CHAPTER 1

Marketing Aspect
This chapter presents the marketing aspect of the proposed business, which
consists of the product/service to sell, target market, demandsupply analysis,
projected sales, marketing program/strategies and marketing/selling expenses.

Product/Service to sell
Caf del Matei is a welcome addition to your favorite caf shop in Davao
City. Caf del Matei provides service to consider social changes to create place
and atmosphere that everyone finds attractive. Cafe del Matei can well
recommend for the food, drinks and service. Caf del Matei will offer its customer
the best tasting coffee beverages and best tasting sweet dessert in the area and
not to expensive either. Caf del Matei will offer its customer the best premium
coffee base frappe which is the best seller, cream-based frappe, hot drinks
chocolate based frappe, royal blend frappe and fruit base frappe. And caf del
Matei will also offer the best dessert compose of Ice cream waffles and most
wanted waffles. Young and older ones alike frequent this place. Caf del Matei is
a better place to enjoy coffee and hang out with your friends because of the
ambiance. Caf del Matei are open for anyone who just loves chatting with
friends while sharing their favorite pastries and doing some business matter but
the space of it is good for four persons only because they are only two tables of

the coffee shop because Caf del Matei is a new local business coffee shop here
in Davao city.

Target Market
The target market of Caf del Matei base on the area that can be covered
by the business.

Area Coverage
A franchise of Caf Del Matei will be installing at Gaisano Mall Grand Toril
of Davao located at Toril St. Davao City. The said mall is rooted at the heart of
the city, gaining massive shoppers and patrons. Thus, the buying preference or
chances of customer are high. The coffee shop will be placing at the lower
ground of the mall where the grocery store and other food counters is located.
The said area is convenient to the shoppers specially those who are tired and
hungry of having their groceries. They do not need go to the other floor just to
find a relaxing place for them to have their coffee break. This is also the same to
those shoppers or customer who wants to have their snack and want to have
their coffee, because lower ground is the area where you can find different food
counters. Since there are no leading coffee shops in the area, the proposed
franchise could take the advantage and could attract more customers. It can be
noted also that people nowadays love just to sit, relax, go over things and have
their coffee. Caf del Matei is the perfect place to be.

Consumer/Customer
The Caf Del Matei is target customers are students who are looking for
some relaxing coffee drinks or frappe that is not expensive .The target customer
is the office workers in nearby establishments who will be offered relaxation to full
themselves from stressful work while enjoying their choices of sweets and coffee.
Target Market

Probable

Target

Population

Percentage

7,100
1,000

20%
20%

1,420
200

2,000

20%

400

market (Population %)
Students
Estimated

no.

employees

of

Sm

Ecoland
Shoppers

from

Sm

of

Ecoland
Total

2,020

The business proponent identified four target market or has the potential
to purchase the product and these are: Students from Philippines Womens of
College, employees from different business establishments and shoppers from
Sm Ecoland of Davao. In order to get to official population of students of
Philippines Womens of Davao, the business proponents requested and acquired,
through a formal letter, the official total population of the school. Based from the
data provided by the Office of PWC, the total population is 7,100. From the date
gathered, the business proponents consider 20% out of the total population of
PWC as probable target market. The percentage represents the highest
probability purchasing Coffee Frapped considering that not all students patronize
Coffee Frapped.

The business proponents also identified employees in different business

establishments and people who goes shopping in SM Ecoland as probable target
market. The number of shoppers passing by the area, the business proponent
made an estimate of their probable numbers wherein 20% out of 1,000 estimated
employees and 20% of 2,000 shoppers by passers.
The proponent identified the target market due to the proximity of the
business location in their area, thus the probability of buying the product is high.
The proponents based are percentage of their target market based on their
projection from the nearest percentage of market share or the highest chance of
patronizing the product.

Demand-Supply Analysis
This will discuss the total potential demand together with the present
competition. There is an illustration shows the breakdown of demand by product
and total potential demand per day.
Total Potential Demand
In Determining the potential demand of Caf del Matei, the business
proponents prepared a survey questionnaires of conducted a survey to probale
market out of 2,020 probable target market, the Business proponents 100
respondents.

Total Potential Demand

This table shows figures that reflect the units of potential demand of
each product based on the survey conducted with 100 respondents as a
representative of the total population of 1,000.

Total Demand
Cups

of No.

of % out of 240 Equivalent

coffee

persons

demanded

(consumers)

Total
demand (no.
(frequency
of (frequency
of cups of
coffee x no.
person
who of persons of persons
who
demanded/Total who
demanded)
frequency

of demanded

persons
surveyed)

specified no.
in of cups of

round-off form

coffee based
on the 1,000
total
probable
target
market)

1
2
3
4

50
25
15
10

50%
25%
18%
7%

400
700
450
400

Total

100

100%

1,000

1,950

Table shows the number of determined by the survey conducted by the

proponents to the target market. The percentage of each no. of demands is base
on the 100 respondents. In the survey concluded the business proponents
computed the total demand from the 1,000 probable target market which has a
total weekly demand of 1,950 cups of coffee, the weekly demand was based
from the 100 person surveyed.

Supply Analysis
To identify the supply analysis particularly those supplied by the identified
competitors, the proponents conducted a personal interview on identified major
competitors like Figaro, Blugre, Bos Coffee, Starbucks and Krispy Kreme, The
business proponents identified These establishment as major competitors
because they sell waffles, pastries and desserts. To get more accurate
information, the proponents asked the management of five (5) identified
competitors on what is the average frequency of Caf del Matei sold per day and
per week in their business establishment. The data acquired from the major
competitors are shown in table.

Total Supply of Competitors per day and per week

Major Competitors
Competitors

Average cups of coffee

Cups of coffee sold in a

sold in a Day

week ( cups sold daily x 7

days in a week)

Figaro
Blugre
Bos Coffee
Starbucks
Krispy Kreme
Total

90
95
105
200
115
605

630
665
735
1,400
805
4,235

Present Competition (Supply)

Competitor Analysis
Competitor
Figaro

Blugre

Bos Coffee

Strength
-Skilled workforce
-Reduced labor costs
-Monetary assistance
provided
-High Profitability and
revenue

-Skilled workforce
-Reduced labor costs
-Monetary assistance
provided
-Skilled workforce
-Reduced labor costs
-Monetary assistance
provided

Weakness
-Small business units
-Investment in research and
development
-Future debt rating
-High loan rates are possible
-Future profitability
-Brand portfolio
-Tax structure
- Small business units
-Tax structure
-Future profitability

- Future debt rating

- High loan rates are possible
- Small business units

Starbucks

Krispy Kreme

-The market leader in

the coffee market
-it has 16,635 stores in
different countries
including 11,068 in U.N
-Customers are
satisfied with the quality
and taste of coffee
-High brand equity
-Locations are
convenient
-Making their Business
more environmental
friendly
-Monetary assistance
provided
-High brand awareness

-Pricing are higher as

compare to the competitor
-High operating cost
-The business profit are highly
dependent on coffee product

-Pricing are higher as

compare to the competitors
-High operating cost

Pricing Structure
Name of Establish
Figaro

12 oz
16 oz

Price
P 130
P 140-160

Blugre

Tall
Grande

P 95-145
P 105-160

Short
Tall
Grande
Tall
Grande
Venti
Medium
Large

P 95 130
P 100 - 160
P 120 -1,158

Bos Coffee

Starbucks

Krispy Kreme

Product

P 105 150
P 105 -165
P 120 - 175
P 100 125
P 120 - 145

The pricing structure of the competitors and the proposed product. It can
be noted that the price of the competitors ranges from P 95 to as high P 1,158

while the Caf del Matei will be priced only P 65 P 85, It shows that the other
competitors are at high prices compare to the Caf del Matei and this can be
attributed to the high operating cost or expenses and the expensive raw
ingredients, materials that there using. Starbucks raw ingredients are mostly
imported and the machines that they used. Caf del Matei are cheaper or at
lower price because of its lower operating expenses such as their raw ingredients
and labor expenses.

Projected Sales
Based on the demand and supply analysis conducted, Caf del Matei has
projected its sales through its market share computed of % based on its capacity
and other factors. The sales are computed from the estimated units sold per day
of Caf del Matei, multiplied by the price of each product multiplied by the total
days of operation of the business for one month.
This illustration shows the breakdown of sales by product units sold per
day, price, and number of operating days per month then total amount of sales
per month.
Per Month
Product

Sold

Price

Per

per

Per Cups

Total

month

Amount

day

12o

COFFEE
BASED
Mocha

16oz

22oz

75

85

12oz

16oz

22oz

13,650

15,750

17,850

65

30

47,250

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White Mocha
Dark Mocha
Caramel
Cappuccino

7
5
6
5

65
65
65
65

75
75
75
75

85
85
85
85

30
30
30
30

13,650
9,750
11,700
9,750

15,750
11,280
13,500
11,280

17,850
12,750
15,500
12,750

47,250
33,780
40,500
33,780

Vanilla Bean

65

75

85

30

15,600

18,000

20,400

54,000

Bubble Gum

65

75

85

30

9,750

11,250

12,750

33,750

Blueberry
Cream
Strawberry

65

75

85

30

13,650

15,750

17,850

47,250

65

75

85

30

13,650

15,750

17,850

47,250

Based Frappe
Chocolate

65

75

85

30

13,650

15,750

17,850

47,250

Dark Chocolate

65

75

85

30

13,650

15,750

17,850

47,250

Chocolate
Mouse
Chocolate Hot
Fudge
Rocky Road

65

75

85

30

15,600

18,000

20,400

54,000

65

75

85

30

9,750

11,280

12,750

33,780

65

75

85

30

11,700

13,500

15,500

40,500

Double Dutch

65

75

85

30

11,700

13,500

15,500

40,500

Cream Based

Chocolate

Total

P648,090

In Volume and Pesos

Per Day
14,115

Per Weak
76,860

Per Month
423,510

Per Year
5.082,120

Marketing/Program Strategies
Practices of Competitors
Existing cafes are just around the area of Caf del Matei such as Coffee
Bar Gaisano Toril, Port Caf Gaisano Toril and Euro Baker of Gaisano Toril.
Those establishments will definitely become direct competitors of Caf del matei.
They also have their own strategies on their business because some of this have

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a good ambient environment and most of all offers a good tasting coffee and
amazing presentation of food. It also promoting their business through the use of
social media, which is trend today. They create a Facebook page which they post
their new products. The customer may share the said post if they like it and invite
their friends to come and try their products by this information is easily spread
and they easily promote their businesses through social media.

Own Marketing Program/Strategies

Caf del Matei will position itself as a unique coffee shop that not only
offers the best- tasting coffee and pastries but also provides cozy and
comfortable environment, which established corporate environments lack. We
will cater to customers bodies and minds, which will help us, grow our market
share in this competitive market. Facebook page will be created where the
company can post their new products and promos. Customers may share the
said post if they like it and invite their friends to come and try their products. By
this, the information is easily spread and they easily promote their businesses.
Caf del Matei will also develop its own brand symbol for customers to easily
remember the place and business name. Attractive presentation of ordered foods
and beverage will also be done. This will serve as practical promotions that the
customers will surely enjoy and make them think to come again.

Marketing/Selling Expenses

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The marketing /selling expenses for the grand opening of Caf del Matei is
the amount of P10,000 ; flyer printing ( 600 flyers at P6 per copy) for the total of
P3,600; and tarpaulin printing (30 pieces at P140 per piece) for a total of 4,200
which tantamount to P17,800.