A Market Potential Study for 70:30 Rice-Corn Blend in Los Baños, Laguna

Date

5-2018

Degree

Bachelor of Science in Agribusiness Management

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Arlene C. Gutierrez

Committee Member

Dia Noelle F. Velasco, Nanette A. Aquino, Agnes T. Banzon, Normito Zapata, Jr.

Abstract

During the past years, there has been an increasing trend in the prices of rice in the Philippines. This was due to the insufficient supply of the primary staple in the country. Therefore, a proposed solution for the shortage of rice in the country would be through an alternative staple – the 70:30 rice-corn blend. It is composed of 70% white rice and 30% corn grits.

This study was conducted to determine the acceptability and the market potential of 70:30 rice-corn blend in Los Baños, Laguna. Specifically, it aimed to describe the profile of the consumers and their buying and consumption behaviors for rice and corn, determine the buyer’s level of awareness and familiarity on corn grits, evaluate the important attributes of rice-corn blend; determine potential consumers and potential demand of rice-corn blend, and recommend strategies to address the opportunities and problems in facilitating product introduction.

The scope of the study was in Los Baños, Laguna because of its vast agricultural lands that are fit for the production and distribution of the product. Also, it is where the supply for the corn grits is located. The presence of institutions such as the UPLB, IRRI, IPB, and PhilRice would make it more reliable for the consumers to purchase and consume the product. Respondents for this study were gathered through a stratified random sampling among the barangays in the municipality.

A descriptive research design was used in the study. Qualitative and quantitative data were gathered through the market consumer survey and the home placement test in 100 households. Qualitative data were derived from the market consumer survey, product attribute analysis, and the home placement test. Storechecks were also conducted to determine the prices of the rice that are available in the market. On the other hand, quantitative data were used in the price expectation analysis and the computation for the market potential. Statistical tools such as descriptive statistics – frequency counts, percentage distributions, and chi-square analysis were used to analyze the results of the study.

Results showed that all the respondents are rice consumers. Majority of them belong to the low-income earners segment (80%). The acceptability of the product was determined among this segment since they are the initial target market for 70:30 rice-corn blend, given its value proposition. Also, 86% of the respondents consume rice thrice a day, compared to corn which is only consumed seasonally. Nevertheless, the level of awareness of the respondents for corn grits was relatively high. This concludes that the respondents are already familiar with corn grits and are knowledgeable of the benefits that it offers. Based on the attribute analysis, the respondents liked the cleanliness of the uncooked rice-corn blend. Moreover, for the cooked rice-corn blend, the respondents liked its aroma the most, then its color. However, there were some who did not like its taste and color due to the presence and unfamiliarity of the taste of corn grits.

Nevertheless, 75% of the respondents were willing to consider rice-corn blend as part of their daily consumption. Seventy percent were willing to completely substitute rice-corn blend for white rice and 91% were willing to recommend it to other consumers.

The respondents’ willingness to pay for a kilogram of the product affected their purchasing behavior for the rice-corn blend. The estimated selling price for the product was P46 and only 14% of the respondents fall within or more than the acceptable price. It was perceived as a low-quality product therefore the computed market potential was only P98, 421, 416 in a year, which is relatively low and may not be able to cover all the costs incurred for the processing facility of rice-corn blend.

As a conclusion, household consumers, specifically the low-income segment are not yet an advisable target market for the 70:30 rice-corn blend. Marketing strategies such as product development strategies, market penetration strategies, market development strategies and other marketing strategies on the pricing, distribution, and promotion of the rice-corn blend were suggested to further improve the product. There must be further developments and adjustments on the attributes of the product that would entail a higher acceptability given that its value proposition is to be a more affordable and healthier alternative for rice. Also, there must be market researches on the market potential and acceptability of the product among institutions such as hospitals, universities, hotels and restaurants since they may also entail a high market potential if the product will be accepted due to the more number of consumers in these institutions.

Language

English

LC Subject

Rice--Varieties, Market surveys

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993 2018 M17 F47

Notes

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Document Type

Thesis

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