Chapter I

INTRODUCTION

The Philippines is a country located in Southeast Asia comprised of more than 7, 000

islands. With this, poverty is one of the most significant challenges that the country faces and its

people. In such predicament, Filipinos’ resiliency becomes a strong weapon in facing such

arduous situation.

In situation, this problem creates a domino effect in different aspects including hunger.

Filipinos keep surviving despite the limited food intake; even when food supplies are stable, they

are most accessible in areas where people have enough income to purchase the food. Unequal

distribution of income leads to low demand for food supplies in less developed areas or to people

with small income. Consequently, these people resort to eat cheaper food supplies, nutritious or

health risky, just to survive the day. Others even only eat rice without a viand; others eat nothing

at worst.

A meal without rice is not a Filipino meal at all. “For poor Filipinos, rice with a little

amount of salt or a little amount of fish sauce will already make a meal (Tecson-Mendoza). In a

survey done for the World Bank, it was found out that eighty-percent (80%) of all respondents

consumed rice three or more times a day. Sixteen percent (16%) said they ate rice twice a day,

while only one percent said once. Most of those who ate rice thrice a day belonged to the middle

class (81 percent) and the rich (79 percent).

In accordance to this matter, the proponents of ‘LugaWOW!’ decided to come up with

the idea of catering porridge or “lugaw” in ways that taste, safety, and affordability will be

assured. Considering factors such as aesthetics, methods of preparation, presentation of food,

1
quality of products, sanitary procedures and best service accommodation will be the key factors

to attain customer’s patronage and loyalty. Through quality management, customer’s satisfaction

will be achieved.

Business Name: LugaWOW!

“LUGAWOW!” is the intended name for stall-type business. It is a compounded word of

the word “lugaw” which is the food business itself and “wow!” which is an interjection word

used when surprised, delighted, or amazed. The business accentuates the word “WOW” for a

tinge of originality.

Description of the Logo

Fig. 1

The proponents came with this logo as it resembles and reflects the business very well.

The logo is composed of several features. One is the slogan: wow sareeep!! wow busog!!. The

word ‘wow’ is chosen as it emphasizes the feeling of amazement and positivity. ‘Sareeep’ is a

colloquial term from the word ‘sarap’ which means delectable or luscious. ‘Busog’ is a term used

which means full, satisfied, or satiated. The chef image is a symbolism of a Filipino cuisine

being served to the customers. The image of a wooden bowl has the biggest size in the logo as it

accentuates the product itself. Orange is the dominant color of the logo because it symbolizes

deliciousness of the product.

2
Brief Description/Background of the Project

The study is about a food kiosk catering porridge type of foods with variety and as its

main dish. The objective of the proponents is to show that a lot of varieties can be made out of

simple lugaw. The business wants to emphasize aesthetics, presentation of food, affordability,

quality, timeliness, and interaction among the employees and customers are important factors in

meeting the customer’s preferences. The researchers make it certain that the product entices the

customers. It is important that customers be one of the top priorities in venturing business.

Furthermore, it is also pivotal to make certain financial consideration on the part of the

businessmen and to make economic consideration as well in the targeted location of business.

General Objectives of the Business

a. to determine the level of the product marketability;

b. to identify the probable market;

c. to find out the sustainability of the target market; and

d. to project possible income that can be generated from selling the product.

Type of Business

The business will be in a form of sole proprietorship under Mabeth A. Galve.

Mission

The business vision will be:

A leading business venture that takes care of the society’s well-being through providing

quality food service and cultural preservation

3
Vision

The business mission will be:

to provide variety of lugaw which are enticing to senses with high nutritional value; to

make the Lugawow! Accessible to people from different walks of life in terms food outlet and

serving time; to ascertain that the original ingredients or recipe will still be used; and to utilize

environmental-friendly utensils

4
 Chapter II

MARKET STUDY

This chapter helps to know the marketing aspect of the business. It is a system of

business activities designed to plan, price, promote and distribute want-satisfying goods and

services to present and potential customers. It serves as the strategic way on how to cope with the

needs and wants of customers, finding opportunities regarding it, introduce and market the

product, and achieve customer’s loyalty and patronage.

Description and outlook of the industry

Lugaw comes from the family of congee, popular in nearly all Asian regions,

differentiated only by the toppings and flavors incorporated into it. ‘Lugaw’, in particular, uses

the same general ingredients: rice and broth, but further flavored with shreds of chicken, ginger,

scallions, and fried garlic. It is a breakfast staple that instantly brings back memories of happy

childhood days as well as rainy, gloomy nights. It is a dish close to many Filipinos’ hearts, as

flavorful as the adobo, and just as symbolic.

In the Philippines, rice is a staple food. Filipinos are insatiable in so many things

including food. Thus, a lot of lugaw business has been ventured all over the country due to the

creativity of Filipinos in making lugaw varieties. Lugaw Republic in Quezon City, Lugawan sa

Tejeros in Makati City, Goto King in Ortigas Avenue are examples of ‘lugawan’ business that

put their names on pedestal and set standards on such business.

5
 These several topmost popular ‘lugawan’ business have also set branches in different

parts of the country. In the locale, some business-minded people have ventured lugawan business

and made their signature dish of lugaw.

Entrepreneurs opt to open business in lugaw industry where urbanization and economic

growth are augmenting thus making their product more profitable.

Size of the industry

According to the 2015 census conducted by Philippine Statistics Authority (PSA),

Borongan City, Eastern Samar has a total population of 69, 297. The datum becomes a basis on

how large the market is in scale of a city.

The Philippines is the world’s eighth largest rice producer. In fact, the country was the

biggest rice importer in 2010 and 2011. The Philippine rice sector has always been the center of

the government’s agricultural policies. The focal points of the policies revolve around promoting

rice self-sufficiency and providing high income to farmers while making rice prices affordable to

consumers. Thus, the existence of several lugawan business in the city is remarkable. On the

other hand, by launching ‘LugaWOW!’ business, it is assured that it will render food services at

a quality affordable price with distinctive, innovative, and therapeutic touch.

Target Market

‘LugaWOW!’ business offers an affordable price and addresses health and wellness

trends. This is perfectly fit for all ages, professional or not, sick or well, economically challenged

or not. This is a definite reason why the proponents chose this certain kind of business because

there is a high probability of market.

6
Market Segmentation

The business to be ventured considers all types of people. Anyone can be a potential

buyer. Prior to the final decision of choosing the business, factors were considered like the

availability of raw materials, capital, and target market.

The product, lugaw, conforms to the Filipino taste. The proponents made innovations to

cater the thirst and preference of people though. However, there is awareness when it comes to

health risk yet it is emphasized that customers eat at their own risk and that too much of anything

is not good. On the other hand, the proponents adhere to the idea that people should also be fed

therapeutically and an array of dishes were made for the health conscious people.

People nowadays are prone and vulnerable of acquiring early health problems because of

unhealthy foods and poor lifestyle. However, it is undeniable that Filipinos love to eat and their

discretion to patronize such product even if it is risky can’t be easily revoked. They may be

aware of the risk yet it does not change the fact they love to eat regardless of health problem if

there is.

Methods of Data

In this study, the researchers used self-structured pre-survey questionnaire in collecting

data, wherein a set of questions was given to the respondents with regard to the product. The

method will help the proponents find out the food inclination of each respondent that represents

our target market. It will lead the study to innovative products that may put the business and

researchers to the limelight.

7
Source of Data

The sources of data will be accumulated through the results from the structured

questionnaire given to the respondents in the public market and Baybay Boulevard.

Validation of Instruments

Accurate data were from the results that came from the pre survey conducted through the

self-structured questionnaire which was answered by the respondents last August 4 and 5, 2018.

Market/Product Analysis

Lugaw considers all types of people regardless of age, gender, religion, and socio

economic status. Each person coming from those groups mentioned can be a potential buyer. The

proponents extend their time and unabated effort to differentiate and understand their preferences

to meet their standard with regard to our product. Thus, the following data collected and collated

on pre survey conducted by the proponents are significant bases for the choice of the product:

Q1. Do you eat lugaw?

Public Market Baybay Boulevard

140 140
120 120
100 119 100 120
80 80
60 60
40 40
20 20 0
0 0
Yes 1
No Yes No

Fig.2.1 Fig. 2.2

8
 The results show that 119 out of 120 respondents from the public market said that they

eat lugaw. Meanwhile, 120 respondents affirmed that they eat lugaw. It can be gleaned from the

graph that there is a big fraction that the proponents’ product will be viable to the target

consumers. It is also palpable from the graph the product has a high percentage rate to be

patronized by the consumers.

Q2. Is the lugaw not so salty? Is it nutritious? Is the lugaw presentable? Is it not too

thick? Do the toppings compliment to the lugaw?

Public Market
120
120 120 120 120
80
85
40
35
0
0 0 le 0 ry 0
lty us ick
sa io ab th ta
o trit en
t
oo en
ts Nu es tt im
No Pr o pl
N m
Co

Yes No

Fig. 3.1

Baybay Boulevard
120
120 120 115 120
80 100

40
0 0 5 20 0
0
lty us bl
e ci k
ta
ry
sa io ta th
so rt it en o en
t Nu es to im
No Pr
t pl
No m
Co

Yes No

Fig. 3.2

9
 The results show in Fig. 3.1 that 120 respondents responded positively that the lugaw is

not so salty, nutritious, presentable, and that the toppings compliment the lugaw. Meanwhile, 100

respondents confirmed that it is not too thick. On the other hand, Fig. 3.2 shows that 120

respondents favored that the product is not so salty, nutritious, and that the toppings are

complimentary. Meanwhile, 115 respondents said that the product is presentable while 100

respondents affirmed that it is not too thick. It can be gleaned from the graph that the innovative

product intended to sell passed the quenching taste buds of the random respondents. It is evident

that the people’s preference is a great material in the making of creative flavor and toppings of

the said product.

Q3. Will you buy lugaw at 40.00 per serving? If no, please specify the price you

prefer to pay for 1 serving?

Public market
₱20 ₱15 ₱50₱45
₱25
7% 1% 4% 5%
7%
₱30
20%

₱40
₱35 45%
12%
Fig. 4.1

10
 Baybay boulevard
₱20
₱25
6%
10%
₱35
13%

₱40
72%

Fig. 4.2

Figure 4.1 shows that 54 respondents out of 120 will buy 1 serving of lugaw at 40.00. 5

respondents suggested 50.00, 6 respondents said 45.00, 14 respondents suggested 35.00, 24

respondents recommended 30.00, 8 respondents suggested 25.00, 8 respondents said 20.00, and a

respondent said 15.00. Meanwhile, figure 4.2 shows that 86 respondents out of 120 affirmed

40.00 as the amount for 1 serving of lugaw. 15 respondents suggested 35.00, 12 respondents

recommended 12, and 7 respondents said 20.00. It can be gleaned from the graph especially in

Fig. 4.1 that the suggested cost by the proponents is approved by the consumers though there

were a number of respondents who preferred the price from 30.00-50.00. The graph will be of

great help and influence to the proponents’ decision in costing.

11
 Q4. Check the time of the day you prefer to eat lugaw.

PUBLIC MARKET
80
70
60 67
50
40
30
20
10 18
11 9 8
0 7
5:00 AM 6:00 AM 10:00 AM 4:00 PM 5:00 PM 6:00 PM
Fig. 5.1

BAYBAY BOULEVARD
35
30
25 29
25
20 23
15
15 15
10 13
5
0
5:00 AM 6:00 AM 4:00 PM 5:00 PM 6:00 PM 12:00
MD

Fig. 5.2

Public market in figure 5.1 shows that 67 out of 120 respondents prefer 5:00 AM to eat

lugaw, 11 respondents prefer 6:00 AM, 18 respondents like 10:00 AM, 7 respondents prefer 5:00

PM and 8 respondents choose 6:00 PM.

Meanwhile, Baybay Boulevard in figure 5.2 shows significant adjustment in time

preference to eat lugaw. 25 respondents like to eat at 5:00 AM, 15 respondents prefer 6:00 AM,

13 respondents choose 4:00 PM, 29 respondents like 5:00 PM, 23 respondents choose 6:00 PM

and 15 respondents like 12:00 midnight. It can be gleaned from the graph that majority of the

12
respondents prefer to eat the product in the early morning at public market while Baybay

boulevard respondents prefer to be served lugaw in the late afternoon though a number of them

also prefer in the early morning. Thus, this becomes a basis for further plans regarding the time

frame of selling the product.

The data collected and collated from the pre survey conducted by the proponents are facts

– facts that strongly support the bases for the choice of product that is ventured. Furthermore,

hypothetical statements are not considered facts unless it is supported with documents or

scholarly paper from authorities. Hence, the results reflected from the graphs are evidentiary and

useful for the decisions and actions of the proponents in posterity.

Description of the Product

Filipinos are known to be food lovers. The country itself is known for diverse and

peculiar cuisines. One of the distinct Filipino cuisines is the porridge. Its variant terms are gruel

and congee. Porridge or fondly known to Filipinos as “lugaw” is a food which has a rich history.

It has a vast popularity in many Asian countries especially in East Asia. In China, it is

popularly known as congee which is one of their traditional foods and is their staple breakfast

dish. In the Book of Zhou, records of the official history of Chinese, “Emperor Huangdi was first

to cook congee with millet which may be the earliest record of it. Other countries have their own

term of congee. Bubur in Malaysia and Indonesia, hsan byok in Myanmar, bobar in Cambodia,

kanji in India, kayu in Japan, juk in Korea, khao piak in Laos, canja in Portugal, Teochew

porridge in Singapore, kenda in Sri Lanka, chok in Thailand, and cháo in Vietnam. In the

Philippine setting, there have been several terms which are associated with congee: lugaw, goto,

arroz caldo.

13
 These terms depend on the locality or region. It also has distinctive seasonings or

ingredients yet ‘lugaw’ works as an excellent base. This specific congee in the Philippines was

introduced by Chinese traders to the Philippine natives. During the Song Dynasty (960-1279) in

China, native Filipinos traded crops, herbs, and condiments in exchange for silk, porcelain, and

ceramics with Hokkien speaking people from China. Chinese traders prepare congee food for

their meal which was eventually shared to the native Filipinos to which they do the trading.

Meanwhile, aside from its rich history, it is also known as a kind of food which has high

nutritional value. Grains sustained empires because they were powerhouses of nutrition,

relatively quick to plant and harvest, easily stored in cold, drought, or rain and capable of feeding

armies (Neimark 2016).

Scientists found that for each ounce (28g) of whole grains eaten a day – the equivalent of

a small bowl of porridge – the risk of all death was reduced by five percent and heart deaths by 9

percent (Knapton 2015). Verily, consumption of porridge increases possibility for longer living.

The recently studied topic on porridge consumption of Harvard University is a clear-cut basis of

its health benefits. In addition to, porridge is loaded with healthy fiber and micronutrients; it

benefits your overall health and provides energy to fuel your active lifestyle (Tremblay 2017).

Fans of porridge have long claimed that it gives them the best start to the day – but scientists say

there is an evidence that it could also have a special ingredient that actively cleans the arteries,

protecting against cancer and heart disease (Donnelly 2014). In the Philippines, ‘lugaw’ is not

only a dish traditionally thought of a soft food for sick people but also a food enjoyed for

breakfast and snack.

The aforementioned literatures point to one direction: ‘lugaw’ is a very significant and

loved food. That is why the proponents are interested to venture in a business on serving

14
porridge. Hence, this feasibility study is being proposed. This study would like to venture about

selling porridge in a manner of sole proprietorship and the rest will be hired. As mentioned

above, there have been three terms associated with porridge in the country, but the proponents

opt to use lugaw. Lugaw is preferably used since it is the most popular term in the country.

Furthermore, lugaw is more euphemistic than the other two. Hence, the proponents make it

certain that the business intended to venture will be attractive to customers from different walks

of life.

The product will be classified into: toppings lugaw, and plain lugaw. One of the unique

dishes among the choices is WOW Putok Batok! which has chicharon, chicken intestines, pig’s

shredded ears, and boiled egg as toppings. Then, another dish is Kim Kardeshan LugaWOW!

Heaven! which has pig’s shredded intestines, pig’s shredded ear, and boiled egg. Another is

PataWOW Lugaw! which has crispy pata, sisig, and boiled egg. The fourth choice is

LugaWOW! Con Carne which has ground pork, boneless dried fish, and boiled egg.

The fifth choice is Dr. Kwekkwek LugaWOW! with native chicken and quail egg as

toppings. The sixth choice is WOW Pusit! with squid and boiled egg. The seventh one is

WOWfishally Yours! with Tuna sisig and boiled egg as toppings. Then, Fish Ball-ero

LugaWOW! with fish ball, potato, carrot with boiled egg. Another distinct set of dishes is

attributed to the health conscious customers. First dish is WOW! Lumpiang Conservative! which

has taugi, sweet potato, carrots, and boiled egg. Second is named Tofu Panda LugaWOW! which

has native chicken with tofu and boiled egg. Third is Lugaw La InihaWOW! which has grilled

tuna, cabbage and boiled egg as toppings. Fourth is Dibdibang LugaWOW! with chicken breast,

papaya, with boiled egg. Next is Juan Pusong LugaWOW! which has kinilaw, banana blossom

15
and boiled egg. The proponents also opt to include champorado (chocolate rice porridge) to the

menu.

First choice for the customers to choose is WOW Something Fishy! which has “dilis”

(dried fish) on it. Another is WOW Champobacon! which has crispy bacon on it. Next is WOW

Spamporado! which has diced spam on it. Lastly, WOW Champorado! will also be among the

choices to choose from which is the plain version itself. The first set of dish may be health risky

for the customers, but one of the slogans which will be raised by the proponents is to “Eat at your

own risk!” or an emphasis on disclaimer. However, the proponents assume that customers would

patronize those kinds of food mentioned. Moreover, the foods are chosen to serve because it has

a culture touch. Most of the toppings selected are foods which Filipinos would love to eat. On

the other hand, as part of the proponents’ advocacy for healthy living and to align the food itself

to the nutritional benefits, several dishes are concocted.

Meanwhile, champorado is included in the list to serve because it is the dessert version of

porridge, though can also be served for breakfast and snack. In the recent century, the existence

of champorado vanishes from time to time especially to the digital natives, millennials or the

new generation. Hence, the business also promotes cultural identity and preservation.

The proponents choose two target places for the stall-type business: Baybay Boulevard

and Borongan Public Market. Borongan Public Market is one of the choices because it has more

chances of attracting customers. The intended time is 4:00 o’clock in the morning to 5 o’clock in

the afternoon. Then, Baybay Boulevard is another choice because it is the place in the city where

people go after work or office and class. It is where people go for hangout or recreation like to

exercise, to bar hop, to dine. The intended time will be from 4:00 o’clock in the afternoon to 2:00

o’clock in the morning. The time preferred is considered most especially to those people who

16
work on graveyard shifts and overtime and even to those who want to stay there late in their

discretion. The degree of market of these two places is high. The proponents intend to use

personalized wooden spoon and fork and coconut shell for utensils. Wood and bamboo paint will

be the interior design of the cart with an audible and pleasant acoustic music and originally

composed jingle of the business. For take-out orders, paper bag will be used.

The proponents also opt to purchase native chicken and other vegetables needed for the

food from the Borongan City Provincial Jail as a way of helping the inmates who take care of

such animals and plant vegetables as their income generating project. The utensils to be used will

also be purchased from the inmates who make artistic things.

This feasibility study is going to be conducted to look into the possibility of venturing the

schemes mentioned above. Some factors to look into consideration is whether the business will

prosper or will lead to bankruptcy and to identify the possibility of market.

Competition

It becomes a natural tendency that businesses have competitors. Thus, the business

ventured shall have something that is new and enticing to the customers to get a high probability

of target.

The researchers were able to find existing competitors in the city. One is Marasa at Iba Pa

which is located at Baybay Boulevard. Another is Payong-payong C’Wall BBQ Cart which can

be found at Baybay Boulevard as well. Mayet’s BBQ Food House is one competitor of the

business. It is situated at Real road, Brgy. Songco. The researchers were also able to find Sugar

and Honey BBQ which is at Brgy. Songco adjacent to Domsower restaurant.

17
 These ‘lugawan’ business competitors have been visited by the researchers to compare

and contrast different factors in their business which incude price, ambiance, product or menu,

etc.

NAME PRICE PRESENTATION FLAVOR LOCATION COMMENTS/

FEEDBACK

1. Marasa at 20 -small serving -fried Bay2x -The rice used

iba pa. -plain -garlic boulevard is not accurate

-1 diced chicken Borongan for lugaw.

City -too much

plain

-You need to

add

condements to

make it

tasteful.

2.Payong2x 20 -small serving Fried Bay2x -they used

C’wall BBQ -2diced chicken -Garlic boulevard saffron flower

cart -spring onions Borongan to make it

City flavorful.

-not sticky

-become

18
 more tasteful

there are some

condiments

3. Mayet 20 Shredded chicken -plain -Brgy. -the lugaw has

BBQ food -big serving -genger Songco too much

house Borongan water.

City @ Real -plain and

road boring

-good for sick

people

-No

condiments

4.Sugar & 25 -Big serving -garlic -Brgy. Sonco Too much

honey BBQ -with boiled egg -ginger Borongan water

-shredded chicken City in front -rice has bad

-with spring onion of domsower aroma

restaurant. -the egg

compliments

the lugaw.

5. 30 - Big -garlic -Brgy. -too much

19
 Foodhouse serving -ginger Songco water

-with beside - not too salty

chicken duptours -delicious

-with egg

toppings

Market Sales and Activities

To uphold our product by the customers in the market, we will distribute flyers and

leaflets in selected places in the city like schools and malls and other strategic locations.

With the advent of technology and remarkable paradigm shift, the researchers will also

use social networking or mainstream sites as medium of advertising the product. It is notable that

the use of social networking sites like Facebook, Instagram, and Twitter become a major role of

people’s awareness in many issues especially the millennials. Most importantly, this

advertisement is free from marketing and promotional expenses because the subscription to such

social sites are free.

Other Activities

• As part of the marketing strategies of LugaWOW!, the proponents made a Facebook

page for both advertisement and online selling. Proponents always post, share and

update available toppings ready to serve in their timeline to attract netizens in

20
 Borongan to make more market. Proponents always post feedback for good reviews

so that our page will get higher rates.

• Another advantage of LUGWOW! Activity is it offers free delivery. LugaWOW!

aims to provide free delivery for customers who are within the vicinity of the city

downtown from Bato to Sabang. Proponents believe that this strategy will attract

more market for LugaWOW! is the only lugawan business that offers such. This

becomes an edge against other competitors. The proponents extend their service

outside downtown that is distant from the city like Can- Abong and Pepelitan with

charge of 10.00 in a minimum order of 3 packs.

• This activity is designed for the benefit of the business to increase sales, revenue, and

to boost average order value that may lead to more orders.

SWOT Analysis

Strengths

 The locations of the business are accessible to meet our target market.

 The business easily entices and catches the interest of the customers for Filipinos are fond

of eating especially rice as a staple food.

 The cart has distinct features and/or characteristics in terms of foods to offer and

ambiance of the cart per se.

 ‘LugaWOW!’ includes therapeutic menu specifically intended for the health-conscious

customers.

 The business also provides alternative foods for those are spend thrift.

21
  The business also provides modern way of communication with the use of print ads and

website that will connect the business to the customers,

 The business also uses personalized coconut bowl, spoon and fork, and saucer as primary

utensils to use. This is a part of the researchers’ campaign in environmental issues.

 The price is affordable.

Weaknesses

 The notion that some of the street foods are unhealthy and unsanitary.

 Maintenance of some equipment is quite costly.

 The existence of quite many competitors can lead to poor market.

 The existence of a new kind of ‘lugawan’ business can redirect the consumer’s

preference.

 This can also lead to dissatisfaction of consumers from other competitors.

Opportunities

 Considers all types of people regardless of age, gender, religion, and socio economic

status eat lugaw.

 It is affordable and nutritious. This will serve as an opportunity for the proponents to give

a different impact or approach regarding the kinds of food catered through safety and

quality assurance.

 The business is the first one to launch such kind of product with toppings.

Threats

 Well-known restaurants within the same vicinity will be the great competitors of the

business.

22
  The business will be new in the market, it may easily have good market standing but it

may encounter difficulty in terms of sustaining demand of the customers that may lead to

its saturation point or declining stage.

 There is a concern in the inconsistency of consumer’s taste.

 The presence of the competitor’s product is also a concern.

 Most competitors are situated in the same location.

Pricing

The pricing of each product menu is based from the pre survey questionnaire result

gathered by the researchers.

Based on the pre survey result, majority of the respondents affirmed 40.00 as the price

per serving. However, the price will only be based on the economic growth of the country or the

price of the raw materials or ingredients of the product.

The prices of the ‘LugaWOW!’ business greatly depend on market price of the

ingredients yet the consumers’ capability to the purchase the product will be taken into account.

We used cost plus strategy in order to set the price of our products. The computation would be:

• Purchase Cost + Operating Cost+ mark-up=Selling Cost

23
 Chapter III

The Technical Study

This deals with the allocation of resources that will be needed in order to satisfy the

market. This chapter also discusses the product, its process, production, equipment used, plant

size, plant layout and structures, etc.

Product

Bases for Choice of Product

Typical Filipino family spends an average amount of 30% of their income for their food

every day. Based on NSO, some can afford to eat five times a day but some families can’t afford

to eat at least three times a day. The staple food of the Filipinos is the rice. It is the main food on

the table of every Filipino family during breakfast, especially lunch and dinner.

The cliché says that change is the only constant thing. Thus, the humankind continuously

seeks alternative to quench their necessities. The proponents’ initiative to provide a possible

clear-cut remedy against famine and interminable increase of commodities in the market is being

24
proposed. With the business concept, a wide array of “merienda” as well as the therapeutic

version of lugaw is offered.

Rice is an important food in the country whatever social or economic class a person

belongs to. Verily, it is certain that the kind of business will prosper for the product is for

everyone. The pre survey results say it all.

Description of the Product

Lugaw is made by cooking sticky and native rice together with a combination of either

vegetable or chicken broth. The rice must be overcooked without burning it. It is done with

consistency for a favorable result.

The product will come in different toppings which makes the product peculiar. Others

have therapeutic taste which can satisfy the taste of customers. Below are the specific

descriptions of the proposed toppings:

Special Toppings Description

Wow Putok Batok! (35.00) Marinated and grilled chicken intestines

with deep crunchy fried shredded pig’s

ears and boiled egg

Kim Kardeshan LugaWOW! Heaven Marinated and grilled pig’s intestine

(35.00) with deep crunchy fried pig’s shredded

25
 ears and boiled egg and garnished with

garlic chips and spring onions to add

delightful flavor

PataWOW! Lugaw (35.00) Grilled and fried bits of pig’s head

together with pieces of pig’s liver

seasoned with salt and pepper; added

with sisig, boiled egg garnished with

garlic chips and spring onions

LugaWOW! Con Carne (35.00) Sauted ground pork with palatable fried

shredded boneless bangus, boiled egg,

garnished with garlic chips and spring

onion

Dr. Kwek Kwek LugaWOW! (35.00) Native chicken cooked with coconut

milk, quail egg, garnished with garlic

chips and spring onion

WowfishallyYours! (35.00) Stir-fried tuna with sisig, boiled,

garnished with garlic chips and spring

onions

26
Fish Ball-ero LugaWOW! (35.00) Ground fish mixed with boiled potato

and carrot, fishball and boiled egg

garnished with garlic chips and spring

onions

Wow! Lumpiang Conservative (35.00) Sliced lumpiang togue made of bean

sprouts and carrots, boiled

egg,garnished with garlic chips and

spring onions

Dibdibang LugaWOW! (35.00) Shredded chicken breast with slices of

papaya, boiled egg, garnished with

garlic chips and spring onions

Juan Pusong LugaWOW! (35.00) Ceviche (kinilaw) banana blossom with

boiled egg garnished with garlic chips

and spring onions

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 Champorado is the chocolate porridge version. Unlike lugaw, glutinous rice is used. It is

cooked with cocoa powder or chocolate tablet.

This product has two flavor toppings with different price. Below are the specific

descriptions:

Special Topping Flavor Descriptions

Wow Something Fishy! (30.00) Sprinkled with “dilis” and added

with milk on top

Wow Spamporado!(30.00) Sprinkled with diced spam

embellished with milk

Wow Champobacon! (30.00) Sprinkled with diced bacon

28
 embellished with milk.

Special Toppings Description

Chickenfinger LugaWOW!(35.00) Friedchicken breast coated with

breadcrumps,boiled egg,garnished

with garlic chips and spring onion

Grilled pork LugaWOW!(35.00) Marinated then grilled pork belly,

boiled egg, garnished with garlic

chips and spring onion

Embutido LugaWOW!(35.00) Fried special embutido,boiled

egg,garnished with garlic chips and

spring onion

29
 Longanisa LugaWOW!(35.00) Special longanisa,boiled egg,

garnished with garlic chips and

spring onion

ADDITIONAL TOPPINGS

• LugaWOW! is open for suggestions from customers.

• According to the operation of the business the proponents used additional toppings

based on the customers’ suggestion which boost a large scale of sales of the products

LugaWOW!. Additional topping creates high demand from the customer. This

additional toppings are namely Chicken finger LugaWOW! Embutido LugaWOW!,

Longganisa LugaWOW! and Grilled Pork LugaWOW! and we decided to put these

in to our menu for higher market purposes that will helps the business create more

revenue.

Licensing Process

Business startup includes the process of registration with the right government agencies

and authorities. This is an important step that must not be missed by any business, whether it is a

small, medium or large enterprise. This is also the process that will make the business legitimate

and duly registered.

30
 The legal requirements for starting a business locally depend on its type of business and

industry. The proponents have to go through the proper and authorized agencies to make the

business official. All businessmen undergo through Business Permit and Licensing Office

(BPLO). Forms and requirements shall be submitted. Charging fee or payment will be given after

having submitted in the BPLO office. Then, barangay clearances shall be secured from the

barangay officials in Baybay boulevard and public market to comply with requirements that

barangays require. Next, the proponents have to secure a business name registration certificate

from the office of the Department of Trade and Industry (DTI) for business operation which is

situated in Barangay Songco, Borongan City. Then, a mayor’s permit is needed. This permit will

be secured from the city mayor’s office located in Barangay Balud 1, Borongan City. The

requirements for seeking this permit vary from different cities or municipalities. The said permit

needs to be secured as it is a pre requisite to obtaining the Bureau of Internal Revenue (BIR)

registration certificate which is in Barangay Songco, Borongan City. BIR certificate is needed to

comply with Philippine tax requirements and to obtain the tax identification number and business

printed official receipts and invoices. However, does not exceed 250,000.00, the business tax is

exempted. Then, SSS employer’s registration must be obtained from their office in Barangay

Songco, Borongan City as well. This is in line with Social Security Act of 1997 that requires

business employer or owner, who uses the services of another person or employee in

undertaking, to register in Social Security System (SSS). Then, PhilHealth employer’s

registration to secure the benefits and rights of the employees who will be employed in the

business. Lastly, the proponents have to secure as well permit from the office of Bureau of Food

and Drugs (BFAD) which is an authority business related to food and drugs. Then, it is also

important that business abide by the rule of law. It is a mandate that businessmen shall follow the

31
standard wage order which is 275.00 approved by Department of Labor and Employment

(DOLE).

Equipment

Design and specification

Material/Equipment Description/Specification

Gas stove A cooker or stove which uses

flammable gas as a fuel source

Liquified Petroleum Gas (LPG) Is a flammable mixture of hydrocarbon

gases used for heating such as in

cooking

Ladle a large long-handled spoon with a cup-

shaped bowl, used for serving soup,

32
 stew, or sauce

Kitchen Knife A kitchen tool used to slice thin cuts of

meat including other ingredients

Chopping Board a wooden or plastic board on which

foods (such as meats and vegetables)

are cut

Measuring cup A measuring cup or measuring jug is a

kitchen utensil used primarily to

measure the volume of liquid or bulk

solid cooking ingredients such as flour

and sugar, especially for volumes from

about 50 mL (2 fl oz) upwards

Pots Are tools where a menu or recipe is

cooked

Serving tray A shallow platform designed for

carrying items

33
 Cashiering machine/Cash box A tool where valuables like money or

cash is kept

Refrigerator an appliance or compartment that is

artificially kept cool and used to store

food and drink

Wooden spoon An eating tool consisting of a small

shallow bowl with relatively long

handle

Wooden fork An implement with two or more

prongs used especially for eating,

pitching, or digging

Servicing and Repairs

Materials or equipment that need servicing and repair shall be taken into account yet

things which are destroyed or damaged are good for replacement.

34
Choice of Suppliers

The proponents have no specific suppliers to mention. However, certain qualifications or

standards are considered when buying ingredients and other things needed. First, food or product

handling is very significant. Cleanliness of the product and the whole store are important factors.

Then, weighing scale matters to the proponent. The supplier must ensure that he or she uses a

legitimate weighing scale for accuracy of the products to be bought. Meanwhile, the supplier

must also be BIR registered for the purpose of issuing invoices or receipts. Furthermore, the

proponents also considered suppliers who sell fresh products. They also ensure that the products

to be bought are of quality at reasonable and preferable price.

Estimate Cost

Material/Equipment Unit Unit Price Total

Gas stove 1 set 1800.00 1800.00

Liquefied Petroleum 1 pc. 850.00 850.00

Gas

Ladle 3 pcs. 10.00 30.00

Kitchen Knife 3 pcs. 20.00 60.00

Chopping Board 3 pcs. 20.00 60.00

Measuring cup 3 pcs. 20.00 60.00

Pot 2 pcs. 360.00 720.00

Serving tray 3 pcs. 40.00 120.00

Cashiering 1 pc. 1000.00 1000.00

35
machine/Cash box

Refrigerator 1 set 12,500.00 12,500.00

Wooden spoon 20 pcs. 20.00 400.00

Wooden fork 20 pcs. 20.00 400.00

Wooden saucer 15 pcs. 30.00 450.00

Coconut bowl 20 pcs. 30.00 600.00

Furnace 1 pc. 1,000.00 1,000.00

Cooking spatula or 3 pcs. 20.00 60.00

turner

Disposable bowl 10 pcs. 60.00 600.00

Disposable sfork 200 pcs. 20.00 200.00

Freezer 1pc. 16,580.00 16,580.00

Cart 1 30,000.00 30,000.00

Total:

67,490.00

Projected Expenses for 1 Month

Expenses Amount

Manpower 78, 275.00

Rental fee (Public Market) 310.00

Rental fee (Baybay Boulevard) 2, 000.00

Electricity fee (Public Market) 310.00

36
 Electricity fee (Baybay Boulevard) 1, 500.00

Operational 175, 800.00

Total:

255, 885.00

Layout

The layout is tactically designed to support the smooth process of the proposed business

(LugaWOW!). Kitchen area is the most important area of the kind of business that is ventured. It

is where the product shall be made including the requisites like cooler and refrigerator. It is also

emphasized that the kitchen shall have the dishwashing area where the equipment or materials

like bowls, spoon and fork will be washed.

37
 Fig. 6.1 Baybay Boulevard Layout

Fig. 6.2 Public Market (http://unique-furniture.company.weiku.com/item/food-

kiosk-with-casters-for-outdoor-selling-14728385.html)

38
 Workflow

Create a lugaw concept.

Gather all the ingredients needed.

Combine the native and sticky rice.

Cook it together.

Add chicken or vegetable broth.

Let it simmer until it gets overcooked without burning it.

Wait until it’s done.

Prepare for the finishing touches like the toppings.

When cooking is done, add the toppings needed.

39
Serve it.
Plant Location

Geographical Consideration

The plant location shall be located at Baybay boulevard and Borongan City public

market. Below is the location of the proposed business.

40
 Fig. 7

Availability Consideration

The proponents considered the availability of the target locations of the business. The

visuals provided say it all. See the pictures below.

Baybay Boulevard

41
 Public Market

Fig. 8

Transport Consideration

One of the most important factors to be considered in business is it accessibility to the

possible consumers. The easier the access is, the higher chance of attracting customers. The

proponents’ considered their choice of locations: Baybay boulevard and city public market.

These two target locations are conspicuously accessible to the customers. Public transport

vehicles like tricycles, motorcycles, and jeepneys from Guian going to Camada pass by Baybay

Boulevard. Tricycles, jeepneys, buses from Arteche and Tacloban can access business in city

public market since the terminal station is also situated in the public market.

Comparison with alternative consideration

The proponents made no alternative choice of locations despite the contingency factor.

There is a certainty that these locations are available. Initially, the proponents had thought of

choosing Uptown Mall as target location. However, it was not realized for financial reasons.

Furthermore, the proponents thought that there will be a high percentage of market if these

locations are chosen. These places greatly depict the “makamasa” idea and avoid the social

classes distinction.

42
Raw materials

The procurement of raw materials must be comprehensively considered. Raw materials

are of great importance especially the inputs. If inputs are defective, problems will occur in

processing and marketing.

The following are considered raw materials in making the proposed product:

Glutinous Rice – It is also called sticky, sweet, or waxy rice. It is a type of rice grown

mainly in Southeast and East Asia and the eastern parts of South Asia,

which has opaque grains. It has very low amylose content, and is

especially sticky when cooked. While it is widely consumed across

Asia, it is only a staple food in northeastern Thailand and Laos. It is

called glutinous in the sense of being glue-like or sticky.

Native Rice – It is the seed of the grass species Oryza sativa (Asian rice) or Oryza

glaberrima (African rice). As a cereal grain, it is the most widely

consumed staple food for a large part of the world’s human population,

especially in Asia. It is the agricultural commodity with the third

highest worldwide production after sugarcane and maize. It is the most

important grain with regard to nutrition and caloric intake.

Ginger- It is an underground stem (rhizome) of a perennial herb which is used as a spice

and as a preserve. Scientific analysis shows that it contains hundreds of

compounds and metabolites that may contribute to health and healing.

Onion- It is a medicinal plant since time immemorial. It is widely cultivated, second to

tomato, and is a vegetable bulb crop known to most cultures and

43
 consumed worldwide (FAO, 2012). It is commonly known as “Queen

of the kitchen,” due to its highly valued flavor, aroma, and unique taste,

and the medicinal properties of its flavor compunds (Selvaraj, 1976;

Griffiths et al., 2002).

Garlic- It is widely used as an obligatory part in many cooked dishes. It is one of the

ancient plants playing one of the most important dietary and medicinal

roles in human beings for centuries. Its physiological roles is its

antimicrobial, anticancer, antioxidant, antidiabetic, cholesterol

lowering, anti-inflammatory, and has potential role in preventing

cardiovascular diseases.

These abovementioned raw materials are primary things needed for the product. These

are easily accessible as they are available in the market from the sources who are suppliers. The

proponents also consider the availability of direct supplier with quality and reasonable price.

Manpower Requirements

It is very essential in any business organization to know the manpower requirements to

operate systematically and effectively at all times. Moreover, it will also help to determine the

capacity or capabilities of the employees who are qualified to be certain with duties and

responsibilities. The existence of standard qualifications in hiring and selecting are keys to

establishing effective and efficient business operations.

Position Job Description Job Specification

Store Manager  Responsible for the  College graduate or

overall supervision undergraduate with

44
 to his/her 4-year management

subordinates. course

 Responsible for the  At least 2 years of

administration of managerial

all the management experience

functions-  Preferably 24 years

planning, old and above.

organizing,  Highly intelligent

controlling and and very good in

directing. decision-making

 Handles the  Creative and

implementation ofn imaginative

the policies, rules  Hardworking and

and regulations, people smart

throughout the  Has good

organization. communication

 Monitors the skills

performance of his

subordinates.

 Responsible for the

overall ongoing

production

operations

45
 including inventory

control, scheduling,

documentation,

equipment

maintenance,

calibration,

shipping, and

Quality

Control/Food

Safety Inspection.

Kitchen Steward/Cook  Ensures the quality  At least high

of products and all school graduate

the food standards  With cooking

are met. experience

 Responsible for the  With working

cleanliness of all experience in any

the kitchen tools fast food or

and equipment restaurant

 Ensures the  Hardworking with

maximum level of high level of work

performance of the discipline

materials and  Fast in

equipment. accomplishing task

46
  Minimizes wastage and can do multi-

of raw materials in tasking.

production

 Responsible for the

safety and

production of food

and elimination of

hazardous

elements.

Counter/Cashier  Greets customers  At least college

politely at all times. undergraduate of a

 Performs the seven 4-year accounting

key steps in every related course

transaction with the  At least 1 year

customers. working experience

 Ensures good in handling money

customer relations  22-30 years old

by giving friendly male or female

service to them.  good

 Handles communication

money/sales skills

properly

 Eliminate loss of

47
 the store by

accurately

receiving payment

and giving of

change.

 Computes

accurately the sales

for the day before

remitting to the

store manager.

Store Waiter/Waitress  Greets the  At least high

customers politely. undergraduate or

 Delivers the graduate

ordered food to the  With good

customers. character and

 Responsible for the pleasing

restoration of the personality

used bowls, spoons  With or without

and forks. experience as a

 Maintains waiter or waitress

cleanliness.  18-30 years old

male or female

 hardworking and

48
 can work under

time pressure

Dish Washer  Responsible for the  Anyone who is

cleanliness of the able to do the task.

utensils used.

Organizational Flow
A
C
D
S
oeasit
osrl
hvkeri
W
P esi
M
r/ aert
W oasr
nhpa
ri
iteat
C ger
oert
or
kr

49
Salary Consideration

Position Per Day Per Month

Manager 500.00

Cook 300.00 x 2 persons 18, 600.00

Assistant Cook 275.00 x 2 persons 17, 050.00

Cashier 275.00 x 2 persons 17, 050.00

Server/Waiter 275.00 x 2 persons 17,050.00

Dish Washer 275.00 8, 525.00

Total: 78, 275.00

Compensation

All employees shall receive their respective salaries or wages as provided in the contract

of employment every 15th and last day of the month. The store will also provide a tip box where

customers will drop cash or coins. The money which will be collected are to be shared equally

among the employees. A year-ender bonus shall also be received by the employees. Every

50
employee shall receive cash good for a month as his/her bonus. This is only addressed to

employees who have already rendered at least 1 year in the business.

Orientation and Training

The proponents don’t need to undergo training for they are skilled enough based on their

job description. However, all newly hired employees regardless of classification of rank and

status must undergo on training, orientation and indoctrination as to the business’s vision,

mission, policies, rules and regulations, duties and responsibilities and menu familiarization.

Personnel Movement and Performance Evaluation

It is the management’s prerogative to assign, transfer, reclassify, promote or demote its

employees accordingly based on merit and performance. Thus, employees are continuously

evaluated as to their performance, work attitude, productivity, honesty and diligence and may be

served as bases for management’s decisions on personnel movement.

Performance evaluation shall be done to every employee on his 3 rd, 4th, and 5th month. For

regular employees, performance evaluation shall be done twice a year every May and November

of a calendar year.

Compensation and Benefits

Salaries and Wages

51
 All employees shall receive their respective salaries or wages as provided in their

Contracts of employment every 15th and last day of the month. Cut-off for payroll computation is

every 10th and 25th of the month.

Christmas Bonus

The Christmas bonus of an employee which shall be equivalent to 1/12 of his basic salary

earned within a calendar year shall be given not later than December 24 of each year.

SSS / Phil. Health Benefits

Benefits under SSS/ Phil. Health law shall be granted in accordance with applicable

laws. Implementation of procedures relative to entitlement of said benefits should be done in

accordance with the regulations to be promulgated by the management.

Power and Utilities

Main Source of Power

It is one of the primary utility requirements of a business to have main source of power

for the operation. The business will greatly need this for a smooth and sailing operation and for

the implementation of the special features. This will also set the atmosphere of the restaurant for

proper lighting and ventilation. The store electricity will be provided by the barangay officials

where the business locations will be situated (Baybay boulevard and city public market). This

can only be realized with the underlying terms and conditions agreed by both parties.

Auxiliary Source of Power

52
 The proponents opt for a generator which will serve as a backup source of power in case

of power interruption.

Heating/Cooling

Heating or cooling is an important aspect in the business as it helps in the food business.

Heating equipment or materials are needed for the making of the product. Meanwhile, a cooler is

needed to preserve the ingredients or food. The proponents made certainties that these equipment

or materials are available in the operation of business.

Water Supply

As the store operates, water is an important element. The store needs a good water supply

in order to execute the tasks continuously. A good water supply can enable the employees to

perform tasks such as cleansing the raw materials as ingredients to the dishes and cleansing of

the kitchen utensils, machines, and equipment or materials. The proponents have already

identified through the barangay officials and acquaintances where to get process water source for

washing. Meanwhile, there will be an available water dispenser provided for the benefit of the

customers.

Materials Handling

In business like the proponents’, the safety and protection of the ingredients and materials

are very important. Since the proponents are dealing with perishable products, it is important that

53
an equipment shall be used for food preservation like refrigerator or freezer. Other equipment or

materials such as microwave and cooler will be kept in the storage area. It is also ensured that the

materials or equipment are checked from time to time as well as the perishable products. It will

also be a mandate that the materials or equipment used shall be cleaned every day after use.

Internal Communication

This is a form of communication that is indispensable to the whole duration of the

business. As a business which is just about to operate, internal communication is crucial. It is

necessary that there shall be cooperation and coordination among the employees within the

workplace. It creates understanding and bond that eventually becomes a secret ingredient to a

successful relationship among co-workers. Through internal communication, a lot of concerns

can be raised like customer’s suggestion or feedback and even recommendations and others. It

can also be an avenue for a better and creative ideas to improve the management and operation

of the business as it goes.

Hygiene and Sanitation

All employees must observe the highest standard of hygiene and sanitation. Employees

must be well-groomed and work with clean and proper attire. For this purpose, the term “well-

groomed” shall mean proper haircut, cut fingernails, and clean hands. This also includes that all

the materials and equipment to be used in the operation shall be properly sanitized.

Industrial Safety

54
 The proponents are aware of the industrial safety that employees must have. It is a

mandate that the employer ensures the safety of his or her employees. With this, the proponents

adhere to the safety policies. There will be an area which safety policies and reminders

specifically on food business will be posted. The employer also intends to provide fire

extinguisher against hazards that may occur.

Security

Crimes are rampant everywhere. A number of reports from media said that there are

stores being robbed by hoodlums. To avoid this incident and to protect the valuables of the store,

the employer will ask for the barangay officials’ security assistance during and even after

operation hours. The barangays have also ensured that exact locations of the store cover the

CCTV camera managed by them. The employers have also ensured the materials and equipment

are kept well and that the stores are securely locked.

Waste Disposal

The store’s customers are always the top priority. It is assured that they are given full

satisfaction with regard to the cleanliness of the store and its surroundings. It is also notable that

the proponents advocate to the environmental-friendly concept. That is the primary reason why

the proponents choose personalized coconut shell, wooden spoon and fork as utensils to be used

in the business. We want to accentuate the essence of using those materials instead of plastics

which may harm the people and the planet per se. The proponents will also use paper bag for

take-out orders. However, proper disposal can only happen when a person has environmental

55
concern and responsibility. Trashes are unavoidable as customers may have it with them even

before arriving at the store. Since this is in the food industry, the proponents will strictly comply

with the set of standards in cleanliness especially with the proper disposal of waste. The business

will provide 3 trash bins labeled biodegradable, non-biodegradable, and recyclable. The

proponents will also collaborate with the barangay officials for the Eco-Swam Project

implemented by city government of Borongan through the city mayor.

Risk Management

The risk management plan is a document plan that the manager prepares to foresee risks,

estimate impacts and define responses to issues.

Evaluation of risk management options is the weighing of available options for managing

a food safety issue in light of scientific information on risk and other factors, and may include

reaching a decision on an appropriate level of customer protection.

Employers are advised to follow five steps when carrying out a workplace risk

management.

1. Identify hazards, i.e. anything that cause harm.

Employers have a duty to assess the health and safety risks faced by their workers and

customers. Employer must systematically check for possible physical, mental, chemical

and biological hazards.

 The proponents will provide reminders and disclaimer for those customers

that have allergies on certain ingredients that we used on our product.

 The proponents will provide emergency kit to prepare and protect employees

and customers for unforeseen events.

56
2. Decide who may be harmed, and how.

Identify who is at risk, start with the employees and customers.

3. Assess the risks and take action.

This means employers must consider how likely it I that each hazard could cause

harm. Even after all precautions have been taken, some risk usually remains.

Employer must decide for each remaining hazard whether the risk remains high,

medium or low.

4. Make a record of the findings.

Employers with five or more staff are required to record in writing the main findings

of the risk assessment. This record should include details of any hazards noted in the

risk assessment, and action taken to reduce or eliminate risk.

This record provides proof that the assessment was carried out, and is used as the

basis for the later review of working practices. The risk assessment is a working

document.

5. Review the risk assessment.

A risk assessment must be kept under review in order to ensure that agreed safe

working practices continue to be applied and take account of any new working

practices.

57