(First published in the Philippine Online Chronicles, December 11, 2011)
by Paz H. Diaz, SERDEF Media Bureau
“I overhauled the outlook of the LPG business which used to be based on the old sari-sari store mentality,” Winston Santos says by way of explaining how Fabson, Inc. became one of the biggest Shellane distributors not only in Iloilo City where it is based, not only in Panay Island, but in the whole country.
Fabson, Inc. was begun by Winston’s wife, Lorie, in 1968 as an appliance store and distributor of LPG cylinders. Today, Lorie continues to run the appliance store but has, by 1964, turned over the LPG business to Winston who then quit his job as marketing manager of Cyanamide Philippines.
Winston applied his considerable knowledge and experience in marketing management to the business, totally changing the marketing perspective of Fabson.
“I began by treating workers as professionals and making them feel they are part of the business. I told them we would not sit in the store waiting for customers. Rather, we would go out and look for them.”
Selling value and service, not just products
And they did.
Winston divided Iloilo province into territories and subdivided the territories into market segments: restaurants, industrial enterprises, marine transport, and households. The restaurants were further subdivided into small roadside eateries or carinderia, establishments in malls, and stand-alone diners. Winston meticulously counted and classified the households in his territory, with emphasis on what he calls the unarticulated segment of his market.
Then he ingrained in his workforce the idea they were not only selling LPG but value, service and convenience. Clients bought Fabson’s products because these stood for safe and clean cooking, he told them over and over.
He overhauled his marketing organization and refocused the development of his network by penetrating new trade outlets.
Aside from his sales force, who covered the markets in Iloilo and nearby provinces, Winston hired technical personnel to provide technical services to customers. They are tasked to handle the installation and safety audits on site.
Selling LPG by the kilo
In 2004, Winston learned from his dealers that small roadside carinderia and households outside of the city prefer to use charcoal as this is assumed to be cheaper. He analyzed the situation and then asked the dealers: “How much is the sector paying for the charcoal they use?”
“Twenty pesos a day,” they answered.
“If we had a way of charging them twenty pesos a day, which is the same amount that they would be paying for the use of LPG in their cylinder in one day, would they buy LPG from us?” he persisted.
The answer: “Of course!”
And this was how Winston thought of selling LPG like charcoal, one kilo at a time.
Thus, Winston’s people went around every other day to collect twenty pesos in every household or carinderia for the LPG they consumed for the day.
For convenience, an area was divided into cells, composed of 100 households/carinderia per cell. A collector was assigned to each cell.
Before Winston and his staff implemented the tingi method, only around 300 roadside carinderia used LPG; not much later, around 450 out of the total 775 roadside carinderia were buying LPG from Fabson’s outlets. Many more households coming from the unarticulated market are beginning to “buy”” LPG on a daily basis from Winston’s firm.
With tingi selling, Fabson, Inc. had to hire more employees to serve as collectors on commission basis, to the delight of Winston who originally thought of it in order to avoid laying off some of his workers.
Winston has since expanded the program to the unarticulated, unserved part of his Panay market.