在巴拿馬的火山鎮建造永續住宅區的可行性研究 - 政大學術集成

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(1)國立政治大學商學院國際經營管理英語碩士學位學程 International MBA Program College of Commerce National Chengchi University. 碩士論文政治. 大. 立Master’s Thesis. ‧. ‧ 國. 學 sit. y. Nat. 在巴拿馬的火山鎮建造永續住宅區的可行性研究 er. io. Feasibility Study on a Sustainable Residential Project in. n. a l Volcan, Panama i v n Ch U engchi. Student: Maria Elena Alvarez Advisor: Prof. Chenghsien Tsai. 中華民國一百零四年五月 May 2015.

(2) 在巴拿馬的火山鎮建造永續住宅區的可行性研究 Feasibility Study on a Sustainable Residential Project in Volcan, Panama. 研究生: 衣瑪麗. Student: Maria Elena Alvarez. 指導教授：蔡政憲. 政治大. 學. ‧ 國. 立. Advisor: Prof. Chenghsien Tsai. 國立政治大學. 商學院國際經營管理英語碩士學位學程. ‧. 碩士論文. sit. y. Nat. io. er. A Thesis. Submitted to International MBA Program. n. a. iv. l C Chengchi University National n. hengchi U. in partial fulfillment of the Requirements for the degree of Master in Business Administration. 中華民國一百零四年五月 May 2015.

(3) Acknowledgements I would like to thank my parents for supporting me in all of my ventures. I must acknowledge my fiancé, David, whose social awareness and innovative thinking inspired me to envision a project that can make a difference. Finally, I would like to express my gratitude to my advisor, Prof. Chenghsien (Jason) Tsai, whose expertise and guidance added considerably to the development of this thesis.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. i. i n U. v.

(4) Abstract Feasibility Study on a Sustainable Residential Project in Volcan, Panama By Maria Elena Alvarez The thesis aims to determine the feasibility of building a sustainable community in the town of Volcan, province of Chiriqui, Republic of Panama. There is a great opportunity to be pioneers in offering an environmentally friendly residential project in Panama, and to fill the void of tenders for the medium to high range of retirement. 政治大. residences and second homes in the province of Chiriqui.. 立. After conducting a demand-side analysis, I determined that there are enough people that. ‧ 國. 學. qualify as target market for the project in terms of age and income.. From the supply-side perspective, the sustainable nature of the project represents a low to moderate over cost, which will turn into savings for the final user in the long run. After. ‧. estimating costs and calculating the profit margin, I concluded that the project could be. y. Nat. profitable.. io. sit. I will pursue a niche marketing strategy, targeting environmentally concerned college. er. educated Panamanian and foreign residents, looking for a retirement or second home in the. al. n. v i n C h I identified that By conducting a sensitivity analysis, e n g c h i U the most relevant variable. mountains, in harmony with nature.. for the. success of the project is the ability to sell the houses at the expected price. Therefore, it is mandatory to execute an effective marketing strategy in order to reach the potential customers, project the right image, and to raise awareness about the benefits of environmentally friendly development. Finally, I conclude that the project is feasible and profitable, as long as an adequate marketing strategy is implemented. Keywords: (Sustainable), (green construction), (demand), (supply), (feasibility). ii.

(5) TABLE OF CONTENTS 1. Motivation ................................................................................................................................... 1 2. The Project ................................................................................................................................... 3 2.1. Construction Site and Issues ............................................................................................ 3 2.2. Geographic Information .................................................................................................. 5 2.3. Project Features ............................................................................................................... 8 2.3.1.. Green Construction ............................................................................................. 8. 2.3.2.. Shared Areas ..................................................................................................... 10. 立. 政治大. 3. Demand-Side Analysis .............................................................................................................. 11. ‧ 國. 學. 3.1. The Market .................................................................................................................... 11. ‧. 3.2. Population Statistics ...................................................................................................... 11 Local Demographics ......................................................................................... 11. 3.2.2.. Foreign Residents’ Demographics.................................................................... 15. al. er. io. sit. y. Nat. 3.2.1.. n. 4. Supply-Side Analysis ................................................................................................................ 20. Ch. engchi. i n U. v. 4.1. Development Plan.......................................................................................................... 20 4.2. Construction Costs ......................................................................................................... 21 4.3. Opportunity Cost of the Land ........................................................................................ 23 4.4. Administrative Costs ..................................................................................................... 24 4.5. Design Costs .................................................................................................................. 25 4.6. Marketing Costs ............................................................................................................. 25 4.7. Cost Breakdown ............................................................................................................ 25 4.8. Revenues ........................................................................................................................ 26 5. Feasibility Confirmation from Customer’s Side ....................................................................... 30 5.1. Customers’ Loan Arrangements .................................................................................... 30. iii.

(6) 6. Marketing Strategies .................................................................................................................. 32 6.1. Product ........................................................................................................................... 32 6.2. Marketing Strategy ........................................................................................................ 32 6.3. Differentiation and Positioning ..................................................................................... 32 6.4. Channels ........................................................................................................................ 33 6.5. Competitors ................................................................................................................... 34 6.5.1.. Competitors in Volcan ...................................................................................... 34. 6.5.2.. Competitors in Boquete .................................................................................... 34. 6.6.1.. Strengths ........................................................................................................... 36. 6.6.2.. Weaknesses ....................................................................................................... 38. 6.6.3.. Panama’s Demographic profile ........................................................................ 38. 6.6.4.. Opportunities .................................................................................................... 39. 6.6.5.. Threats .............................................................................................................. 47. 政治大 6.6. SWOT Analysis ............................................................................................................. 35 立 ‧. ‧ 國. 學. sit. y. Nat. n. al. er. io. 7. The Team ................................................................................................................................... 48. Ch. i n U. v. 7.1. The Team ....................................................................................................................... 48. engchi. 7.2. Financing Arrangement ................................................................................................. 48 8. Risk Analysis ............................................................................................................................. 50 8.1. Sensitivity Analysis ....................................................................................................... 50 8.2. Break-Even Analysis ..................................................................................................... 53 9. Future of the Project .................................................................................................................. 55 References ..................................................................................................................................... 56. iv.

(7) LIST OF FIGURES AND TABLES Figure 1 Construction Site .......................................................................................................... 3 Figure 2 Baru Volcano View from Ojo de Agua de Volcan Farm ............................................. 4 Figure 3 Dairy Farm Ojo de Agua de Volcan ............................................................................ 4 Figure 4 Location of the Republic of Panama ............................................................................ 6 Figure 5 Location of the Province of Chiriqui ........................................................................... 6 Figure 6 Location of Volcan ....................................................................................................... 7 Figure 7 Break-Even Chart ....................................................................................................... 54. 立. 政治大. Table 1 Estimated Population in the Republic, for the provinces of Chiriqui and Panama, by. ‧ 國. 學. Age Groups, to July 1, 2013 ............................................................................................. 12 Table 2 Active population of 35 years old or older, by monthly income received. ................. 13. ‧. Table 3 Panamanian Targeted by the Project ........................................................................... 14. y. Nat. Table 4 Estimated Market Size from Panama .......................................................................... 14. sit. Table 5 Population Born Abroad by age group and region of birth ......................................... 15. er. io. Table 6 Economically Active Population Born Abroad by Occupation Selected .................... 16. al. n. v i n C h by Region ofUOrigin............................................. 18 Table 8 Percentage of Potential Customers engchi Table 9 Market Size for both Panamanians and Foreigners ..................................................... 19 Table 7 Foreign Residents - Potential Customers .................................................................... 17. Table 10 Percentage of Customers to be reached ..................................................................... 19 Table 11 Houses and Lots Assumptions................................................................................... 21 Table 12 Area’s Breakdown ..................................................................................................... 21 Table 13 Construction Costs..................................................................................................... 22 Table 14 Cost of Land .............................................................................................................. 23 Table 15 Project’s Stages ......................................................................................................... 24 Table 16 Administrative Costs ................................................................................................. 25 Table 17 Cost Breakdown ........................................................................................................ 26 Table 18 Estimated Revenue for Pricing-Strategy 1 ................................................................ 27 Table 19 Profit Margin from Pricing-Strategy 1 ...................................................................... 27 v.

(8) Table 20 Pre-sale (Special Price).............................................................................................. 28 Table 21 Regular Price Sale ..................................................................................................... 28 Table 22 Total Revenue and Profit Margin .............................................................................. 29 Table 23 Customer’s Mortgage by Present Values Houses ..................................................... 30 Table 24 SWOT Analysis ......................................................................................................... 36 Table 25 Sensitivity Analysis ................................................................................................... 50 Table 26 Optimistic Sales –Project Areas Breakdown ............................................................. 51 Table 27 Optimistic Sales –Houses and Lots Size ................................................................... 51 Table 28 Optimistic Sales –Revenues and Profit ..................................................................... 52. 政治大. Table 29 Break-Even Analysis ................................................................................................. 53. 立. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. vi. i n U. v.

(9) 1. Motivation Despite how much we humans have developed our environment through the history of civilization, we cannot deny that our welfare is highly related to nature and the environmental conditions around us; for example, the effect of air and water pollution on our health and the climate changes due to global warming, remind us of it. Recognition of this fact has encouraged the global trend towards a greater environmental awareness and a more sustainable development. Green or environmentally friendly building practices are becoming integral part to all real estate development, for both residential and commercial projects. People are waking up to its. 政治大 incorporate some form of sustainability. 立. importance and benefits, and as a result every day increases the number of projects that. These trends apply to the majority of developed countries, many of which have made efforts. ‧ 國. 學. to adapt regulations towards a greener construction; but the reality is quite different for most developing countries, such as my own country, Panama, where the concept is new, and. ‧. despite recent efforts by private groups of professionals, still lacks regulations and awareness.. y. Nat. My motivation for this project is to bring a new concept of residential development in Panama,. sit. to build something good and beautiful for the community, but also sustainable and. er. io. environmentally responsible.. al. n. v i n C h house and second The location is suitable for a retirement e n g c h i U home for those whishing to relax in. The project will be located in Volcan, a peaceful mountain town in the province of Chiriqui.. a place close to nature.. It should be noticed that currently the offerings for retirement and second homes in Panama are limited and most price ranges are extremes. For instance, in the nearby town of Boquete, offerings target “the elite” of foreigners by selling high-class social lifestyle with an empty luxury concept; these houses are huge and prices are skyrocketing high. On the other extreme, there are very small, low-range houses. There are no options in between and much less environmentally concerned projects, with a cause and a heart like the one I am planning. I see an opportunity in Volcan, a mountain town that rivals the popular Boquete in beauty but is not as developed, which I think adds to Volcan’s charm.. 1.

(10) My idea is to take the opportunity to fill the above-mentioned gaps: offer a pleasant place with a new vision, in harmony with nature. A home within a modern and well-planned community, where people can enjoy a good quality of life and a healthy lifestyle, while at the same time diminishing the environmental impact. Besides the benefit for the community and the environment, this project could be a benchmark for other residential projects in Panama. It could increase awareness by proving that sustainable projects are affordable and beneficial for all the parties involved: the moderate increase of construction costs for the real estate developer in the short run, turn into significant savings on the energy bill for end users.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. 2. i n U. v.

(11) 2. The Project 2.1. Construction Site and Issues The intended project is the construction of a sustainable residential community in Volcan town. The land available for development is up to 33 hectares, which belongs to my family (See Figure 1: Construction Site; the area for available for development is highlighted in red). We plan to develop it as a residential community by stages. This thesis is about the first stage (“the project”), which consists of approximately 10 hectares (100,000 square meters). The property is located within the land of the dairy farm Ojo de Agua de Volcan, in Las. 政治大 approximately 1500 meters 立 of altitude, close to downtown Volcan, only 50 meters away from Perlas neighborhood, Nueva California, Volcan town, province of Chiriqui. It is at. ‧ 國. 學 Figure 1 Construction Site. ‧. io. sit. y. Nat. n. al. er. the main road.. Ch. engchi. i n U. Source: Google Maps. 3. v.

(12) Figure 2 Baru Volcano View from Ojo de Agua de Volcan Farm. 政治大. Source: Photography by Luis Carlos Alvarez. 立. Figure 3 Dairy Farm Ojo de Agua de Volcan. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. i n U. v. Source: Photography by Maria Alvarez. The project area has access to drinking water and electricity, and internal rustic roads made of crushed stone. The urban proposal will consider preservation of springs and areas near creeks and ditches, integrating them to walking paths and hiking circuits. The architectural and engineering design will integrate concepts and technologies with bioclimatic and sustainable features, in order to reinforce the concept of healthy community.. 4.

(13) 2.2. Geographic Information Chiriqui is a province located on the western coast of Panama (See Figure 4: Location of the Republic of Panama); it is the second most developed province in the country, after the Panamá Province. Its capital is the city of David. It has a total area of 6,490.9 km², with a population of 445,098 as of the year 2013. Chiriqui is bordered to the north by the province of Bocas del Toro and the Ngobe-Bugle indigenous region, to the west by Costa Rica, to the east by the province of Veraguas, and to the south by the Pacific Ocean. (See Figure 5: Location of the Province of Chiriqui, below; Chiriqui is highlighted in color red).. 政治大 1500 meters altitude in the populated area, and 3,475 meters above see level in the Baru 立 Volcano, which is also Panama’s highest point. (See Figure 6: Location of Volcan; Volcan is. Volcan is a town located in the mountains of the province of Chiriqui. It sits between 1300 to. ‧ 國. 學. highlighted in color red).. With a mild tropical mountain climate, a “spring like” weather year around, it maintains an. ‧. average annual temperature of 18 °C, with average 15 °C during the morning and maximum 26 °C in the evenings during the summer. It has two seasons, wet and dry.1. y. Nat. sit. Volcan is the “Heart of the Bread Basket” of Panama. Major roads out of Volcan go to the. er. io. farming communities of Cerro Punta, Plaza de Caisan, La Concepcion, Rio Sereno on the. al. v i n C hlettuce, corn, tomatoes, carrots, coffee, bananas, potatoes, cauliflower, broccoli and cut U i e h n c many smaller sheep, pigs and chicken farms flowers. Large dairy, horse and cattle farmsg with n. border with Costa Rica, and to Boquete. Crops in and around Volcan include onions, cabbage,. are along the roads in Volcan. A few kilometers north of Volcan on the road to Cerro Punta is a large trout farm.. 1. http://en.wikipedia.org/wiki/Volcán,_Panama. 5.

(14) Figure 4 Location of the Republic of Panama. 立. 政治大. ‧. ‧ 國. 學 Source: Google Maps. y. Nat. n. al. er. io. sit. Figure 5 Location of the Province of Chiriqui. Ch. engchi. i n U. Source: Google Maps. 6. v.

(15) Figure 6 Location of Volcan. 立. 政治大. ‧. ‧ 國. 學 Source: Google Maps. The Baru Volcano divides the towns of Boquete and Volcan. Boquete is the main center of. y. Nat. sit. attraction of Chiriqui highlands, a popular touristic destination. Volcan rivals Boquete in. al. er. io. natural beauty and offers almost the same possibilities for adventurous travelers; not being as. v i n C hitself bestowing majestic Volcan's attractions are the volcano views everywhere, the Amistad U i e h n g cCosta Rica, and Volcan Baru National Park. International Park that straddles Panama and n. "developed" as Boquete is a big part of the Volcan's charm.. Activities include hiking the volcano, sighting the prized and elusive Quetzal, the charming town of Guadalupe home to the famous Los Quetzales Eco-lodge, and Barriles, a preColombian archeological site. Volcan has all the basic services (including banks, lodging, restaurants, coffee shops and tour operators) and an enclave of satisfied foreign retirees.2. 2. http://www.volcan.chiriqui.org/chivolcan-serv.htm. 7.

(16) 2.3. Project Features The project consists of the development of an environmentally friendly and sustainable residential community, with shared facilities to interact with the neighbors and pursue a healthy lifestyle. The whole project is connected through jogging and cycling paths, which converge in parks and green areas. In the following I will explain these features in more detail.. 2.3.1. Green Construction The project incorporates the concepts of sustainable development and bioclimatic architecture. Sustainable development is that which conserving resources, such as natural and cultural. 治政 development vigorously but balanced, with high sense of大 social equity. Bioclimatic architecture is 立 that with a connection to Nature. Is to design by taking into heritage of cities, and exploiting them in a sustainable way, in turn fosters an economic. ‧ 國. 學. account the environmental factors and the climate characteristics: taking advantage of the natural resources available such as the sun, vegetation, rain and wind. All these natural. ‧. elements contribute to achieve thermal comfort, reducing energy consumption based on a set of passive techniques, in order to maintain the balance between the environment and that. Nat. sit. y. manipulated by man (De Las Casas, 2011).. er. io. To design by taking into account environmental factors represents a great value added that in most cases does not lead to additional costs. Some of the multiple benefits are: reduction in. n. al. Ch. i n U. v. energy consumptions by the use of natural light, contribution to the reduction of global. engchi. warming, reduction in water consumption, environmental conservation, natural air conditioning of the spaces and harmony between man and nature. But these benefits require long-term vision: the additional cost for the developer, entail benefits for the end user, who will reap the economic benefit of lower energy bills (De Las Casas, 2011).. The idea of the project is to offer a well-planned modern community, energy efficient and environmentally sustainable. The project will be built with sustainability in mind from top to bottom, following sustainable principles and practices in all its stages in order to drastically reduce the environmental impact.. 8.

(17) The pillars of the project are a good architectural design, the introduction of “green” elements and systems to reduce water waste and promote energy efficiency, and a good waste management system. As a starting point, the project adapts the design taking into account the humid tropical weather of the area, and takes advantage of the nice mild mountain temperature. These are some of the concepts and green components that will be included in the design: . Optimal orientation: Architectural design takes into account solar cycle, prevailing winds and cross ventilation for the most efficient orientation of the houses and roads,. 政治大. regarding lightening, temperature and humidity. It should be noticed that with these application the houses wouldn’t require active air conditioning systems. . 立. The layout of roads will adapt to the natural topography, minimizing the volume of cut. ‧ 國. 學. and fill materials, and facilitating a more efficient storm water flow. The design will also adapt the regulations for especial (more efficient) road sections. Use of locally sourced and recycled materials: Existing materials in the area include. ‧. . wood and stone.. Every house will be equipped with a bio-digester for sewage water treatment.. . Every house will have a rainwater recollection system, the water collected can be used. er. io. sit. y. Nat. . for flushing the toilets; the whole project will also have a rainwater recollection. n. al. i n U. v. system to water the community’s organic garden and orchard. . Ch. engchi. Efficient water heating: every house will be equipped with a solar energy efficient unit for heating purposes.. . Every house will be outfitted with high efficiency showers, faucets and toilets.. In addition to the design components, other sustainable activities will be hold once the houses are functioning: . Waste management: All the community will support waste separation; there will be containers for recycled materials (plastics, paper, cans and bottles), organic material (for compost production), and general waste.. . Soil regeneration: the compost produced with the organic waste will be used for soil regeneration and as fertilizer for the community garden and orchard. 9.

(18) 2.3.2. Shared Areas The project is a gated community featuring shared areas for a healthy lifestyle and social interaction among its residents, such as: . Parks.. . Walk and bicycle tracks.. . Hiking paths (connecting nearby areas).. . Barbecue and gathering area.. . Specially designed community garden and orchard: green house, composting areas,. 治政大aerobics. Fitness area: community space for yoga, tai chi and 立 Administrative and maintenance office. worm farms, orchard, and tool storage.. . 學. ‧ 國. . The cost of the shared areas mentioned above was included in the cost of the project as. io. sit. y. Nat. n. al. er. Analysis.. ‧. “Public area” in Table13: Construction Costs, in the following Section 4 Supply-Side. Ch. engchi. 10. i n U. v.

(19) 3. Demand-Side Analysis 3.1. The Market The project is suitable for Panamanians and foreigners residing in Panama who would like to retire or have a second home in a peaceful community in harmony with nature. The target market for this construction project (“the Project”) is divided in four categories: . Group A: Middle-high income foreign retirees of age 50 or more, who might be interested in a house for retirement.. . Group B: Middle-high income Panamanian retirees of age 50 or more, who might be. 政治大 Group C: Middle-high income foreign residents of age 35 to 49, who might be 立 interested in a house for retirement.. . interested in a second home in the mountains.. ‧ 國. 學. . Group D: Middle-high income Panamanians of age 35 to 49, who might be interested in a second home in the mountains.. ‧. 3.2. Population Statistics. y. Nat. sit. 3.2.1. Local Demographics. er. io. The project will be developed in the town of Volcan, located in the district of Bugaba, in the. al. n. v i n For the Groups C and D, I haveCconsidered from the province of Chiriqui as U h e n g Panamanians i h c well as a smaller percentage of people from the province of Panama who might have ties to province of Chiriqui.. Chiriqui. It should be noticed that internal migration between the countryside and the Capital (province of Panama) is commonplace. Many people migrate from Chiriqui to Panama City looking for work or to attend college, and some of them return when they have established a family or for retirement. Table 1 below summarizes the demographic information for the Republic and for the provinces of Chiriqui and Panama, by age group.. Table 1:. 11.

(20) Table 1 Estimated Population in the Republic, for the provinces of Chiriqui and Panama, by Age Groups, to July 1, 2013 Province Age group Population Chiriqui Panama Total. 3,850,735.00. 445,098.00. 1,990,042.00. 35 - 49. 768,735.00. 80,430.00. 462,563.00. 50 and over. 749,616.00. 97,012.00. 392,810.00. Source: Table 211-02, Panama in figures 2009-2013, National Institute of Statistics and Census, General Comptrollership of the Republic of Panama3. 治政大the population of Panama Province the population of Chiriqui Province was 445,098 people; 立 was 1,990,042.. As shown in Table 1, as of 2013, the Population of the Republic of Panama was 3,850,735;. ‧ 國. 學. It is noteworthy that, according to the World Bank, 39.5% of Panamanians are considered middle class; this category includes those who earn between $10 to $50 USD per day4.. ‧. For a regular 8 hours a day, 6 days a week, 24 days a month job, this means between $240 to $1,200 USD income per month. I consider that this numbers do not agree with the reality of. y. Nat. sit. my country, instead I think middle class should start with around $800 USD per month.. al. er. io. I believe that an income of at least $1,500.00 a month is required to live comfortably in. n. Panama; consequently, I consider that the minimum income my customer can have in order to. Ch. i n U. v. purchase a house in my project is around $1,500 USD, taking into account living expenses and the bank loan payments.. engchi. According to the World Bank definition of middle class mentioned above, I should re-label my target market as “high class”. On the other hand, for retirees I can start my offer from upper-middle class, because retirees at this stage in life are most likely free from debt and are also able to use money from the sale of their former homes to buy a new retirement home in my project.. 3. https://www.contraloria.gob.pa/inec/archivos/P6221211-02.pdf. 4. http://www.capital.com.pa/seis-de-cada-diez-panamenos-son-pobres-o-vulnerables/. 12.

(21) Following this analysis, from the total numbers mentioned above, I selected the population whose monthly income was 1,500 USD or more (see Table 2). Table 2 Active population of 35 years old or older, by monthly income received. Population 10 years and older employed Province and Monthly income received (ranges) age groups Total 1500-1999 2000-2499 2500-2999 3000 + CHIRIQUI. 147,147. 2,109.00. 1,045.00. 526.00. 1,427.00. 35 to 49. 53,293.00. 897. 425. 233. 499. 50+. 32,884.00. 716. 406. 200. 734. PANAMA. 745,383. 7,687. 24,311. 35 to 49. 273,591.00. 50+. 138,563.00. 9,860. 6,309. 3,737. 11,755. 5,848. 3,527. 2,093. 8,232. 學. ‧ 國. 立. 政22,969 治 13,555 大. Source: Table 6, Volume IV: Economically Active Population 2010, National Institute of Statistics and Census, General Comptrollership of the Republic of Panama5. ‧. Then, I decided to put another filter according to the age group (the younger population tend. y. Nat. sit. to have higher living expenses and debts to pay), and taking into account the distance between. al. er. io. Panama province and Chiriqui (6 to 7 hours drive) where the project will be built.. n. For the Chiriqui province I selected the population of 35 to 49 years old with a monthly. Ch. i n U. v. income of 2,000 USD or more, and the population of 50 years or older with a monthly income of 1,500 USD or more.. engchi. Then, for the province of Panama, I narrowed the selection even more by selecting the population with a higher income than those from Chiriqui: population of 35 to 49 with a monthly income of 3,000 USD or more, and a population of 50 years or older with a monthly income of 2,000 USD or more. These numbers are shown on Table 3 below.. 5. http://www.contraloria.gob.pa/INEC/Publicaciones/Publicaciones.aspx?ID_SUBCATEGORIA=59&I. D_PUBLICACION=358&ID_IDIOMA=1&ID_CATEGORIA=13. 13.

(22) Table 3 Panamanian Targeted by the Project Population 10 years and older employed Age Province Monthly income received (ranges) group 1500-1999 2000-2499 2500-2999 3000 + 35 to 49 425 233 499 CHIRIQUI 50+ 716 406 200 734 35 to 49 11,755 PANAMA 50+ 3,527 2,093 8,232 Total 716 4,358 2,526 21,220. Total 1,157 2,056 11,755 13,852 28,820. Finally, as a conservative measure, I assumed that only a small percentage of the population. 政治大. of the province of Panama selected above is more likely to be interested in the project. I selected only 4% of the population of 35 to 49 years old. For the population of 50 and more, I. 立. selected 3% of those with a monthly income of 2000 to 2,999, and 4% of those with an. ‧ 國. 學. income of 3000 USD or more. The final results are shown in Table 4.. ‧. n. al. er. io. sit. y. Nat. Table 4 Estimated Market Size from Panama Population 10 years and older employed Age Province Monthly income received (ranges) group 1500-1999 2000-2499 2500-2999 3000 + 35 to 49 425 233 499 CHIRIQUI 50+ 716 406 200 734 35 to 49 470 PANAMA 50+ 106 63 329 Total 716 937 496 2,032. Ch. engchi. i n U. v. Total 1,157 2,056 470 498 4,181. As summarized in Table 4, there are around 4,181 Panamanians that could be considered the target market for the project. Around 3,213 of them are from the province of Chiriqui and 968 from the province of Panama.. 14.

(23) 3.2.2. Foreign Residents’ Demographics According to the Migration and Remittances Factbook 2011, issued by the World Bank, as of 2010 there were 121,000 immigrants in Panama6. On the other hand, according to the 2010 census of Panama, there were 140,236 people born abroad. I could not find information about the foreign population distribution by income, so I used an alternative method to estimate the foreign potential customers of the project, based on the country of origin, age group and occupation. Following I will proceed to explain my analysis. First, to narrow the total number mentioned above, I identified the population born abroad by. 政治大 origin of interest. I grouped them in this ways because I consider they tend to share similar 立 characteristics relevant to my project.. country of birth and by age groups, and selected the people of age 30 and more by region of. ‧ 國. 學. ‧. Table 5 Population Born Abroad by age group and region of birth Population born abroad Age group Region of birth (years) Total 30-49 50+ North America 15,700 4,193 5,609 Central & South America 81,116 33,699 19,740 Europe 9,789 3,367 4,410 Asia 22,036 10,476 4,791 TOTAL 51,735 34,550. n. er. io. sit. y. Nat. al. Ch. engchi. i n U. v. Source: Table 7, Volume II: General and Educational Characteristics 2010, National Institute of Statistics and Census, General Comptrollership of the Republic of Panama.7. Secondly, out of the active population born abroad by the category of occupation and the age group, I selected the occupations that could be related to higher income. The occupations. 6. World Bank, 2011. Retrieved from:. http://issuu.com/world.bank.publications/docs/9780821382189/1?e=0 7. http://www.contraloria.gob.pa/INEC/Publicaciones/Publicaciones.aspx?ID_SUBCATEGORIA=59&I. D_PUBLICACION=356&ID_IDIOMA=1&ID_CATEGORIA=13. 15.

(24) selected are directors and managers, professionals, scientific and intellectual, as shown in the following table (Table 6). Table 6 Economically Active Population Born Abroad by Occupation Selected Age group Occupation Total 35 to 49 50 and over Total Directors and managers of public, private and social interest organizations Professional, scientific and intellectual. 67,099.00. 27,193.00. 14,617. 10,368. 4,820. 2,407. 7,910. 3,224. 2,024. 政治大 8,044 4,431 Source: Table 14, Volume IV: 立Economically Active Population 2010, National Institute of Statistics Total. and Census, General Comptrollership of the Republic of Panama8. ‧ 國. 學. From Table 6 it should be noticed that out of the 67,099 people within the active population. ‧. born abroad, there are 27,193 people of age 35 to 49. Within this age group 8,044 people comply with the selected occupations; this represents a 30%. In a similar way, out of the. y. Nat. sit. 14,617 active-population born abroad of 50 years old or older there are 4,431 that have the. al. er. io. selected occupations, which is around 30% as well.. n. From these numbers, I inferred that out of the total population born abroad around 30% could. Ch. classify as a potential customer in terms of income.. engchi. i n U. v. Based on the data mentioned above, I compiled a table with the estimated number of foreigners that could be potential customers for my project (See Table 7 below).. 8. http://www.contraloria.gob.pa/INEC/Publicaciones/Publicaciones.aspx?ID_SUBCATEGORIA=59&I. D_PUBLICACION=358&ID_IDIOMA=1&ID_CATEGORIA=13. 16.

(25) Table 7 Foreign Residents - Potential Customers Final numbers Region of origin 30-49 50+ TOTAL North America. 109. 726. 834. Europe. 27. 62. 89. Asia. 87. 255. 343. Central & South America. 44. 114. 158. TOTALS. 266. 1,158. 1,424. 政治大 It can be inferred that a percentage of the population born abroad are not immigrants, 立. The results from Table 7 are based on the following assumptions and calculations: . for instance they might be Panamanians who were born abroad and return to Panama. ‧ 國. 學. with their families. On this regard, only 86% of the numbers from the Panamanian census will be used (121,000/140,236).. ‧. Only 30% of the foreign resident population might have the required income.. . I assume that in the case of foreigners, the ones of 50 years and older are more likely. y. Nat. . sit. to be potential customers for the project, based on the trend of people from developed. al. n. v i n I consider people from C thehsame country or region of origin tend to share similar engchi U cheaper living expenses and high quality of life.. . er. io. countries going to Panama and other developing countries to retire motivated by. characteristics relevant to my project such as consumer behavior, remoteness from Panama, Economy of the country of origin, the kind of economic activities they perform in my country, etc. I assigned percentages depending on the region of origin and age, according to how likely I consider that a person from certain nationality might be a potential customer for my project. In this extent, I consider that foreigners coming from North America are more likely to be potential customers, given a stronger economy and the relative proximity to Panama. In the second place Europeans, coming from developed countries but from a more distant region. In the third place Asians because of the remoteness of their country of origin, the difference in culture and their usual economic behavior in my country (they tend to continue. 17.

(26) working their whole life and don’t usually retire or buy second houses). On the last place people from Central and South America, given that their economy of origin tend to be weaker and frequently they go to Panama looking for any job opportunity and end up with informal or even illegal jobs in construction, hotels and restaurants. The country factors shown on Table 7 are conservative estimations. Table 8 Percentage of Potential Customers by Region of Origin Country factor Region of origin 30-49 50+ North America Europe. 立. 50%. 政治 5%大 1%. Central & South America. 1%. 10% 5% 5%. 學. ‧ 國. Asia. 10%. See footnote with an example of calculation.9. ‧. I conclude that there could be approximately 1,424 potential foreign customers. Around 1,150. io. sit. y. Nat. of them retirees, and 266 age 30 to 49.. n. al. er. From the results of Table 4 and Table 7, I compiled a summary with the total potential market,. i n U. both Panamanian and foreigners, in the following table:. 9. Ch. engchi. v. As per Table 4 above, there are 4,193 people age 30 to 49 and 5,609 age 50 or more born on North America (residing. in Panama). I proceed to reduce to 86% so I have 3,618 age 30-49 and 4,840 age 50 or more; then I keep only a 30% considering the income, resulting on 1,085 age 30-49 and 1,452 age 50+; finally I apply the country factor mentioned on Table 6, which for North America is 10% for age 30-49 and 50% for age 50+; the result is a final number of 109 people of age 30-49 and 726 people of age 50+ as per Table 8.. 18.

(27) Table 9 Market Size for both Panamanians and Foreigners Age group Description Total 35-49 50+ Panamanian. 1,627. 2,554. 4,181. 266. 1,158. 1,424. 1,894. 3,711. 5,605. Foreigner Total target market. The total estimated potential market of 5,605 people is made up of around 4,181 Panamanians and 1,424 foreign residents.. 政治大. As explained in section 4 Supply-Side Analysis (following section), the first stage of the. 立. project comprises the construction of around 86 houses in 10 hectares of land, which means. io. Percentage of customers required. y. 86. 100. 150. 200. 300. 1.53%. 1.78%. 2.68%. 3.57%. 5.35%. al. sit. Nat. 5,605. Table 10 Percentage of Customers to be reached Number of houses developed. er. Potential Market. ‧. ‧ 國. potential market.. 學. we need 86 customers. As shown in Table 10 below, 86 customers is less than 2% of the. n. v i n C project Ultimately, for future stages of the develop h e nifgwec h i U up to 300 houses within the total 33 hectares of land available, we would cover only 5.35% of the potential market. The project seems to be feasible from the demand-side perspective.. 19.

(28) 4. Supply-Side Analysis 4.1. Development Plan The project consists of the construction of a sustainable residential neighborhood in Volcan town, province of Chiriqui, Panama. The total land available for the project is 33 hectares. We will begin with 10 hectares (“Stage 1”), to gain some market insight and let people know about the project. When starting the design and planning stage of the project, it will be necessary to conduct a detailed study of the area to be developed and undertake a proper parceling, to proceed with the breakdown of the areas, and then calculate the construction costs in detail. For the. 政治大 breakdown, based on advise立 from local construction professionals and after studying nearby purposes of this thesis, I will work with general assumptions for the lots sizes and the areas. ‧ 國. 學. offerings.. For the 10 hectares of the project (Stage 1) we will build around 86 houses on 86 lots. The customer might select the lot size; it would be charged separated from the house, starting. ‧. with 600 M2.. y. sit. er. Model A: duplex, 85 square meters of construction, 2 rooms (can expand to 3), 1.5. io. . Nat. Regarding the size of the house, I intend to offer three different models:. al. v i n C h 125 square meterUof construction, 3 rooms (can expand Model B: single-family home, engchi n. bathrooms, and 1 parking lot. . to 4), 2 bathrooms, and 2 parking lots. . Model C: single-family home, 150 square meters of construction, 3 rooms (can expand to 4), 2.5 bathrooms, and 2 parking lots.. Assumptions: After studying the offerings in the area, I assume that most of the people would be interested in the intermediate-size model (Model B). For Stage 1, I estimate that around 60% of the houses will be Model B, 20% Model A, and 20% Model C.. I assigned a lot of 600 M2 for Model A, a lot of 810 M2 for Model B, and a lot size of 1,225 M2 for Model C. These assumptions are summarized on Table 11 below.. 20.

(29) Table 11 Houses and Lots Assumptions Total. Construction. Lot size. #. M2. (M2). Houses. A. 85. 600. 18. 1,530.00. 10,800.00. B. 125. 810. 52. 6,500.00. 42,120.00. C. 150. 1225. 16. 2,400.00. 19,600.00. 86. 10,430.00. 72,520.00. Model. TOTALS. Total Lots. Construction. Area M2. M2. I used the assumptions mentioned above and benchmarked other local projects to estimate the. 政治大. area’s breakdown, shown in the following table:. 立 Table 12 Area’s Breakdown. ‧ 國. 學. Stage 1 (10 Hectares) Project area. 9.85 Ha 600+ (varies) M2. ‧. Lots size Number of lots. 86 Lots. sit. y. Nat. M2. io. er. Areas Breakdown Lots area (86 lots) Stage 1. n. al. 72,520.00. i n U. Public use area. v. %. 73.61%. 5,600.00. 5.68%. e n g c h i 19,700.00. 19.99%. Rain sewage area. 415.00. 0.42%. Tank area. 285.00. 0.29%. Street area. Ch. TOTAL. 98,520.00 100.00%. 4.2. Construction Costs Using the assumptions and area’s breakdown of Table 11 and Table 12 respectively, I run a model to calculate the construction cost of the project shown in Table 13 below.. 21.

(30) Table 13 Construction Costs Unit. Description. Unit Measure. Price. Quantity. Total. Regular Construction Infrastructure. 85.00. $/m2. 19,700.00 $1,674,500.00. House construction. 550.00. $/m2. 10,430.00 $5,736,500.00. Public area. 10.00. $/m2. 5,600.00. $56,000.00. Utilities. 70.00. $/month. 18.00. $1,260.00 $7,468,260.00. Green Elements Bio-digester Rainwater collection system. 立. 2,000.00 治 Unit 政 6,000.00 Global/大 house. 86.00. $516,000.00. ‧ 國. 學. CONSTRUCTION. 3%. % of cost. io. TOTAL CONSTRUCTION COSTS. n. al. Ch. Global. $163,125.20. y. % of cost. n U engchi. $8,156,260.00. Global. $244,687.80. sit. Nat. Additional permits. 2%. $407,813.00. er. Municipal taxes. ‧. Taxes and Permits. . $172,000.00. $688,000.00. SUB-TOTAL. Table 13 notes:. 86.00. iv. $8,564,073.00. The unit prices in the table are current values provided by local contractors interviewed.. . I first calculated the cost of construction without the especial systems and equipment to make it “green” (“Regular Construction”); then, under the label “Green Elements” I added the bio-digester and the rainwater collection system cost.. . Regarding “Taxes and Permits”, the Panamanian contractors interviewed explained that the amount is a percentage of the construction cost: 2% for Municipal Taxes and around 3% for additional permits.. 22.

(31) . “Public Area” includes the construction of the shared areas mention in section 2.3.2 Shared Areas.. From Table 13 it can be noticed that there is an increase of $8,000 USD per house due to the inclusion of “green” systems and equipment, which represents a 9.21% increase of the total construction cost. Additionally I estimate the construction cost is 8,564,073.00 USD.. 4.3. Opportunity Cost of the Land As previously mentioned, the land of the project is located within the dairy farm Ojo de Agua. 政治大. de Volcan, owned by my family. These area is not suitable for livestock farming because it. 立. has two many rocks; additionally, it is very close to the main town so it’s more valuable for. ‧ 國. 學. residential development. My family is considering either developing the project or selling the land in the future.. Even though we don’t have to actually buy the land to develop the project, I will include the. ‧. sit. Nat. project in a more realistic way, considering the opportunity cost.. y. estimation of the land cost in my calculations in order to compute the net present value of the. According to locals and the price of nearby properties listed in real estate websites, the current. io. er. price of the land is between $35 to 50 USD. In the current conditions the lots could be sold at. al. n. v i n C U $50 USD today. and the internal roads developed) thehprice e ncould g c hbe iaround. $35.00 USD per square meter. On the other hand, if the parceling is executed (lots divided. Based on these values, I assume that if we were to buy the whole area for the project in its current conditions the price would be $30.00 USD. The land cost is estimated below. Table 14 Cost of Land Description Land. Unit Price. Unit Measure. Quantity. Total. 30.00. $/M2. 98,520.00. $2,955,600.00. The cost for 9.85 hectares of land is 2,955,600 USD.. 23.

(32) 4.4. Administrative Costs The construction project has three general stages: the Design and Planning, the Infrastructure Construction, and the Houses’ Construction. The total estimated duration of the project is 4 years, as summarized on Table 15 below. Table 15 Project’s Stages Duration Stages of the project Years Months 1 Design & Planning. 1.5. 18. 1 治政 3 Houses' Construction 1.5 大 Total 立 4 2 Infrastructure. 12 18 48. ‧ 國. 學. The design and construction of the project will be outsourced (subcontracted).. ‧. As developers, we will hire a team to supervise all the stages of the project. For the Design & Planning stage we will pay an engineer for his professional services to lead and supervise.. sit. y. Nat. Before the Infrastructure Construction stage begins, we will set up and administrative office for all the paperwork, paying the bills, etc. For this purpose we will rent an office in David. io. n. al. er. City. Additionally a “field office” will be built in Volcan, nearby the project.. i n U. v. We will hire an engineer with experience to supervise the contractor and lead the entire. Ch. engchi. project, an engineer assistant, and a secretary or clerk.. The following table summarizes the administrative costs for the project.. 24.

(33) Table 16 Administrative Costs Unit Price Unit Measure. Description. Months Total. Office Rent. 400.00. $/month. 30. 12,000.00. Computers & equipment. 900.00. Unit. 3. 2,700.00. Pickup car (Frontier LCV 4X4). 24,999.00. Unit. 1. 24,999.00. Engineer part time initial stage. 5,000.00. Global. 1. 5,000.00. Engineer. 2,300.00. $/month. 30. 69,000.00. Engineer assistant. 1,000.00. $/month. 30. 30,000.00. Secretary/ clerk. 700.00. $/month. 30. 21,000.00. 48. 960.00. Stationary TOTAL. 立. 政20.00 治 $/month 大. ‧ 國. 學. The estimated administrative cost is $165,659.00 USD.. 165,659.00. ‧. 4.5. Design Costs. The design of the project will be contracted from an engineering design firm. According to a. Nat. sit. y. local designer, the cost of design is around $1,500 USD per hectare. For the 9.85 hectares of. io. er. the project the value would be $24,630 USD. As a conservative measure I increased the value to $27,000 (around 10% more), considering the project will need a sustainable design with. al. n. “green” features.. 4.6. Marketing Costs. Ch. engchi. i n U. v. According to interviews with local businessmen, I estimate $20,000 USD as marketing expenses. The content of the marketing expenses will be explained on section 6 Marketing Strategy.. 4.7. Cost Breakdown The total estimated cost for the project is $11,732,332 USD. The following table summarizes the costs of the project.. 25.

(34) Table 17 Cost Breakdown COST BREAKDOWN Description. Cost. Land. $2,955,600.00. Design & Planning. $27,000.00. Construction. $8,564,073.00. Marketing & Sales. 20,000.00. Administrative Office TOTAL. 立. 4.8. Revenues. 165,659.00 $11,732,332.00. 政治大. ‧ 國. 學. For the 86 houses, I estimated the price per construction square meter, added the green elements price (as a global value), and estimated the price of the land per square meter.. ‧. The following table presents the revenue from the 86 houses, with a first pricing strategy: a price per construction square meter of $1,100, green elements $8,400, and land price per. Nat. n. al. er. io. sit. y. square meter of $50.. Ch. engchi. 26. i n U. v.

(35) Table 18 Estimated Revenue for Pricing-Strategy 1 House Construction Model. # Houses. House +. Land. $/M2. Green. House. Const.. elements. price. Land. Land price/. Selling Lot Price. Total Revenue. price/. m2. house. A. 18. $1,100. $8,400. $101,900. $50. $30,000. $131,900. $2,374,200. B. 52. $1,100. $8,400. $145,900. $50. $40,500. $186,400. $9,692,800. C. 16. $1,100. $8,400. $173,400. $50. $61,250. $234,650. $3,754,400. Total. 86. 政治大 Table 19 Profit Margin from Pricing-Strategy 1 立 Description Amount Comments Total Cost. $11,732,332. Profit. $4,089,068. ‧. ‧ 國. $15,821,400. 學. Total Revenue. $15,821,400. 26%. (Profit/ total revenue). Profit percentage. 35%. (Profit/ total cost). sit. y. Nat. Profit margin. er. io. Then, I studied a second pricing strategy following the market trend which divides the range. al. n. v i n C h70% of the houses U lower price, then sell the remaining e n g c h i (60 houses) for a higher price. The market common trend is that the pre-sale price is almost as low to cover cost in order to. of prices in two stages: a Pre-sale of the first 30% of the houses (26 houses) with a special. gain money to start building the project, and the “regular” price is close to 30% higher than the pre-sale one. For the pre-sale of the first 26 houses, the prices listed in the following Table 20 were applied:. 27.

(36) Table 20 Pre-sale (Special Price) House Construction #. Model. Houses. House +. Land. $/M2. Green. House. Const.. elements. price. Land price/ m2. Land. Total. Lot. Selling price/. Price. house. Revenue. A. 5. $1,000. $8,400. $93,400. $40. $24,000. $117,400. $587,000. B. 16. $950. $8,400. $127,150. $40. $32,400. $159,550. $2,552,800. C. 5. $950. $8,400. $150,900. $40. $49,000. $199,900. $999,500. 26. Table 21 Regular Price Sale. #. Green. House. Const.. elements. price. Land price/ m2. Lot Price. Selling price/ house. Total Revenue. Nat. $1,000. $9,660. $94,660. $42. $25,200. $119,860. $1,558,180. B. 36. $1,200. $9,660. $159,660. $50. $40,500. $200,160. $7,205,760. C. 11. $1,200. $9,660. $189,660. $50. $61,250. $250,910. $2,760,010. n. 60. al. Ch. engchi U. sit. 13. io. A. er. Houses. $/M2. House + Land. ‧. Model. Land. y. House Construction. 學. ‧ 國. 政治大 For the regular sale of the remaining 60 houses the following prices were applied: 立. $4,139,300. v ni. $11,523,950. Notes from Table 20 and Table 21: . I intentionally gave Model A houses a price under $120,000 USD, in order to have an offering within the range that applies for a special government subsidy, a lower interest rate for the bank loan. (See Table 23 in the next section).. . Readers may ask if this prices are reasonable, as shown in Section 5 Feasibility Confirmation from Customer’s Side, the potential customer with middle-upper and high income can afford it; additionally this prices are even lower than other highquality retirement home offerings in the nearby area, as mentioned in Section 6.5 Competitors.. 28.

(37) The total revenue and profit margin for the 86 houses are summarized in the following table. Table 22 Total Revenue and Profit Margin Description. Amount. Total Revenue. $15,663,250. Total Cost. $11,732,332. Profit. $3,930,918. Comments. Profit margin. 25%. (Profit/ total revenue). Profit percentage. 34%. (Profit/ total cost). 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. 29. i n U. v.

(38) 5. Feasibility Confirmation from Customer’s Side The purpose of this section is to confirm if our calculations are consistent and the selling price is affordable for our target market.. 5.1. Customers’ Loan Arrangements As stated in section 3 Demand Side Analysis, my premise is that the project could offer three models of houses. The estimated selling prices stated in section 4 Supply go from around 120,000 USD for the first model, 200,000 USD for the second model, to 250,000 USD for the third model (See Table 16 and Table 18).. 政治大 present values (selling prices) of the house, as shown in the following table. 立. Based on these estimated prices, I calculated the mortgage payment per month for different. ‧ 國. B. C. $120,000.00. $150,000.00. $180,000.00. 3.50%. 4.75%. 4.75%. 5%. 10%. 10%. $6,000.00. $15,000.00. (Minimum). Period (years) Mortgage payment/ month. al. $114,000.00 30. 4.75%. 10%. 15%. $18,000.00. $20,000.00. $37,500.00. 90%. 90%. 90%. 85%. $135,000.00. $162,000.00. $180,000.00. $212,500.00. 30. 30. $946.14. $1,084.61. Ch. $507.52. $250,000.00. 4.75%. 95%. n. financed. io. Amount to be. $200,000.00. y. Nat. Down Payment. E. sit. Interest rate (per year). D. ‧. A. er. PV house (USD). 學. Table 23 Customer’s Mortgage by Present Values Houses Data & Calc.. e n30g c h i $709.60. i n U30. v. $851.52. Source: Banco General10. Table 23 notes: . The Panamanian government subsidizes a percentage of the interest rate of houses up to $120,000 USD.. 10. https://www.bgeneral.com/bgespanol/calculadoras/personal/sbg_calculadora_letra.asp. 30.

(39) . The data from the table has been extracted from Banco General, one of the most popular Panamanian banks. I calculated the values using the mortgage calculator from the bank’s website.. As shown in Table 23, for a house with a selling price from 120,000 USD to 250,000 USD the buyer must be economically capable to pay for a monthly mortgage payment between 500 USD and 1,000 USD respectively. I conclude that my calculations are consistent and the selling price is affordable for the target market selected on section 3 Demand-Side Analysis (See Table 9: Total Potential Target Market).. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. 31. i n U. v.

(40) 6. Marketing Strategies 6.1. Product A new concept of housing development: We provide sustainable homes and shared facilities within an environmentally concerned community. We will call the project “Rocas Azules”, which means blue rocks in English, standing for the name of the specific area where the project is located, undoubtedly inspired by the abundance of dark rocks on it.. 6.2. Marketing Strategy. 政治大 customers of the project are professional college-educated, environmentally concerned people 立. We pursue a customer-driven and concentrated (niche) marketing strategy. The potential. looking for a healthy lifestyle within a peaceful community.. ‧ 國. 學. The potential customers have an upper-medium to high income, are Panamanians or foreign residents of 35 years old ore more. Those of age 35 to 49 are couples with family, looking for. ‧. a second home in the mountains. Those of age 50 and more are people looking forward to. y. Nat. retire in a beautiful and peaceful community close to nature.. sit. Through the niche marketing I intend to achieve a strong market position because of a greater. al. n. Armstrong, 2012).. er. io. knowledge of the customers needs, and by acquiring a good image and reputation (Kotler &. Ch. e. ngch 6.3. Differentiation and Positioning. i. i n U. v. Our green sustainable community provides a high quality of life within a pleasant location, in harmony with nature. We position our project as a green orientated community, a balance of sustainability and quality of life. In terms of price, we have a “More for More” positioning: We offer high quality of life while protecting the environment. We charge a little more in order to cover the cost of green elements (it is moderately high priced). This cost will be returned in the long run by energy and water savings. Positioning statement: “To environmentally concerned people looking for a healthy lifestyle, Rocas Azules is a new developing concept: a sustainable community in harmony with nature.”. 32.

(41) 6.4. Channels It is essential for the project to be able to sell the right image as an environmentally friendly sustainable community. We need to create awareness about the benefits of the sustainable construction for the final user as well for the environment. Since we have a niche market, which is not that numerous, we need to be effective and attractive in order to reach them. We will use the following channels: . Website: We would create a website with all the information and pictures about the project..  . 治政 YouTube: We will launch a video with a render 大 of the project and shoots of the area. 立 Signs: We will put an advertisement sign on the road from Panama City to David City, Social media: We will be active on Facebook, Twitter and Instagram.. 學. ‧ 國. . another one on downtown David, and two more on the road from David to Volcan. Events: We will held the following events, which will be announced on our website. ‧. and social media:. o Visits: We look forward to partner with the Tourism Authority of Panama. y. Nat. sit. (ATP for its acronym in Spanish) and/or the National Environmental Authority. io. (ANAM for its acronym in Spanish) in order to host visits to the area. The visit. al. er. . n. would include the project area, a tour to the dairy farm, and a tour to the. Ch. i n U. attraction of Volcan town and surroundings. o Workshops: . engchi. v. We will hold an organic crop workshop as soon as we open our vegetables orchard and garden.. . Vegetarian & organic cooking workshop: as soon as we have enough crops we will hold a cooking workshop.. . Yoga workshop on the future area.. o Placement of the First Stone event: We will hold a family picnic and barbeque for the ceremony of the “placement of the first stone” of the project.. 33.

(42) 6.5. Competitors 6.5.1. Competitors in Volcan Currently there are not similar projects in Volcan: residential projects are not commonplace in the area; there are no gated communities. There is only one residential project under development in Volcan town, but it is a low-income project, targeting perhaps local people of Volcan. Normally people buy land and build their own house, or rent cabins for a weekend.. More over, there are not sustainable residential projects in the rest of the province or even the country. There is an advantage by being the first mover, but there are other kinds of high-. 政治大. quality residential projects nearby that should be taken into account, as explained on the. 立. 學. ‧ 國. following section 6.5.2.. 6.5.2. Competitors in Boquete. Boquete is a mountain town also located in Chiriqui, half an hour ride from the capital of. ‧. Chiriqui (David City). It is located on the other side of the Baru Volcano, so it has similar weather and geography to Volcan town.. y. Nat. sit. Boquete has become a tourist town, with many visitors and foreigners retirees. It is more. al. er. io. developed than Volcan, with many restaurants, lodging and touristic services available.. n. On the other hand, due to its touristic boom, living expenses and land prices are getting more. Ch. i n U. v. expensive every day, while it is also becoming more crowded. Volcan town can offer the. engchi. same great weather and beautiful landscape, in a more intimate and peaceful area, with lower expenses. There are some high quality residential gated communities in Boquete, some are functioning for a couple of years already and others are under construction. These are luxury gatedcommunities, with huge houses, golf clubs and other luxury facilities, targeting an elite of high-class foreigners. The first one was Valle Escondido Residential Resort, and now there are about five new projects under development such as Boquete Canyon Village, Lucero Golf & Country Club, The Springs, Boquete Country Club and Los Nances. These projects are more about high-class status for older people. I consider these projects’ target market is very different from mine.. 34.

(43) On the other hand there’s an upper-medium to high-class residential project closer to David City, Los Molinos, which offers high quality of life for families and retirees. The size of the houses, the age range and income characteristics of its target market are similar to those of my project, but Los Molinos differentiates itself by being close to the capital of the province, on the way from David to Boquete, so it can be the main house of a family who works in David. Different from my project, it is not within the main mountain town, and it does not have the sustainable components of my project.. After analyzing the competition mentioned in sections 6.5.1 and 6.5.2, I consider that the. 治政 served so far in the nearby area, thus there is not direct大 competition. Moreover, the size and 立 price of country houses offerings go to opposite extremes: there are mostly huge and very niche market of environmentally concerned people looking for a healthy lifestyle is not been. ‧ 國. 學. expensive houses, or very small and cheap houses.. I consider that the most relevant indirect competition come from Los Molinos, with an. ‧. existing offering for high quality of life for upper-middle to high class in a mountain environment, but as indicated before, it has a different positioning. On this regard, I conclude. y. Nat. n. al. er. io. differentiate.. sit. that it’s critical for the success of my project to pursue a good marketing strategy in order to. 6.6. SWOT Analysis. Ch. engchi. i n U. v. I conducted a SWOT analysis to evaluate the strengths, weaknesses, opportunities and threats of the project; the summary is shown on Table 24 below. Some of the points are explicit while other could require further explanation, therefore later I will only broaden the points I consider pertinent.. 35.

(44) Table 24 SWOT Analysis. Increase of construction materials cost.   . Availability and cost of green elements Increase of construction cost in general Lack of awareness and regulations for sustainable building People may be tempted by cheaper options Dependence on the contractor compliance.  . ‧. Low cost of living in Volcan town Volcan is still an undiscovered paradise Volcan will become head of the district New health care facilities in Volcan Aging population in Panama and worldwide Panama's growing economy and low unemployment Government subsidy for houses under 120,000 USD Stable government The Dollar as currency Panama is safe Local regulations encourage foreign retirees Foreign investment -friendly government. . al. n.     . 立. io. . Lose momentum 政  治大stage others my copy the idea After the first. Nat.      . Threats. 學. . Family owned business Large initial capital investment Lack of experience as project developers. y.   .   . sit. . Weaknesses. er.   . Strengths Family owned business Own the land Knowledge of the area Local contacts and possible partners Experience in construction projects management Vertical integration with dairy farm Good location of the project Access to water and electricity services Opportunities Worldwide trend towards "greener" construction First mover as sustainable residential project Lower construction cost in Chiriqui province Local sources of construction materials available Low competition in Volcan. ‧ 國.     . Ch. engchi. i n U. v. 6.6.1. Strengths 1.1.1.1 Family Owned Business Currently my father is the leader (the second generation) of what my grandfather started as a dairy farm. I considered that the nature as a family-owned business has both advantages and disadvantages.. 36.

(45) Among the main advantages we have stability since my father has been the leader for several years; the commitment, since the needs of the family are at stake there’s a greater sense of commitment and accountability; the flexibility to perform different tasks; the long-term outlook; and, the trust and communication between each other. On the other hand, some of the disadvantages are the unstructured governance: we need the agreement of all the members, which are not business people, so their decisions might not be as rational and goal oriented; the risk of family conflicts; the lack of interest or support of some of the family members; and finally the risk associated with not having a clear and strong succession plan yet.. 政治大. 1.1.1.2 Local knowledge and contacts. 立. My father lives in David City where he works part time as a doctor, and goes to Volcan. ‧ 國. 學. several times a week in order to run the dairy farm. He knows the area and have many contacts since he has always been an active member of both doctors and farmers associations.. ‧. We also know local contractors and designers who could be partners for the project. For. y. Nat. instance, one of our partners for the design of the project could be our family’s friend Rodrigo. sit. De Las Casas, Structural Architect with a Master in Bioclimatic Architecture from Panama. er. io. Isthmus University/ Colima Mexico (2008), and an Advanced Course in Landscaping,. al. v i n C Casas Academy, and co-owner of De Las firm, which offers architectural services h e nArquitectos hi U c g and urban planning, specializing in bioclimatic architecture. I personally interviewed Rodrigo n. Barcelona- Spain (2009). He’s the founder of the Bioclimatic Architecture and Technology. on February of 2015 regarding this thesis; he guided me to generate the concept of my project and the calculations of costs, and said he was interested to participate in the project. On the other hand, I studied Civil Engineering and have worked in construction management for three years, so I have experience and colleagues in the same field in Panama City. 1.1.1.3 Vertical integration with the dairy farm There will be hiking trails connecting the residential project with specific areas of the land of the dairy farm.. 37.

(46) On the other hand, having the dairy farm leaves open doors for other business in the future, for example we could sell milk to the community. Additionally, the dairy farm is looking forward to become more sustainable and energy efficient; it already utilizes the cattle’s excrement to produce compost to fertilize plants, and methane gas for electricity. We could explore the possibilities to improve all the processes to become even more ecofriendly and thus integrate it to the other businesses, like ecotourism.. 6.6.2. Weaknesses 1.1.1.4 Lack of experience as project developer. 政治大. As stated before, my family has experience running a dairy farm successfully, and I have. 立. experience in the construction field, but non of us have run a real estate developer company or. ‧ 國. 學. work for one. This could be our major challenge.. 6.6.3. Panama’s Demographic profile. ‧. Panama is a country of demographic and economic contrasts. It is in the midst of a. y. Nat. demographic transition, characterized by steadily declining rates of fertility, mortality, and. io. sit. population growth, but disparities persist based on wealth, geography, and ethnicity. Panama. er. has one of the fastest growing economies in Latin America and dedicates substantial funding. al. n. v i n C h poor and extreme accounts for a growing share of Panama's e n g c h i U poor, while the non-indigenous to social programs, yet poverty and inequality remain prevalent. The indigenous population. rural poor have been more successful at rising out of poverty through rural-to-urban labor migration. The government's large expenditures on untargeted, indirect subsidies for water, electricity, and fuel have been ineffective, but its conditional cash transfer program has shown some promise in helping to decrease extreme poverty among the indigenous population. Panama has expanded access to education and clean water, but the availability of sanitation. and, to a lesser extent, electricity remains poor. The increase in secondary schooling - led by female enrollment - is spreading to rural and indigenous areas, which probably will help to alleviate poverty if educational quality and the availability of skilled jobs improve. Inadequate access to sanitation contributes to a high incidence of diarrhea in Panama's children, which is. 38.

(47) one of the main causes of Panama's elevated chronic malnutrition rate, especially among indigenous communities.11. 6.6.4. Opportunities 1.1.1.5 Local source of construction materials available Volcan is rich in natural resources, there are good quality local materials available such as wood and rocks; additionally, there are block plants and hardware stores. Other construction materials and equipment can be brought from major retailers in David (1 hour ride) or Bugaba. 政治大 Chiriqui Province立 attractions. (30 minutes ride).. 學. ‧ 國. 1.1.1.6. Chiriqui claims to have it all: Panama’s tallest mountains, longest rivers and most fertile valleys are here. The province is also home to spectacular highland rainforests and the. ‧. country’s most productive agricultural and cattle-ranching regions.. Bordering Costa Rica to the west, Chiriquí is often the first province in Panama encountered. y. Nat. 1.1.1.7 Panama’s Economic Indicators and Trends. al. er. io. sit. by overland travelers and serves as a subtle introduction to Panama’s immense beauty.12. n. v i n C hdollarized free market The economy of Panama is a fully e n g c h i U economy with a history of low. inflation. It is based mainly on the services industry, heavily weighted toward banking,. commerce, and tourism. The hand-over of the canal and military installations by the US has given rise to new construction projects. Panama's economy is based primarily on a well-developed services sector that accounts for nearly 80% of its GDP. Services include the Panama Canal, banking, the Colón Free Trade Zone, insurance, container ports, and flagship registry, medical and health, and other business.. 11. The World Factbook, 2013-2014. Retrieved from: https://www.cia.gov/library/publications/the-. world-factbook/geos/pm.html 12. http://www.lonelyplanet.com/panama/chiriqui-province#ixzz3Y2O7QpA9. 39.

(48) The country's industry includes, manufacturing of aircraft spare parts, cements, drinks, adhesives, and textiles. Also the leading exports for Panama are bananas, shrimp, sugar, coffee, and clothing. Panama has the second largest economy in Central America13 and is also the fastest growing economy and largest per capita consumer in Central America. In 2013, Panama ranked 5th among Latin American countries in terms of the Human Development Index, and 59th in the world.14 Since 2010, Panama remains the second most competitive economy in Latin America, according to the World Economic Forum's Global Competitiveness Index.. 立. Economic Growth. 政治大. ‧ 國. 學. Panama's economy has been growing as an impressive rate in the wake of the world’s economic turmoil. Panama's GDP has been growing between 7-10% since 2009. It's Law 41,. ‧. modeled on Singapore's law that gives tax breaks, hiring privileges and other incentives, has convinced many corporations to make their regional headquarters in Panama.. y. Nat. sit. In 2011, the Panamanian economy grew by 10.6%, continuing the high growth rates it has. al. er. io. seen in recent years. The expansion was driven mainly by public and private infrastructure. n. megaprojects such as the expansion of the Canal and a new city subway system. Over the past. Ch. i n U. v. 10 years, Panama has grown at an average annual rate of 7.3%.. engchi. Numerous sectors showed vigorous growth in 2011, in particular mining (18.4%), construction (18.2%), commerce (15.9%) and transport and communications (13.7%). By contrast, activity in the fishing sector slumped by 21.9% owing mainly to weather events. Between January and March 2012, the monthly index of economy activity measured in terms of the original series went up by 9.2% (9.1% adjusted for trend and cycle). The sectors having. 13. CIA – The World Factbook – Field Listing – GDP (official exchange rate)". CIA. Retrieved January. 12, 2010. And: "CIA – The World Factbook – Country Comparison – National product". CIA. Retrieved January 12, 2010. 14. UNDP Human Development Report 2010. Table 1: Human development index 2010 and its. components (PDF). UNDP. p. 144. Retrieved November 6, 2010.. 40.