B.

DEMAND ANALYSIS 

Demand is an economic principle referring to a consumer’s desire to purchase goods

and services and willingness to pay a price for a specific good or service. Analysis of demand

helps firms to design their pricing policy. Firm can choose either to lower or raise a product’s

price by observing trend of consumer demand for that product. Producers can’t fix price for

their products without first understanding the market demand for them. It also helps firms

to adopt appropriate investment policy. Based on the nature of demand for a particular

product in a particular market, firms can make their investment decisions.

The demand will be analyzed both in the past and future through the use of

mathematical methods to predict the actual demand on the commodity in the future.

Table 1: Historical Population

Year  Population 
2015 345,366
2016 350,685
2017  356,086
2018 361,569
2019  367,138
 

To identify the demand for the product, the researchers floated questionnaires in

their target market which are the individual population of Baguio City. This includes the

students, family and friends of the researchers who lives in Baguio City. Questions asked

include the frequency of consuming puto and leche flan, willingness to buy the product, and

how much the respondents are willing to avail Strawberry Puto with Leche Flan. 

The proponents used Yamane’s formula to calculate the sample size given the

population and a margin of error. Since the age of 0-3 months are not capable of eating solid

foods, they are not included in the computation for the sample size. 

Below shows the computation of the sample size that will be used in this study.

N
n
1  Ne 2
367,138
n
1  (367,138)(0.05) 2

n  399.56  400
Where:

n = Sample size

N = Total individual population in Baguio City

e = Margin of error

Using the Yamane’s formula, a sample size of 400 individuals was derived.

Table 2: Frequency of respondents who consume puto

Response Frequency Relative frequency

Yes 390 97.5%
No 10 2.5%
Total 400 100%

Table 2 shows that out of 400 respondents in Baguio City, 97.5% of them consume puto.

This data showed that majority of respondents in Baguio City would buy the Strawberry Puto

with Leche Flan.

Table 3: Frequency on how often respondents consume puto

Response Frequency Relative Frequency

Daily 37 9.5%
Twice a week 55 14.1%
Weekly 78 20%
Monthly 149 38.2%
Others 71 18.2%
Total 390 100%
Table 3 shows that respondents usually consume puto monthly with a percentage of

38.2%. While consumption rate of daily, twice a week, weekly, and others (for example,

once a year), are 9.5%, 14.1%, 20%, and 18.2%, respectively.

Table 4: Frequency of respondents who consume leche flan

Response Frequency Relative frequency

Yes 384 96%
No 16 4%
Total 400 100%

Table 4 shows that out of 400 respondents, 96% of them consume leche flan. This data

can indicate that most respondents would avail the product.

Table 5: Frequency on how often the respondents consume leche flan

Response Frequency Relative Frequency

Daily 23 6.1%
Twice a week 50 13%
Weekly 54 14%
Monthly 161 41.9%
Others 96 25%
Total 384 100%

Table 5 shows that respondents usually consume leche flan monthly with a percentage

of 41.9%. While consumption rate of daily, twice a week, weekly, and others are 6.1%, 13%,

14%, and 25%, respectively.

Table 6: Frequency of respondents who want to buy Strawberry Puto with Leche Flan
Response Frequency Relative frequency
Yes 372 93%
No 28 7%
Total 400 100%

Table 6 shows that out of 400 respondents, 93% of them are willing to buy the product.

Thus, it can be said that considerably high portion of the market will buy the Strawberry

Puto with Leche Flan.

Table 7: Frequency on how many pieces the respondents are willing to buy Strawberry Puto

with Leche Flan

Response Frequency Relative frequency

1-4 163 44%
5-8 100 27%
9-12 99 26.5%
Others 10 2.5%
Total 372 100%

Table 7 shows that most of the respondents prefer to buy 1 to 4 pieces of the product.

This will help the proponents agree on whether the production of the product will be

increased or decreased.

Table 8: Frequency on how much the respondents are willing to buy Strawberry Puto with

Leche Flan

Response Frequency Relative frequency

Php 20 158 42.5%
Php 25 108 29%
Php 30 106 28.5%
Total 372 100%

Table 8 shows that majority of the respondents are willing to pay at a price of Php 20.
This indicates that the consumers are willing to buy if the price is cheaper.

Table 9: Historical Demand

Year Population Percentage of Annual Historical Demand

Consumption Consumption
2015 345,366 97.5% 63 21,214,106.55
2016 350,685 97.5% 63 21,540,826.13
2017 356,086 97.5% 63 21,872,582.55
2018 361,569 97.5% 63 22,209,375.83
2019 367,138 97.5% 63 22,551,451.65

Table 9 shows that historical demand used to forecast future demand. It is computed by

multiplying the population each year by the percentage of consumption and annual

consumption.

Table 10: Annual Consumption

Frequency Number of Respondents How many in a year Total

Daily 37 298 11,026
Twice a week 55 104 5,720
Weekly 78 52 4,056
Monthly 149 12 1,788
Others (Twice a month) 71 24 1,704
Total 390 24,294

CJHANE!!! YUNG FORMULA NG ANNUAL CONSUMPTION, DITO MO ISINGIT. THANK YOU!!!

Table 10 shows the computation for annual consumption which is used for the historical

demand in Table 9. Annual consumption is the average consumed puto of an individual for a

year.
Table 11: Summary of Standard Deviation

Methods of Projection Summation

Arithmetic Straight Line 108.45
Arithmetic Geometric Curve 3,834.32
Statistical Straight Line 69.56
Statistical Parabolic Curve 37.15

Table 11 shows the results of computing the standard deviation of demand using

different methods. Standard deviation is a measure of risk, therefore, the method that gives

the least figure should be chosen. Table 12 shows that Statistical Parabolic Curve yielded the

least standard for the respondents, thus, this method was used for the computation of the

projected demand.

Table 12: Statistical Parabolic

Year Y X X2 X4 XY X2Y
2015 21,214,106.55 -2 4 16 (42,428,213.10) 84,856,426.20
2016 21,540,826.13 -1 1 1 (21,540,826.13) 21,540,826.13
2017 21,872,582.55 0 0 0 0 0
2018 22,209,375.83 1 1 1 22,209,375.83 22,209,375.83
2019 22,551,451.65 2 4 16 45,102,903.30 90,205,806.60
Total 109,388,342.70 - 10 34 3,343,239.90 218,812,434.80

a b X c X2 Yc Y-Yc (Y-Yc)2
21,872,561.48 334,323.99 -2 2553.53 4 21,214,127.61 (21.06) 443.7041
21,872,561.48 334,323.99 -1 2553.53 1 21,540,791.02 35.11 1,232.8124
21,872,561.48 334,323.99 0 2553.53 0 21,872,561.48 21.07 443.9449
21,872,561.48 334,323.99 1 2553.53 1 22,209,439 (63.17) 3,990.2684
21,872,561.48 334,323.99 2 2553.53 4 22,551,423.57 28.08 788.2457
109,362,807.40 1,671,619.95 - 12,767.65 10 109,388,342.70 - 6,898.9755

Table 13: Projected Values Using Statistical Parabolic

Year a b X c X2 Yc
2020 21,872,561.48 334,323.99 3 2553.53 9 22,898,515.21
2021 21,872,561.48 334,323.99 4 2553.53 16 23,250,713.90
2022 21,872,561.48 334,323.99 5 2553.53 25 23,608,019.64
2023 21,872,561.48 334,323.99 6 2553.53 36 23,970,432.45
2024 21,872,561.48 334,323.99 7 2553.53 49 24,337,952.31

Table 14: Actual Projected Demand

Year Yc % of Willingness Actual Projected Demand

2020 22,898,515.21 93% 21,295,619.14
2021 23,250,713.90 93% 21,623,163.92
2022 23,608,019.64 93% 21,955,458.27
2023 23,970,432.45 93% 22,292,502.18
2024 24,337,952.31 93% 22,634,295.65

Table 14 projects the demand for puto throughout Baguio for the years 2020 to 2024,

showing that there is an increasing demand. The projected demand was computed by

multiplying Yc and the percentage of willingness. The table shows that the supply of puto

should also increase to meet the increasing demand.