BUKO SARAP

Dr. Yanga’s College Inc. Wakas, Bocaue Bulacan

College of Accountancy

Principles Of Marketing By: Jesika Mae M. Tendero Christine Joy D.G. Custodio Liza T. Salamat

I. Executive Summary

Buko Sarap is a food cart started by enterprising friends namely Christine, Liza and Jesika. It guarantees quality of a 100% natural juice. Buko Sarap discovered a system that extracts buko juice in a systematic way wherein the buko is extracted and chilled in a hygienic manner keeping its freshness and natural elements. Because of the countless benefits of buko, Buko Sarap will certainly address the needs of people who are health conscious. We solve the problem of answering to the demand of Buko Juice in a hygienically and modern way, which consist in chilling the juice soon after it was extracted without needing to add ice or cold water. Buko Sarap also introducing our freshly blended Buko Shake a new choice to those People who have a healthy life by offering 100% pure and natural buko meat, on the other hand the fact of extracting the juice in right moment it guarantees the quality of our products through a new technology that also allows the conquest and settlement of large sections in the market such as: shopping center, supermarkets, schools, metro stations and so on. Pioneering is the right word for this system which consists in extracting, chilling the buko juices hygienically and safely, keeping its natural properties. This system also favors a practical way of dealing with a product that was formerly available to consumers only in a marginal way. "ISANG BUKO KA LANG" that is BUKO SARAP!

II. Company Profile

Mission The Buko Sarap aims at satisfying the tastes and needs of its consumers in the Filipino society. The efforts of the Buko Sarap are focused on bringing the most distinctive and innovative products to the market in Philippines. The main concern of the business is the health of its customers and thereby it strives to serve hygienic and healthy food along with taste and quality.

Vision The motto of the Buko Sarap is “WHAT YOU SEES IS WHAT YOU DRINK”. The vision is to attain the number one position in providing quality food with international standards, taste and freshness. The Buko Sarap aims to be a leader in the area of ethics and values in the continuously growing food industry in the national and international markets.

III. Current Marketing Situation

Competitive Profile Matrix

Our main competitors in this segment are any food outlets within the 300 meter radius along the Mall. In our location, there are Fruitas, Zagu, Buko Express.  Fruitas In 2002, when Lester Yu put up Lush Corporation a company that serves fresh fruit juices and other healthy refreshments he knew he would someday go beyond servings drinks. Fruitas is locally owned franchise who sells Fresh fruits shakes. Fruitas had expanded its operation nationwide.  Zagu Zagu introduces the “Pearl Drink” to the Philippine market. The drink’s uniqueness and the variety of flavors it offers broaden its appeal to the customers and keep them interested. Taste and flavor is the essential component, keeping customers coming back for more. 

Buko Express

Buko Express is one of the significantly emerging food cart concepts in the market today. Buko Express starter as an offshoot of Sonia Buko and Native Kakanin Express chain of food carts that started in 2005 by an enterprising couple.

Porter’s Five Forces Model

HIGH

LOW

LOW

LOW

HIGH

Threat of New Entry The threat of new entrants is HIGH because the product in prone on imitation. Also, nowadays, entrepreneurs are aiming for product innovation that mainly draws more customers. Competitive Rivalry The rivalry among competing firms is LOW because competitors are inconsistent in identifying our strategy on how to keep the buko in its natural properties which we called pioneering. Also, our pricing is in consideration.

Buyer Power The bargaining power is LOW because even though customer switching costs are nearly zero, the Buko Express does not worry about loyalty because most Filipinos loves the natural taste of buko especially those who are health conscious.

Threat of Substitution With so many firms in the quick service, low switching costs, similar products, and healthier options, the threat of substitutes is HIGH.

Supplier Power The bargaining power of suppliers is LOW because there are thousands of suppliers of buko to choose from and select theirs through a competitive bid process. We can switch suppliers easily and tend to make up a large portion of the supplier’s revenue.

IV.

Marketing Mix Analysis 

Product and Price



Place

(Target place if we will ready to upgrade our business) 5 years after



Promotion

Social Media, Samples and coupons, creative and attractive packages



People Competence: They possess the required skills and knowledge. They are courteous, friendly, respectful, and considerate with credibility. They are trustworthy, reliable and perform the service consistently and accurately. Responsiveness: They respond quickly to customer requests and problems; Trained people who can serve their customer in an excellent manner.



Physical Evidences

The outside of the package will attract a first-time buyer; the quality of food will bring buyers back and purchase more, and also the place where our business is located.



Personalization

Buko Sarap focuses on “repeat customer. They give rewards and offer them discounts to increase their loyalty.

V. Comparative SWOT Analysis

SWOT

BUKO SARAP  Brand

Competitors

Strengths

And

Uniqueness STRENGTHS

 Leading

smoothie

brand

 Product That Tend To Make Consumers Lifestyle Healthy  Strong Existing Distribution

 Consistent growth  Distribution channels

Channel

WEAKNESSES

OPPORTUNITY

 Lack Of Product Awareness  Availability Of Coconut Juice

 Low customer base

 Introduction Of Buko Sarap

 Increase market

 Brand

Is

Attractive

To

share  Emerging markets

Consumers

 Increase product range

THREATS

 Growing Number Of Competitors

 Changing customer

 Downward Price Pressure

 Brand susceptibility

 Large Number Competitor

tastes

Of

Indirect

BUKO SARAP SWOT Strengths  BRAND STRENGTHS AND UNIQUENESS – The Company’s brand name is original and attractive to the customers.  PRODUCT THAT TEND TO MAKE CONSUMERS LIFESTYLE HEALTHY – The product contains nutritional benefits to the customers.  STRONG EXISTING DISTRIBUTION CHANNEL – This kind of product usually distributed through stall or carts. Weaknesses  LACK OF PRODUCT AWARENESS – Though the product is new, it may fail to create the proper awareness towards the target customers.  AVAILABILITY OF COCONUT JUICE – Philippines climate is suitable for the coconut juice. So people can collect juice easily. So it is the weakness of our product to commercialize.

Opportunities  INTRODUCTION OF BUKO SARAP – The Company added some innovations and twist that we want to share or introduce to the target market.  BRAND IS ATTRACTIVE TO CONSUMERS – The product’s unique name seems to be attractive to the consumers.

Threats  Growing Number of Competitors - A s t h e r e i s a g r o w t h v i s i b l e i n t h e b e v e r a g e industry, many multinational and national companies are entering in the market to serve the customers. To survive in the industry, Buko Sarap has to face the threats created by these new entrants.  Downward Price Pressure Increased competition and market-share strategies are perusing beverage companies to decrease their prices. So the profit margin is very low in here.  Large number of indirect Competitor - In the coconut juice, there are lots of indirect competitor. Lots of coconut sellers are available all around. It is easy to collect coconut and its juice. So these coconut sellers are the main threats of our product.

Competitors SWOT Strengths  Leading smoothie brand –It has established itself as a premium brand by charging premium prices above its other similar specific competitors based on its unique selling point.  Consistent growth – “Philippines fastest growing fruit & shakes smoothies business”  Distribution channels – They are currently stocked in over hundred retail outlets including larger supermarket chains. Weaknesses  Low customer base Opportunity  Increase market share - The market operates in is still growing as more and more consumers are becoming cautious of the effects of processed goods. This is a clear opportunity for them to cease more of the market.  Emerging markets – Expansion.  Increase product range – i.e. vegetable, dairy and whole grain products. Threats  Changing customer tastes i.e. product range/variety becoming repetitive.  Brand susceptibility – As the company grows the brand’s values are subject to greater scrutiny

VI. Objectives 

Our objective is fully professionalized and we have the target to provide service in a familiar atmosphere and with greater warmth.



To create a strong product awareness.



To provide fun, delicious, appetizing and healthy buko juice while maintaining the commitment to our consumers.



To achieve an increasing number of loyal consumers.



To maintain a positive, strong growth of the company each year.



To become the top market leader in that particular product and segment.

VII.

Operating Plan

Facilities & Offices The cart will be at a mall. The licenses and codes' issues are all in order. New equipment will be purchased and installed by the general contractor.

Hours of Operation Buko Sarap 7 days a week, service will begin at 11:00 AM and end at 11:00 PM.

Employee Training & Education Employees will be trained not only in their specific operational duties but in the philosophy and applications of our concept. They will receive extensive information from the chef and be kept informed of the latest information on healthy eating.

Systems & Controls A big emphasis is being placed on extensive research into the quality and integrity of our products. They will constantly be tested for our own high standards of freshness and purity. Food costs and inventory control will be handled by our computer system and checked daily by management.

Food Production Most food will be prepared on the premises. The kitchen will be designed for high standards of sanitary efficiency and cleaned daily. Food will be made mostly to order and stored in large coolers in the basement.

Delivery Food for delivery may be similar to take-out (prepared to order) or it may be prepared earlier and stocked.

VIII. Management Plan

Jesika Mae Tendero, Christine Joy Custodio, Liza Salamat | Owner Owners is extremely dedicated and motivated to creating a thriving healthy drink and feels confident in succeeding based on her well-rounded experience, established sound vendor and customer relationships, and strong work ethic. Owners are graduated from DYCI batch 2014 with a bachelor's degree on Accountancy and Board passers of batch 2015. Personnel Plan The personnel plan is included in the table, below. In addition to the owner, there will be one part-time (30 hours/week). Employees of Buko Sarap will be paid competitively and will receive in-depth store training. Additionally, employees will receive special store benefits including:  30% Store Discount  Special monthly bonuses as sales goals are met  Paid Holidays  Paid Time Off (PTO) based on # of hours worked Our philosophy is to empower our staff to do the best they can and give them the freedom to do so. Inevitably, they will make mistakes and if they don't make mistakes, they don't learn. I will lead by delegation but I won't let "hang themselves”. We will provide appropriate objectives, guide them throughout the process (utilizing Management by Objectives) and help them make decisions based on the company philosophy. I believe in recognizing good work and letting my staff know that I value and appreciate them when a job is well done. I have confidence my philosophy will not only attract smart and loyal employees, but also develop strong mutual respect, as they will feel that their ideas are valued and that they are respected.

Owners Personnel Total People Total Payroll per month Total Payroll per year : ₱ 31,000 x 12 months = ₱ 372, 000

Year 1 ₱20,000 ₱11,000 5 ₱31,000

IX.

Financial Plan

Start-up Funding Currently, the company is owned by the original 3 founders, who each will contribute ₱35,000. This will more than cover start-up requirements, and provide the business with a cash cushion to use for expansion over the first three years.

Start-up Funding Start-up Expenses to Fund Start-up Assets to Fund Total Funding Required Assets Cash Requirements from Start-up Additional Cash Raised Total Assets Liabilities and Capital Liabilities Current Borrowing Long-term Liabilities Accounts Payable (Outstanding Bills) Other Current Liabilities (interest-free) Total Liabilities Capital Planned Investment Jesika Mae Tendero Christine Joy Custodio Liza Salamat Additional Investment Requirement Total Capital Total Capital and Liabilities

₱ 40,000 ₱ 65,000 ₱ 105,000 ₱ 50,000 ₱ 55,000 ₱ 105,000

₱0 ₱0 ₱0 ₱0 ₱0

₱ 35,000 ₱ 35,000 ₱ 35,000 ₱0 ₱ 105,000 ₱ 105,000

Sales – Buko Sarap is basing its projected sales on the assumption that the first unit will open on July 1, 2020. We have projected sales on the low side using 100,000 per year per cart. We did not factor in any sales growth for subsequent years. Cost of Goods Sold -- The cost of goods sold was determined by taking actual Profit and Loss statements from various food business concepts and then using our pricing structure and guest counts to arrive at costs.

Management Payroll -- Figures are based upon the use of five managers per unit at our maximum bonus and salary levels. If we use four managers per restaurant, this will lower our payroll. Fixed and Variable Expenses -- The various fixed and variable expenses were determined by taking actual numbers from several different restaurant concepts. Marketing Fees -- These funds will be used for the production of various marketing materials. Advertising -- These funds will be used, if necessary, to maintain our sales at projected levels. If we are running significantly ahead of our sales projections, then these funds may not be necessary. Management Fees -- We will use these pesos for accounting and payroll services of our firm. As we grow in size, this cost burden will shrink per store due to efficiencies in volume. Important Assumptions The financial plan depends on important assumptions, most of which are shown in the following table as annual assumptions. The monthly assumptions are included in the appendix. Interest rates, tax rates, and personnel burden are based on conservative assumptions. Some of the more important underlying assumptions are:  We assume a strong economy, without a major recession.  We assume, of course, that there are no unforeseen changes in consumers' tastes or interests to make our concept less competitive. General Assumptions Plan Month Current Interest Rate Long-term Interest Rate Tax Rate Other

Year 1 1 10.00% 10.00% 25.42% 0

Year 2 2 10.00% 10.00% 25.00% 0

Year 3 3 10.00% 10.00% 25.42% 0

Key Financial Indicators Food costs must be kept at, or below, 35%. Unit level employee costs must be kept at, or below, 17%. All systems will be computer-based, allowing for accurate off-premises control.

Break-even Analysis VARIABLE COSTS 1. 35.00% - Cost of goods sold. 2. 17.00% - Employee payroll. 3. 00.25% - Credit card charges. 4. 00.33% - Marketing fees. 5. 2.00% - Management fees. 6. 2.00% - Advertising. 7. 2.00% - Management bonus. 8. 3.03% - Employee payroll taxes and benefits. 9. 1.50% - Paper and cleaning. 10. 63.11% - Total variable costs.

1. 2. 3. 4. 5. 6.

ANNUAL FIXED COSTS ₱ 30,000 - Management salaries. ₱ 37,000 - Management payroll taxes and benefits. ₱ 20,100 - Controllable expenses minus credit card charges and paper/cleaning. ₱ 10,200 - Other expenses minus marketing fees, advertising, and management fees. ₱ 15,000 - Depreciation. ₱ 112,300 - Total fixed costs

Pro Forma Profit and Loss Month 1

Month 2

Month3

Sales

₱60,000

₱75,000

₱100,500

Direct Cost of Sales

₱40,000

₱45,000

₱55,000

Other Costs of Sales

₱0

₱0

₱0

Total Cost of Sales

₱20,000

₱30,000

₱45,500

₱31,000

₱31,000

₱31,000

₱2,000

₱2,000

₱2,000

₱0

₱0

₱0

₱33,000

₱33,000

₱33,000

(₱11,000)

₱3,000

₱12, 500

Expenses Payroll Marketing/Promotion Depreciation Total Operating Expenses Net Profit