CHAPTER 1

Introduction

This study provides the reader with a background and reasons why the

researcher chose to pursue this study. The study aims to provide details that can

support the feasibility of establishing Pinoy Blues Bar & Grill Café in Sgt.

Esguerra Avenue, Quezon City. The pursuance of this study mainly came from

the objective of the researcher to further provide consumers with a different and

hybrid type of foodservice business. Through this study, it will give rise to the

emphasis of offering local alcoholic and non-alcoholic beverages, domestic

coffee beans, and local bands/artists, which in return will provide more

recognition to Philippine-made products and Filipino talents, whilst uplifting the

beverage serving sector foodservice industry here in the Philippines.

Statement of the Problem

The following questions are formulated to further determine the feasibility of

establishing a bar and grill café called Pinoy Blues, to be positioned in Sgt.

Esguerra, Quezon City. Therefore, this research aims to answer the following at

the end of the study:

Marketing

1. What marketing strategies should be used for the proposed business?

2. How should the service and product offerings be designed to capture the

target market?

Operations
 3. What can be the supply chain and who can be the major suppliers of the

proposed business?

4. What are the tools and equipment needed for the operation of the

proposed business?

Management and HR Functions

5. What organizational structure is ideal for the proposed business?

Finance

6. How much can be the start-up cost for the proposed business?

7. How can the proposed business get back their invested capital in the least

number of years/earliest payback periods?

8. How can the proposed business finance their operations?

Corporate Social Responsibility

9. How can the business give back to the community?

10. How can the business be able to promote environmental sustainability?

Objectives of the Study

To determine the feasibility of establishing a Pinoy Blues bar and grill café in

Sgt. Esguerra, Quezon City, the researcher aims to come up with the following:

Marketing

1. To formulate marketing strategies ideal for the proposed business.

2. To create a service and product design that will capture the target market.

Operations

3. To determine the supply chain and major suppliers.

4. To determine the tools and equipment needed for the operation.

 Management and HR Functions

5. To determine an ideal organizational structure for the proposed business.

Finance

6. To determine the start-up cost for the business.

7. To formulate strategies that will yield to a faster payback period of the

invested capital.

8. To assess ways on how the proposed business will be able to finance

their operations.

Corporate Social Responsibility

9. To formulate vision, mission, and philosophy that will benefit the

community.

10. To formulate strategies that will promote environmental sustainability.

Brief Background of the Study

The formal audit conducted by Department of Trade and Industry

(DTI) revealed that, as of 2016, there were approximately 7,218 full-service

restaurants, 4,411 fast-food restaurants, 4,209 food kiosks, 4,725 cafeterias, and

1,548 bars & pubs operating in the country. (ASPBI, 2016)

As of the beginning of 2015, there were approximately 6,652 full-service

restaurants, 4,477 fast-food restaurants, 3,772 food kiosks, 3,748 cafeterias, and

1,445 bars & pubs operating in the country. (ASPBI, 2015)

As of 2014, there were approximately 21,443 Restaurants and mobile food

service activities registered the highest total number of establishments

accounting for 76.4 percent and short-term accommodation activities had a total
of 3,262 (11.6%) establishments. Beverage serving activities followed with 2,572

(9.2%) establishments. Beverage serving activities ranked third with a share of

9.2 percent or 2,572 establishments. (ASPBI, 2014)

Bars, Grills, and Cafes continue to flourish in the Philippines, according to

a recent Euromonitor report as of 2017. This growth can be attributed to the

consumers’ growing demand over beverages and food that are served in café,

grills, and bars. Independent players recorded an 89 percent share of total value

sales in the channel in 2015. (Euromonitor, 2017)

As for the chained players, Rustan’s Coffee Corp took the lead with a

value share of 6 percent overall due to its Starbucks brand. Some of the newly

opened bar and cafe shops in the metropolis are Satchmi, Single Origin, Toby’s

Estate, and Frank & Dean. Among the new pubs are The Bottle Shop in

Bonifacio Global City, Taguig City, OnBoard Game + Gastro Pub in Makati City,

and Brewery pub in Iloilo. Bars, cafés, and other pubs are expected to gain a

stronger following due to the growing middle-income segment, who prefer a

comfortable setting, good quality food, a wider selection of alcoholic beverages,

and who have developed a more sophisticated taste for their coffee. (FOODBIZ,

2018).

The proliferation of bar and café businesses led the researcher to further

study ways on how such growth of such business will be able to promote our

country's local products, food, and artists through the fusion of the three ideas in

one. The influx of cafés and bars helped the researcher to have an idea to have

an opportunity to provide jobs to our fellow Filipinos that have the talent and skill
to be part of the business. A business that does not only aim to gain income for

thyself but also aims to uplift the dying spirit of the consumers here in our country

to patronize local products/services. Also, the study aims to establish a business

that does not only cater locally made products but also targets to utilized these

local products that will be internationally accepted as well. Unlike existing bars

and cafes here in the Philippines, wherein they mainly cater to foreign alcoholic

drinks, imported coffee, and foreign-influenced food, the newly proposed

business aims to offer a new approach to the growing bar and café shops,

through catering of local wines/alcoholic drinks (like Palawan Wit, Amadeo

Coffee Liqueur, Manille Liqueur de Calamansi, Don Papa Rum, Baguio’s

strawberry wine, VuQo Premium Vodka, Katipunan Indio Pale Ale, REFMAD

Farms’ dragonfruit wine, and Manila Sunshine); also, the proposed business

aims to cater locally-grown coffee here in the Philippines (e.g. Arabica, Robusta,

Liberica, and Excelsa), and will only serve pure Filipino dishes (e.g. grilled blue

marlin, grilled squid, grilled cheese, and others) but with just a twist of how will

they be cooked/prepared (grilled food).

The proposed bar and grill café will also be incorporating a solo, duo, trio,

or a 4-piece indie band every day. They will be playing acoustic, jazz, pop, blues,

electronic, rock or R&B songs every night. The mentioned band that will be

performing will be local indie artists/band from universities here in the Philippines

who are not yet known in the big scene and still working on their names in the

Philippine music industry. In this way, the proposed bar and grill café will also be

able to promote the budding local student-artists, specifically who are of legal
age. Bottom line, the newly proposed bar, and café will be offering ONLY local

products and services, from local alcoholic drinks to locally grown coffee, to pure

Filipino Grilled dishes, and to indie OPM artists/bands, setting the Pinoy Blues

Bar & Grill Café apart from its existing rivals or competitors. Some of its

competitors are: Frank and Dean Café and Kitchen, Satchmi, Cowboy Grill,

Supremo Grill, Handle Bar, and After All Bar and Grill, Café Escudero, Coffee

Project, White Camp Specialty Coffee and Kitchen, Sugar Fix Coffee Cakes and

Pastries, Café Amadeo, EDJA Coffee World, Coffee Project, Half Saints, Mom

and Tina’s Bakery Café, Café 80s, Packo’s Restaurant and Bar, and Livestock.

Some of the mentioned businesses are direct competitors, wherein they cater

service and ambiance that are the same and offers it to the same category of the

target market. While some are indirect competitors, wherein they cater to the

same service/product but targets a different market. (Primer, 2017)

The researcher chose Sgt. Esguerra Avenue, Quezon City as the location

for this Bar and Grill Café as it is known as the “tourism district of Quezon City”

as per Quezon City hall. Quezon City is considered as the most populous city in

the National Capital Region with a population of over 2.9 million according to the

last national census as of 2018. It has an area of almost 64 square miles. This

means that the population density is approximately 46,000 people per square

mile. Regarding employment labor force, the city represents 33.8% of Metro

Manila's aggregate labor force and 4.3% of the country's total labor force. The

chosen place in Quezon City is Sgt. Esguerra Avenue. Due to existing zoning

and/or CLUP, the researcher preferred to locate the proposed business in it as it

(the place) allows bars/pubs and other beverage serving businesses that also

cater live bands. Also, the place is nearby offices and nearby different

universities, thus, making it ideal for the proposed business. (Quezon City

Government, 2018)

Assumptions

This section lists the facts that the researcher presumed to be true. The

key underlying assumptions are:

1) A Memorandum of Agreement (MOA) will be undertaken between

the owner and the supplier/s of beverages and other ingredients for

dishes.

2) There will be a price increase in three (3) years.

3) 4.4% inflation rate will be utilized.

4) 2% growth rate will be used.

5) The minimum wage rate for workers in Metro Manila is at 532

according to the National Productivity and Wages Commission. The

minimum wage set by the Department of Labor and Employment

(DOLE) will increase for the next 3 years.

6) Pinoy Blues Bar & Grill Café will operate from 6:00 AM to 2:00 AM

every day, and there will be a shift of employees from 6:00AM-4: 00

PM and 4:00PM-2: 00 AM. It will be opened from 8:00 AM to 2:00

AM
Scope and Limitations

This study will only cover the feasibility study of Pinoy Blues bar and grill

café from the year 2019 to 2021. Relative to the target market, the study will not

focus on generation X, Y, and Z but rather will focus on the so-called millennials,

aged from 23-38 years old and working class. It will also focus on socio-

economic class A, B, upper and lower C.

The questions to be asked to the respondents are according to their

preferences and may differ from customer to customer since they are not

identical in terms of tastes and preferences. The data will be limited to those

gathered through the survey questionnaires and data gathered from academic

books and the Internet. The researcher herself will do the observation of the

place and foot traffic. The study will be tackling marketing, operations,

management & HR functions, financial strategies, and corporate social

responsibility factors that can affect the overall operation of the proposed

business; moreover, the secondary data that will be gathered as a reference will

only cover from the year 2015 to the current year. The researcher will only cover

a 3-year forecast of operations, projection of financials, and a historical time

constraint.

Importance of the Study

This feasibility study will be beneficial to the following sector/s of society:

1. Researcher. As this study will hone his/her analytical skills gained from

past educations and experiences and will enable him/her to apply the
 business concepts gained from past educations and experiences that are

relevant to the study. It also benefits

2. Business Students, as it will enable them to have more information on

how a business can be established and how the strategies for putting it up

can be implemented. For

3. Future researchers, this study can be used as a reference to gain

knowledge or to improve the study further.

4. Business Practitioners and Bar & Café industry in the Philippines will also

be benefited as the study gives business owners an idea whether the

business of such kind will flourish, thus if it is worthwhile to pursue, and

because of its newness to the eyes of the masses, an increase of

business concept under such industry; for the

5. Stakeholders, this research will generate employment opportunities for

the unemployed and give additional income for the suppliers (of local

beverages and ingredients), and creditor (financial assistance for start-up

cost). Lastly, it will benefit the

6. Community, as this research will contribute to the economic growth

because of the revenue it will gain in the form of taxes, which serves as a

contribution from doing the business; and its aim to hire local indie artists

from universities here in the Philippines, which in return will uplift the lives

of struggling Filipino students financially.

Definition of Terms

This section contains the list of terms that are used operationally in the

study to give clarity to the readers

1. Bar – caters a variety of alcoholic beverages.

2. Bar and Grill Café – a fusion of bar, grill, and café catering

beverages such as alcoholic drinks and coffee, and main course

dish meals that are cooked and exposed to heat through charcoal

or electricity.

3. Café – mainly gives emphasis on the short term for “cafeteria” or

lunchroom and coffee as well.

4. Grill – mainly serves food that is cooked over an open fire

(charcoal or electricity)

5. Millennials - relating to a millennium or to the people from 23 to 38

years old and are updated with the latest news socially, politically,

and environmentally. Updated with the different trends.

Methodology

Research Design

Descriptive Research. Note: Observation of potential rivals will also be done.

Treatment of Data

1. Determination of sample size using Slovin’s Formula: n = N / (1 + Ne 2)

where n = Number of samples, N = the average daily foot traffic in Quezon

City and e = Margin of error. Five (5) percent margin of error will be used

or a 95% level of confidence.

2. Data will be analyzed using Porter’s Model, SWOT analysis, financial ratio

analysis, and Break-even analysis. The primary data gathered using the

survey instrument would be interpreted with the aid of SPSS statistical

tool.

3. Also, the data on required permits/licenses and costs of the establishment

(cost of the land, maintenance and operation inclusion of capital

equipment) would be gathered by canvassing several potential suppliers.

The costs of getting permits and licenses will be recorded and included as

part of pre-operating costs. Tables and graphs will also be utilized to help

the readers understand the trends and data acquired from the study more

easily.
Sources of Data:

 Primary data will be obtained by using survey method. The researcher will

use a structured questionnaire that will be distributed to the target market

of the proposed business to obtain needed information appropriate to the

study.

 Secondary data will be utilized including, articles, journals, newspapers,

books, reports by government agencies and trade associations.

Inputs Process Output

Primary Data Statistical Tools The feasibility of
Secondary Data Porter’s Model establishing Pinoy Blues Bar
Key Success Factors and Grill Café
SWOT
Financial Ratio Analysis

Research Paradigm

Figure 1.0

Figure 1.0 shows the types of data that will be utilized, the processes that

will be done, to come up with the identification if the proposed business, which is

the " Pinoy Blues bar and grill café" will flourish in terms of profitability,

industry/sector background, and willingness of its target market.