May 2008 Archives

DRIVING BY EDSA, you can’t help but be distracted by the gigantic billboards on both sides of the road. A while back, there was Heart and Jericho (when they were still together) for Penshoppe, John Lloyd Cruz for Bench, Gretchen Barretto for Plains and Prints, and now, Toni and Alex Gonzaga for Faces & Curves. Can product endorsers really help in marketing a business? Or are there instances when they can give the opposite desired effect (turn away customers)? “Product endorsers can have a tremendous impact on one’s business. Awell-known and respected celebrity can add instant credibility to an otherwise unknown or untried product,” says Art Ilano, a marketing professor at the College of Business of the University of the Philippines. Take the case of PH-care. It was an unheard of feminine hygiene brand when it came to the market, but Sharon Cuneta made it a trustworthy product to use. Now why is there a need to get an endorsement? It all boils down to inertia. According to Ilano, people will not necessarily try out a new product just because it is in the market. This is particularly true of products in the mature product category (such as detergents, soaps, softdrinks or coffee). “[People] would rather stick to their old habits. But the backing of an endorser can change their habits, particularly if the only reason they stick with their old products is because they feel they don't know any better. Celebrities can add both credibility and value to a product. And of course, the higher the perceived value of the product, the better a deal it seems to be!” says Ilano. But it doesn’t work all the time. The endorser has to have the love of the fans, points out Ilano. “Kris, Aga and Sharon are blessed with this kind of love and respect. And despite whatever scrapes they get themselves into, their fans love them nevertheless. They also appear to have a certain air of authority when they are being serious, and I think that this is also an important factor.” Second-tier or B-list celebrities may not elicit such an enthusiastic reaction. “The trust won't be there, and the audience ends up viewing them simply as entertainment-oriented message delivery devices rather than as credible authorities,” says Ilano. “If you look at the way Cesar Montano pitches Touch Mobile (not that he's in the B-list), this is what is happening. He is not treated as an authority but rather as an entertainment figure. So the verdict is still out as to whether the ad would be just as effective without him in it at all.” According to Ilano, notorious and infamous celebrities do not make good endorsers, too, unless you are selling a product that is purposefully edgy or rebellious in tenor. “A classic example of the former happened in the 1970s, when Rod Navarro, an actor who was known for his acerbic humor and kontrabida roles, donned a pilot's uniform for an ad by Philippine Air Lines. The result was an increased negative perception of the airline... because the market didn't like the idea of someone like Rod Navarro flying their planes!” And then there are the celebrities lacking in the looks department. Ilano shares the story of Dr. Dieter Zetsche, then the CEO of Chrysler. “In 2006, he appeared in a $100 million ad campaign endorsing his own cars. The problem was that Dr. Z, with his caricature-like handlebar mustache (he has been compared to the cartoon character on Monopoly game sets), looked more like a comical figure than a CEO. And this led to a massive failure in terms of eliciting credibility for Chrysler's vehicles.” So then, when thinking of getting an endorser, determine if the celebrity: 1. has the love of fans 2. is not notorious or infamous 3. is good-looking 4. is someone you can afford. An A-list celebrity endorser’s fee is no joke!

IT used to be that Sigel Inc. was raking in dollar sales as an exporter of hand crafted premium boxes for home accents and gift items such as chocolates, wines and dates. Over the years, sales have slowed down as companies abroad started ordering goods from China, where items are so much cheaper. The fact that the peso has strengthened itself against the dollar has hurt the business too. Eugene Leyran says, “At a trade show, if a buyer is interested, I would send samples right away. By the time the buyer sends a purchase order, the peso-dollar exchange rate may have gone down by two pesos.” And with a 30-day credit term extended to clients, Sigel may find itself staring at an even leaner margin by the time the client pays if the exchange rate goes down again. The cost of manufacturing has also gone up. “Our constraint is the price of our finished product. It’s too high because it’s labor intensive. Maski ako namamahalan,” says Eugene. At times, clients would set a price for their items, and won’t budge if Eugene explains that they can’t offer the goods at that price given the forex rate. “We still have active buyers but orders have gone down due to the price.” Sigel Inc.’s competitive edge, however, remains its exquisite designs, which attract a lot of inquiries. “By word of mouth, maraming nagtatanong about our boxes even through e-mail,” says Eugene. To cope with the situation, Sigel has started tapping the local market. But there is that risk that their designs will be copied if their goods are sold locally. Eugene is also asking, “Should I get space at Tiendesitas? Should I go door to door to multinational companies for their corporate giveaways?” Arcilla sees that Sigel cannot control the crisis. “You cannot control the wind but you can always adjust your sails,” he counseled. Because Sigel’s products have been proven attractive to foreign buyers, mentor Willy Arcilla recommends that Sigel Inc. go into e-commerce. Eugene admits they have thought about it but have not really put much effort into it. By going into e-commerce, Sigel will be able to make its presence known to more foreign buyers who may be interested in their products. Willy’s other recommendations for Sigel Inc. are as follows: 1. Join more trade fairs. 2. Give emphasis on marketing. “Nike is not Nike without the brand. It’s in the marketing.” 3. Diversify by continuing to tap the local market. Eugene sees the wisdom in this, and resolves to just come up with new designs to counter the risk of copycats using Sigel’s designs. By doing so, even if Sigel’s design is copied, he’ll have a new design out once the old one becomes passé. Here's a video taken by INQUIRER.net business editor Ma. Salve Duplito of Arcilla saying Sigel should put more emphasis on marketing. How will Sigel Inc. do after following Willy’s recommendations? Let’s find out in the coming months.

IT used to be that all Filipinos had to do to look fabulous was to go to the neighborhood beauty salon. Now there are a whole lot of places to patronize if one is really vain or conscious about appearance: the facial salon, the spa, the medi-spa, the cosmetic surgeon, etc. Indeed, it seems that Filipinos have become more vain over the years, a fact observed by Faces & Curves’ Dr. Jesus “Jay” Recasata, Jr., a plastic surgeon, and his wife Dr. Sheila A. Recasata, a dermatologist. In the past eight years since Dr. Jay established his practice in Greenhills, he has seen the demand for cosmetic surgery and beauty services rise. “The prospects for the future are good,” says Dr. Jay. This is why in 2005, Dr. Jay asked his wife to join him in his practice and renamed the clinic Faces & Curves. Aside from surgical services offered (cosmetic, plastic, and reconstructive), the state-of-the-art clinic has since offered beauty services for the face, skin and body, all performed by board-certified doctors. Aside from having local clients, Faces & Curves also gets its share of foreign clients through the medical tourism program. A lot of their clients are balikbayans from the US, Japan, and Europe. Dr. Jay credits the Filipino doctors’ tender loving care and personal touch for the success of the medical tourism program. Prices for services in the Philippines are also more affordable. “Our rates are one-third that of US or Europe. Take breast augmentation, for instance. It may cost as much as $15,000 but will only run up to about $3,000 to $4,000 here,” says Dr. Jay. “The website is a big help,” says Dr. Sheila. Inquiries from all around the world have been pouring in through the website. Because of the clinic’s popularity, Faces & Curves opened a branch in Minato-ku, Tokyo called World of Beauty by Faces & Curves. Faces & Curves does about 30 surgeries a month but that doesn’t mean they do it on just about anyone. “We do a test first to see if you’re qualified to undergo surgery,” says Dr. Jay, citing one surgery they cancelled when a patient had a cough. He also refused one patient who he felt had too many surgeries already. “You have to look at it from a holistic view,” says Dr. Jay. Asked what the three popular surgery procedures are at Faces & Curves, the couple cites nose lift, liposuction and breast augmentation. But in the beauty department, the facial service is the runaway winner. At Weigh Less Center (Mendez Medical Group), facial services are also very much in demand, points out medical director Dr. Joel C. Mendez. “Filipinos just love to look good, and we are happy to make them look good,” says Dr. Mendez. His clinic offers many other services as well, from anti-ageing treatments to surgery procedures as well. There are many other beauty and medical clinics offering the same services in the country. But to get the best service, Dr. Jay advises people to look at the people behind the clinic. They should be board certified, he says. The future looks bright for the beauty business.

UPDATE: Editor's note: Added video taken by INQUIRER.net business editor Ma. Salve Duplito. COMTEQ COMPUTER & Business College is one growing enterprise in the Subic Bay Freeport Zone. Started in 1990 as an institution offering computer literacy courses to high school students, it has now become a full college offering bachelor’s degree courses in Computer Science, Information Technology, Accountancy, and Business Administration. It also offers shorter two- and three-year courses in computer programming, animation, and electronics technology, among others. Hundreds of students now go to Comteq wanting to be equipped with the technological know-how needed in the marketplace. What attracts the students to Comteq is the school’s strong on-the-job (OJT) training program and affordable tuition fees. “We want our graduates na may alam na paglabas [ng school] because of OJT,” says John Bayarong, Comteq’s dean. In fact, students have already done websites for organizations. The students have also been joining competitions and have in fact won in some contests already. Here's a video taken by INQUIRER.net business editor Ma. Salve Duplito. Bayarong and Ausbert Joaquin of Comteq Computer & Business College listen with Allan Cruz of Business Mentors Inc. to mentor Willy Arcilla (not in video) as Arcilla advises strengthening Comteq's hold in the market first before venturing into franchising. Because of the projected increase in enrollees, Comteq, a non-stock, nonprofit company, wants to expand the business, either by franchising it or by inviting new investors. They also want to bring the concept to other areas of the country and have Comteq campuses there. They have seen the concept work and know that it will help a lot of students. John says they have the business model but there are still some areas that need fixing. For instance, Comteq does not have a marketing officer. The recruitment of human resources also needs to be improved as they just get fresh people internally; they know that people with external experience will bring a lot of needed insight to the company. Mentor Arcilla suggests focusing on strengthening Comteq as a company first. “Ayusin muna ang operations to be able to franchise later,” he says. Once Comteq’s operations are problem-free, Willy says the people will be the one to go to them to ask for a franchise. "Make Comteq the leading computer and technical school for the masa first." Here are Willy’s other recommendations: 1. Make the mission and vision sharper and clearer. 2. Fix the operations bug. Recruit more highly qualified staff. 3. Go aggressive in marketing. Go on campus tours and target the best students in high school. Take part in symposia to let more students to know about Comteq. 4. Rebrand the OJT program as “Comteq Incubation Lab” or something like that. For every website done by students for organizations, brand this as “Powered by Comteq Incubation Lab.” This is a marketing strategy. 5. Make a business plan. 6. Look into availing of educational grants or fund assistance. Franchising is a fast way of getting the needed funds to expand a business. But there’s a right time and a right way to do it. Let’s follow Comteq’s actions in the coming months and see if they’re on the right track.

AT THE DANGWA Flower Market, some 50-plus vendors sell an array of fresh cut flowers 24 hours a day, 7 days a week. This market has been there for more than 30 years. Retail buyers and those with floral businesses flock to this market for their floral needs. Jay Domingo and his wife Gina run a branch of Pat’s Flowers & Supplies in Dangwa. The main outlet located in Quiapo was put up by Gina’s grandmother in the early ‘70s. It still exists today. As the name suggests, Pat’s Flowers & Supplies does more than just provide flowers: They also make available to flower shops the supplies they need, from pots, ribbons, and other tools of the trade. But five years ago, they started doing retail floral arrangements for consumers. They called this business Flora Grande. Business is brisk on Valentine’s and All Saint’s Day, when sales would be ten times higher than a normal day’s sales. Flora Grande also gets a lot of requests for sympathy floral arrangements, wedding arrangements, and arrangements to decorate stages during school affairs. Jay said they would like to expand the business by putting up a website offering gifts and flowers so OFWs abroad can send these to their relatives in the Philippines. They can even do exports. There is a lot of competition now for Pat’s Flowers & Supplies in Dangwa, and profit margins have become leaner. Jay and Gina are thus faced with a dilemma: Should they still continue Pat’s Flowers & Supplies in Dangwa? Or should they just close it and focus on Flora Grande? The thing holding them back is sentimentality. Gina was raised by her grandmother Pat, and so is reluctant to let go of the business. The couple is also reluctant to take that step as they will not be able to absorb the 12 people employed -- all old-timers -- by Pat’s Flowers & Supplies. Mentor Willy Arcilla sums this up as the couple’s “fear factor -- fear of the future.” How can Jay and Gina address this dilemma? Willy suggests the following: 1. Define your mission and vision. Ask yourself: What do you want to be? A business with P50 million as long as grandma is happy, or a business with P100 million even without grandma’s business? 2. Make a business plan. Putting it on paper will force you to think. “A business plan is not just for multinationals,” says Willy. Study the cost benefit of keeping or letting go of one business. 3. Find out how you can differentiate yourself from other vendors in Dangwa. Jay and Gina said the flowers they use for Flora Grande’s arrangements are different from others’. That can already be the company’s competitive edge. 4. Segment the market. Decide whether you want to focus on institutional customers or retail customers, and whether you want to focus on sympathy, romance, or wedding arrangements. Decide which market you want. “You cannot be everything to everybody,” says Willy. 5. Know your consumer. Once you have identified your target market, find out what he/she likes: his/her favorite color and favorite flowers, then prepare arrangements to suit his/her likes. 6. When putting up the website, beat the top competitor. Show the flowers and the benefit one can get from them. “Find the human emotion -- it is the highest form of consumer need.” Think of Kodak offering not just photos, but memories. What would happen if Jay and Gina follow Willy’s recommendations? Abangan! :) Editor's note: Photo courtesy of Jay Domingo

UPDATE: Editor's note: Added video taken by INQUIRER.net business editor Ma. Salve Duplito. DELILAH GALANG is a retiree with a mission. Having seen how cancer can take away the lives of people dear to her, she has, since 2000, embarked on a personal mission to offer Filipinos an alternative way to treat and care for cancer patients. This alternative way is the Gerson therapy introduced by the German physician Max Gerson in the 1920s. Gerson therapy is an all-natural non-toxic treatment program using organic foods, juices, coffee enemas, detoxification and natural supplements. Dr. Gerson founded the Gerson Institute based in San Diego, California to spread the word about Gerson therapy and to train caregivers to administer the therapy program. How she got into Gerson therapy is interesting. Delilah’s nephew was just six years old when he was diagnosed with advanced non-Hodgkin’s lymphoma. Doctors gave him only a 25-percent chance of survival. He was having chemotherapy every three weeks. After losing her mother to pancreatic cancer, Delilah didn’t want to lose her nephew to the dreaded disease. And so she researched on the Internet and found out about Gerson therapy. The success rate for treating cancer using Gerson therapy is reportedly 85 percent. The more she read, the more she wanted to learn, and so she enrolled in the practitioners’ intensive training program in San Diego. She became the only licensed practitioner here in the Philippines. Applying what she has learned on her nephew, the boy got better. After six months of therapy, his blood was cleared of cancer. Today, he is 19 years old and has not been back to the hospital ever since. If her nephew got well on Gerson therapy, Delilah knew many more people can benefit from the alternative therapy program. And so in 1990 she established the Cancer Council of the Philippines, a charitable organization. The organization has since been providing financial support to indigent patients. Delilah has also been practicing the Gerson therapy program on some patients. Now here’s what she wants to do: Raise enough funds. These funds will be used to train more people as caregivers of the program. She also wants to get government accreditation for that caregiving training. She also wants to have an office and a wellness center where patients can come and relax. The funds will also be used to build the organization’s website so more people can know about it. Right now, Delilah is Cancer Council’s one-woman team. 9( But how does one raise funds for a cause when there is donor fatigue? In the Philippines, alternative therapy is also not as well-received by people as traditional medicine. Mentor Willy Arcilla recommends the following: 1. Raise the level of awareness about Gerson therapy by using mass media: TV, newspapers, and even websites. Doing so will educate people about the benefits of Gerson therapy. 2. Network with other cause-oriented organizations. Some organizations may have needs that Cancer Council of the Philippines may provide, and so a “swap” can be made for funds Cancer Council needs. The business is laudable, says Willy. Let’s hope things work out in the coming months as Delilah does her homework.

UPDATE: Editor's note: Added video taken by INQUIRER.net business editor Ma. Salve Duplito. FRANCO MESINA is in an enviable position. At twenty-something, his problem is how to keep up with the success of Icylicious, his snow cone business, and how to sustain the seasonal business of FranzAvian Trading Co. Ltd., which supplies equipment to water refilling stations. Franco has been running his businesses with his girlfriend Abby Sarmiento, and they sat down with mentor Willy Arcilla for advice last March for their first mentoring session. Because they had space in front of Fountain Cool, the water refilling station in Binondo he put up with his dad, Franco thought of selling something there. Lots of young people pass by on their way to school. And so Franco and Abby started Icylicious just three months ago. They registered the business with DTI and SEC. They got an electric ice crusher and sourced ready-to-use syrups for the snow cones. To distinguish themselves from other snow cone vendors, Franco and Abby made sure the syrups are delicious and do not leave discoloration in the teeth and mouth. They would sell as much as 1,000 cups of 6-oz. styro cups a day for P15 a cup, so the profits are coming in swiftly. Franco foresees the return on investment to happen in five to six months’ time. Now people have been making inquiries about franchising. One person who inquired said that one obstacle facing them is their company background. "They’re asking, ‘Who are you? What’s your background?’" shares Franco. Is this a good time to franchise? It seems a good time. Willy says, "Milk the market before competitors come in." But Willy is also cautioning the two that there’s a possibility of Icylicious becoming an instant hit like Zagu. The market then became quickly saturated due to the low cost of entry. Here’s Willy’s advice: 1. Think of how to differentiate Icylicious from competitors. Look for the unique selling point. 2. Protect the patent. 3. Touch base with franchising organizations. 4. Don’t be sentimental. If the business loses its luster later on due to mushrooming of competitors, bug out. FranzAvian’s water refilling equipment/assembly business has more favorable long-term prospects. Today they can put up two to three water refilling stations per month. But Franco says if they can streamline procedures, they can even do one water refilling station per week. They can do different setups, from residential to commercial. The company’s competitive edge is in using bigger filters for tanks, and not artificial filters and cartridges that have to be replaced monthly. The problem is that this business is seasonal, and there are many water stations already in Binondo -- few new ones are being put up. Franco sees the need to market their services more effectively to get more customers. Because PET bottles are environmentally damaging, Willy blew Franco’s and Abby’s minds when he said, "Why not filter straight from the source? Imagine the campaign: Dump the Plastic Bottle, Save the Planet." Franco remarked that some have already tried but all failed. Willy responded by quoting Benjamin Franklin: "I have not failed. I have found just 10,000 ways not to do it." And so here’s FranzAvian’s homework: 1. Research and get data about the possibility of filtering water sources. Other countries have clean potable drinking water coming out of their faucets so this is attainable. 2. Don’t commit the same mistakes made by home filtration systems. 3. Test water filtered by FranzAvian and document this. Talk to an engineer, a water expert, and a quality testing company. 4. Be clear about your mission. Don’t be opportunistic. These all sound exciting. Let’s see how FranzAvian and Icylious fare in the coming months.