Colegio de San Juan de Letran Calamba

City of Calamba, Laguna, Philippines • www.letran-calamba.edu.ph • +63(049)-5455453

School of Business, Management and Accountancy

Managerial Economics: Business Plan

Daebak Aiseu Keopi

Name: Crystal Joy A. de Guzman

Section: 1BSA1

Course: ACTED093 – Managerial Economics

Date of Submission: 5/21/2020

Business Identity

Korean culture is a prevalent presence in the Philippines. Since I love iced coffee and I

am very fond of Koreans I will be naming my business “Daebak Aiseu Keopi”. Daebak means

jackpot, big success, originally. But now people often used it when something awesome has

happened or if something impresses you. It is like a parallel word for English expressions like

“Awesome!” or “Cool!”. And as for the Aiseu Keopi, it is the Korean word for Iced Coffee.

My main focus is to satisfy the need of my customers. Like when they are stressed or

depressed, they can order an iced coffee to my shop. While drinking iced coffee or eating some

cakes and cookies, they can chill and think about how wonderful life is. My aims are to serve

the best quality and most interesting varieties of coffees, teas, espresso drinks, and

accompaniments at all times to my fellow coffee lovers. To treat my customers respectfully as

our guests, I intend to offer my guests service that is prompt, efficient, friendly, and relaxed.
Mission.

To provide an authentic and traditional coffee experience and quality beverages at an

affordable price.

Vision.

We strive to be a well-known coffee shop that offers a high quality of beverages. 

Product

As I build my own business, since I loved coffee, especially when it is cold, my main

product will be iced coffee. Iced coffee is cold coffee with ice. It is cold, sweet, and nutty with a

strong coffee flavor. The iced latte and iced mocha are examples. After having one glass of iced

coffee on a hot afternoon, you will feel incredibly refreshed. I will also be serving hot coffee and

other beverages.
 The target market of Daebak Aiseu Keopi is my fellow coffee lovers. People nowadays

always buy coffee because it is refreshing and at the same time you will feel relaxed. Daebak

Aiseu Keopi is determined to become a daily necessity for coffee addicts. Coffee can make us

healthy, and it is the reason why I picked this kind of business.

A cup of coffee in the morning may pack more than just an energy boost. More and

more research emerging to suggest that there may be several health benefits associated with

drinking coffee, from helping prevent diabetes to lower the risk of liver disease. Each additional

cup of coffee per day lowered the risk of diabetes by 7%. The more coffee people drank, the

lower their risk. People who drink several cups per day are the least likely to become diabetic.

Aside from being a coffee lover, I know that drinking coffee is also good for our health and I

have 10 reasons why we should drink coffee every day.

1. Just smelling the coffee could make you less stressed.

2. Coffee could lessen the symptoms of Parkinson’s disease.

3. Coffee is great for your liver.

4. Drinking coffee could help keep your brain healthier for longer.

5. Coffee consumption has been linked to lower levels of suicide.

6. Coffee could reduce your chances of getting skin cancer (if you are a woman)

7. Coffee can make you a better athlete.

8. Coffee could reduce your risk of getting diabetes.

9. Coffee may make you more intelligent.

10. Coffee can make you feel happier.

 I also want to aware my fellow coffee addicts that it is not wrong to drink coffee every

day. We must be conscious of our coffee consumption because it is not healthy to drink too

much in a short period.

Customers

As we try to escape the daily stresses of life, many people can benefit from my business.

As of today, many people are craving coffee, so I think it will have an incredibly good outcome.

Many coffee lovers will surely love this. They can order my shop whenever they want to.

Watching movies, reading books, and socializing with our loved ones while having a great iced

coffee is very refreshing.

As you can see, I came up with a Korean name for iced coffee. My ideal customers will

not be only my fellow coffee lovers. Also, my fellow Korean drama fans. A lot of Korean dramas

scenes were the characters are sipping their coffee while chatting with their friends. Other

characters are walking or chilling in the park with an iced coffee in their hands. Since that many

fans of Korean dramas get fond of the idea, by imitating those scenes, they also feel like their

idols.

Competition

Business competition now comes in many different forms and from a great variety of

competitors, and the challenges are increasing. Since coffee is in demand in our society many

businesses focus on building their café stores. Like Starbucks, Coffee Bean, Coffee Town and

many more. These stores are found anywhere because cafés intend to wide their franchises.

They are factors that is considered when it comes to analyzing business competitors: (a) brand

awareness: customers tend to buy what they recognize and it can be difficult to challenge a
well-known brand, (b) costs: estimating the costs of a competitor’s products from financial

statement, (c) products: identifying the strengths and weaknesses of the competitor’s products

from sources such as product reviews, (d) customer experience: evaluations of the competitor’s

customer experience such as customer service, (e) capabilities: evaluating business capabilities

that are relevant to your industry.

Daebak Aiseu Keopi will provide a pleasant and welcoming environment where

customers are served with the best coffee and foods that are satisfying, great tasting and worth

every penny. And instead of a powdered creamer, Daebak Aiseu Keopi will offer an iced coffee

with fresh milk and a unique vanilla syrup.

Marketing Strategy

These are the following strategies that can catch the attention of my fellow coffee

lovers:

1. Provide a website that contains the pictures of Daebak Aiseu Keopi’s best iced

coffee.

2. Publish advertisements in various social media platforms

Team

Making a product is not that easy. It is important to consider factors when it comes to

the production. Direct labor is one of the factors that are needed to consider when making a

product. It will be a disadvantage for a small business to hire employees because it will only

increase the cost of the production. So, for business like mine, Daebak Aiseu Keopi will be run
by me and my family. Certain roles and responsibilities will be implemented. Aside from

running the business my family can spend our time together. As the owner of the business and

a student major in BS Accountancy, I will be the one is responsible for preparing the costs and

capital required. Monitors the business’ income and expenses and makes the beverages,

especially the main product, which is iced coffee, with the help of my mom. My sisters are the

ones who will be accepting the orders from customers. And my dad will be the one who will be

delivering the orders.

Production and Costs

It is an enormous task to build brand loyalty, to reach brand loyal customers, and to give

those customers’ product satisfaction. Building your own business is not a joke. Before

investing a single peso into starting your coffee shop you should create a set of financial

projections. Instead of trying to project how many lattes, coffees, etc. you will sell, it is much

easier and probably just as accurate to just estimate the average purchase per customer order

and then estimate what your average cost would be for that order. 

Materials & Ingredients (estimated 50 cups) Costs

Coffee Maker ₱ 1, 300
Cups for Iced Beverages ₱ 250/35pcs.
Cups for Hot Beverages ₱ 150/15pcs.
1 kilo of sugar ₱ 100
Grounded coffee ₱ 400
15 liters Fresh Milk (₱82.00/1liter) ₱ 1,230
Iced cubes 1 sack ₱ 200
5 gallons of water (₱30.00/3liters) ₱ 150
Total Cost ₱ 3, 410

Breakdown of Product Cost

Ingredients (1 serving) Costs

 1 Cup for Iced or Hot Beverages ₱ 10.00
1 tablespoon of grounded coffee ₱ 8.00
1 tablespoon of sugar ₱ 2.00
250 ml of milk ₱ 21.00
250 ml of water ₱ 3.00
1 cup Iced cubes ₱ 4.00
Total Cost ₱ 48.00

Ingredients (for 1 serving):

 1 tablespoon instant coffee

 250 ml of fresh milk

 1 tablespoon honey (or sugar)

 1 cup cold water

 1 cup ice cubes

Directions:

1. Combine the coffee, milk, sugar, and the water in a quick shaker.

2. Cover and shake for about 30 seconds until mixed well.

3. Pour into a glass and add the ice cubes. Stir well and serve.

How to make iced coffee without a quick shaker:

1. The ingredients are the same, but instead of 1 cup cold water, use ¼ cup hot water and

¾ cup cold water.

2. Combine the coffee, fresh milk, and sugar in a glass.

3. Mix with the hot water with a spoon until well mixed.

4. Add the cold water and ice cubes. Stir well and serve.
 With the never-ending demand of people to coffee, a lot of entrepreneurs take this

opportunity to increase their profit. Pricing is complicated for both service and product

businesses, established owners expanding their business and entrepreneurs starting one. It

requires both cold calculation and sensitive intuition. The best pricing strategies use a clear

understanding of basic financials as a springboard for experimentation and a deeper

understanding of the market.

Fixed Cost:

Coffee Maker = ₱1,300/2years (₱54.17/month or ₱1.80/day)

Freezer = ₱5,000/2years (₱208.33/month or ₱6.94.day)

Rent = ₱5,000/month (₱166.67/day)

Total = ₱175.41

Variable Cost:

Iced coffee per serving expense = ₱48.00

Iced coffee price = ₱60.00 (common rate)

Net = ₱12.00

Daily Cost/Profit Schedule

Output (per Total Fixed Total Variable Total Cost Total Profit/(Loss)

serving) Cost Costs Revenue

0 175.41 0 175.41 0 (175.41)
 20 175.41 960.00 1,135.41 1,200.00 64.59
40 175.41 1,920.00 2,095.41 2,400.00 304.59
60 175.41 2,880.00 3,055.41 3,600.00 544.59
80 175.41 3,840.00 4,015.41 4,800.00 784.59
100 175.41 4,800.00 4,975.41 6,000.00 1,024.59

Breakeven Point

Output (per Total Fixed Total Variable Total Cost Total Profit/(Loss)

serving) Cost Costs Revenue

14.62 175.41 701.64 877.05 877.05 0

14.62 is the breaking point, whereas the total cost is equal to the total revenue. Since it

is impossible to serve 14.62 cups of iced coffee, I estimated the serving of iced coffee to be 15

cups, whereas the total cost(₱895.41) is close to total revenue (₱900) which has a profit of only

₱4.59.

Output (per Total Fixed Total Variable Total Cost Total Profit/(Loss)

serving) Cost Costs Revenue

15 175.41 720.00 895.41 900.00 4.59

Future Plans

My main goal is to build and put my café inside the city zone. Where I maintain a clean

and attractive coffee house at all times. Also, a unique place where customers can socialize with

each other in a comfortable and relaxing environment while enjoying the best brewed coffee.

So that my customers can be relieve with their daily stresses by providing piece of mind

through great ambience, convenient location, friendly customer service, and products of

consistently high quality. My café would serve iced coffee, cakes, donuts and other. If I still have
a budget, I will add meals. The meals will be conveying hand crafted. My coffee shop should be

a place of enjoyment and relaxation. By sharing the great quality of iced coffee, I will make sure

that the customers will feel at ease. I also plan to have my employees, my customers where

they can feel appreciated, supported, and satisfied, every time they come to my cafe.

In my café where my customers can chill, have fun, eat, and drink iced coffee while

watching movie. They can also watch Korean dramas in my café since I am a fan of Korean

dramas. I am going to put some tv’s so that my customers can watch. And also, books, I am

going to put books so that they can read while drinking their coffee.

Daebak Aiseu Keopi would be a place where my customers can try to escape their daily

stresses of life and just have a comfortable place to meet their friends or to read a book, all in

one.

Final product
Market Structure

Daebak Aiseu Keopi’s coffee shop is a monopolistic type of market structure.

Monopolistic competition refers to a market situation with a large number of sellers offering
similar but not identical products and, hence are not perfect substitutes. Whereas, Daebak
Aiseu Keopi’s café is owned by an entrepreneur that offers similar but not identical products to
other coffee shops. Compared to perfect competition, the number of firms under monopolistic
competition is lesser. Considering Daebak Aiseu Keopi’s location is in the city zone, other coffee
shops will be their competitors.

Here are the lists of different coffee shops that may lead to a potential competitor:

Starbucks Corporation is an American

multinational chain of coffeehouses and roastery
reserves headquartered in Seattle, Washington.
As the largest coffeehouse in the world, Starbucks
is seen to be the main representation of the
United States' second wave of coffee culture.
Tim Hortons Inc. is a fast-food restaurant chain,
specializing in coffee, doughnuts, and other fast
food items. It is Canada's largest quick service
restaurant chain; as of December 31, 2018.
The Coffee Bean & Tea Leaf is an American coffee
chain founded in 1963. It is owned and operated
by Jollibee Food Corp. which has its corporate
headquarters in Pasig, Philippines. As of 2017, the
chain has over 1,000 self-owned and franchised
stores in the United States and 31 other
countries.
 Coffee Town Calamba is located at Halang,
Calamba Laguna. The wood interior design of the
coffee shop makes the place very cozy. Coffee is
palatable. Anyone can work in this place as jazz
music is played at the background. Aside from
coffee, meals were also served. Price is indeed
reasonable.

Like these other coffee shops, Daebak Aiseu Keopi’s main product is iced coffee. It can

be similar to other café’s iced coffee, but it will be different in other aspects. The iced coffee of

Daebak Aiseu Keopi will be unique since the business will be using different ingredients in

making the product. The cafe will use distinctive packaging to differentiate its main product

from other coffee shops. To limit the use of plastic cups or bottles, Daebak Aiseu Keopi will be

using mugs and glasses for the orders of dining in customers. Aside from advertising through

the different types of social media platforms, Daebak Aiseu Keopi will be using other

promotional techniques. By giving away free coupons and samples of their products, they can

attract more customers.

Firms are assumed to be profit maximizers. Coffee shops tend to be small with

entrepreneurs who are actively involved in managing the business. Businesses like coffee shops

own the authority to base their decisions on their costs and expenses. Daebak Aiseu Keopi is

owned by an entrepreneur that makes independent decisions about the price and output of a

particular product. And these decisions will be based upon the product, its market, and its

production cost. The Daebak Aiseu Keopi’s main product is iced coffee. The estimated range of

the product is from ₱48.00 to ₱55.00. Considering the production cost of the product, they can
set their product price at ₱60.00 to ₱100.00. Daebak Aiseu Keopi has the authority to set its

price depending on the costs and expenses, including advertisements, salary & wages of

employees, free sampling, coupons, and others. Aside from it, the business will also consider

the industry’s price of the product. As we all know, coffee shops are very in demand in today’s

society, like everybody has been craving for coffee. These businesses must take matters and

considers risks in terms of decisions making.

As I have said Daebak Aiseu Keopi’s coffee shop is a monopolistic type of market

structure. Building your coffee shop is not a joke, there is no certainty that it will run in long

years. One of monopolistic competition’s characteristics is these firms are all small size and

capable of producing substitutes, they can easily leave or enter the industry in the long run.

Firms or businesses like coffee shops has the freedom to open, they are capable of producing

substitutes. Just like how these coffee shops have the same type of product but can be

differentiate in many aspects. For example, Starbucks is best known for its Caramel Macchiato.

And Daebak Aiseu Keopi’s café is determined to be the best-known coffee shop for its Vanilla

Iced Coffee. But these businesses also have the power to leave the market. The business may

lose, or the entrepreneurs may want to pursue another type of business. As there are no major

barriers to entry or exit but the firm has no power to restrict the entry of new firms.

Thanks to the strong influence of Korean culture and the health benefits of coffee,

Daebak Aiseu Keopi’s café will be successful. The Korean themed coffee shop will serve as a

place where coffee lovers and Korean dramas fans can watch their favorite movies or series and

read a book while drinking iced coffee. Sometimes, themed coffee shops can also attract people

with the same interest or people looking for something new and unique. Some of them might
only want the ambiance of the café, not the product. Studying the people’s buying behaviors

and consumption is not just for companies. Small businesses and entrepreneurs can also study

their customers for greater success.

Many small businesses operate under conditions of monopolistic competition, including

independently owned and operated high-street stores and coffee shops. In the case of coffee

shops, each one offers something different and possesses an element of uniqueness, but all are

essentially competing for the same customers.