Innovation deployment of a high quality and refined iodized salt : a case study of the Barangay Doña Lucia Fisher Folks Association in Mondragon, Northern Samar / Isabelita M. Pamposa

Year : 2012

Number of Pages : 49 leaves

Adviser : Prof. Edison D. Cruz

Executive Summary

The Salt Refining enterprise of the Barangay Doña Lucia Fisher Folks Association (BDLFA) illustrates the dynamics of technology adoption by a rural community organization. The BDLFA is a micro player in the salt industry, as a pioneering salt production facility in Easter Visayas in 2006 utilizing the traditional salt production technology. It availed the DOST SETUP assistance in 2010 to upgrade its facility and production through the adoption of the DOST-ITDI technology on salt refining and iodization. This study evaluates the operations of the BDLFA in the implementation of a newly acquired technology improvement, in particular, the introduction of process innovations designed to upgrade the production capacity of the enterprise for a more competitive product. Specifically, the study answers the questions on the existing business practice(s) of the organization, particularly in the production of iodized salt determine the current problems in the manufacturing processing of iodized salt identify other appropriate technologies for product / process improvements and standardization in conformity to market standards and to propose doable marketing strategies for the product. A semi-structured survey questionnaire, personal interview, and on-site assessment were used in the collection of primary data at the firm-level with key officers and members of the association as respondents. A total of 15 firm-respondents participated in the study comprised of 5 officers and 10 members of the organization who are directly involve in the management and the manufacturing operations of the enterprise, respectively. Insights and additional relevant information were also gathered from other stakeholders of the industry. Secondary data from reports and previous studies were likewise used as sources of information. A descriptive analysis of data was adopted using the analytical frameworks of value chain, PEST, SWOT and Porter's five forces model for determining industry competitiveness. Based on the assessment of the enterprise, the study concludes that the business operations of the BDLFA salt refining facility still needs some improvements in order to attain the organizational objective of increasing the competitiveness of the firm in an industry where the major players are large companies offering branded products. The facility is constrained with some inefficiency in its manufacturing processes resulting to problems in ensuring the production of a standard and consistent quality of salt. The manual mixing during the critical iodization step is considered as a major limitation. Other deficiencies identified are the low level of technical knowledge among the workers minimal technology applications in some activities (e.g. transport of seawater, product packaging, process and product quality monitoring and control) non-compliance to regulatory requirements and absence of a marketing strategy for the product. However, the internal weaknesses of the organization and enterprise are perceived as surmountable in view of existing opportunities and strengths of the industry particularly in the socio-political, economic and technological dimensions. For instance, the government support for MSMEs' development in terms of various assistance packages and policy instruments the increasing demand for the product and opportunities for its other applications the availability of technologies for product/process innovations and improvements. It is therefore recommended that the enterprise should adopt some innovations in its manufacturing operations to derive economic benefits from the venture. These improvements include : innovation on the processing like procurement of motor pump with hydraulic hose for ease in hauling and transportation of sea water from appropriate source installation of electricity on the facility to be able to use the available electric iodizing machine and quality monitoring of iodine content of salt use of appropriate packaging and labeling design and facility and process operations complaint to regulatory standards. To maximize the market potential and existing opportunities for market expansion, a marketing strategy is proposed which details the positioning, pricing, distribution and promotion mechanisms deemed strategic for the product. The marketing objectives are geared towards obtaining a substantial market share for the BDLFA. With the presence of several brands in the market, both locally produced and imported, promotional activities and advertisements are critical in increasing market penetration of the product. Because of the limitations in resources, promotional activities identified are those that would not require significant investments such as the use of the internet and participation in trade fairs and bazaars. Since, the proposed target market is the entire Eastern Visayas region, the organization needs to tap available marketing channels such as retailers, supermarkets, groceries and distributors. Service provision to target market intermediaries and end-users should aim to attract customers and retain markets. Mechanisms for internal marketing are also proposed to increase and sustain commitment of BDLFA members and personnel to organizational goals.