“The Development of a Sustainable Lemongrass and Oregano Candle Business Model for

Tourism”

Background of the Study

The global tourism industry is increasingly embracing sustainability as a core principle,
integrating eco-friendly practices into its offerings. As tourists become more conscious of
environmental impacts, the demand for sustainable souvenirs and wellness products has risen.
Candles made from natural and locally sourced ingredients, such as lemongrass and oregano,
represent a promising opportunity for eco-conscious businesses. Both lemongrass and oregano
are known for their aromatic properties and health benefits, including stress relief, insect
repellence, and antimicrobial qualities. Leveraging these properties into a candle product can
enhance the tourism experience by offering a sustainable and locally inspired keepsake. This
study explores the development of a business model that integrates sustainable production, local
resource utilization, and tourism value.

Statement of the Problem or Opportunity

While there is a growing interest in sustainable products within the tourism sector, there is a gap
in offering locally sourced, natural wellness products that contribute to both environmental and
economic sustainability. Specifically:
 How can a business model for lemongrass and oregano candles be designed to maximize
sustainability and appeal within the tourism market?
 What operational strategies can ensure eco-friendly production and sourcing?
 How can the business model align with the wellness trends and demands of tourists?
Objectives of the Project
General Objective:
To develop a sustainable and marketable business model for producing and distributing
lemongrass and oregano candles aimed at the tourism industry.
Specific Objectives:
1. To analyze the market potential and consumer preferences for natural candles in the
tourism sector.
2. To develop an operational plan for sourcing and processing lemongrass and oregano for
candle production.
3. To design a branding and marketing strategy that aligns with sustainability and local
cultural identity.
 4. To identify financial projections and investment requirements for the business model.
5. To recommend sustainability practices in packaging, distribution, and waste management.
2.4 Scope and Limitations
This project focuses on developing a sustainable business model for lemongrass and oregano
candles targeted at tourists. It covers the following:
 Market research within a specific tourist destination or region (e.g., a heritage town or
eco-tourism site).
 Feasibility study of sourcing lemongrass and oregano locally.
 Basic production processes using artisanal or small-scale manufacturing techniques.
 Branding, marketing, and financial planning for a start-up phase.

Limitations include:
 Exclusion of large-scale industrial production models.
 Limited geographic scope for sourcing and market testing.
 Dependence on seasonal availability of raw materials.
 Exclusion of detailed environmental impact assessments beyond the product lifecycle.

Significance of the Study

This project is significant as it:
 Promotes sustainable tourism by offering environmentally friendly, locally sourced
products.
 Supports local agriculture by creating a value-added market for lemongrass and oregano.
 Enhances the tourist experience through wellness products aligned with eco-conscious
values.
 Contributes to the academic study of sustainable business models and entrepreneurship in
tourism.
 Provides a replicable model for other regions seeking to integrate sustainability into
tourism-related businesses.
Review of Related Literature / Conceptual Framework
Operations Management
Operations management is the practice of designing, managing, and improving processes
involved in producing and delivering goods and services. According to Heizer, Render, and
Munson (2020), operations management involves the strategic planning of resources, capacity,
and processes to achieve operational efficiency and meet customer needs. Stevenson (2021)
highlights that operations management is essential in aligning production activities with market
demands while ensuring quality and cost-effectiveness. Slack, Brandon-Jones, and Burgess
(2019) emphasize that operations management includes capacity planning, supply chain
management, and lean production principles to reduce waste and enhance value creation.
Krajewski, Malhotra, and Ritzman (2019) argue that operations management is not only about
efficiency but also about agility and responsiveness, especially in sectors like tourism where
customer preferences can shift rapidly. Similarly, Chase, Jacobs, and Aquilano (2020) state that a
well-structured operations strategy can create a competitive advantage, enabling businesses to
deliver high-quality, sustainable products—an approach highly relevant to developing a
lemongrass and oregano candle business model.

Total Quality Management (TQM)

Total Quality Management (TQM) promotes continuous improvement and customer satisfaction
by integrating quality principles across all levels of an organization. According to Goetsch and
Davis (2021), TQM emphasizes customer-driven quality, continuous improvement, and total
employee involvement, which are crucial for maintaining high standards in product-based
businesses like candle production. Oakland (2014) points out that TQM requires a cultural shift
where every employee contributes to quality improvements and problem-solving. Evans and
Lindsay (2016) stress that TQM relies on a combination of leadership, teamwork, and tools such
as statistical process control to drive quality outcomes. Dale (2015) underlines that the
application of TQM principles leads to defect reduction, waste minimization, and improved
operational efficiency. Moreover, Sadikoglu and Zehir (2010) found that innovation and
employee performance play mediating roles in enhancing firm performance through TQM
practices, making them essential for integrating sustainability and quality in a candle business
aimed at tourism.

Lean Systems, Six Sigma, Kaizen, and ISO

Lean systems focus on eliminating waste and optimizing value streams. According to Womack
and Jones (2003), lean thinking enhances operational efficiency by identifying and eliminating
non-value-adding activities, thus improving customer value. Pande, Neuman, and Cavanagh
(2000) introduce Six Sigma as a data-driven approach to reducing process variations and defects,
ensuring consistent product quality and customer satisfaction. Imai (1986) presents Kaizen as a
continuous improvement philosophy that involves all employees in incremental changes, leading
to improved efficiency and quality. Liker (2004) elaborates on Toyota’s lean principles,
emphasizing respect for people and long-term thinking, which are applicable to developing
sustainable business models. Additionally, the International Organization for Standardization
(2015) outlines the frameworks of ISO 9001 for quality management and ISO 14001 for
environmental management, which provide global standards to ensure quality, safety, and
environmental responsibility in production processes—ideal for a sustainable candle business
targeting eco-conscious tourists.

Best Practices and Benchmarking

Benchmarking involves studying successful companies to adopt best practices that drive
sustainability and efficiency. In the candle industry, companies like Yankee Candle and The
Little Market emphasize:
 Sustainable Sourcing: Partnering with local farmers for natural, pesticide-free raw
materials.
 Eco-friendly Packaging: Using biodegradable or recyclable materials to reduce waste.
 Energy-efficient Production: Implementing lean and green manufacturing processes.
 Product Differentiation: Creating unique scents and experiences that reflect local
heritage and appeal to tourists.
 Community Engagement: Supporting local communities and artisans to build goodwill
and brand identity.
In this project, these best practices are adapted and localized to develop a sustainable business
model that leverages local resources (lemongrass and oregano) and appeals to eco-conscious
tourists.

Conceptual Framework of the Study

The conceptual framework integrates the core concepts from operations management, TQM, lean
systems, and sustainability to develop a business model for lemongrass and oregano candle
production aimed at the tourism sector.
Framework Components:
 Input: Locally sourced lemongrass and oregano, eco-friendly materials, skilled labor,
tourist market demand.
 Process:
 o Operations Management: Streamlined production using lean principles.
o Quality Management: TQM and Six Sigma practices to ensure product quality.
o Continuous Improvement: Kaizen-driven innovation and ISO-aligned
quality/environmental management.
 Output: High-quality, sustainable lemongrass and oregano candles tailored for the
tourism market.
 Outcome: Enhanced tourist satisfaction, local economic development, environmental
sustainability, and business profitability.

Company / Case Profile

Description of the Business / Organization Analyzed

The business analyzed for this study is a conceptual startup focused on producing and marketing
sustainable lemongrass and oregano candles for the tourism industry. The company, tentatively
named “Name of the Company", is envisioned as a small-to-medium enterprise (SME) that
combines local agriculture with innovative, eco-friendly candle production.
The business will source lemongrass and oregano from local farmers, promoting sustainable
agricultural practices and supporting rural communities. By utilizing natural waxes, recyclable
materials, and a blend of essential oils from lemongrass and oregano, “Name of the Company”
aims to offer a unique, aromatic product tailored for hotels, resorts, souvenir shops, and eco-
conscious tourists.

The global candle industry has experienced significant growth in recent years, driven by
consumer demand for wellness, aromatherapy, and sustainable home products. According to
Smith and Johnson (2021), the global candle market is projected to reach USD 13 billion by
2026, expanding at a compound annual growth rate (CAGR) of around 6% from 2021 to 2026.
This growth is fueled by increasing consumer preferences for natural and eco-friendly products,
the popularity of home décor trends, and the wellness movement, where candles infused with
essential oils (such as lemongrass and oregano) are used for relaxation, stress relief, and
ambience.
In addition to the global context, the Philippine candle industry presents unique opportunities,
particularly within the tourism and hospitality sector. The Philippines, being a top tourist
destination in Southeast Asia, boasts a vibrant network of resorts, spas, boutique hotels, and
souvenir shops that increasingly seek locally crafted and sustainable products to offer a
distinctive guest experience (Department of Trade and Industry, 2023). The rise of eco-tourism
and the country’s commitment to sustainability initiatives have contributed to a growing demand
for artisanal products made from natural ingredients, aligning perfectly with the concept of
lemongrass and oregano candles.
Tourism in the Philippines has been a vital economic driver, contributing to 12.7% of the GDP in
2019 before the pandemic (Philippine Statistics Authority, 2020). As the tourism industry
rebounds post-pandemic, the emphasis on health, wellness, and sustainable tourism experiences
has become more pronounced. Local travelers and international tourists alike are looking for
products that reflect authenticity, environmental responsibility, and support for local
communities. This trend has encouraged many SMEs and local producers to innovate with
sustainable products, including natural home fragrances, handmade soaps, and eco-friendly
candles (Lopez, 2021).
Additionally, the growing awareness of environmental issues has prompted both consumers and
businesses to shift toward green practices. A study by Villanueva and Ramos (2022) indicated
that Filipino consumers, especially younger demographics and millennial tourists, are
increasingly willing to support brands that prioritize sustainability, transparency, and community
empowerment. This trend has resulted in increased support for local enterprises that incorporate
zero-waste practices, biodegradable packaging, and organic ingredients into their products, thus
opening an attractive niche market for businesses like “Name of the Company”.
However, the industry also faces challenges. These include supply chain disruptions, inconsistent
raw material quality, and competitive pressures from mass-produced candle brands. According to
Cruz (2021), many local artisans struggle with scaling production while maintaining consistent
product quality and sustainable sourcing. This emphasizes the importance of implementing
robust operations management and quality control systems, drawing from best practices in TQM,
Lean Systems, and ISO standards, to create a competitive and sustainable business model for the
lemongrass and oregano candle enterprise.

Organizational Structure and Operations Processes

1. Organizational Structure
“Name of the Company” will operate with a flat organizational structure that promotes
agility, collaboration, and continuous improvement. The key roles include:
 General Manager (Owner/Founder) – Responsible for overall strategy, partnerships,
and business development.
 Operations Manager – Oversees production processes, inventory, and supply chain
management.
 Quality Control and Compliance Officer – Ensures product quality and adherence to
environmental standards.
  Marketing and Sales Team – Manages brand positioning, social media, partnerships
with tourism establishments.
 Production Staff – Skilled artisans and workers responsible for candle-making,
packaging, and order fulfillment.
This structure allows for efficient decision-making and a high level of employee involvement,
which is essential in quality-driven, small-scale production.
Operations Processes
“Name of the Company” operations involve:
1. Sourcing – Procurement of natural lemongrass and oregano essential oils from certified
local suppliers, and natural waxes (soy, beeswax).
2. Production – Blending of essential oils, wax melting, pouring into molds, cooling, and
curing. The process follows lean principles to reduce waste and ensure consistent quality.
3. Quality Control – Inspection of raw materials, in-process checks, and final product
testing for scent balance, burn time, and aesthetic appeal.
4. Packaging – Use of recycled materials, biodegradable labels, and refillable containers
where possible.
5. Distribution and Sales – Targeting partnerships with resorts, souvenir shops, online
platforms, and participation in trade fairs.

4.3 Quality Management Systems in Place (If Any)

Currently, as a conceptual startup, “Name of the Company” is in the process of establishing a
quality management system (QMS) based on ISO 9001:2015 principles and Total Quality
Management (TQM) concepts. The planned quality initiatives include:
 Supplier Quality Assurance – Partnering with certified local farmers and suppliers to
ensure raw material quality.
 Standard Operating Procedures (SOPs) – Documented processes for production,
inspection, and packaging.
 Employee Training – Regular workshops on lean production, Kaizen practices, and
environmental sustainability.
 Customer Feedback Loop – Collecting and analyzing customer feedback to identify
improvement opportunities.
 Environmental Compliance – Aligning with ISO 14001:2015 standards to minimize
environmental impact, focusing on waste reduction and energy efficiency.
The company aspires to benchmark its quality and operational processes against successful eco-
friendly and artisanal candle producers, ensuring continuous improvement and customer
satisfaction.
Methodology
Research Design
This capstone project will utilize a mixed-methods research design, combining both qualitative
and quantitative approaches to comprehensively analyze the development of a sustainable
business model for lemongrass and oregano candles targeted at the tourism industry. The
qualitative component involves interviews and document reviews to explore best practices,
sustainability factors, and operational insights. The quantitative component involves surveys and
data analysis techniques to measure potential demand, quality factors, and customer preferences.
This approach enables the study to gain in-depth understanding of the factors affecting quality
and sustainability while also gathering measurable data to support decision-making and process
improvements.

Data Collection Methods

To achieve a comprehensive analysis, the following data collection methods will be used:
 Surveys: A structured questionnaire will be distributed to potential customers, tourism
businesses, and local suppliers to gather insights into product preferences, perceived
value, and sustainability expectations. The survey will include Likert-scale items and
open-ended questions.
 Interviews: Semi-structured interviews will be conducted with industry experts, local
artisans, and potential business partners to explore best practices in operations
management, quality control, and sustainable product development. These interviews will
provide qualitative insights into challenges and success factors.
 Observations: On-site visits to local candle-making workshops and agricultural suppliers
will be conducted to observe production processes, quality practices, and raw material
handling. This will provide contextual understanding of potential operational challenges.

Tools and Instruments Used

To support analysis and improvement initiatives, the following tools will be used:
 Pareto Chart: To identify the most significant issues affecting production quality or
customer satisfaction, based on survey and observational data.
 Cause-and-Effect Diagram (Ishikawa/Fishbone): To analyze root causes of potential
problems in production, quality, or sustainability.
  Control Charts: To monitor key process variables such as production time, defect rates,
and scent consistency over sample batches.
 Flowcharts: To map the current and proposed operational processes, enabling visual
identification of bottlenecks or inefficiencies.
 SWOT Matrix: To analyze internal strengths and weaknesses, as well as external
opportunities and threats in the candle industry for strategic planning.

Data Analysis Methods

 Descriptive Statistics: Survey data will be analyzed using measures of central tendency
(mean, median) and dispersion (standard deviation) to understand customer preferences
and satisfaction levels.
 Thematic Analysis: Qualitative data from interviews and document reviews will be
coded and analyzed to identify recurring themes related to sustainability, quality
management, and operational challenges.
 Root Cause Analysis: Using cause-and-effect diagrams, data from observations and
interviews will be synthesized to determine the underlying causes of potential production
or quality issues.
 Process Capability Analysis: Control charts and statistical tools will be used to assess
process stability and capability, ensuring that the production process meets quality
standards.
 Benchmarking Analysis: Data from best practices and competitor analysis will be
compared with current processes to identify areas for improvement and innovation.

Proposed Solutions / Interventions

Recommendations Aligned with TQM Principles
1. Customer Focus:
 Conduct regular surveys and focus group discussions with target customers (tourists,
hotels, souvenir shops) to align product features with expectations.
 Establish a formal feedback mechanism (e.g., QR codes on packaging for customer
reviews).
2. Continuous Improvement (Kaizen):
 Regularly assess production processes to identify areas for waste reduction, efficiency,
and quality improvements.
  Foster a culture of employee involvement through suggestion schemes and quality
circles.

3. Employee Involvement and Training:

 Conduct training programs on lean manufacturing, quality control, and environmental
sustainability for all employees.
 Promote cross-training among staff to enhance flexibility and problem-solving.
4. Process-Centered Approach:
 Develop and document clear Standard Operating Procedures (SOPs) for sourcing,
production, quality checks, and packaging.
 Implement in-process and post-production quality checks to reduce defect rates.
5. Integrated System and Supplier Partnership:
 Establish long-term partnerships with certified local suppliers of lemongrass and oregano.
 Audit suppliers periodically to ensure quality consistency and sustainability practices.
6. Fact-Based Decision-Making:
 Use control charts and process capability indices to monitor production performance.
 Analyze customer feedback and defect data to identify root causes and corrective actions.
7. Sustainability Integration:
 Adopt eco-friendly materials and packaging in alignment with ISO 14001.
 Reduce carbon footprint through optimized sourcing and production methods.

Action Plan / Improvement Plan (Using PDCA and Six Sigma DMAIC)
Phase Action Steps Responsible Units

- Identify key customer requirements (scent strength, burn General Manager,

Plan (Define) time, eco-packaging). - Develop a SIPOC diagram for Marketing,
process mapping. Operations

- Collect baseline data on defect rates, production time, and

Do (Measure raw material quality. - Conduct root cause analysis Operations, Quality
& Analyze) (Fishbone diagram) for defects and inefficiencies. - Perform Control
SWOT analysis.

Check - Implement Kaizen-driven process improvements (e.g., Operations,

Phase Action Steps Responsible Units

lean layout, improved mold design, better curing

Production Staff,
(Improve) techniques). - Develop eco-friendly packaging prototypes. -
Packaging
Pilot new procedures with small batches.

- Standardize successful process improvements into SOPs. -

Use control charts for ongoing monitoring of defect rates Quality Control,
Act (Control)
and process variability. - Conduct regular audits and General Manager
customer satisfaction reviews.

-Define: Establish customer needs, process goals, and key

deliverables.
-Measure: Gather data on quality, efficiency, and
DMAIC sustainability. Cross-functional
Adaptation -Analyze: Identify root causes of defects or delays. teams

-Improve: Develop and implement targeted improvements.

-Control: Institutionalize best practices and monitor
keymetrics.

Feasibility Analysis (Cost-Benefit, Impact, Sustainability)

Aspect Details

- Initial investments: Equipment (melters, molds), training programs, eco-

packaging R&D.- Operational costs: Higher for local sourcing and eco-materials
Cost Analysis
but offset by premium pricing.- Estimated breakeven: Within 2-3 years if market
demand is secured.

- Enhanced customer satisfaction and brand reputation through sustainability and

Benefit
quality.- Access to niche markets (eco-tourism, wellness tourism).- Potential
Analysis
partnerships with hotels/resorts for steady demand.

- Positive environmental impact: Reduction of synthetic chemicals, lower carbon

Impact footprint, biodegradable packaging.- Social impact: Supports local agriculture
Analysis and artisans, promotes sustainable livelihoods.- Economic impact: Generates
employment, enhances local tourism offerings.

- Long-term viability supported by growing trends in eco-conscious

Sustainability consumerism.- Scalability potential through gradual capacity expansion and
diversified product lines (e.g., soaps, essential oils).
Implementation Timeline and Responsible Units
Phase Activities Timeline Responsible Units

- Conduct market research and customer surveys.-

Q1 General Manager,
Establish supplier partnerships and conduct audits.-
(Months 1- Months 1-3 Operations,
Develop pilot production processes and eco-
3) Marketing
packaging prototypes.

- Train employees on new SOPs and quality

Q2
management principles.- Launch small-scale pilot Quality Control,
(Months 4- Months 4-6
production.- Collect data on defects, process time, Production Staff
6)
and customer feedback.

- Analyze pilot results, identify areas for

Q3
improvement.- Finalize SOPs and implement process Operations,
(Months 7- Months 7-9
improvements.- Initiate formal launch of products to Marketing
9)
local tourism market.

- Scale up production to meet growing demand.-

Q4 Implement continuous improvement cycles (Kaizen,
Months 10- Operations,
(Months control charts).- Expand distribution through online
12 Marketing, Sales
10-12) platforms and partnerships with tourism
establishments.

- Monitor performance metrics, customer feedback,

General Manager,
and sustainability outcomes.- Update processes based
Ongoing Continuous Quality Control,
on data insights and market changes.- Pursue
All Units
certifications (ISO 9001, ISO 14001) as needed.
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