIFO and EOQ, and direct procurement from suppliers. Feed sources are local, either from the same city, other cities of NCR, or nearby provinces. The average inventory in stock and peak inventory level is 775 kg of feeds, with shop locations chosen for high foot traffic areas. Products sold include livestock feeds and pet food, animal vitamins, and respective equipment and supplies. The marketing strategies mainly rely on word-of-mouth, referrals, and physical store sales, with discounts and giveaways as promotions. Procurement and selling prices are similar across shops, with customers primarily buying pet food and poultry feeds, and fewer buying hog and bird feeds. The two main customers of the shops include backyard farm owners and pet owners.

In human resources, the shops mostly have one or two employees who each receive monthly salaries of Php 8,000, and who are usually trustworthy and efficient helpers. They also receive additional compensation and benefits like free food and water. In terms of finances, the average starting capital of the microenterprises is around Php 125,000, sourced mainly from personal savings, while there are some who loaned from banks. Monthly expenses average Php 68,000, with rent included. Average daily sales among all microenterprises are Php 8,700, and target monthly sales is around Php 192,000.

Relatively few issues were noted in the three functional areas of marketing, human resources, and operations. Marketing issues included low sales of certain feed brands and expired products. In operations, miscommunication with suppliers, sometimes low-quality feeds purchased, and old facilities. Human resources challenges included employee incompetency within the workplace and miscommunication between customers, employees, and the shop owner and/or mangers. In addition, financial issues included low sales on certain weekdays which were common for all shops, and a few with debts. Most aimed to maintain their current operations in both the short and the long-term, though some want to have more employees, remove poorly selling products, introduce new ones, or open new branches.

The recommendations addressed the issues and challenges faced by Animal Feed Retailing Microenterprises. Marketing strategies included market penetration by selling more feeds in more areas of their respective cities. To do this, they can use more social media platforms for selling, adding new feed brands, and other promotional methods. Improvements in the operational aspect include stricter feed quality checks, employee involvement in decision-making, and in general, implementing Kaizen or continuous improvement. Human resources improvements involve employee retention strategies like more competitive compensation to make the job more enticing, training, and feedback. Employees could be also trained to offer alternative products to customers. Financial strategies include setting attainable sales targets, retrenchment strategies, and concisely analyzing opportunity costs. These recommendations apply to all the shops facing issues in any functional area. There are also recommendations for opportunities that Animal Feed Retailing Microenterprises with no issues in the four functional areas can get such as government programs, offering all possible promotional methods that could be adopted, among others.

Language

English

LC Subject

Animal feeds, Retail trade

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993 2024 M17 C78

Notes

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Document Type

Thesis

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