Monday, February 24, 2003
Business Times Section
Monday, Feb 24, 2003
LEARNING AND INNOVATION
By Moje Ramos-Aquino
That thing between products and services
If you have been with us since the start of our Journey in Entrepreneurship, you would have noticed that we always refer to products or services as products and services. If you have a product, then service comes with it. Even if you are selling a tangible product like fish to a housewife in the wet market or a frequency converter to a manufacturing company in an industrial park, the fish and the frequency converter comes with service, not all by their lonesome.
The fish you sell comes with honest service. You talk to your customers and help them select the freshest variety of fish you are selling. You have to weigh the fish in an accurately calibrated scale; clean it by removing the scales, gills and whatever other parts your customers wouldn’t want to eat; wash it; and wrap it twice in a clear plastic bag, then in a more portable “sando” bag. You get the payment and give the exact change. Sometimes, you even give a discount. Then, you scribble something like a receipt in a “Grade 1 pad paper.” Then you bid them goodbye, “Balik kayo, suki.” Those are expected services when you are selling fish in the public market.
When you are selling a frequency converter, there is also after sales service for repairs and maintenance aside from the pointofsale service. So, when you have products to sell, they come with service.
Or your main product might be service, e.g. laundry service or car repair service. You are actually selling them something tangible, too. It is the dress or shirt that is clean, smoothly ironed, no buttons missing, no damage to the fabric or buttons or zipper in a hanger inside a clean plastic wrap. Or it is a clean car than can now run without trouble, with new or duly repaired parts with all its nuts and bolts in place. When I used to bring my car to the repair shop, I would always tell the mechanics to please make sure that whatever nuts and bolts they remove from my car should be properly returned or replaced. Do you notice that there are so many “extra” nuts and bolts scattered around a car repair shop? Not enough service. Mechanics are too lazy to put them all back. “Puede na ito. Umaandar na, eh.”
So, Ms./Mr. Entrepreneur, when you are considering a certain product, please also think about the services that come with it; vice versa, when you are talking service, think about the tangibles that come with it.
This is where and how you distinguish an entrepreneur from a profitoriented businessperson. An entrepreneur is customeroriented. An entrepreneur knows that customers set the standards of quality products and services and remembers that the customers are the ones who will buy and pay for the product and keep your business afloat. This is the arena for mere survival or growth.
This is where you need to go into market research and market tests. Last Monday, we discussed about customer demographics and needs to help you determine what product to sell. These factors, among others, will also help you choose the right location for your business.
Other questions to ask yourself in determining products and services and doing your market research and testing your market are:
• Will you make and sell your products and services or will you just buy and sell? Is it more advantageous to make your own products? Do you have enough financial capital? If you will go into manufacturing, will you be able to hire the number of personnel with the right competencies (knowledge, skills, values and attitudes) that you will require? Do you have enough space to house your manufacturing operations, warehouse, delivery, administrative offices, etc. Where and how will you get your raw materials, supplies, equipment and others?
What we need more in our country are manufacturers, inventors, makers, producers. The real entrepreneurs are those who invent new or reinvent old and make them new products and services again.
Entrepreneurship is akin to innovation. Innovation is what separates the entrepreneurs from the usual profitseekers or fastbuck artists. All developed and progressive economies are backed by strong entrepreneurial manufacturing community. They continuously learn and innovate. Small as they are in terms of land area, the rich economies of Singapore and Hong Kong are supported by strong their manufacturing backbones and Filipino domestic helpers.
Two weeks ago at the HRD Japan 2003 Conference in Yokohama, Japan, I listened intently to the English translation of the Japanese speaker from NEC. (Sorry, I didn’t even get his name or position. The handouts and programs were all in Japanese. We were blessed with simultaneous translations, though.) He said that the threat to the dominance of Japan in the home appliance business is coming from China which is now an emerging manufacturing economy. Where five years ago Japan was ranked No. 2 in the world and China was nowhere in the list. Now Japan has slid to No. 3 and guess who is in No. 4 position? China.
Manufacturing requires real commitment and involvement. It is not easy to back out of a manufacturing business. Manufacturing is like building a cathedral for people to worship. You are not just putting hollow blocks together or simply building a cathedral.
Aside from our overseas Filipino workers, the manufacturers who create new business, new products and new technologies are the real heroes of our economy. Bill Gates continue to amass mindboggling wealth because he relentlessly pursues his dream of inventing and reinventing technology. Tiger Woods has made a selfactualizing career of his sports—always striving for new and better ways to play golf and win tournaments. Two entrepreneurs in different fields.
Indeed, we need more manufacturers, producers, makers, inventors, innovators in this country if our economy has to survive globalization and the bully tactics of wealthy countries. Our country has long been selling raw materials/inputs to production from minerals to human resources, not finished products.
• If you will be buying and selling, where will you source your products? How will you determine quality and how will you do quality control? What should be the lead time for reorders of your stockpile? Where and how big is your warehouse and display areas? How big is the area for customers to mill around while they look at and ponder upon your products? What about the area for your sales people and cashier?
Last December, my friend Lydia Castro, proprietor of Gibi Shoes, said she is willing to consign her shoes for us to sell. We were elated by her support. Then she asked: “Where would you stockpile the shoes? You need to get from us at least one truckload for our partnership to be mutually beneficial. You need to have, at least, one each of all sizes of each shoe style. You need to have a variety of styles for your customers to choose from.” Unfortunately, our booth was only two meters by three meters and we had other goods to sell. We didn’t have enough space for people to sit down and try the shoes. We didn’t have enough personnel to attend to them.
• If you want to locate, say, near the Quezon City Hall as Ms. Chat Macapanton asked last column, your question, aside from demographics, is: Will they pass by your location going to City Hall or coming from City Hall? Going to City Hall means that they would need things that they will use to transact business at City Hall, e.g. ballpen, paper, copying service, photo service, etc. Coming from City Hall means that they are either going back to their office or going home. That means they need something to bring home as in “pasalubong.” Food items or little things that don’t cost a lot for their children.
Going or coming, they need food, for sure. Food that they could eat on their feet.
We have many more questions. This is becoming more interesting and complicated than I originally intended this Journey in Entrepreneurship to be. I wish I wrote this column before I ventured into our night market store. Anyways, we’ll continue this learning adventure every Monday. Stick with us.
Meantime, I am pleased to invite you to the American Society for Training & Development (ASTD) 2003 International Conference and Exposition. It will be held at the San Diego Convention Center, San Diego, California, this May 1822. You may call Ms. Malou Amante at 7144533 for details of the conference and of joining the delegation of Paradigms & Paradoxes Consultants. To avail of our special delegation rate, please remember to write our delegation code (10429860)in your registration form.
Ms. Moje RamosAquino is president of Paradigms & Paradoxes Corporation and invites you to email your feedback to firstname.lastname@example.org
Monday, February 17, 2003
The best products and services are those that your customers will
continue to purchase again and again. Or will go back to you for
additional purchases such as parts, service, add-ons, new models and
reorders. It could be a car, a house and lot, a bowl of lugaw, a pair of
pants, an umbrella, spare parts, accessories, repair service, a hammer,
gasoline, a capacitor, laundry service and many others. More sales
equals more profit. Experts also say that it is costlier to get new
customers than to maintain your suki's.
To continue our Journey on Entrepreneurship, we would devote this column
still on the issue of choosing the right product and services that will
answer the real needs of your customers and that they are willing to
An umbrella is not like any other umbrella. One umbrella may have 16
spines while others will have only six or eight. It may have floral
design or striped or checkered or plain. It could be black, white or
multi-colored. It may be small, medium, large or extra large. It may be
cane-type or three- or two-folds. Its material may be silver-lined,
silk, nylon or paper. It might have a plastic, metal or wooden tip and
handle. It might be automatic or manually opened and closed. It may even
come with a whistle. Some are disposable after some usage; others last
longer and are repairable. All have the risk of being misplaced or lost.
Yes, there are a thousand and one types of umbrellas. And you can't
manufacture and sell all types lest you want your inventory and
warehousing costs to balloon.
So, how do you choose the right models of umbrella that would sell?
Actually, this is not your sole decision. It is your customers who will
eventually make this decision for you with your prodding. Therefore, it
is a must for you to know immediately who your intended customers are:
* Who are your likely customers?
* Where do they live?
* What do they spend their money on?
* Where and how do they shop?
* What is their lifestyle, way of life, standard of living?
* What business or career are they in? What is their level and status of
employment or business?
* What is their age, gender, income, education background, marital
After gathering this initial information about your customers, ask
yourself: What products and services do they need and can afford to buy?
What will entice them to buy a certain product, your product? In a
previous column, I said that your customers would buy your product on
the basis of emotion, price and logic.
Some reasons, mostly emotional, people will buy certain products and
* To be comfortable - comforter, square-toed shoes, thick mattress, foot
spa, aerobic pillow, electric fan, air conditioner, silver-lined
* To save time - microwave oven, computers, personal digital assistant
(PDA), typing services, laundry service.
* To make money/profit - stockholdings, condo units, anything that can
repacked and resold.
* To have prestige - membership in sports clubs, signature clothes,
shoes, watch and others, laptop or handheld computer, travel, credit
card, "prestigious" school; "golf" umbrella.
* To be healthy - multivitamins, organic foods, support stockings,
no-MSG foods, tread mill, membership in a gym, services of medical
professionals, chi-gong lessons, HEALTH NEWS, umbrella.
* To avoid effort - vacuum cleaner, washing machine, electric can
opener, Internet or ATM banking, carwash service, automatic umbrella.
* To be entertained - VCD player, diskman, camera, karaoke machine,
co-mics, movies, toys, concert, stage play.
* To be popular - golf lessons, latest model car, song and dance
lessons, credit card, silk umbrella.
* To satisfy a craving - chocolate, ice cream, cigarette, chewing gum.
* To be in style - dresses in vogue, accessories, new footwear, cell
phone, PDA, folding umbrella.
* To be attractive - cosmetics, clothing, hair do's, hair dye,
liposuction, eyebag removal, nose lift, face lift, corset, teeth braces,
* To escape physical pain - medicine, wheel chair, surgery and other
medical services, hilot, acupuncture, orthopedic shoes; silver-lined
* To save money - insulation, capacitor, diesel-fueled car, ukay-ukay,
reusable containers; heavy-duty umbrella.
* To protect family and possessions - insurance, smoke detector, burglar
* To be safe - karate lessons, tear gas in small canisters, car,
* To acquire knowledge/continuing education - magazines, books, travel
and tour, graduate and post-graduate courses, seminars, PDA and
computer, Internet, educational toys and tapes, The Manila Times.
* To nourish the soul - rosary, mass card, religious books and
magazines, concert, meditation sessions.
* To be mobile - transportation, cellphone, wheelchair, bicycle,
motorcycle, skating shoes, Internet.
* To aid/advance career - pen, organizer, personal computer, PDA, laptop
Please note that some pro-ducts and services fulfill more than one
customer need. In choosing your products and services, you may want to
offer specialized products that would answer a very specific need, e.g.
wheel chair, sunblock. Or choose a pro-duct that could satisfy several
needs, therefore, several types of customers and budgets, e.g. regular
ballpen, sedan car.
Whatever you decide on, don't manufacture or buy a lot for your initial
offering. Test the market first. We shall discuss this next Monday plus
the choice of location for your product/business.
We shall try to answer the concern of Ms. Chat Macapanton: "Thanks for
the free classes on entrepreneurship. My learning buddy is planning to
put up a small coffee shop near Quezon City Hall ... his sister has a
big place housing a restaurant. Do you think this is a good idea?"
Also that of Ms. Malou Mendoza: "Your column interests me coz of my
preparation for retirement ... maybe sooner or later. I want to be an
entrepreneur like you. I am also planning to set up a store maybe in the
public market or if I have the resources, to buy a small lot and begin
organic gardening/farming. I am sure I will learn much from you. I might
get ideas for other ventures. I'll be one of your regular students."
Mr. Wilson Bumanlag wants some help, too: "Good day. A lot of people
like your article on entrepreneurship. I am one of your avid fans when
it comes to negosyo. I just only want to know if you have some seminars
for those who want to become entrepreneurs. Currently I'm working in a
MNC, but I am already tired of working and I want to put up my own
business that is why I'm asking if you have some workshop or seminar for
those who want to start their own business. Hoping for your response
Please participate in this our Journey on Entrepreneurship and share
your ideas with Chat, Malou and Wilson. You may send them e-mail or
Moje Ramos-Aquino is president of Paradigms and Paradoxes Corp. and
invites you to email her at moje@ mydestiny.net
Monday, February 10, 2003
Ms./Mr. Entrepreneur, have you made any decision on the kind of product you will produce and/or sell?
In the last column, we discussed one possible product — food. Everybody needs it. Everybody wants it. Everybody must have it. However, too much of anything could have not so desirable side or after effects. Not many food businesses are successful. By the way, Triple V is up for sale.
Jeff Taylor, founder and chairman of Monster.com, opines in the January 2003 issue of Fast Company: “We all need to go into the corn-storage business. By that I mean deve-loping ‘silo expertise’ in emerging business areas — such as health care, government, biotechnology and pharmaceuticals — that haven’t gotten much attention in the past five years. Those are the places where money is still being spent.
“Call them ‘silos’ or ‘niches,’ ‘business units,’ ‘communities’ or ‘channels.’ I like ‘silo’ because it represents a harvest. The marketplace in 2003 is more specialized, competitive and focused. If you want to harvest revenue, then you’ll have to get into the silo business. You’ll have to build 20 of them, each with a different expertise. Then, depending on the size of your business, you could make millions in one of those silos and substantially increase your revenue productivity.
“What does this mean for each of us? We can’t be generalists anymore. If you want to have a chance, you need to be a specialist. Be bold about your industry or niche expertise. If you’ve been in pharmaceutical sales, trumpet your expertise in the industry, not just your sales skills. You need to become a silo yourself.”
The question now is how to determine your very own “silo,” that product that will catapult you to success beyond your imagination. Don’t laugh now. Aim high. You don’t go into business just to earn money for your next meal, do you? So you need a product that will help you not only to sustain a comfortable lifestyle, but also to help you achieve psychic and material abundance.
You are looking for a rare product that will satisfy the needs of your customers. That is, a product that your customers are willing to buy and able to pay for. Have you ever experienced walking around a mall or along a street, then your eyes are suddenly fixed on a particular item in a store. No question asked, you buy it even if it wrecks your budget or you find no immediate use for it. Basta. Or you look at it and exclaim: “I’ve been looking for this product for a long time now. Eureka, I found it!” You want a product or service that will elicit such reactions from your customers.
It should not be just another bag or umbrella or car or dress or pots-and-pans or electronic gizmo. It should answer a real need of your customers at the same time it should be unique and different from all the bags or umbrellas or cars or dresses or pots-and-pans or electronic gizmos in the world or, at least, in the cluster of stores you are located.
This is where you need to do a little market research before you take that plunge into the wonderful world of entrepreneurship. You need not hire a professional market research company. They’ll cost you an arm and a leg and their process takes time. There are other references available for you, such as the National Economic Development Authority (NEDA) or the Department of Trade and Industry (DTI) or your local government business office. They would have statistics upon statistics on the business situation here in our country or your locality. Seek their expertise and advice on what industry and product you could explore.
The business section of our favorite The Manila Times will also tell you about the business environment, the players, the goings-on, the active products and services and many others.
You also need to study the law of supply and demand. Whew! Economist Jimeno Damaso, in his book How to Start Your Own Business, explains its dynamics as: “if the quantity supplied is greater than the quantity demanded, the tendency is for the price of the commodity to go down, and vice versa. Prices are signals that direct the behavior of both buyers and sellers. A rising price could look good to a seller, but not to a buyer. On the other hand, decreasing prices benefit buyers who can buy more commodities given a certain level of income, but may discourage sellers who will view such prices as signals of less profits for them.”
Simply put, you need to have a product that is not so common and oversupplied such that the only way to sell it is to bring down your price to a level that might not be profitable anymore. Or you might end up with a “Warehouse Sale. Everything must go before we go.”
Jimeno adds that ability and willingness of both buyer and supplier are other important considerations in supply and demand. What would your customers be willing and able to pay for your product? How often would they buy it? Are they happy with their current product? Would they be willing to make a shift to your product? What differentiates your product from a present product?
You can do your own market research by asking similar questions and more. You need to identify your target market in order to do this. Or your intended business location. Then you can do your own research. Walk around, talk to people, ask their opinions, seek their advice. This is better done as foresight before you start or if you are contemplating your current “silo.” This is harder to do in hindsight when you have already lost your shirt.
When you have acceptable answers to all your questions, then we can proceed to other key decisions for you, Ms./Mr. Entrepreneur. Join us regularly every Monday as we continue our Journey on Entrepreneurship.
Let’s hear from Alrey Galang of Parañaque (alrey888@yahoo. com):
“Glad to see another fiery writer on entrepreneurship online. Writers like you on this subject inspires the young and not-so young to go into the jungle of owning-your-own-business.
“Spending money in the Night Market University can be really more fulfilling and experiential compared to the comfort of AIM’s SGV room or any of their newer rooms … and having somebody else pay for your tuition. You’re right! It can indeed be fun and gratifying specially after figuring out how to rectify each and every mistake you make … for the observable ones.
"Paying P2,500 a night for a stall can still be viable (even with a minimum of 10-percent net profit) if the buyers come in hordes. At that rental rate, I guess you should be selling some P8,000-10,000 a night. And this means you must have a very, very attractive product or set of products that those young people (most of them work at night in the vicinity) would want to part their money for. So that means you should get at least 80 customers each buying an item worth an average of P100.
"With those hordes of people at the night market (specially on Saturdays) and many of them coming from the A, B and upper C market levels, you should be able to make it. However, I have no idea what kind of gift items you are selling.
"I do agree with you that certain buyers’ motivation can be emotional particularly those whom the sellers are intimately acquainted with. Emotional selling can be effective in the personal selling profession where a salesman calls on prospective customers. In the retail business … hmm … I guess it can work too if you put up a sign in front of your stall that says “Buy a P100 gift and give a Payatas child a happy Christmas. Each purchase entitles you to one ribbon with your name on it and shall be handed over to a child. Be blessed this Christmas!
"And that may mean you’ll donate a portion of your 10-percent profit to charity; but you must ensure that you keep your investment intact, earning a bit and enjoying the whole experience of being a charitable entrepreneur!"
Moje Ramos-Aquino is president of Paradigms $ Paradoxes Consultants and can be reached at email@example.com.
Monday, February 3, 2003
It is not enough to have the drive and motivation to be an entrepreneur. One important question is having the “right” product and service. Or better yet, does your product satisfy a real need of your customers? Given the number and variety of similar products in the market, does your product have a unique selling attraction? Do you have the requisite marketing support, e.g. advertising, promotion, publicity, etc.
When Rene Mayol and I were planning to venture into business, we first thought that we should go into the food business. I remember what my professor in college taught us. He said that during economic hard times, people would generally spend their money on two products: food and beauty products. He said that they would ensure their survival so they need food and would be in denial stage most often so they mask their desperation and frustration, even hunger, with beauty products.
At Eastwood, the best selling product was the never-say-die barbeques. Coming from their respective offices and before they do their rounds of the stalls, shoppers first feast on barbecued pork and chicken meat, innards and feet. The foods taste and smell good, the prices affordable, the portions are just right. You don’t have to wait for a table. You could eat, as is the wont of Filipinos, while walking and talking.
At Riverbanks, the food stalls made a killing. Even the ice cream, peanut and quail egg itinerant vendors were all smiles. People will always need food. Filipinos are insatiable eaters. My son Adrian just turned off the DVD player in the middle of a movie he was watching and said, “I can’t continue watching. I ran out of popcorn.”
Max’s, Savory, Aristocrat, The Plaza, Ma Mon Luk, Juanchito’s, Ferino’s, Little Quiapo, Emerald, Via Mare, Aling Nene’s, Joseña’s and many others are still serving their specialty food for countless loyal customers despite the dominant presence of Jollibee, McDo, KFC and others. I am sure that in every nook and cranny of our country, there are eateries that are still very much in business to this day. A&M Restaurant in Baranggay Kumintang, Batangas City, continues to serve the same nutritious and delicious native dishes they have been known for for the past 50 years. Satisfied customer Boni Pontipedra proudly says that A&M have also been consistently adjudged the cleanest restaurant in Region IV year after year by the Department of Trade and Industry.
Joseph Mapalo says a bowl of steaming mami at Session Café, Star Café or Luisa’s along Session Road is a must when you visit Baguio. His family also enjoys the bread and pasta at Café by the Ruins in front of City Hall. Sylvia Hermosisima-Luz remembers her family’s and friends’ eating outings at Carlo’s, Ding Qua Qua and Blue Café at Executive Royal Inn. In Davao, my friend Jess Dy and his family have been dining at Tai Huat Claypot House, Dencia, Famous and Grand Men Seng and the many restaurants at the pier for as long as he could remember.
Biscocho House in Iloilo is still the best for pasalubongs. The best La Paz Bachoy is served in the public market. When in Bacolod, Aklan, Mindoro, Roxas City, Dumaguete, Sorsogon, La Union, Pangasinan and other seaside places in Visayas, Mindanao and Luzon, you will inevitably dine in one of the seaside restaurants offering fresh seafood, sinugba-style, dipped in a mixture of calamansi and soy sauce or soy sauce and vinegar with plenty of siling labuyo.
The unnamed restaurant along the entrance to the public market in Balanga, Bataan, serves the best seafood cooked in sampaloc. That is why the restaurant is popularly known as “Sampalukan.” Their eel dish is also heavenly.
I have observed the peanut vendor at the corner of Road 4 and V. Mapa Streets in Sta. Mesa grow old and wrinkly but her roasted peanuts are still the best and her balut always freshly boiled. Sari-sari stores in our community say that their most saleable goods are food items.
There is one or two bakery in every barangay here in Manila that sells comfort breads like kabayan. Fruit and vegetable vendors are all over the place. Comes summer, families (grandparents, parents, children, grandchildren, aunts, uncles, housemaids) make halo-halo and ice candy together and sell them in front of their house. You see wrappers of candy, bread, frozen delights and other foods litter every street. Proof that Filipinos munch at something everywhere.
Open every drawer or locker in your office and you will find food items in them. Our employees not only keep their minds and hands busy at work; also their mouth. We are so afraid we might starve and that our big intestines will eat our small intestines.
What is the lesson to be learned here by budding entrepreneurs like you and me? Food is, and will always be, the product for all season, all the time. There is big business opportunity in food. Comfort food, I may add. The food our mother used to serve us. Our stomach is used to them and crave for them. International food such as shawarma or sashimi or others takes a lot of getting used to and requires special ingredients and equipment to prepare. I’ll have Excellente, Adelina’s or Majestic ham anytime with my hot pandesal and tsokolate eh.
Alan Yu, consultant for business development at Riverbanks’ Big Fan Corp., warns of stiff competition, though. Last December when I got a stall in the Riverbanks Night Market he said, “please don’t sell anymore food items. Everybody wants to sell food items.” Almost every non-food stall still sold one or two food items. They said that food is what attracts customers to their stalls. What Big Fan has done, starting February 1st, is to construct 18 food stalls for vendors of all kinds of cooked, fresh, processed food. Go visit them and make those entrepreneurs happy and smiling on their way to the bank.
Man does not live by bread alone. So what other products sell? Let’s discuss that in our continuing Journey on Entrepreneurship.
Ms. Moje Ramos-Aquino is president of Paradigms and Paradoxes Corp. and welcomes your comments and participation via firstname.lastname@example.org.