An Analysis of Espasol Producers in Nagcarlan, Laguna

Date

5-2019

Degree

Bachelor of Science in Agribusiness Management

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Faustino Q. Arrienda II

Committee Member

Rachelle A. Mariano, Hanna D. Miranda-Quibot, Agnes T. Banzon, Normito R. Zapata, Jr.

Abstract

Espasol is a product classified as “kakanin” and as “pasalubong” product. It is a native delicacy popular in the town of Nagcarlan. Since the development of the product, its process as well as its product form, undergone minimal changes and was not able to effectively adapt to changing tastes and preferences of the consumers. Thus, this study aimed to present and analyze the current espasol producers in Nagcarlan, Laguna. The problems were identified and possible recommendations were suggested for the existing business, prospective entrants, stakeholders, and supporting institutions.

There are eight identified producers of espasol in Nagcarlan, Laguna and the researcher was able to interview all of them. A series of personal interview, as well as personal observation, were used as tools for data collection. Conversely, secondary data were sourced from related and reliable textbooks and internet sites, various government institutions, previous Special Problem reports, thesis, and journals.

The espasol enterprise in Nagcarlan developed due to the availability of food crops in the locality, particularly coconut, and as a complement to the tourist industry. In terms of organization, most businesses started out as family enterprises. More so, the enterprise is dominated by micro and small enterprises.

Supplier agreement is not common for espasol producers. In general, only those with supplier ties have their raw materials delivered to their production area. Location of suppliers is mainly in the locality of Nagcarlan. But nearby towns and provinces also serve as options for sourcing the raw materials for espasol. there are two modes of payments in the supply sourcing aspect: the cash basis and the credit basis. In the credit basis, one unique paying scheme is the consignment mode of payment.

There are two machines essential in the production of espasol: the grating machine (kayuran) and the grinding machine (gilingan).

In terms of demand, demand for espasol is high during summer, Christmas and other Holidays. The length of marketing channel varies in the distribution of espasol to its final consumer. Some are in a zero-level channel, while others oinvolve the use of one to many selling intermediaries. The buyers of espasol differ on the type of variant.

Espasol production is a business which is more of a labor intensive than a capital intensive. So, considerably, a small amount of money is needed to start an espasol business. aside from this, there are micro-credit institutions available that assist the espasol producers. Economically speaking, the espasol business is a very profitable to venture with because if the high profit margin.

The espasol producers is still at the growth stage, especially with the addition of different flavors of espasol as a new variant. There are numerous areas for growth and improvement in this enterprise that needs to be tapped. And in order to ensure the success of the business, the following competitive factors are important: (1) high quality of products in terms of freshness and taste; (2) stability of supply; (3) use of advanced production technology; (4) product innovation; (5) good relationship with stakeholders of the business; (6) high market share; (7) good promotional activities; (8) good distribution channels; and (9) wide breadth of product line.

The main problem among the enterprises is spoilage. Espasol has a maximum of one week shelf life. With this problem, geographic reach is limited to domestic markets near the province of Laguna. Other problems in the enterprise include: (1) fluctuations on the prices of sugar; (2) lack of loyal suppliers resulting to shortage of supply; (3) low switching cost between brands of espasol; (4) low cost of substitution between pasalubong food products; (5) manually operated production which enhances spoilage; and (6) presence of unreliable supplier who do not pay their debts.

Prospects in the industry, on the other hand, include: (1) unsaturated domestic market; (2) unmet overseas demand; (3) product development; (4) concentric diversification; (5) improving technology for processing; (6) presence of supporting institutions; and (7) increasing trend in bringing the native delicacies in groceries and shopping malls.

Suggested recommendations for the study include establishing supplier agreements to ensure stable supply and lower prices at high quality of raw materials, especially sugar.

This strategy will entail the use of JIT system in the procurement of raw materials. A semi- mechanized production is also advised. Improvements in the packaging of espasol is also

emphasized in order to increase the appeal, value, marketability, and most importantly shelf life of espasol. in terms of marketing, taking advantage of the unsaturated domestic market opens a profitable opportunity for the espasol producers. Continuity on the use of sales agents (intermediaries) and retail stores are also pointed out to be effective marketing strategies. Moreover, it was found out in the study that the espasol business is very profitable. Thus, prospective entrants should not hesitate to venture in this type of business. lastly, coordinating and cooperating with supporting institutions in the research and development aspect of the business to improve production processes and the product itself is recommended.

Language

English

LC Subject

Rice cakes industry, Business enterprises--Philippines

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993 2018 M17 C37

Notes

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Document Type

Thesis

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