ATENEO GRADUATE SCHOOL OF BUSINESS

FINALS

Submitted By:

Marie Caroline Castillo

Jose Mario Follosco

Jasmine Gabriel

Gorge Liwag Jr.

Andrie Song

MARKETING MANAGEMENT

Submitted To:

Professor Yolanda Ibarle

July 10, 2010

 Luto sa Palayok Luto c/o
Jorge. Jorge pakilagay dito yon
logo ng Luto sa Palayok
 TABLE OF CONTENTS

1.0 Executive Summary

2.0 Situation Analysis

2.1 Market Summary

2.1.1 Market Demographics

2.1.2 Market Needs

2.1.3 Market Trends

2.1.4 Market Growth

2.2 SWOT Analysis

2.2.1 Strengths

2.2.2 Weaknesses

2.2.3 Opportunities

2.2.4 Threats

2.3 Competition

2.4 Product Offering

2.5 Keys to Success

2.6 Critical Issues

3.0 Marketing Strategy

3.1 Mission

3.2 Marketing Objectives

3.3 Financial Objectives

3.4 Target markets

3.5 Positioning

3.6 Strategies

3.7 Marketing Mix

3.8 Marketing Research

4.0 Financials

4.1 Break-Even Analysis

4.2 Sales Forecast

4.3 Expense Forecast

5.0 Controls

5.1 Implementation

5.2 Marketing Organization

5.3 Contingency Planning

6.0 Recommendations

1.0 Executive Summary (Kathleen paulit na lang to)

FOOD

The basic human needs are food, clothing and shelter. Of these three, food is
the most popular, in fact, it is the single most consistent item in every
celebration. As a popular adage say, good food brings people together. The
right to food is a human right derived from the International Covenant on
Economic, Social and Cultural Rights (ICESCR), recognizing the "right to an
adequate standard of living, including adequate food", as well as the
"fundamental right to be free from hunger." Since time in memorial, people
all over the world have been in search of flavors -- delicious food. Like the
time when the Spaniards lead by Ferdinand Magellan accidentally discovered
the Philippines while in search of Spice Island. Food is very powerful, it is
used as offering to the gods and even by women as it is said that the way to
a man’s heart is through his stomach.

FILIPINOS

Filipinos are very passionate people in general and one passion that almost
all Filipinos have is the passion for good food. The Philippines has one of the
most celebrated and rich cultures in the world. Culture that is built through
its multiculturalism which resulted from both local traditions and beliefs as
well as influenced by foreigners among which are the Chinese, the
Spaniards, Americans and Japanese. Filipino food is known to be one of the
best in the world because of its flavors, variety and diversity that is why
many Filipino restaurants can be found in other countries such as in America,
Europe and other Asian countries.

MAKATI CITY

Makati City is the business district of the Philippines. It was founded in 1670
and has since time in memorial been home to many businesses both local
and international, from small businesses to multinational corporations. Sky
scrappers are allover the metro. One of the busiest barangays in Makati is
Salcedo Village. It is where buildings such as 88 and 139 Corporate Center
and Philamlife Tower among others are situated. It is the home location of
several banks, BPO, multi-national firms, schools and even condominium
buildings.

LUTO SA PALAYOK

Luto sa Palayok is a fastfood style, small scale restaurant with delivery

service that offers Filipino food to both employees and residents of the
Makati Central Business District. Currently, there are a lot of restaurants and
fastfood outlets all over the metro and most if not all offers Filipino foods but
what sets Luto sa Palayok from the existing players in the food
industry/business is the facts that Luto sa Palayok offers quality food that is
affordable. Quality and affordability are Luto sa Palayok’s battle cry. Quality
in terms of taste, the owners believe that to have delicious food in every
meal is a basic human right that is why the recipes that are being followed in
the creation of every meal is well researched, tested and even standardized
to ensure superior taste at all times. Quality in preparation is another factor,
Luto sa Palayok boasts of using only quality ingredients from the produce to
the meats and even spices, the owners believe that each and every meal
that is being offered in Luto sa Palayok are foods that they themselves and
their families and loved ones will eat. The meals are ensured to be complete
to provide nutrition to the consumers as each and every set meal is made
from fresh vegetables, lean meat and prepared observing cleanliness and
hygiene. Quality in delivery on the other hand is all about timeliness, all
orders are committed to be delivered in 15 minutes. The delivery staff as
well as order takers are required and trained to be respectful, polite and well
mannered. Affordability is value for money. As a result of the financial crisis,
consumers are very careful in their spending. They save as much as they
possibly can and spend as little as humanly doable. Given the recession
issue, Luto sa Palayok priced their food offerings at very low prices. It is a
common saying that the best things in life are free but with Luto sa Palayok,
we the owners find it more fitting to say that the best things in life are
cheap.

The five incorporators of Luto sa Palayok namely, Dimple, Jomar, Jorge,

Andrei and Kath are passionate Filipino food lovers and are looking at
achieving fast market penetration in the Makati City fastfood industry
through their quality and affordable Filipino food. The same five principals on
the management team are all taking up Masters in Business Administration
Degrees from the Ateneo Graduate School of Business and have over 30
years of combined experience in the various fields of business which
provides Luto sa Palayok experiential information, leadership and
management that is aimed at creating value and even nation building and
not concentrated in money making alone. The company’s plan is to initially
sell their food products in Makati City specifically in the Salcedo Village area
where they aim to get a considerable percentage of market share. Luto sa
Palayok uses market-penetration strategy as represented by their low price
offering to gain a significant amount of market share within their first year of
operation. Aside from this, the team believes that delicious, quality (Clean &
Healthy) Filipino food must be available to all.

1.0 Situation Analysis

Philippine Retail Food Industry

Filipinos are known for its distinct taste and love for food. It has already been
part of the Filipino culture to eat or dine out as a way to celebrate
memorable moments and successes with its families, friends and even
business associates over a sumptuous meal. Dining has really become a time
for bonding chitchats or a perfect opportunity to conduct business meetings.
This unique “food culture” has paved a way to a lucrative opportunity to
penetrate the food industry in the country.

Through the years, the country has witnessed a substantial growth in the
retail industry. Growth is seen not only in terms of numbers but more visible
in terms of size, investment on structure and modernization in operation. The
Philippine retail industry’s performance comprises about 11 percent of the
Gross Domestic Product (GDP) in 1997. The total sales in 2002 also shown
an increased by 11.1 percent and its GVA has contributed 10.6 percent to
GDP in the same year. In addition to, about seventy-three percent (72.84%)
of this share was in the trade sub-sector while 25.43 percent was in the
service sector.

The food retail industry grew by 5.83 percent annually from 1981 to 1997,
outpacing the average annual GDP growth rate of 2.27 percent over the
same period. Also, combined with the wholesale sector, the industry
absorbed 15 percent of the country’s employed labor in 1998. The food,
beverage and tobacco industry contributed 37 percent of the total
employment in the wholesale and retail industry in the Philippines in 1995.

In the Philippines, food is intricately linked with its culture and traditions
Food means brisk business. In the family, food accounts for 43 percent of
total expenditures. Outside the home, eating has become lucrative for the
retail business. The expenditure for dining out has an average growth rate of
15 percent to 20 percent per annum in the last year. According to the Family
Income and Expenditure Survey(FIFES) of the National Statistics Office(NSO),
household spending on food increased by 26% percent from 1997 to 2000.
The Personal consumption expenditure on food and beverages in 2002 has
an average annual growth rate of about 3 percent which means that more
people have spent their money on food. This is also the reason why more
entrepreneurs are into the food retail business.

The retail food industry has been a very lucrative business in the Philippines
because of its high demand since Filipinos are known for its distinct love for
food. In addition to the growing food expenditures, entrepreneurs saw this
opportunity and are willing to make a solution to meet the demands of the
market and because of this more entrepreneurs are venturing in the food
retail industry.

Company Background

Luto sa Palayok is a fastfood outlet with delivery services that offers Filipino
food to the employees and residents of the Makati Central Business District.
What is unique about the company is that customers can just order
delectable quality food that are very affordable and they can have them
delivered to their offices and/or homes. The company will be serving home-
styled Filipino dishes that are fresh, healthy, affordable, delicious and quality
food.

Luto sa Palayok will be incorporated under the name Bench Buddies

Corporation. The President of the company will be Mr. Jorge Liwag with four
other incorporators. The company believes that serving delicious Filipino
classic food is a way to promote the culture and tradition of the Filipinos.

Luto sa Palayok will be situated along Valero Street in Salcedo Makati. The
company chooses this place since it is strategically located along offices and
condominiums and other commercial businesses in the area which is also
accessible and convenient to its target market. Luto sa Palayok will start its
operations from 7am to 9pm to serve different types of meals (breakfast,
lunch and dinner) and will be accepting delivery services.

2.1 Market Summary

Target Markets

Makati City is one of the 16 cities that make up Metro Manila. It is one of the
most populous metropolitan areas in the world. Its population is about
510,383 and ranked as the 40th most densely populated city in the world
with 18,654 inhabitants per km. Makati is the financial center of the
Philippines and one of the major financial, commercial and economic hub in
Asia. It is also an important center for international affairs since it host
various embassies within the city.

There are many districts and landmarks in the city that have become well
known to outsiders. Makati has been known as the "Financial Capital of the
Philippines". Anchored by Ayala Avenue, Makati is the home of the Philippine
Stock Exchange and the Makati Business Club, two of the most important
economic hubs in the Philippines.
Based on the Population Growth Rate of 0.4 between the census periods
1990-2000, the projected population of the City will reach 586,477 by 2010.

Projected Population, Makati City, 2001-2010

Projected
Year Population

2001 479,847
2002 486,217
2003 493,534
2004 501,999
2005 511,735
2006 522,903
2007 535,715
2008 550,392
2009 567,211
2010 583,477

The Central Business District (CBD) is where most of Makati's financial

resources are concentrated. This district is bounded by EDSA, Sen. Gil Puyat
Avenue (formerly Buendia), Antonio Arnaiz Road, and Chino Roces. It mainly
includes Legaspi Village, Salcedo Village, Ayala Center, and parts of Bel-Air.
Most of the companies have their offices and country/regional headquarters
within the CBD of Makati City

Although it is populated at about 510,383, the day-time population of Makati

is estimated to increase during weekdays. This is caused primarily by the
presence of the Makati Central Business District (CBD) which is the country's
largest concentration of business and service activities.

According to the City’s Transport and Traffic Improvement Plan 2004-2014,

the city’s daytime population is estimated to be 3.7 million during weekdays,
owing to the large number of people who come to work, do business, or
simply treat themselves to world-class shopping and entertainment at the
central business district.

The call center industry is also one of the country’s bright prospects in the
area of business process outsourcing. Most of the call center offices are
located in Makati since this is the center of business in the country. It
started in year 2000 and became a significant activity in the services sector.
In the year 2004, the country was able to capture 20 percent of the total
world market share in contact center services and is estimated to capture 50
percent of the total English speaking world market by 2008. As a result,
some industry analysts projected that more than a million Filipinos will be
employed in the call centers in year 2010 and can bring about P500 billion
revenue to the country.

The daily arrival of people into the city provides the skilled labor force that
allows Makati to handle the service requirements of domestic as well as
international transactions. It also serves as the bases of a large consumer
market that fuels the retail and service trade in the city. Because of this,
Makati is known to be the center of commerce in the country.

Based on the Labor and Employment Survey of the National Statistics Office
(NSO), the employment situation in the City of Makati slightly improved
between the periods 2001 to 2003. The unemployment rate of 17.0% in 2001
was reduced to 16.8% in 2002 and further declined to 15.5% in 2003. Makati
's unemployment rate is lower than the NCR average of 17.0%, but higher
than the national average of 12.2%

Year Total Pop Labor

15 yrs old Force
& over
The increasing population of Makati and the economic growth of the Central
Business District are the major factors why more businesses have been
established in the area. Like for instance, the food business would be a
lucrative venture especially during the daytime since over a million of people
go to the Central Business District to work. These employees would prefer
food that have quality and affordable enough to fit with their monthly

2001 331,000 216,0

budgets. These are the reasons why alot of food outlets, restaurants and
fastfoods are located in Makati, they want to cater to the needs of this big
market.

2002 334,000
Luto sa Palayok’s target markets are 1) Young, working professionals ranging
from 20-30 years old; 2) Single people who live in condominiums all over
Makati City; 3) Call center agents who have limited budgets; 4) Other
219,
2003 339,000
employees in Makati who wants quality yet affordable food and 5) Newly
married couples who live in condominiums in Makati. 229,
Market Analysis

Based on the Family Income and Expenditure Survey (FIES) 2000, nearly two
thirds or 61.7% of the total number of families sourced their income from
wages and salaries. Entrepreneurial activities and other sources of income
accounted for the remaining 8.50% and 29.8% , respectively.

Total Number of Families by Main Source of Income and Income Class, 2000 (
referring to the residents of Makati)

Main Source of Income Total No. o

Wages & Salaries

a) Agricultural -
b)Non Agricultural 63,3
Entrepreneurial Activities
a)Livestock &
Poultry Raising -
b)Wholesale & Retail 4,94
c)Manufacturing -
d)Community, Social
Recrational &
Personal Services 2,08
Based from the table above, most families’ source of income are from wages
and salaries. These families budget their salary to buy basic necessities in
order to suffice their needs, one of which is food. Most of the employees
would prefer to buy food that are delicious quality food yet affordable since
they need to budget their money for other important things such as rent,
clothing, school expenses and utilities among others.

2.1.1 Market Demographics

The profile for the typical Luto sa Palayok customers consist of the following
geographic, demographic and behavior factors:

Geographic
• The main geographic target is the offices and residential
condominiums in Salcedo Village, Makati City
• The total targeted population is at least 5% of Makati City employees
on the first year.

Demographic
• Target market will be male and female from class B and C
• Young professionals whose age is between 20 to 30 years old that are
earning minimum wage and up
• Employees of companies that are near Luto sa Palayok’s location
particularly call center agents, clerks and rank-in-file employees
• Residents who live close to Luto sa Palayok

Behavior Factors
• Customer who wants delicious, home styled Filipino food
• Customer who wants fast and convenient ways to order food
• Clients who wants value for money and who finds the other
restaurants in Makati expensive
• Customers who are looking for variety in their food
• Customers who live in condominium units in Makati and do not have
enough time to prepare and cook their food

2.1.2 Market Needs

Based on research, the top five quality characteristics that influence the
Filipinos choice of restaurants and fastfood outlets, ranked according to
importance, are 1) flavor and taste, 2) value for money and nutrient content,
3) presentation and packaging, 4) variety, and 5) systematic ordering and
selling.
Because of these, the Luto sa Palayok aims to provide the following to its
customers:

• Quality of Food
o Filipinos are known for its distinct taste and love for food. The
company will provide the finest and quality ingredients in order
to make the food delicious and suited to the taste of its
customers

• Affordable prices
o Customers who have “limited budgets” can now afford to have
delicious meals anytime of the day.
• Systematic ordering and delivery service
o Luto sa Palayok will also provide an ordering system that is fast
and efficient to create more value for the customers. The
company also guarantees on-time delivery services to maintain
the freshness and quality of food delivered.

2.1.3 Market Trends (Jorge pa-revise na lang to)

Based on 2008 study conducted by reportbuyer.com that the Philippines has

emerged as one of the rapidly growing food and drinks industries in the
Asian region over the recent past. The country is characterized by various
factors, such as its growing young affluent population, rising disposable
income and rising consumer awareness regarding health and safety
concerns. With these factors, the demand for health food and drinks is
surging high, says our new research report, "Philippines Food and Drinks
Market: Emerging Opportunities".

Now let’s look at the micro level, in the business district of Makati we can see
a contrasting scenario that despite it being the highest earning city in the
Philippines we can see that there are still a significant number of employees
that are earning below the average monthly wage. In this sense we can see
why there are lots of jolly jeeps in Makati that is to cater to the large number
of under paid employees.

2.1.4 Market Growth

In the Philippines, the food retailing industry has grown tremendously. It

involves a wide array of sellers from the sidewalk vendors, wet and dry
markets, sari-sari stores, groceries, supermarkets, hyper marts, warehouse
and discount clubs and convenience stores. The number of food related
businesses has substantially increased since food accounts for 43 percent of
total expenditures in every family. Outside the home, eating has become
lucrative for the retail business. The expenditures for dining out, excluding
corporate representation registered an average growth rate of 15 percent to
20 percent per annum in the last 10 years. In the quick service or fast food
segment, there is an average annual growth rate of about 3 percent.
Furthermore, the total market in 2000 was over PhP30B on food and
beverages in 2002 and reached about PhP448B from PhP401.7B in 1998.

2.2 SWOT Analysis (revise this na lang this Jorge)

2.2.1 Strengths
• Affordability

• Company will offer delicious quality food that are affordable

• Quick and efficient delivery service

• Clean food handling

• Opens 7am – 9pm serving breakfast, lunch and dinner

2.2.2 Weaknesses
• It has limited menu to choose from

• Limited space for storage given its cramp space

• It has a limited budget for advertising and promotion

• Limited area of service delivery (Salcedo Village Makati)

2.2.3 Opportunities
• Increasing BPOs in Makati
• Use of technology (like Cellphones and mobile landlines) to take
delivery orders

• Use of delivery to cater to customer that may be out of reach of the

other Jolly jeeps

• Can cater to the employees who don’t want to go out of their office
and limited budgets

• Due to economic problems, people will lead to find alternative to look for cheaper
alternative rather than dining in an expensive restaurants
2.2.4 Threats
• Lower price range for the menu of the competing jolly jeeps

• Major Fast food chains in the area

• Ever changing city ordinances that regulate the food stalls and
establishments like the jolly jeeps.

2.3 Competitors

Jollibee –is a phenomenal success story: what began as

a two-branch ice cream parlor in 1975 offering hot meals and
sandwiches became incorporated in 1978 with seven outlets to explore
the possibilities of a hamburger concept. Thus was born the company
that revolutionized fast food in the Philippines. Due to its commitment
to cater to Filipinos with different salary cap it launches the “39ers”
meals which are price at P 39.00. This marketing strategy is targeted
at catering to individuals that are on a “budget”.

Binalot – a Filipino inspired fast food restaurant

that is offering a tasty yet affordable variety of Filipino dishes and
innovate the use of a banana leaves for packaging which is an old
Filipino practice. The Binalot menu is composed of various favorite
meals such as adobo, tapa, bistek, tocino, longganisa among others, all
atop steaming hot rice and garnished with appetizing sidings of salted
egg and tomato. Its meal prices range from P 25.00 – P 60.00.
 Dencios - Since it was established in 1991, Dencio's is
a brand associated with original year-round Filipino grilled dishes that
can only be relished in authentic Filipino dining atmosphere. As a
pioneer in the bar and grill restaurant category, Dencio's set the trend
of nipa hut style dining. The customers budget should range P 200.00 –
P400.00.

Other jollijeeps – are present in every street corner

in Makati City. It uses the same theme as Luto sa Palayok – small time
but home cooked style Filipino meal. However, a very big factor that
distinguishes Luto sa Palayok with them is the cleanliness and quality
of food that is prepared by Luto sa Palayok.

Other fast food chains (McDonalds, Burger King, Etc.) – presence wise,
these are close competitors, however, since the target of Luto sa
Palayok ang consumers who are tired of eating the same meals of
burger, spaghetti, chicken and fries everyday.

2.4 Product Offering

Luto sa Palayok now offers several products:

• The company will offer Filipino classic food such adobo, menudo and
more cooked in the traditional home-styled dishes suited to the Filipino
taste.

• Likewise, the company will offer a fast and convenient delivery service
for customers in the Salcedo Village vicinity who want their food
delivered in their homes and offices.

2.5 Key success factors

Based on research, there some characteristics that Filipinos consumers

value the most in choosing restaurants and fastfood outlets, these are 1)
flavor and taste, 2) value for money and nutrient content, 3) presentation
and packaging, 4) variety, and 5) systematic ordering and selling, 6) prompt
delivery and service

Luto sa Palayok will plan strategies in order to provide this all of these to its
customers. Luto sa Palyok will provide food that are delicious quality food
using the finest ingredients. Kathleen ituloy mo na lang to using this.
Affordability

1. High Quality Filipino food which is quality represented by taste and

flavors; quality that is achieved by using recipes that are well
researched, tested and standardized; quality preparation that is clean
and hygienic; Quality in the use of only fresh and healthy ingredients.
2. Affordability is value for consumers’ money that is shown through
generous serving and low price ranging from Php50.00 to Php75.00
3. Easy to reach as orders can be placed through text message or phone
calls.
4. Good location in Valero Street which is one of the most accessible
areas in Makati City.
5. Excellent service provided by well trained staff and includes in the
menu all three meals of the day – Breakfast, Lunch and Dinner.
6. Quick and reliable delivery service which guarantees hot / warm food
delivered in 15 minutes from placement of order.
7. Open communication with consumers which is an almost personalized
relationship with clients. Since Luto sa Palayok encourages clients to
give feedbacks and suggestions on how the service and food can be
improved / made better.
8. Love for Filipino foods by the owners.

2.6 Critical Issues

Establishing itself in the market among the many popular fastfood

chains.

Maintenance of low price despite increasing market price of raw

materials and produce as well as minimum wage standard for
employees.

The Central Problem and Sub-Problems

COMPETITION

There are a lot of challenges in bringing a new restaurant into existence and
since the restaurant is new the competition is considered as the biggest or
central problem. These can be restaurants in the area that are more popular,
those offering the same kinds of foods and those whose target market is the
same as Luto sa Palayok.

STAFFS AND SUPPLIERS

On the back end, there are supply issues with new distributors, lines of credit
and a reliable kitchen work staff to hire and maintain. On the front end, there
is the delivery person, sales lady and manager that must be trustworthy and
hard-working.

EQUIPMENT AND FACILITIES

There are a lot of unavoidable things in running a business and one is the
breakdown of equipment such as oven or stove or even accidents such as
fire among others.

Alternative Courses of Action

COMPETITION

As a player in the same fields/industry, Luto sa Palayok makes it a point to

be aware of how their products and services compare with competition.
Information such as their menu, service standards, prices, minimum amount
for delivery, waiting time from time of order to delivery, etc. Active
advertising is another move that Luto sa Palayok is investing upon.

STAFFS AND SUPPLIERS

Suppliers must provide quality products and timely delivery. owners of Luto
sa Palayok, show zero tolerance for substandard service so that we will
receive the gold standard every time. Also, Luto sa Palayok keeps back-up /
alternative suppliers in case of natural calamities (i.e. typhoon in north Luzon
where produce are produced, back-up supplier from south Luzon).

For our staff, we ensure that there is a comfortable atmosphere in the place
of work, that they don't feel like every move they make is being monitored.
The staff are the front liners. They answer the questions of customers,
explain the dishes and the preparations and, in a sense they represent Luto
sa Palayok to the customers. The owners feel that to do their jobs in an
effective way, they must feel comfortable and free to express themselves.

As a company, Luto sa Palayok makes sure that the rules and boundaries of
the staff are clear and unquestionable because there is a difference between
being comfortable and being lax. A comfortable yet tightly run operation is
what is preferred, optimally. Even though there is good relationship
(friendship) with the employees, the restaurant must be run accordingly that
is why rules are enforced.

Communication is encourage constantly in the organization be it between

the owners and the staff. One of the biggest problems that Luto sa Palayok
have is establishing and maintaining a line of communication. In this regard,
Luto sa Palayok regularly have staff meetings so that the staffs can talk
outside of the pressure environment of meal service in order to make sure
that any problems encountered will be that much easier to resolve.

EQUIPMENT AND FACILITIES

Luto sa Palayok prepares for unfortunate events that are unavoidable by

ensuring insurance coverage. This applies to the business itself including
coverage for its employees. Another way to be safe is to perform scheduled
preventive maintenance and routine check-ups of equipments and other
facilities. This will help avoid expensive repairs, likewise, providing the staff
the contact numbers to call in case of emergencies are very helpful.

Decision Criteria

The decision Criteria will focus on the following factors in determining the
marketing plans:

1. Profitability – the profitability of the company during the 1st year will
determine whether we are going to expand the business or change the
overall strategy for the company.

2. Market growth – Opening of new business districts within Metro Manila

like The Fort is an opportunity in expanding the Jolly Jeep business.
Currently there are no Jolly Jeep or restaurants that offers affordable
food within the area even though there are a lot of commercial and
even residential buildings that are built every year.

Objectives/Goals

Profit Goals - should consider the current cost of money as it will determine
your decision to continue the business or invest your capital in the money
market instead. Since the current cost of money as stipulated by Bangko
Sentral is at 7% for 2010 , the Luto sa Palayok would like to set the profit
margin goals at a minimum of 10% up to a maximum of15% for the first 2
years and 20% at the 2nd – 4th year. The justification behind the 10%-15%
profit goal is because of the introductory stage of the product during the 1st
and 2nd year.
 Cash
Needed % of
Tota
to Start l
Monthly Costs

Php27,000. 10.7
All other salaries and wages 00 %
Php16,900.
Rent 00 6.7%
Php5,000.0
Advertising 0 2.0%
Delivery expense Php0.00
Php39,000. 15.5
Supplies 00 %
Telephone Php800.00 0.3%
Php10,000.
Other utilities 00 4.0%
Insurance Php600.00 0.2%
Php2,000.0
Taxes, including social security 0 0.8%
Interest Php0.00
Php1,000.0
Maintenance 0 0.4%
Legal and other professional Php1,000.0
fees 0 0.4%
Miscellaneous Php0.00
Php103,30 41.0
Subtotal 0.00 %

One-Time Costs
Fixtures and Equipment Php30,000. 11.9
 00 %
Php10,000.
Decorating and remodeling 00 4.0%
Php5,000.0
Installation charges 0 2.0%
Php10,000.
Starting inventory 00 4.0%
Php1,000.0
Deposits with public utilities 0 0.4%
Legal and other professional Php2,500.0
fees 0 1.0%
Php10,000.
Licenses and permits 00 4.0%
Advertising and promotion for Php5,000.0
opening 0 2.0%
Php75,000. 29.8
Cash 00 %
Other Php200.00 0.1%
Php148,70 59.0
Subtotal 0.00 %

Php252,00 100
Totals 0.00 %
3.0 Marketing Strategy

Luto sa Playok being a new entrant in the market, the company should
focus on building awareness in the area. The company aims to do
extensive flyering by leaving flyers at office lobbies and residential
reception area in order that potential clients will know about the
company. The company will also put banners in well trafficked place in
Salcedo Village and will also used buzz marketing in order to promote
the company to increase brand awareness.

Second marketing strategy is that the company will be focusing on its

target area which is Salcedo Village of the Makati Central Business
District. Luto sa Palayok will familiarize its primary target by building
rapport with its customers. The company may be able to implement
this by giving excellent service especially with its delivery service.
Being on time, friendly and reliable food service can help build rapport
with its target market. Also, the company will give freebies (like
desserts) for frequent client who always order from the company and
also for offices who purchase bulk orders. In this way, the company
will be able to establish loyal customers will provide the company with
repeat orders to gain more profit.
 The last marketing strategy is that Luto sa Palayok will give
concentrate on providing quality delicious food that are very
affordable. The company will provide special of the day, combo meals
and set meals in order that customers with budget can now afford to
buy quality delectable food.

3.1 Mission and Vision

Luto sa Palayok mission is providing its customers quality, affordable
and delicious Filipino classic food through fast and convenient delivery
services to the residents and employees of Makati.

Luto sa Palayok’s vision is to be the no.1 fastfood in the Philippines.

The company will provide delicious and affordable Filipino dishes with
excellent service and reliable delivery services.

3.2 Marketing Objectives

• Increase brand awareness at least within the Makati area on the
first quarter of fastfood operation
• To create an effective marketing promotion
• To obtain at least 5% market share of Makati employees on the
1st year

3.3 Financial Objectives

• To hit monthly target sales of 225 set viands1 and 2

• Achieve and Maintain 20% annual growth
• Achieve breakeven in 2 years after start of operation

3.4 Target Markets

• Luto sa Palayok will target the class B & C

• Luto sa Palayok will target the residents of Makati(particularly
the area of the Makati Central Business District) especially
those people who are single, working and do not have time to
cook for them which makes food delivery the best way to
have a decent meal on their table.
• The company would also cater to newly married couples living
in condominiums that seldom cook but still prefer Filipino
classic dishes and wants them to be delivered in their homes.
• Luto sa Palayok customers are young professional and
employees of Makati who wanted to have a decent and
delicious Filipino classic dishes at affordable prices.
• Luto sa Palayok will serve offices in Salcedo Village, Makati
through its delivery services.
3.5 Positioning

• Luto sa Palayok will position itself as a truly Filipino restaurant

serving delicious and home styled Filipino meals that are
affordable with a fast and convenient delivery service.
This positioning will be achieved by leveraging Luto sa
Palayok competitive edge:
Product -Luto sa Palayok will be serving Filipino dishes
made from the finest and freshest ingredients.
Service – Luto sa Palayok will be providing excellent service
by having a quick and efficient delivery service to assure
client of its prompt delivery.

• To the employees and residents of Makati, Luto sa Palayok is

a Filipino fastfood outlet that serves only delicious and home
styled Filipino meals that are affordable with a fast and
convenient delivery service. (Positioning Statement)

3.6 Strategies

Specific Action Programs( Strategies)

In order for its marketing strategies to be successful specific programs

should be implemented. Choosing the location is very important. The
company has decided to put its fastfood outlet in Valero St. Salcedo Village.
The company chose this place because it is strategically located along offices
and residential condominiums in the area.

The company can increase brand awareness by doing extensive flyering in

the area. The company will hire a staff to do the flyering within the vicinity of
Salcedo Village. The staff can start doing the flyering before the company
starts to open its food outlet. The staff will go buildings to buildings and
leave flyers in lobbies. He must also go to other residential areas in the
vicinity to give flyers to the reception lobbies. Indicated in the flyers are
contact numbers for delivery service, sample menu and location of the
fastfood outlet. This will be implemented for several months until the
company will be recognized using rezo as a means for bulk flyering and the
promotional personnel will be given a minimum wage.
Banners can also be placed in high trafficked areas and where people can
notice the ads in this way it is also a promotional means to promote the
company. The cost of this is minimal since it will just put its banner to places
that has minimal cost but is a heavy trafficked area.

Through buzz marketing, the company can ask or do its own survey to
identify information such as the most in demand Filipino viand, price that
customers are willing to pay and how to go about its delivery service.
Through this, the company will only be serving the best of the Filipino dishes
yet affordable with a reliable delivery service.

In order to have established loyal clients, the company aims to provide

excellent service to its target market. Being friendly, accommodating and
prompt delivery service will a way to display good service to the clients. The
company shall also offer freebies such as deserts and/or drinks for bulk
orders of at least 10 set viands per order. Also, the company can give
freebies to clients who frequently order food such as 3x day or 5x a week.

Lastly, the company will concentrate on promoting its delicious quality food
yet very affordable by having promotions such as “special of the day” that
will be cost lower compared to its usually price so that customers will
encourage to order this and that the company can promote dishes that are
not sellable by having it the “special of the day”. Plus, having combo meals
and set meals will attract customers who have budget since they can now
afford to buy delicious quality food with an affordable price.

These are some of the specific action plans that the company will do in order
achieve its target goals.

3.7 Marketing Mix

• Product – Luto sa Palayok will be offering the classic Filipino

food cooked in the traditional home style way.

Standardized recipes shall be followed in the preparation of

each viand to guarantee quality at all times while ensuring
the use of fresh and high quality ingredients such as produce
and meats in each meal. Food will be served with care,
quality, the finest flavors at affordable prices that a Filipino
budget can afford.
 Packaging shall be in plastic microwavable and reusable
containers.

• Service Luto sa Palyok will not only sell food but it will offer
an excellent service with quick and efficient delivery. All
employees must go through a training program to serve its
customer well and to practice fast and on-time delivery.

Minimum order for delivery will be at least Php100.00.

Delivery waiting time will be at 15 minutes upon order. Cut off
shall be as follows:

Breakfast 9:00am
Lunch 1:00pm
Dinner 8:00pm

• Pricing

Luto sa Palayok price range will be P50.00 for one viand and
P75.00 pesos for two viand meals. It may be a little expensive
compared to the traditional jolly jeeps but the dishes are sure on
its quality, taste and preparation of food. With the high-quality
and freshness of Luto sa Palayok , the prices are considered to
be affordable. Comparing it to its competitors the company’s
prices are very competitive since Luto sa Palayok offers Filipino
home-styled dishes that are more flavorful, satisfying and
delicious.

• Promotion

Luto sa Palayok will have the following promotion strategies:

a) Flyers – the company will be distributing flyers in nearby

offices and residents within the vicinity of Salcedo Makati.
Flyers will include the exact location of the fastfood, contact
numbers, delivery services and a sample of the menu. Flyers
will be distributed in office lobbies and residential reception
areas.

b) Banners – the company will also put banners in strategic

areas such as trafficked areas where people could notice and
see the banner. This banner will be placed in the vicinity of
Makati.
 c) Word of mouth – people listens to the opinions of others
especially when it comes to food so through the help of word
of mouth people will recommend the company once they have
tested the food which is also a good promotion for the
company. Buzz and viral marketing will be used as part of the
promotion of the company

d) Special of the day- the company can put special of the day
meals at a discounted price so that this would encourage
customers to purchase this meal. This is also a good way for
the company to put unsellable dishes as special of the day
which is a way for the clients to buy the dish.

e) Set meals/ Combo meals – the company will provide combo

meals and set meals so that people who have budget can now
afford to buy quality delicious food that are very affordable.

• Place

Luto sa Palayok will be located at Valero Street in Salcedo

Village Makati wherein it would be strategically located to
nearby offices and residentially area so that it would be
accessible to its target customers.

3.8 Marketing Research

With the help of research, the company will include surveys forms in their
deliveries to ask customers on how Luto sa Palayok can better serve them.
1) What are the top Filipino dishes they prefer to eat? 2) How much are they
willing to pay for a decent meal. 3) Lastly, what are their expectations in
terms of delivery services. The company will also measure and analyze
customers’ attitude towards the competitors by asking customers additional
feedback. Brand awareness research will help the company determine the
effectiveness of the promotions that the company did.

4.0 Financials

On the first year of operation, Luto sa Palayok assumed that it will hire 4
employees. These are the manage, cook, clerk and delivery boy. Since the
company it just starting up, these would be the needed employees needed to
start the operations. There will also be cut-off in delivery to further reduce
cost in terms of delivery.
The company will first invest on a bike since its delivery would just be in the
vicinity of Salcedo village and other near places in Legaspi village so that it
would not incur gasoline expenses and parking fees. Other initial investment
would also include gas range, kitchen materials and utensils .

Basis of preparation

The financial statements of the company will be based in accordance with

the generally accepted accounting principles. It would also be using accrual
method of accounting and financial statements will be using the calendar
year tax period.

Assumptions for the projected financial statements of the company

1) First year the company will assume the following:

a. Viand 1 (compose of one viand and rice), the company will serve at
least 150 orders a day

b. Viand 2 (compose of one viand, rice and vegetable), the company

will serve at least 75 orders a day

2) Salaries of the four employees are in compliance with the minimum

wage in accordance of the Department of Labor and Employment
amounting to P9,000 per month

a. In accordance to the new revenue regulation enacted last year, this

explains that minimum wages should be exempted to taxes.

Assumptions for the annual projections

1) For 2nd to 4th year, there will be a 20% annual growth because of
increase of sales since the company will be known that time

2) Operating expense will increase 5% annually due to inflation and

salary increases

3) Depreciation for furniture and fixture and equipments would be 5 years

4) Taxes will be at 32% per year since net income will be more than
P500,000

5) These are the monthly projection for the first year and the annual
projections for the next 5 years.
 6) Figures to breakeven sales for viand 1 and 2 were computed by
deriving the contribution margin from the company’s sales mix ratio.
Below is the company’s variable cost and fixed cost computations.

7) Computation for the 1 and 2 Viand meals

1 Viand meal 2 Viand

Selling Price P 50.00

Variable Cost
4.1 Break Even Point P 30.00
Jomar discuss ka ng konti tungkol dito kindly refer sa book for
references (page 101)

Contribution P 20.00
Margin
4.2 Sales Forecast

CM % 0.40
Luto sa Palayok feels that the sales forecast figures are conservative. (jomar
pati dito discuss ka ring konti.(refer to page 101) Dude san yon
expense forecast mo yon dapat 4.3 san ba dto? pwede mo mapalitan
ng formal to medyo magulo kasi?

Balance Sheet
6.0 Controls Dude yon dito lets follow sa book tapos dicuss more rin
ng konti kung pano gagawin and in peso ha. Refer to page 102

Revenue: monthly and annual

Expense: monthly and annual

Customer satisfaction

6.1 Monthly inventory (siguro kasama na to sa revenue)

6.2 Accounting/ tallying of sales everyday (eto siguro sa expense)

6.3 Cash handling (additional na lang to)

6.4 Handling of money shall be the responsibility solely of the manager

(additional na rin)

I. Monthly inventory

Manager usually supervises the monthly tally of inventories:

Here is a sample template of an inventory sheet for jolly jeep

LUTO SA PALAYOK
DAILY INVENTORY

Beginnin spoila ending

Product g stock Delivery sales ge stock
meal1 10 5 10 2 3
meal2 10 5 10 2 3
meal 3 10 5 10 2 3
meal 4 10 5 10 2 3
meal 5 10 5 10 2 3
meal 6 10 5 10 0 5
meal 7 10 5 10 0 5

TOTALS 70 35 70 10 25

Year 1 model inputs

1. Year-one forecasted
revenue
viand viand
meal1 meal2
Number of units sold
annually 12500 9200
Average sales price per
unit Php50 Php75
Annual revenue per Php625,0 Php690,0
product 00 00

Php1,315
Total year 1 revenue ,000

2. Year 1 cost of goods

sold
viand viand
meal1 meal2
Expected gross margin
per product 40% 40%
Annual cost of goods sold Php250,0 Php276,0 Php0 Php0
per product 00.00 00.00 .00 .00

Total year 1 cost of Php526,0

goods sold 00.00

3. Annual maintenance,
repair, and overhaul
Factor (%)
on capital equipment 5%

4. Number of years for

straight-line depreciation 5

5. Annual tax rate 32%

6. If long-term debt is Php0

being used to finance
operations, enter the
total loan value.

II .Cash handling
Procedures for Balancing a Cash Register in the Restaurant

1. Maintain single-drawer accountability.

When assigning access to cash drawers, managers should admit a cash

drawer to only one employee at a time. When only one cashier (and the
manager) has access to the money in a drawer, any cash issues can be
traced to the right person.

2. Count the beginning cash amount.

The cash amount that should always start and stay in a drawer is known as
the beginning cash amount. Management usually determines this cash
amount and sets it as a restaurant policy. At the beginning of the day or
shift, the cashier assigned to a cash drawer must count the money in the
drawer to validate that the beginning cash amount is correct.

Example
The restaurant's beginning cash amount is always $150.00. This is usually an
assortment of bills, $20 and smaller, for change-making purposes. The
cashier for the shift needs to count his or her drawer to verify that it has
$150 dollars inside, and also to be sure that the drawer has sufficient coins
for making change.

3. Deposit cash during the shift.

During busy shifts, the amount of money in the cash drawer can increase
very quickly. Managers and workers should stay aware of the money in each
cash drawer, as cash registers with constantly opening and closing drawers
full of hundreds of dollars can be tempting to observant robbers. Managers
can do this very easily with POS systems, which provide constant access to
current sales and register balance amounts. You may want to select a point
at which to remove cash from the drawer. For instance, if the balance in the
register rises to $200 or more above the beginning cash amount, it is
prudent to remove cash and deposit it into the safe. This is sometimes
known as a cash-drop.

How to perform a cash-drop:

1. Wait until a lull in customer traffic, if possible.

2. Check to see how much cash is in the cash drawer. If there is $200.00
or more over the beginning cash amount, it is time to perform a cash-
drop.
 3. Take the total current balance in the cash drawer and subtract the
beginning inventory amount. The result is the amount you need to
remove.
4. Both the cashier and the manager need to approve that the cash
removed is the right amount.
5. Both the cashier and the manager witness that the cash is deposited
into the safe. Often there is a secondary compartment where these
cash drops are deposited.

Example
If there is $475 in the drawer, and your beginning cash amount is $150, you
would subtract $150 from $475.

475-150 = 325

The amount you should remove from the drawer is $325.

Example
If the number is not a whole number, managers will often just round down to
a cash amount that is easy to drop.

If there is $476.59 in the drawer, and your beginning cash amount is $150,
you would still subtract the two. However, you would round down to the
closest 20 so as to remove the big bills first. The smaller bills and coins
should be in there for making change.

476.59 – 150 = 326.59

The amount you should remove from the drawer is $320.

4. Balance the drawer at the end of the shift.

At the end of the shift or at the end of the day, all cash registers need to be
balanced. Some restaurants call this "checking out," since a cashier typically
needs to make sure all the sales transactions and cash totals check out
correctly before he or she can clock out. Like a cash-drop, this procedure
requires a manager's assistance for extra accountability.

How to balance the register:

1. Take the cash drawer out of the register and to the back of the
house (BOH) or a secluded area to count it.
2. Count the total amount in the drawer, including all bills and coins.
Use a cash drawer check out sheet to keep track of these amounts.
Also account for checks and credit card receipts, writing down the
totals charges.
 3. Compare the total counted amount with the total as calculated by
the POS reports or register receipts. Theoretically, these amounts
should be the same.
4. Check for discrepancies. Overages or shortages less than a dollar
are usually a result of minor human error. However, large or consistent
discrepancies between the cash that should be present and the cash
that is present could indicate theft or lack of proper training.
5. Check for voids. Usually, the manager needs to approve voids before
the cashier can proceed with one, but revisit any voids that were
entered into the POS or register during that shift so that the manager
is aware and the employee stays accountable. Include all voids on the
cash drawer check out sheet.
6. Place all cash in a deposit envelope. Include the cash drawer
check out sheet and attach any receipts, credit card slips or terminal
reports to the sheet. Place everything in the deposit envelope and drop
it into the safe to be deposited the following day.

5.1 Implementation

The implementation of the marketing programs would be done

simultaneously. But first the company will have to study and allocate
budgets to suffice all the needed promotional materials in order to promote
the company.

First is task to provide flyers and banners within the area of Makati. Second
is combo meals should already be set so that the company can now offer
good food with an affordable price. Lastly, the company can train its
employees on how to serve the customer well by being friendly,
accommodating and punctual. These activities will be done simultaneously.
The training of employees, making of flyers and banners will be made before
the start of operations.

5.2 Marketing Organization

Luto sa Palayok will be headed by Jorge Liwag. Mr. Liwag being the president
of the company will be in-charged of the over-all operations of the company.
Jasmine Gabriel being the Marketing head will supervise all the marketing
functions such as promotion, selling of the product, product innovations and
customer service. Jomar Follosco will be handling all the finances of the
company. Caroline Castillo will be the one to manage the recruitment of the
company. Lastly, Andrei Song will head the legal department that would
handle business related issues. Four employees will be hired and be given
different job positions. The manager will be the overall head in the food
outlet. The cook will do all the food preparations for the company. The server
will be serving the clients while the delivery staff will be delivering the food
to the customers. Luto sa Palayok will be a functional company.

5.3 Contingency Plan

Difficulties and risks Contingency Alternative

Solutions

1) The taste of food would not be appealing a)Conduct market research

such as survey to
ask customer feedback

b) Conduct taste tests

2) Fierce competition a) Differentiate product

b) Focus on quality and delivery

service

3) Problems in delivery services a) Proper scheduling

b) strict implementation of cut-off

Recommendation:

1) Will diversify the menu by adding other Filipino dishes . The company
can diversify its menu by not limiting it to Filipino classic foods maybe
it could add some other dishes especially those viands that are popular
in a particular provinces.(such as Laing, Bicol express and more)

2) Implementing on line delivery service in the future

 The company can eventually put up an on-line delivery service in order
to make ordering easy and more convenient to the employees and
residents of Makati

3) Having other retail outlets in malls

If the pilot food outlet of Luto sa Palayok will be successful, it aims to

put its fastfood outlets in mall in order to increase market share.

Appendix

Adobo 40.00

Menudo 40.00

Pork Sisig 40.00

Beef Mechado 40.00

 Sinigag 40.00

Tinolang Manok 40.00

Bistek 40.00

Inihaw na Baboy 40.00

Kare- Kare 40.00

Kaldereta 40.00

Breakfast

Tapsilog 50.00
 Longislog 50.00

Tocilog 50.00

Bangsilog 50.00

Gulay

Pinakbet

Chop suey

Drink

Sago't Gulaman₱10.00
 Halo-Halo ₱20.00

Softdrinks ₱ 30.00

Dessert

Turon

Bananaque

References:

http://www.pecc.org/food/papers/2005-2006/Philippines/ppecc-catelo-
paper.pdf

http://www.makati.gov.ph/portal/index.jsp

http://dirp4.pids.gov.ph/ris/eid/pidseid0605.pdf
http://www.pecc.org/food/papers/2005-2006/Philippines/ppecc-catelo-
paper.pdf

http://www.wikipedia.com