II.
Market Aspect
2.1. Product Description
Hogwarts House Cafe
The Hogwarts House will be a coffee house/cafe located in Libjo, Dinagat. Located in
the Poblacion area, the cozy and Hogwart-ish house will be located in the front of the
Park near the Municipal hall, Free-wifi are, High School, and Elementary School area.
The cafe will not only serve gourmet coffees, espresso, and drip coffee, lattes,
milkteas, and smoothies but also provide different snacks that could satisfy
everyone’s cravings. When it comes to pastries, the primary line will be muffins,
breads, cookies, croissant, and rolls. All pastries will be supplies daily by a local
bakery.
The cafe will be open for business on Monday- Thursday 7am-9pm, Fridays and
Saturdays 7am-11pm, and Sundays 7am-5pm.
2.2. Target Market
Business Owners & Workers
57.16% of Libjoanons are those economically active population which shows that
10,152 of 18,051 are those actual or potential members of the work force. During the
week, over 250 people work in the Poblacion and most of them work in the morning
so the cafe will open early in 7am. This group includes managers from the
establishments near the area, local government worker, and teaching professionals.
With the fact that this cafe is located at the center of business and workers area, a
number of tradesmen have promised to patronize the cafe everyday. Fast and accurate
service will be provided, as these customers often have limited time to eat.
Students
ACES (Albor Central Elementary School) and (ANHS) Albor National High School
is nearby. Pupils and Students are likely to visit the Hoggy Cafe and Snack House
during their free time, weekends, on very nice days, and during their holiday periods.
With the help of word of mouth and flyers that will be distributed on campus during
those times, offering the students a percentage discount on certain meals and during
certain times will be a good idea for promotional purposes.
2.3. Demand
The market for Coffee segment is expected to show a volume growth of 5.5% in
2023. The averagge volume per person is ecpected to amount to 1.3kg at the end of
2022. The total coffee consumed in the Philippines in 2020 was about 3.3 60 kg bags.
This reflects a long-term increase in coffee consumption over the years. In addition,
according to the Philippines statistics, millennials and Gen Z’s are willing to spend
P100 on a cup of coffee although the prices of this cafe is cheaper than that.
2.4. Supply
While Philippine coffee production remains relatively low and is unable to even meet
local consumption demand (coffee production was at 62,062 metric tons of green
coffee beans in 2019 but Filipinos consume 100,000 metric tons of coffee a year and
drink almost as much coffee as the people of other big countries), the Philippines is
looking to be one of the leading producers of top-gradee coffee around the world.
According to the Philippine Coffee Industry Roadmap, the country is expected to
raise coffee production seven-fold by 2022. Through the coffee roadmap, they aims to
guarantee a coffee industry that is cost-competitive, aligned with global quality
standards, reliable, and environment-friendly.
2.5. Demand & Supply Analysis
70% of Philippine coffee shop are imported which means that coffee lovers are
consuming more of the country’s own coffee supply. Reduced coffee growing and
increased coffee consumption mean that the country is more reliant on coffee imports
than ever before, and 5,000 metric tonnes of the world’s second-most highly traded
commodity (after oil) is shipped into the nation every year. This means that the
business can’t rely solely at the local supply. Though this is only a small business and
can’t be deemed as fast supply consumer, this won’t stay as it is for the reason that
there are future plans for expansion.
Particulars Year 1 Year 2 Year 3
Projected Demand 1,665,476 1,534,987 1,786,345
Less: Projected 1,045,274 963,734 1,102,482
Supply
Projected Gap 620,202 571,253 683,863
Apparently, the demand still exceeds the supply resulting to shortage of the
abovementioned products. The table below shows the gap between demand and
supply. The bigger the gap, the more favorable it is for the group to enter into such
venture.
2.6. Market Share
Taking also into consideration the group’s capacity to produce certain volume of
processed fish, the table below shows the captured market of the group. Each year, it
fluctuates.
Particulars Year 1 Year 2 Year 3
Projected Production 19,476 25,533 18,445
Volume
Divided by: Projected 620,202 571,253 683,863
Gap
Projected Market Share 0.03140% 0.04469% 0.02697%
2.7. Price
The proponent will use the cost plus mark-up method, the psychological pricing
method, and Bundle pricing.
Cost plus mark-up method, involves taking the amount it cost you to make the
product and increasing that amount by a set percentage to determine the final price. In
this type of pricing, the profits are more predictable since you’re setting your mark-up
to a fixed percentage.
Psychological pricing method on the other hand play on the psychology of consumers.
In a way, it involves luring customers by slightly altering price, product placement, or
product packaging. In this method, it can help the business to sell more products by
slightly tweaking sales tactics without losing profits.
Meanwhile, the Bundle pricing is selling two or more similar products or services
together for one price. Bundling is an effective way to upsell additional products to
customers or add value to their purchase. In this way, the customers discover new
products they weren’t intitally planning to buy and may end up purchasing them
again.
All of these pricing method are applied below.
Coffees 80Z 120Z
Latte P79 P109
Cappuccino P79 P109
Flat White P89 P119
Americano P68 P98
Mocha P79 P109
Espresso P50 P68
Hot Chocolate P68 P98
Iced Coffee
Iced Latte P79 P109
Iced Mocha P79 P109
Iced Americano P68 P98
Coffee Jelly P60 P90
Milkteas
Matcha Milk Tea P80 P109
Oreo Cheesecake P80 P109
Strawberry P80 P109
Strawberry Oreo Chocolate P80 P109
Choco Wintermelon P90 P115
Banana Wintermelon P90 P115
Lemon Wintermelon P90 P115
Milk Taro P90 P115
Caramel Milk Tea P80 P109
Coffee Milk Tea P80 P109
Toffee Milk Tea P80 P109
Average P78 P106
Breakfast Menu
Beefsilog P65
Porksilog P65
Longsilog P65
Hotsilog P65
Lumpiasilog P75
Hamsilog P65
Daingsilog P55
Pancakes P55
Snacks
Hoggy Cafe Special Burger P99
Ordinary Burger P55
Fries P50
Combo Meals
Burger, Iced Coffee 80z (mocha or 180
latte), and Fries
Silog, Milktea 80z, Burger 190
Total 83
Price Pojection
The proponent will use the cost plus mark-up method. In the first year of operation,
the cost of the products will be increased by 25%. Each year the mark-up will increase
also by 5%.
Particulars Year 1 Year 2 Year 3
Drinks 80oz 78 81.9 85.995
Drinks 80oz 106 111.3 111.565
Meals 83.00 87.15 91.51
Total Raw
267 280.35 289.07
Materials Cost
SCHEDULES
Projected Sales- Drinks 80 oz
Particulars Year 1 Year 2 Year 3
Beginning - 50 50
Inventory
Add- Production
6,000 6600 7260
Volume
Total goods 6,000 6650 7,310
available for sale
Less: Ending 50 50 50
Inventory
Total Units Sold 5,950 6,600 7,260
Multiply by: Selling 78
81.9 85.9
Price
Total Sales 464,100 540,540 623,634
Projected Sales- Drinks 120 oz
Particulars Year 1 Year 2 Year 3
Beginning - 50 50
Inventory
Add- Production
6,000 6600 7260
Volume
Total goods 6,000 6650 7,310
available for sale
Less: Ending 50 50 50
Inventory
Total Units Sold 5,950 6,600 7,260
Multiply by: 106
111.3 111.565
Selling Price
Total Sales 630,700 734,580 809,961.9
Projected Sales- Meals
Particulars Year 1 Year 2 Year 3
Beginning - 30 30
Inventory
Add- Production
4,500 4950 5445
Volume
Total goods 4500 4980 5,475
available for sale
Less: Ending 30 30 30
Inventory
Total Units Sold 4470 4950 5445
Multiply by: Selling 83.00
87.15 91.51
Price
Total Sales 371,010 431,392.5 498,271.95
2.8. Channel of Distribution
Hoggy
Supplier Customers
House Cafe
2.9. Promotional Strategy
Local Residents & Workers -
Specials will be promoted with an A-frame sign and during slow periods coupons and
‘2-for-1 deals will be offered. Menus will be distributed to local businesses and the
faxing-in of orders will be encouraged. Take-out will be attractively boxed andgiven
equal priority to sit-down services.
Tourists - Menus will be distributed to the local lodging establishments to encourage
their guests to come to the Café. Advertisements and listings will be placed in state
wide and regional tourist guides and publications. Menus will also be placed at
information booths and other spots likely to have tourist traffic.
Students- With the help of word of mouth and flyers that will be distributed on
campus during those times, offering the students a percentage discount on certain
meals and during certain times will be a good idea for promotional purposes.
Online- It would also be better to put my cafe online as it can help to gain more
customers. By providing a free delivery within the area, and for attracting potential
customers by giving coupons on special occasions.
2.10. Projected Sales
The table below shows the increasing sales of the business for the
succeeding three (3) years. The Sales is projected to increase 25% for
year 1, 30% for year 2, and 35% for the year 3. The receivables is
projected to increase by 8% each year.
Particulars Year 1 Year 2 Year 3
Drinks 80oz 464,100 540,540 623,634
Drinks 120 oz 630,700 734,580 809,961.90
Meals 371,010 431,392.50 498,271.95
Total Sales 1,465,810 1,706,513 1,931,868
