Chapter I

PROJECT BACKGROUND

"Ready to write" is symbolized by a pencil. The pencil signifies potential and gives
courage to be more open to oneself. It is also a sign of hope, from the countless
historical instances that demonstrate how writing has altered people's destinies and
fates. Like ink pens, pencils don't bleed, burst, run dry, or freeze.

Nicholas-Jacques Conte, a scientist serving in Napoleon Bonaparte's army,

invented the modern pencil in 1795. Although the Aztecs had used it as a marker several
hundreds of years earlier, it wasn't until the beginning of the fifteenth century that it was
first found in Europe, in Bavaria (Bellis, 2019). The form of pure carbon known as
graphite was the magical substance that's been perfectly suited for the task. Initially, it
was mistakenly referred to as "plumbago" or black lead and was thought to be a type of
lead hence the "plumbers" who repair our lead water-carrying pipes. The very first
illustrations of human art can be found in the prehistoric cave paintings that were made
to use both charcoal and chalk in the period around 40,000 and 10,000 BC. Graphite is
not the initial example of a component constructed from the ground and utilized as a
mark-making tool. Only in 1789 was it given the name graphite, derived from the Greek
word "graphein," which means "to write." The term "pencil" is older and comes from the
Latin "pencillus," that also means "little tail" and was used to define the tiny ink brushes
that were used in the Middle Ages for writing.

Graphite sticks were initially wrapped in string. The wood-cased pencil was
created later when graphite was incorporated into hollowed-out wooden sticks. An Italian
couple named Lyndiana and Simonio Bernacotti invented the wooden casing that
surrounds the graphite stick in the early 1560s. Regardless of the fact that the local
mines have long since been shut down and that supplies of the graphite used today are
now imported from Sri Lanka and other far-off countries, the Cumberland Pencil
Company has just celebrated its 175th anniversary since the first factory opened in
1832. (Tancia, 2016). Cumberland pencils were among the best because the graphite
they used left no dust behind and marked the paper exceptionally well. The first pencils
made in large quantities were created in Nuremberg, Germany, in 1662. During the
Industrial Revolution of the nineteenth century, a thriving pencil industry emerged,
propelled by Faber-Castell founded in 1761 as well as Lyra, Steadtler, and other
businesses. Since then, the use of pencil became a tool of knowledge that resulted in
mass production.

With the current climate condition, many companies have adopted green
marketing as well as environmental and social responsibilities which helps companies to
build public trust, enhance positive relationships, and increase profit and customer
loyalty. Donnatella and Bernardo (2021) states that, consumers adopting sustainable
purchasing habits primarily out of concern for the environment and social well-being on
the theory that their thoughtful purchase decision can mitigate the effects of the human-
caused climate crisis, paving the way for the revival of certain low-impact products and
resulting the conventional rivals to lose market share. Additionally, consumers base their
purchases of environmentally friendly goods on various packaging green indicators,
some of which are unclear and thus undermine consumer green trust. Furthermore,
moderate green consumption is good for the environment, but excessive use of green
products is not.

According to Michael Stausholm, CEO of Sprout World, one of the companies

that developed green products such as the first plantable pencil. A team of MIT robotics
students were tasked with creating the office of the future back in 2013. The students
decided to concentrate on pencils, creating the first pencil with a seed capsule that could
be planted when it was no longer large enough to write with. On Kickstarter, where
Michael Stausholm found it, the students posted the project. Then, Michael purchased
the rights to sell the pencil in Europe and established Sprout World to do so after being
immediately impressed by it and the potential the project offered. It only sold 70,000
pencils in Denmark during the first year. Michael purchased the patent and rights
outright after seeing this as sufficient proof of concept. As time has passed, Sprout has
concentrated on creating various product editions, introducing a variety of seed types,
including Daisy, Cherry Tomato, and even Spruce trees, and working hard to make sure
that Sprout World operations are as sustainable as possible. In 2021, the company
introduced makeup pencils with brow and eyeliner options, one of the many
advancements related to the original Sprout pencil. This was done in partnership with a
major European beauty company. Because of this astounding concept, Sprout World
has received numerous awards and recognition such as The European Business
Awards 2021 in the category of Sustainable Merchandizing, ONBOARD HOSPITALITY
AWARD 2020, Fast Company Award, Promotional Gift Award, and more. Sprout World
was also featured on different prominent media magazines such as 100 Worthy list, Eppi
Magazine, ELLE, Authority Magazine, CEO today Magazine, and numerous more well-
known news networks.

Floods, storms, wastes management, and numerous crises that the earth have
had caused by human wastes, it is undoubtedly that humans were the ones to blame for
these disasters. Research indicates that recyclables and organic waste make up the
majority of the waste produced in the Philippines. This enormous waste problem cannot
be resolved by the government alone. A sustainable recycling industry requires good
governance, participation from stakeholders and the general public, awareness
campaigns, advertising, and technological advancement. (Atienza, 2011). With this
innovative concept, the proponents of this feasibility study discovered the company that
produced the very first plantable pencil. They were heavily influenced by how such
small ideas can have a massive positive impact on the environment. What's more, it is
commendable that Plantery is making an effort to help the educational industry
overcome these problems. Besides growing a pencil, it is growing more than just a new
plant; it is also fostering the development of a green mindset that questions the
ideals and considers ways to reuse items rather than disposing it directly after its usage.

In order to increase the range of customers the business can serve, Plantery
long-term goals include becoming one of the Philippines' top suppliers of plantable
pencils. By constantly looking for new and efficient ways to produce and supply the
products while maintaining the high quality, the aim is to increase the business'
profitability and continuously satisfy customers. Another goal is to establish a strong
reputation as one of the top vendors of plantable stationery in San Fernando,
Pampanga, and on online shopping sites like Shopee and Lazada. Being a product-
based business, Plantery strives to have better employee relations in order to boost
productivity, attract and keep devoted staff, and have a productive workplace as a
whole. The advocates contend that modest innovations can bring about lasting change.
By enabling everyone to manageable and tangible sustainable actions, Plantery is driven
to make a difference. Customers want to be assured that the brands they support are
contributing to environmental protection. The group argued that using straightforward
products that encourage environmental change is the best way to demonstrate support
for sustainability.
 Today's world is heavily influenced by consumerism. It's critical to understand that
convenience and speed come at a cost with a number of disastrous effects. The benefits
of these products most certainly do not outweigh the drawbacks, whether it be in terms
of textile waste, pollution, the depletion of natural resources, or social injustice. The next-
gen materials industry is a growingly well-liked response to the industries expanding
environmental impact. It wastes a lot of paper and wood to make stationery. Waste
paper constitutes 19% of the Philippines' total municipal solid waste in which its primary
component is made up of wood, according to Parayno and Busmente (2001). Next to
kitchen waste, it is the solid waste that is produced the most. Even though there is a lot
of waste paper produced, the Philippine paper industry still relies heavily on waste paper
as its main raw material. On the other hand, waste management is significantly
increasing, therefore we must seriously consider ways to reduce pollutants, prevent the
felling of trees, collaborate to address the issue of environmental deterioration, and
provide consumers with "eco-friendly" options.

Plantery came up with a product that inspires customers to protect the

environment. Every material of this product was used efficiently to strictly use its full
purpose in order to maximize its utilization without having to waste too much of the
materials. Because a lot of companies are becoming more and more environmentally
responsible and the market has become conscious of products they consume, the
company can benefit from the current trend of environmental consciousness occurring
throughout the world. The company developed a brand reputation that supports
sustainability, gained modestly good profits, and will help raise environmental awareness
while also fulfilling its core purpose by producing an eco-friendly pencil. In order to allow
for plant growth after the pencil is no longer functional for writing, the company has
switched out erasers for seeds. The pencils look like regular pencils, but on one end
they have gelatin capsules that contain plant seeds in place of rubber erasers. Because
the capsules are non-GMO, preservative-free, gluten-free, and hypoallergenic, they are
also sustainable.
 Chapter 2

MARKET STUDY

Marketing is an essential element of business strategy and a key contributor to

keeping competitiveness. A market study helps one’s business to gather information
about their customers and their target market. It involves determining whether a new
product is feasible or not.

Plantable pencil is made up of eco-friendly materials to look distinctive and

affordable than the other pencil products that are readily available on the market.

There is 3.44% market share of the Plantery that has been identified by the proponents.
Plantery Company has privilege and opportunity to enter the market wherein the result of
the demand and supply gap analysis is 74.47%.

Target Market Description

The proponents will sell Plantable Pencil to the market. It is composed of cedar
wood from a sustainably managed forest and non-GMO seeds, the proponents also
added different seeds to add more variety and make it more attractive to its target
market. Various firms that sell stationary, specifically different bookstores in the City of
San Fernando were chosen as the target market.

City of San Fernando is the capital of the province of Pampanga and a first-class
component city, it has established its role as the region’s hub of growth and a center of
commerce. The City's economy is mostly service- and retail-oriented, with these sectors
accounting for around 75% of all enterprises that are currently registered. Because of
this, the City of San Fernando presents itself as a prospective location for all kinds of
investors looking to grow outside of Metro Manila. The proponents constructed survey
questionnaires for 10 retail establishments for the study of marketing demand.

The target participants and the target market of Plantery are the business
establishments within the vicinity map of City of San Fernando, Pampanga.

 United Bookstore- San, Fernando, Pampanga

 Pandayan Bookstore- San Fernando Downtown, Pampanga

 La Creation Bookstore- San Fernando Downtown, Pampanga

 Bundalian Bookstore- San Fernando Downtown, Pampanga

 Orchids Bookstore- City of San Fernando, Pampanga

 National Bookstore- SM Pampanga

 Papemelroti- SM Pampanga

 Book Sale- Robinson, San Fernando, Pampanga

 Paper & Co- Vista Mall, San Fernando, Pampanga

 Expressions- Waltermart, San Fernando Pampanga

The City of San Fernando is the Capital of Pampanga and based on the results all of the
ten business establishments have chosen Plantery Company as their plantable pencil
supplier.

Demand-Supply Analysis

Our economy relies on supply and demand in important ways. Demand is the
eagerness of the customer to purchase an item and supply is a service or item that is
readily available on the market. The proponents have 10 business establishments to
answer the questionnaires that are made by the proponents. Supply Analysis is the total
supply of the different pencil suppliers in the target market of the proponents.

Sources of Marketing Demand

The proponents conducted surveys to the ten (10) business establishments

within the vicinity of City of San Fernando, Pampanga to collect and to analyze
information required for the entire study.
Sources of Marketing Supply

The proponents projected the supply of each competitor to determine the

demand and supply gap analysis.

Consumer Survey Summary

The proponents conducted a survey to the ten business establishments,

particularly bookstores in the City of San Fernando, Pampanga. All ten respondents are
willing to purchase plantable pencils from Plantery Company. Based on the survey
results, 100% of the business establishments are willing to purchase plantable pencils to
Plantery Company. Some of the respondents are willing to purchase 25 pieces, 50
pieces and 100 pieces of plantable pencil for 35 pesos.

Survey Analysis

Table 1: What pencil brand do you usually sell?

Pencil Brand Frequency Percentage

Mongol 5 50%

Faber Castell 3 30%

T-pencil 2 20%

Total 10 100%

Note: Table 1 shows that Mongol got the highest percentage than Faber castell and T-
pencil which is 50|%.

Table 2: Where do you usually procure the pencil you are selling? Please state the
name of your supplier?
 Pencil Supplier Frequency Percentage

Amspec 2 20%

Crown Supply 3 30%

Star 360 PH 3 30%

Wha An Trading Inc 2 20%

Note: Table 2 shows that Amspec and Wha An Trading Inc. got the same percentage
and also the Crown Supply and Star 360 Ph.

Table 3: How many pencils do you usually purchase from your supplier?

Number of Pencils Frequency Percentage

1 box (100pcs) 0 0%

2 box (200pcs) 1 10%

3 box (300pcs) 2 20%

4 box (400pcs) 7 70%

Note: As shown in table 3, there are 7 respondents who purchase 4 boxes of pencils to
their supplier while the others purchase 2 and 2 boxes from their supplier.
Table 4: How often do you purchase pencils?

Frequenc Percentage
y

Monthly 10 100%

Quarterly 0 0%

Annually 0 0%

Note: Table 4 shows that all of the respondents make monthly purchases to their
supplier.

Table 5: Have you heard about plantable pencils?

Frequency Percentage

Yes 7 70%

No 3 30%

Note: As shown in table 5, 7 of the respondents heard about the plantable pencils while
the 3 of the respondents have not heard about it.
Table 6: If plantable pencils will be introduced in the market, are you willing to
purchase them?

Frequency Percentage

Yes 10 100%

No 0 0%

Note: Table 6 shows that all of the respondents are willing to purchase plantable
pencils.

Table 7: How many are you willing to buy if the plantable pencil cost around
P30.00 - P35.00 per pencil?

Frequency Percentage

1 box (25pcs) 3 30%

2 boxes (50pcs) 5 50%

3 boxes (75pcs) 0 0%

4 boxes 2 20%
(100pcs)

Note: As shown in table 7, 2 out of 10 respondents choose

Table 8- Population in the City of San Fernando Pampanga

Barangay Population
Alasas 7,470

Baliti 7,329

Bulaon 29,243

Calulut 45,214

Dela Paz 6,132

Norte

Dela Paz Sur 3,220

Del Carmen 7,278

Del Pilar 11,516

Del Rosario 8,617

Dolores 21,840

Juliana 4,304

Lara 4,033

Lourdes 4,301

Magliman 7,087

Maimpis 13,659
Malino 5,403

Malpitic 7,983

Pandaras 1,702

Panipuan 8,775

Pulung Bulu 6,855

Quebiawan 11,697

Saguin 8,778

San Agustin 23,963

San Felipe 6,416

San Isidro 10,223

San Jose 17,185

San Juan 6,073

San Nicolas 10,524

San Pedro 12,810

 Sta. Lucia 10,727

Sta. Teresita 1,472

Sto. Nino 11,916

Sto. Rosario 773

Sindalan 15,944

Telabastagan 16,605

Total 377,069

Source: City of San Fernando Information Office

Note: Table 8 shows the total population of the City of San Fernando, Pampanga
in the year 2022.

Table 9 - Annual Projected Demand

Year Annual Demand

2022 301,656
2023 309,197
2024 316,927
2025 324,850
2026 332,971

Note: For table 9, In the year 2022, The proponents get the 80% of the population for the
total demand. Since the 3.1% is for the demand rate of established pencil brands,
Plantery demand will increase 2.5% annually.
Table 10: Competitors Market Supply

Competitors Survey Online Platform Total

Amspec 9,600 8,300 17,900

CROWN SUPPLY 12,000 9,500 21,500

STAR 360 PH 13,200 10,000 23,200

Wha An Trading, Inc. 8,400 6,000 14,400

Total: 77,000

Note: The information for Table 10 was obtained by the proponents from the
survey responses as well as from internet sources used by the competitors, including
their websites and shopee stores.

Table 5: Competitors Market Supply in the City of San Fernando, Pampanga

Year Number of Pencil per Year

2022 77,000

2023 79,695

2024 82,484

2025 85,370
 2026 88,358

Note: The proponents assume that the supply will increase 3.5% annually.

Table 11: Market Share

Competitors Year Supply (per piece) Market Share

STAR 360 PH
25,000,000 60.35%

CROWN
5,000,000 12.06%
SUPPLY

Amspec
6,000,000 14.48%

Wha An Trading,
4,000,000 9.66%
Inc.

Plantery
1,427,884 3.45%
Company

Total
41,427,884 100%

*Competitors Annual Supply / Total Annual Supply * 100

Note: The percentage of market share is calculated by adding the annual supply
of the competitors including the annual supply of the Plantery Company and dividing the
overall market share of competitors to the total market share and multiplying by 100.
As shown in table 11, Plantery Company has a 3.45% market share and it has
the lowest percentage because the business is new to the market.

Table 12- Demand Supply Gap Analysis

Year Demand Supply Gap Unsatisfied Percentage
2022
301,656 77,000 224,656 74.47%
 2023
309,197 79,695 229,502 74.23%

2024
316,927 82,484 234,443 73.97%

2025
324,850 85,370 239,480 73.72%

2026
332,971 88,358 244,613 73.46%
*Gap= Demand – Supply
*Unsatisfied Percentage= Gap/Demand x 100
Note: The Demand Supply Gap Analysis is used to determine the unsatisfied
percentage of the total demand. There is an unsaturated market that can be seen in the
table. Therefore, Plantery Company has the privilege and opportunity to enter the
market.

Marketing Program and System

Marketing Program is very essential to a company to achieve profitable
operation. Through the use of marketing, businesses can gain more customers and
retain their existing customers. Since the product is new to the market, it is essential to
use appropriate promotion and a good advertising strategy.
Plantery Company will be utilizing different strategies to be recognized as the
supplier of a plantable pencil in the City of San Fernando, Pampanga. The strategies
listed below are the following:

Competitor's Marketing Strategies

Mode of Payment
Some competitors offer different modes of payments such as cash, debit/credit
card.
Incentives
The competitors give incentives when their retailers reach their sales quota and
some of the competitors give sales discounts for bulk orders.
Channel of Distribution

Competitors offer their product by distributing their products to business

establishments and by distributing their products directly to the customers. Amspec,
Crown Supply, Star 360 Ph and Wha An Trading Inc. uses 2 levels of distribution, they
distribute their products to the business establishments and to the end consumers.

BUSINESS
PRODUCER
ESTABLISHMENTS
 PRODUCER CUSTOMERS

Figure 10: Competitor’s Channel of Distribution

Channels of Distribution
Plantery Company aims to offer the product by supplying it directly to the
establishments.

BUSINESS
PRODUCER
ESTABLISHMENTS