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Le Circuit Mobile Bar
Market S t u d y | 16
Introduction Market study should be conducted first because it will determine the success of a business. It is where you can substantiate through research that adequate demand for your service exist, or if you can attain sufficient quantity to meet expected demand that will determine if your service is feasible or if continuing to the next step into the feasibility would still be practical. Customer’s willingness to go bar and avail of the services is the cornerstone for the survival of the business. Giving thorough notice to the market study, this will be achieved. The study head into the demand, appropriate marketing program, the supply and demand condition, prices and factors affecting the market. I. SERVICE DESCRIPTION To be patronized, the business should be named in such a way that people can easily it. And a business name is a big factor in the success of every business nowadays. It has a big impact on the market and helps business to attract customers. Le Circuit mobile bar shall engage in both food and drinks and also KTV services. It is primarily focused in providing easy and comfortable way for those who want to party and want to see the tourist spots here in Baguio City. A lot of party goers do not only stay in one bar at one night, they prefer to do what they call bar hopping wherein they go to another bar after the other for their satisfaction. Le Circuit Mobile Bar promotes tourism in the city that is why we thought of a service where tourist’s spots in Baguio City are considered in the itinerary of our bus at the same time they are enjoying their selves having party all night inside the bus and at the same time they can enjoy our KTV services
Le Circuit Mobile Bar
Market S t u d y | 17
with their friends. And with those places included in the itinerary they will have a bar hopping experience by staying only in one bar wherein the customers are given the chance to save their money but with fulfilled satisfaction. A. Name of the Service Our business name is Le Circuit Mobile Bar. Le means “the” and Circuit means a periodical journey around an area. The name of our business will already give you the idea of what kind of services are we offering once you read this. We considered these words in order for our business name to be unique and catchy to the people. We chose this kind of business not only to gain profit but to give a comfortable ride to those who want to enjoy disco bar inside a bus. Le Circuit itinerary includes Session Road, Harrison Road, Baguio Botanical Garden, Burnham Park, Camp John Hay, Mines View Park, Philippine Military Academy, The Mansion, and Wright Park. Business Logo
Slogan: A ride that brings you FUN! A logo is a graphic mark commonly used by commercial enterprises, organizations and even individuals to aid and promote instant public recognition.
Le Circuit Mobile Bar
Market S t u d y | 18
For colors: Pink – represents that the researchers who are conducting this study are all females Yellow – represents happiness We designed our logo in a round shape because it shows that our mobile bar goes around the city by having its own route, a wine glass in the center which shows that we offer the best mixed drinks and shadows of girls dancing shows the fun that you will feel when you are inside our mobile bar. B. Services offered Le Circuit includes amenities that are guaranteed to give you and your friends a grandiose experience, fit for your exuberant and lavish lifestyles. Le Circuit is equipped with a videoke equipment system that contains a wide variety of songs from local and foreign artists. To top it all off, Le Circuit boasts of a top-of-the-line sound system, with matching dazzling lighting effects, that is sure to make you groove to the music. Our music library features thousands of songs. We allotted a space as a dance floor where people can dance inside the bus like when you are inside the disco bar and we also provide a DJ which will make the dance floor awesome. You will truly live like a star inside Le Circuit. It also has a variety of connectors and chargers for almost all units of mobile phones. For sustenance, Le Circuit is outfitted with a mini-fridge that will chill your favorite beverages like cocktails, beer, and brandy. We also serve food which is pica-pica. Lastly, a chauffeur is provided who will be at your disposal to make sure you get to your destination safe and on time.
Le Circuit Mobile Bar
Market S t u d y | 19
C. Properties of the service Le Circuit Mobile Bar will cater to patrons who seek for leisure and entertainment. The business will provide high quality services to their customers and sees to it that every customers and sees to it that every customer’s needs and wants are satisfied. We serve food which are finger foods (“pica pica”); liquors like cocktails, beers and brandy; and KTV which are guaranteed to satisfy our valued customers who are 20 years old and above. D. Hours of Operation Le Circuit Mobile Bar will operate for 8 hours which will start at 6:00 in the evening until 2:00 in the morning. We will open at exactly 6:00 pm because we considered those customers who prefer to go to disco bars this early in the evening for the purpose to chill out and not staying very late in a bar. And this will also give chance for the customers to still see the tourists’ spots in Baguio City while the night is still young. The bar will close at 2:00 in the morning because most of the party goers go home at this time. The hours of our operation considered hours where people wanted to go to the bar and the time they leave the bar. E. Areas Served Baguio is one of the major tourist attractions in the country and is also considered as the center of education in Northern Luzon; many people are visiting and enrolling here in Baguio City. Since our target customers will be students and young professionals, tourists, Baguio City is the perfect place to put up a Mobile Bar. The mobile bar will serve the people in the city of Baguio who are 20 years old and above. The mobile bar will not cater for 19 years and below because they are still considered as minors. F. s of the Business The goal of our mobile bar is to catch the attention of the market, specifically people ages 20 years old and above who wants to have families and friends get together.
Le Circuit Mobile Bar
Market S t u d y | 20
Professionals, students, and the tourists (both local and international are the major s of the services that we are going to offer. G. Geographical Area of Dispersion Le Circuit Mobile Bar services will be available anywhere the mobile bar stops in its proposed itinerary but will then be provided to other areas if favorable profits which are enough for its expansion and additional operations arise in the next years to come. Though, the office is situated in a home-based location, with the aid of internet, connecting to and reaching people in distant areas is never impossible that could help to attract more customers to the center. II. DEMAND ANALYSIS In any business, one fundamental aspect to be considered is the demand. The concept of demand is parallel to the profitability of a business enterprise, which refers to the level of desire or need that exists for particular goods or services. Moreover, a high demand is indicative of a chance of obtaining a sustainable share of the market in which a business enterprise is planning to thrive in. A total of 400 respondents of different legal age brackets in Baguio City were subjected into this survey. a total of 262 males or 65.5% and 138 females or 34.5% participated in the survey. Data were gathered through a questionnaire istered to respondents containing five items aimed at assessing their practices and lifestyle related to disco bar and the like. Results and summary of the responses of the respondents were presented in the tables below. Table 1.1 Projected Population by Age Group (Baguio City with a growth rate of 2.36%; source: NSO)
Le Circuit Mobile Bar
Age Range 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 Total
2009 36518 30031 24212 19737 18762 16474 13390 9639 6855 4075 145734
Market S t u d y | 21
2010 37401 30757 24797 20214 19215 16872 13741 9872 7021 4174 149256
2011 38284 31483 25382 20691 19668 17270 14065 10105 7187 4273 188408
2012 39187 32226 25981 21179 20133 17678 14397 10343 7356 4373 192854
2013 40112 32986 26594 21679 20608 18095 14737 10588 7530 4477 197406
In order to determine the sample size needed for this study, the researchers adapted Slovin’s Formula. The above values were derived through obtaining the average population of our target market which are 20 years old to 49 years old (female and male) in Baguio City.
A. COMPUTATION OF THE SAMPLE SIZE
N
n
=
1 + Ne2
Where: n = sample size N = total projected population
Le Circuit Mobile Bar
Market S t u d y | 22
e = standard error at 0.05 level 197406 1+ [(197406)0.052]
n
n = 399.19 or 400 B. FINAL TALLY OF QUESTIONNAIRE Table 1.2 Distribution of Respondents as to Party Goer or Non-Party Goer Across Gender Sex Party Goer Non-Party Goer Total Male
Frequency 255
Percentage 66.58
Frequency 7
Percentage 41.18
262
Female
128
33.42
10
58.82
138
Total
383 100 17 100 400 The table above shows the distribution of the respondents who goes to disco bar,
described as party-goer, and those who never experienced going to a disco bar, described as nonparty goer. It is reflected on the table that 95.75% or equivalent to 383 respondents are disco goers, of which majority or 255, equivalent to 66.58%, are males and only 128 or 33.42% are females. This result clearly shows that large portions of the sample population who are considered disco-goers are men. This means that going to a disco bar is most preferred by men, than women do. This s the fact that men are more adventurous in nature and that they are more inclined at engaging themselves in a party-filled environment. On the other hand, only 17 of the respondents are considered non-party goers. Of this number, 7 are men and 10 are women. Table 1.3 Services frequently Availed by the Disco Goer respondents
Le Circuit Mobile Bar
Market S t u d y | 23
Services Liquor Cocktails Beer Brandy Total Food Fries Nachos Onion Rings
Frequency
Percentage
205 158 20 383
53.52 41.25 5.23 100.00
97 178 108
25.33 46.48 28.19
Total KTV
383 380
100.00 99.22
The respondents who are considered party goers were instructed to continue answering the items on the questionnaire. Those non-party goers jumped to question 5 of the questionnaire. The disco goers respondents were asked of the services, in of liquor, foods and KTV, they frequently avail of when inside the disco bar. Their responses were presented in Table 2. As to drinks, most of the respondents are cocktail lovers with 205 or 53.52% of them availing the said product. Brandy was the least availed-drinks comprising only 5.23% of the respondents. The respondents disclosed during the data-gathering that they prefer taking-in light drinks so they could stay longer in the disco bar bringing them more time to enjoy the party-like atmosphere. The respondents, moreover, choose to buy nachos over fries and onion rings. A total of 178 or 46.48% of the respondnets said that they enjoy more eating nachos than fries or onion rings as it compliments and blends well with the taste of their cocktail drinks. In addition, almost all the respondents avail also of the KTV services of the disco bar as this adds up to their enjoyment and makes their stay more fun and thrilling. Table 1.4 Frequency of Respondents’ Availment of the DISCO Bar Services Frequency
Liquor
Food
KTV
Le Circuit Mobile Bar
Daily Every other day Once a week Twice a week Monthly Total
Market S t u d y | 24
30 53 107 137 56 383
89 78 98 87 31 383
73 103 98 87 19 380
The respondents were also asked of the the number of times in a week that they avail of the services offered in a disco bar. When it comes to liquor, most of the respondents take it in moderation as reflected by the 137 and 107 respondents who take it twice and once in a week, respectively. Only 30 of the 383 respondents take-in daily any liquor sold in a disco bar. As to food consumption, the respondents vary in their responses from daily, to every other day, to once or twicein a week. However most of them consume any of the three foods offered in the disco bar once a week. Only 31 of the respondents buy foods in a disco bar in a monthly basis. In of KTV services, most of the respondents prefer availing it every other day or once a week. Only 19 of them enjoy KTV services once a month. Table 1.5 Respondents’ Average Weekly expenditure on Liquor Liquor Cocktails Beer Brandy
Weekly Expenditure P50 to P99 P100 to P149 5 200 150
Total P150 to P200 205
8 20
158 20
Since the respondents take-in liquor weekly in moderate manner, their weekly expenditures on said disco bar product ranges for as low as P50.00 and as high as P200.00 only. Most of the respondents spend P50.00 – P99.00 on beer, accumulating a total of 150 respondents out of 158 who take-in such liquor. On the other hand, almost all cocktail drinkers respondents
Le Circuit Mobile Bar
Market S t u d y | 25
spend P100.00 – P149.00 weekly, while all brandy lovers cost them P200.00 in a week to enjoy such more expensive liquor.
Table 1.6 Respondents’ Average Weekly Expenditure on Food Food Fries
Weekly Expenditure P50 to P99 P100 to P149 86 11
Nachos Onion Rings
94 97
86 11
Total P150 to P200 97 7
178 108
The table above reflects that most of the respondents spend an average of P50.00 to P99.00 pesos weekly to enjoy the tastes of fries, nachos and onion rings in a disco bar. The data implies that the disco goers practice giving contributions in buying such foods as they may share in each serving of the abovementioned food products, which they can rarely do in availing liquor.
A total of 108 respondents, meanwhile, where 11 are fries lovers, 86 for nachos and another 11 for onion rings, spend an average of P100.00 – P149.00 pesos in a week in those foods. The remaining seven respondents allot a weekly budget of P150.00 – P200.00 for onion rings.
Table 1.7
Le Circuit Mobile Bar
Market S t u d y | 26
Respondents’ Average Weekly Expenditure on KTV
Amount P5.00 P10.00 P15.00 Total
Frequency 378 2 0 380
Percentage 99.47 0.53 0.00 100.00
On KTV services, the respondents only spent weekly an average range of P5.00 to P15.00. almost all the respondents pay P5.00 weekly to sing their favorite song in a disco bar. Since each song costs P5.00, this reflects that most of the KTV lovers go to a disco bar only once a week. This may even imply that those disco goers who visit twice or even more frequent in a week only get to sing one song. This results may have been affected by the fact that most disco bars only have one KTV which means that disco goers get the chance to sing one after the other. Table 1.8 Possible Public Patronage on Mobile Disco Bar with KTV
Public Patronage Yes No Total
Frequency 376 24 400
Percentage 94.00 6.00 100.00
The respondents were asked whether or not they will patronize a Mobile Disco bar with KTV whenever it will be introduced in Baguio City. The proposed business concept received almost 100% of the respondents patronage. 376 out of 400 or equivalent to 96% responded positively that they will avail of the services of such business. Respondents revealed that the concept is absolutely new in Baguio City. The Mobile Disco Bar with KTV according to respondents does not require them to go where the disco bars are. As the name implies, the Mobile disco bar with KTV will be the one which will go to the place of disco goers. This Disco
Le Circuit Mobile Bar
Market S t u d y | 27
Bar maybe also be rented by a group in a very reasonable price so as to provide them utmost privacy. C. PROJECTED YEARLY DEMAND Analyzing Demand is very important in order for us to identify the needs of our prospective customers and their willingness and their capability in availing the services that we are going to offer. Therefore, demand analysis will help us to foresee if our business will succeed in the future. Table 1.10 presents the summary of the computed deviation for each statistical method, followed by Table 1.10 for the solution of the proper method of projection for the study. Table 1.9 Historical Demand Populatio Year 2009 2010 2011 2012 2013
n 145734 149256 188408 192854 197406
*Percentage of Demand
% of Demand *94% 94% 94% 94% 94%
Estimated Demand 136989.96 140300.64 177103.4358 181283.0769 185561.3575
= No. of respondents who said yes Total no. of sample size
=
376 400
Percentage of Demand
=
94%
Table 1.9a
Le Circuit Mobile Bar
Market S t u d y | 28
Summary of Mathematical Method Arithmetic Straight Line
38,877.89
Arithmetic Geometric Curve
23,797.19
Statistical Straight Line
7,979.00
Statistical Parabolic
62,295.82
Based on the Standard deviations derived Statistical Straight Line has the lowest value therefore we will use statistical straight line in projecting the demand for the next five (5) years.
Le Circuit Mobile Bar
M a r k e t S t u d y | 31
Table 1.10 Method of Projection Used HISTORICAL VALUES YEA POP'N
X
X2
XY
a
b
Yc
Y-Yc
(Y-Yc)2
R 122810. 2009
1
1
136,990
12 122810.
13812.52
5 150,435.1
367.31 -
134,918.35 102,708,715.3
2
4
280,601
12 122810.
13812.52
7 164,247.6
10,134.53
7 165,270,096.0
3
9
531,310
12 122810.
13812.52
9 178,060.2
12,855.74
4
4
16
725,132
12 122810.
13812.52
2 191,872.7
3,222.86
10,386,824.37
5 1
25
927,807 2,601,84
12
13812.52
4
-6,311.38
39,833,554.23 318,334,108.3
821,238 5 55 σ 7,979 a 122810.1245 b 13812.52318
1
2010
2011
2012
2013
TOT AL
136,622.6
136,990
140,301
177,103
181,283
185,561
7
Le Circuit Mobile Bar | 32
Market Study
Table 1.11 Projected Demand PROJECTED VALUES YEA a
b
x
Yc
4 201
122810.1
13812.52
6
205685.26
5 201
122810.1
13812.52
7
219497.79
6 201
122810.1
13812.52
8
233310.31
7 201
122810.1
13812.52
9 1
247122.83
8
122810.1
13812.52
0
260935.36
R 201
Table 1.11 shows the demand for the year 2013 up to 2018. We got the figures written above using the arithmetic straight line. Projected demand is important because it will help us to know the demand for this kind of business for the years to come. III. SUPPLY ANALYSIS Supply is defined as a basic economic concept that describes the total amount of a certain good or service that is available to customers. Supply represents how much the market can offer. The quantity supplied refers to the amount of a certain good producers are willing to supply at a certain price. The relationship between the price and the quantity of a good which is being supplied to the market is known as the supply relationship.
Le Circuit Mobile Bar | 33
Market Study
Since the project is being offered to the City of Baguio for the first time, there are no direct competitors existing as of the present based from the list of the existing business in Baguio City provided by the Department of Trade and Industry (DTI). Since there are no direct competitors, there is no existing supply in the market. Since there are no direct competitors, Le Circuit Mobile Bar is expected to satisfy as much as 100% of the demand. However, there are certain limitations regarding the supply of the service, thus Le Circuit Mobile Bar will try to accommodate all the demands. IV. DEMAND AND SUPPLY ANALYSIS Demand and Supply Analysis is important for an enterprise to determine the existing gap between demand and supply. Demand and Supply Analysis will help us know if there is a surplus or shortage in the market for our business which is a mobile bar. It would also help us to determine if the business that we are planning to enter would be profitable or not to know if there is still a need for an additional supplier for this kind of business or if there is too much already. The absence of existing supply in the market for the service that will be offered by the business indicates that Le Circuit Mobile Bar should satisfy the 100% demand of the business wishes to do it so. However, because of the limited capacity of the business and taking into the estimated capacity that the business can operate with, the business may satisfy 17% of the market demand.
Le Circuit Mobile Bar | 34
Market Study
Table 1.17 Projected Demand - Supply and Unsatisfied Demand Projected
Market
Unsatisfied
% to be
Target
Year 2014 2015 2016 2017 2018
Supply 0 0 0 0 0
Demand 193,344.15 206,327.92 219,311.69 232,295.46 245,279.23
Satisfied 17% 17% 17% 17% 17%
Demand 32,868.51 35,075.75 37,282.99 39,490.23 41,697.47
V. PRICE STUDY In economic theory, price is determined by the demand and supply situation which indicates that if the demand increases, prices will increase and the reverse will result in a lower prices. However, there are other factors that will affect the pricing of products and services like the presence of direct and indirect competitors highly influences the pricing of products and costs incurred in rendering our services and other necessary expenses also affect the pricing of the services. Le circuit mobile bar’s KTV, food and beverages are priced based on the cost of production and the added percentage of mark up of each foods and drinks offered. The percentage of mark up will cover the other incurred costs (cost of labor, cost of operations, maintenance costs and other incidental related costs). Although we aim to have a fair rate of return, we have to price our products in a reasonable rate that will be acceptable and marketable
Le Circuit Mobile Bar | 35
Market Study
to our customers. This is suitable to the tight competition, and in consideration of the most individual in the City as our target market. VII. FACTORS AFFECTING THE MARKET The demand, supply and prices of the services can be affected by different factors influencing the market. Population Growth Philippines is one of the countries with increasing population then if the population increases, the demand also increases. This would mean more demand for this kind of business. Le Circuit Mobile Bar will satisfy the demand of people ages 20 years old and above for this kind of entertainment. The bigger population to satisfy would mean greater chance for our business to prosper because there would be more customers. Income Income is one factor that dictates the consuming habits of an individual. The greater the income of the people has the greater capacity on availing the services that we are going to offer and the lower their income would mean that their capacity on availing the services that we are going to offer would be limited. Income of different people varies and we can only cater to those who have higher income and so our market is limited to people who can afford to spend their money unwinding in bars.
Le Circuit Mobile Bar | 36
Market Study
Taste and Preference The taste and preference refers to an individual’s interest towards product and services and these interests may vary over time. That is why most of the consumers are attracted to new ideas and innovations, new products. Thus, results to an increase in demand for new products and services. Bars should adapt to these changes by introducing new ideas. Taxes A fee charged or levied by a government on a product, income, or activity. The tax to be imposed on the business is an indirect tax since it is levied in the price of our service. Inflation Inflation is an economic situation where there is a sustained and general increase in prices of all or nearly all of the markets in an economy causing, a decrease in the purchasing power of the Philippine peso. As a result, prices of the services offered will increase because of the increased costs of operations like cost of labor and materials. Competition Establishing a new business is not easy because other firms own the loyalty of customers. It is a thorny step of penetrating the market because the customers have present qualification of the related services. Efforts are needed to convince them to shift their loyalty to the business or earn their fidelity.
Le Circuit Mobile Bar | 37
Market Study
VIII. MARKETING PROGRAM Because of the growing competition in the market, adapting effective marketing program is highly recommended in order for the business to be known and patronized by customers. One of the most popular marketing strategies by the business enterprises in promoting their services is through ment. We intend to our bar through the following: Print ment We will be having an ment in Baguio Midland Courier with its name, address and the telephone number of our business establishment. It will be published twice a month for two issues of the said newspaper. The estimated cost to be incurred is 3,500 pesos. We will also be distributing flyers within the City of Baguio to create awareness among the people and this will encourage them to visit the bar. The estimated cost to be incurred is 4800 pesos. Social Media Most of the business establishments use social media for the promotion of their business because it is very popular to everyone and there will no cost to be incurred. We will be making our own website wherein the people will see the services we offer, our menu, operations, promos, and other details of our business. Social media will also be a way to have relationships with our loyal and prospect customers.
Market S t u d y | 16
Introduction Market study should be conducted first because it will determine the success of a business. It is where you can substantiate through research that adequate demand for your service exist, or if you can attain sufficient quantity to meet expected demand that will determine if your service is feasible or if continuing to the next step into the feasibility would still be practical. Customer’s willingness to go bar and avail of the services is the cornerstone for the survival of the business. Giving thorough notice to the market study, this will be achieved. The study head into the demand, appropriate marketing program, the supply and demand condition, prices and factors affecting the market. I. SERVICE DESCRIPTION To be patronized, the business should be named in such a way that people can easily it. And a business name is a big factor in the success of every business nowadays. It has a big impact on the market and helps business to attract customers. Le Circuit mobile bar shall engage in both food and drinks and also KTV services. It is primarily focused in providing easy and comfortable way for those who want to party and want to see the tourist spots here in Baguio City. A lot of party goers do not only stay in one bar at one night, they prefer to do what they call bar hopping wherein they go to another bar after the other for their satisfaction. Le Circuit Mobile Bar promotes tourism in the city that is why we thought of a service where tourist’s spots in Baguio City are considered in the itinerary of our bus at the same time they are enjoying their selves having party all night inside the bus and at the same time they can enjoy our KTV services
Le Circuit Mobile Bar
Market S t u d y | 17
with their friends. And with those places included in the itinerary they will have a bar hopping experience by staying only in one bar wherein the customers are given the chance to save their money but with fulfilled satisfaction. A. Name of the Service Our business name is Le Circuit Mobile Bar. Le means “the” and Circuit means a periodical journey around an area. The name of our business will already give you the idea of what kind of services are we offering once you read this. We considered these words in order for our business name to be unique and catchy to the people. We chose this kind of business not only to gain profit but to give a comfortable ride to those who want to enjoy disco bar inside a bus. Le Circuit itinerary includes Session Road, Harrison Road, Baguio Botanical Garden, Burnham Park, Camp John Hay, Mines View Park, Philippine Military Academy, The Mansion, and Wright Park. Business Logo
Slogan: A ride that brings you FUN! A logo is a graphic mark commonly used by commercial enterprises, organizations and even individuals to aid and promote instant public recognition.
Le Circuit Mobile Bar
Market S t u d y | 18
For colors: Pink – represents that the researchers who are conducting this study are all females Yellow – represents happiness We designed our logo in a round shape because it shows that our mobile bar goes around the city by having its own route, a wine glass in the center which shows that we offer the best mixed drinks and shadows of girls dancing shows the fun that you will feel when you are inside our mobile bar. B. Services offered Le Circuit includes amenities that are guaranteed to give you and your friends a grandiose experience, fit for your exuberant and lavish lifestyles. Le Circuit is equipped with a videoke equipment system that contains a wide variety of songs from local and foreign artists. To top it all off, Le Circuit boasts of a top-of-the-line sound system, with matching dazzling lighting effects, that is sure to make you groove to the music. Our music library features thousands of songs. We allotted a space as a dance floor where people can dance inside the bus like when you are inside the disco bar and we also provide a DJ which will make the dance floor awesome. You will truly live like a star inside Le Circuit. It also has a variety of connectors and chargers for almost all units of mobile phones. For sustenance, Le Circuit is outfitted with a mini-fridge that will chill your favorite beverages like cocktails, beer, and brandy. We also serve food which is pica-pica. Lastly, a chauffeur is provided who will be at your disposal to make sure you get to your destination safe and on time.
Le Circuit Mobile Bar
Market S t u d y | 19
C. Properties of the service Le Circuit Mobile Bar will cater to patrons who seek for leisure and entertainment. The business will provide high quality services to their customers and sees to it that every customers and sees to it that every customer’s needs and wants are satisfied. We serve food which are finger foods (“pica pica”); liquors like cocktails, beers and brandy; and KTV which are guaranteed to satisfy our valued customers who are 20 years old and above. D. Hours of Operation Le Circuit Mobile Bar will operate for 8 hours which will start at 6:00 in the evening until 2:00 in the morning. We will open at exactly 6:00 pm because we considered those customers who prefer to go to disco bars this early in the evening for the purpose to chill out and not staying very late in a bar. And this will also give chance for the customers to still see the tourists’ spots in Baguio City while the night is still young. The bar will close at 2:00 in the morning because most of the party goers go home at this time. The hours of our operation considered hours where people wanted to go to the bar and the time they leave the bar. E. Areas Served Baguio is one of the major tourist attractions in the country and is also considered as the center of education in Northern Luzon; many people are visiting and enrolling here in Baguio City. Since our target customers will be students and young professionals, tourists, Baguio City is the perfect place to put up a Mobile Bar. The mobile bar will serve the people in the city of Baguio who are 20 years old and above. The mobile bar will not cater for 19 years and below because they are still considered as minors. F. s of the Business The goal of our mobile bar is to catch the attention of the market, specifically people ages 20 years old and above who wants to have families and friends get together.
Le Circuit Mobile Bar
Market S t u d y | 20
Professionals, students, and the tourists (both local and international are the major s of the services that we are going to offer. G. Geographical Area of Dispersion Le Circuit Mobile Bar services will be available anywhere the mobile bar stops in its proposed itinerary but will then be provided to other areas if favorable profits which are enough for its expansion and additional operations arise in the next years to come. Though, the office is situated in a home-based location, with the aid of internet, connecting to and reaching people in distant areas is never impossible that could help to attract more customers to the center. II. DEMAND ANALYSIS In any business, one fundamental aspect to be considered is the demand. The concept of demand is parallel to the profitability of a business enterprise, which refers to the level of desire or need that exists for particular goods or services. Moreover, a high demand is indicative of a chance of obtaining a sustainable share of the market in which a business enterprise is planning to thrive in. A total of 400 respondents of different legal age brackets in Baguio City were subjected into this survey. a total of 262 males or 65.5% and 138 females or 34.5% participated in the survey. Data were gathered through a questionnaire istered to respondents containing five items aimed at assessing their practices and lifestyle related to disco bar and the like. Results and summary of the responses of the respondents were presented in the tables below. Table 1.1 Projected Population by Age Group (Baguio City with a growth rate of 2.36%; source: NSO)
Le Circuit Mobile Bar
Age Range 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 Total
2009 36518 30031 24212 19737 18762 16474 13390 9639 6855 4075 145734
Market S t u d y | 21
2010 37401 30757 24797 20214 19215 16872 13741 9872 7021 4174 149256
2011 38284 31483 25382 20691 19668 17270 14065 10105 7187 4273 188408
2012 39187 32226 25981 21179 20133 17678 14397 10343 7356 4373 192854
2013 40112 32986 26594 21679 20608 18095 14737 10588 7530 4477 197406
In order to determine the sample size needed for this study, the researchers adapted Slovin’s Formula. The above values were derived through obtaining the average population of our target market which are 20 years old to 49 years old (female and male) in Baguio City.
A. COMPUTATION OF THE SAMPLE SIZE
N
n
=
1 + Ne2
Where: n = sample size N = total projected population
Le Circuit Mobile Bar
Market S t u d y | 22
e = standard error at 0.05 level 197406 1+ [(197406)0.052]
n
n = 399.19 or 400 B. FINAL TALLY OF QUESTIONNAIRE Table 1.2 Distribution of Respondents as to Party Goer or Non-Party Goer Across Gender Sex Party Goer Non-Party Goer Total Male
Frequency 255
Percentage 66.58
Frequency 7
Percentage 41.18
262
Female
128
33.42
10
58.82
138
Total
383 100 17 100 400 The table above shows the distribution of the respondents who goes to disco bar,
described as party-goer, and those who never experienced going to a disco bar, described as nonparty goer. It is reflected on the table that 95.75% or equivalent to 383 respondents are disco goers, of which majority or 255, equivalent to 66.58%, are males and only 128 or 33.42% are females. This result clearly shows that large portions of the sample population who are considered disco-goers are men. This means that going to a disco bar is most preferred by men, than women do. This s the fact that men are more adventurous in nature and that they are more inclined at engaging themselves in a party-filled environment. On the other hand, only 17 of the respondents are considered non-party goers. Of this number, 7 are men and 10 are women. Table 1.3 Services frequently Availed by the Disco Goer respondents
Le Circuit Mobile Bar
Market S t u d y | 23
Services Liquor Cocktails Beer Brandy Total Food Fries Nachos Onion Rings
Frequency
Percentage
205 158 20 383
53.52 41.25 5.23 100.00
97 178 108
25.33 46.48 28.19
Total KTV
383 380
100.00 99.22
The respondents who are considered party goers were instructed to continue answering the items on the questionnaire. Those non-party goers jumped to question 5 of the questionnaire. The disco goers respondents were asked of the services, in of liquor, foods and KTV, they frequently avail of when inside the disco bar. Their responses were presented in Table 2. As to drinks, most of the respondents are cocktail lovers with 205 or 53.52% of them availing the said product. Brandy was the least availed-drinks comprising only 5.23% of the respondents. The respondents disclosed during the data-gathering that they prefer taking-in light drinks so they could stay longer in the disco bar bringing them more time to enjoy the party-like atmosphere. The respondents, moreover, choose to buy nachos over fries and onion rings. A total of 178 or 46.48% of the respondnets said that they enjoy more eating nachos than fries or onion rings as it compliments and blends well with the taste of their cocktail drinks. In addition, almost all the respondents avail also of the KTV services of the disco bar as this adds up to their enjoyment and makes their stay more fun and thrilling. Table 1.4 Frequency of Respondents’ Availment of the DISCO Bar Services Frequency
Liquor
Food
KTV
Le Circuit Mobile Bar
Daily Every other day Once a week Twice a week Monthly Total
Market S t u d y | 24
30 53 107 137 56 383
89 78 98 87 31 383
73 103 98 87 19 380
The respondents were also asked of the the number of times in a week that they avail of the services offered in a disco bar. When it comes to liquor, most of the respondents take it in moderation as reflected by the 137 and 107 respondents who take it twice and once in a week, respectively. Only 30 of the 383 respondents take-in daily any liquor sold in a disco bar. As to food consumption, the respondents vary in their responses from daily, to every other day, to once or twicein a week. However most of them consume any of the three foods offered in the disco bar once a week. Only 31 of the respondents buy foods in a disco bar in a monthly basis. In of KTV services, most of the respondents prefer availing it every other day or once a week. Only 19 of them enjoy KTV services once a month. Table 1.5 Respondents’ Average Weekly expenditure on Liquor Liquor Cocktails Beer Brandy
Weekly Expenditure P50 to P99 P100 to P149 5 200 150
Total P150 to P200 205
8 20
158 20
Since the respondents take-in liquor weekly in moderate manner, their weekly expenditures on said disco bar product ranges for as low as P50.00 and as high as P200.00 only. Most of the respondents spend P50.00 – P99.00 on beer, accumulating a total of 150 respondents out of 158 who take-in such liquor. On the other hand, almost all cocktail drinkers respondents
Le Circuit Mobile Bar
Market S t u d y | 25
spend P100.00 – P149.00 weekly, while all brandy lovers cost them P200.00 in a week to enjoy such more expensive liquor.
Table 1.6 Respondents’ Average Weekly Expenditure on Food Food Fries
Weekly Expenditure P50 to P99 P100 to P149 86 11
Nachos Onion Rings
94 97
86 11
Total P150 to P200 97 7
178 108
The table above reflects that most of the respondents spend an average of P50.00 to P99.00 pesos weekly to enjoy the tastes of fries, nachos and onion rings in a disco bar. The data implies that the disco goers practice giving contributions in buying such foods as they may share in each serving of the abovementioned food products, which they can rarely do in availing liquor.
A total of 108 respondents, meanwhile, where 11 are fries lovers, 86 for nachos and another 11 for onion rings, spend an average of P100.00 – P149.00 pesos in a week in those foods. The remaining seven respondents allot a weekly budget of P150.00 – P200.00 for onion rings.
Table 1.7
Le Circuit Mobile Bar
Market S t u d y | 26
Respondents’ Average Weekly Expenditure on KTV
Amount P5.00 P10.00 P15.00 Total
Frequency 378 2 0 380
Percentage 99.47 0.53 0.00 100.00
On KTV services, the respondents only spent weekly an average range of P5.00 to P15.00. almost all the respondents pay P5.00 weekly to sing their favorite song in a disco bar. Since each song costs P5.00, this reflects that most of the KTV lovers go to a disco bar only once a week. This may even imply that those disco goers who visit twice or even more frequent in a week only get to sing one song. This results may have been affected by the fact that most disco bars only have one KTV which means that disco goers get the chance to sing one after the other. Table 1.8 Possible Public Patronage on Mobile Disco Bar with KTV
Public Patronage Yes No Total
Frequency 376 24 400
Percentage 94.00 6.00 100.00
The respondents were asked whether or not they will patronize a Mobile Disco bar with KTV whenever it will be introduced in Baguio City. The proposed business concept received almost 100% of the respondents patronage. 376 out of 400 or equivalent to 96% responded positively that they will avail of the services of such business. Respondents revealed that the concept is absolutely new in Baguio City. The Mobile Disco Bar with KTV according to respondents does not require them to go where the disco bars are. As the name implies, the Mobile disco bar with KTV will be the one which will go to the place of disco goers. This Disco
Le Circuit Mobile Bar
Market S t u d y | 27
Bar maybe also be rented by a group in a very reasonable price so as to provide them utmost privacy. C. PROJECTED YEARLY DEMAND Analyzing Demand is very important in order for us to identify the needs of our prospective customers and their willingness and their capability in availing the services that we are going to offer. Therefore, demand analysis will help us to foresee if our business will succeed in the future. Table 1.10 presents the summary of the computed deviation for each statistical method, followed by Table 1.10 for the solution of the proper method of projection for the study. Table 1.9 Historical Demand Populatio Year 2009 2010 2011 2012 2013
n 145734 149256 188408 192854 197406
*Percentage of Demand
% of Demand *94% 94% 94% 94% 94%
Estimated Demand 136989.96 140300.64 177103.4358 181283.0769 185561.3575
= No. of respondents who said yes Total no. of sample size
=
376 400
Percentage of Demand
=
94%
Table 1.9a
Le Circuit Mobile Bar
Market S t u d y | 28
Summary of Mathematical Method Arithmetic Straight Line
38,877.89
Arithmetic Geometric Curve
23,797.19
Statistical Straight Line
7,979.00
Statistical Parabolic
62,295.82
Based on the Standard deviations derived Statistical Straight Line has the lowest value therefore we will use statistical straight line in projecting the demand for the next five (5) years.
Le Circuit Mobile Bar
M a r k e t S t u d y | 31
Table 1.10 Method of Projection Used HISTORICAL VALUES YEA POP'N
X
X2
XY
a
b
Yc
Y-Yc
(Y-Yc)2
R 122810. 2009
1
1
136,990
12 122810.
13812.52
5 150,435.1
367.31 -
134,918.35 102,708,715.3
2
4
280,601
12 122810.
13812.52
7 164,247.6
10,134.53
7 165,270,096.0
3
9
531,310
12 122810.
13812.52
9 178,060.2
12,855.74
4
4
16
725,132
12 122810.
13812.52
2 191,872.7
3,222.86
10,386,824.37
5 1
25
927,807 2,601,84
12
13812.52
4
-6,311.38
39,833,554.23 318,334,108.3
821,238 5 55 σ 7,979 a 122810.1245 b 13812.52318
1
2010
2011
2012
2013
TOT AL
136,622.6
136,990
140,301
177,103
181,283
185,561
7
Le Circuit Mobile Bar | 32
Market Study
Table 1.11 Projected Demand PROJECTED VALUES YEA a
b
x
Yc
4 201
122810.1
13812.52
6
205685.26
5 201
122810.1
13812.52
7
219497.79
6 201
122810.1
13812.52
8
233310.31
7 201
122810.1
13812.52
9 1
247122.83
8
122810.1
13812.52
0
260935.36
R 201
Table 1.11 shows the demand for the year 2013 up to 2018. We got the figures written above using the arithmetic straight line. Projected demand is important because it will help us to know the demand for this kind of business for the years to come. III. SUPPLY ANALYSIS Supply is defined as a basic economic concept that describes the total amount of a certain good or service that is available to customers. Supply represents how much the market can offer. The quantity supplied refers to the amount of a certain good producers are willing to supply at a certain price. The relationship between the price and the quantity of a good which is being supplied to the market is known as the supply relationship.
Le Circuit Mobile Bar | 33
Market Study
Since the project is being offered to the City of Baguio for the first time, there are no direct competitors existing as of the present based from the list of the existing business in Baguio City provided by the Department of Trade and Industry (DTI). Since there are no direct competitors, there is no existing supply in the market. Since there are no direct competitors, Le Circuit Mobile Bar is expected to satisfy as much as 100% of the demand. However, there are certain limitations regarding the supply of the service, thus Le Circuit Mobile Bar will try to accommodate all the demands. IV. DEMAND AND SUPPLY ANALYSIS Demand and Supply Analysis is important for an enterprise to determine the existing gap between demand and supply. Demand and Supply Analysis will help us know if there is a surplus or shortage in the market for our business which is a mobile bar. It would also help us to determine if the business that we are planning to enter would be profitable or not to know if there is still a need for an additional supplier for this kind of business or if there is too much already. The absence of existing supply in the market for the service that will be offered by the business indicates that Le Circuit Mobile Bar should satisfy the 100% demand of the business wishes to do it so. However, because of the limited capacity of the business and taking into the estimated capacity that the business can operate with, the business may satisfy 17% of the market demand.
Le Circuit Mobile Bar | 34
Market Study
Table 1.17 Projected Demand - Supply and Unsatisfied Demand Projected
Market
Unsatisfied
% to be
Target
Year 2014 2015 2016 2017 2018
Supply 0 0 0 0 0
Demand 193,344.15 206,327.92 219,311.69 232,295.46 245,279.23
Satisfied 17% 17% 17% 17% 17%
Demand 32,868.51 35,075.75 37,282.99 39,490.23 41,697.47
V. PRICE STUDY In economic theory, price is determined by the demand and supply situation which indicates that if the demand increases, prices will increase and the reverse will result in a lower prices. However, there are other factors that will affect the pricing of products and services like the presence of direct and indirect competitors highly influences the pricing of products and costs incurred in rendering our services and other necessary expenses also affect the pricing of the services. Le circuit mobile bar’s KTV, food and beverages are priced based on the cost of production and the added percentage of mark up of each foods and drinks offered. The percentage of mark up will cover the other incurred costs (cost of labor, cost of operations, maintenance costs and other incidental related costs). Although we aim to have a fair rate of return, we have to price our products in a reasonable rate that will be acceptable and marketable
Le Circuit Mobile Bar | 35
Market Study
to our customers. This is suitable to the tight competition, and in consideration of the most individual in the City as our target market. VII. FACTORS AFFECTING THE MARKET The demand, supply and prices of the services can be affected by different factors influencing the market. Population Growth Philippines is one of the countries with increasing population then if the population increases, the demand also increases. This would mean more demand for this kind of business. Le Circuit Mobile Bar will satisfy the demand of people ages 20 years old and above for this kind of entertainment. The bigger population to satisfy would mean greater chance for our business to prosper because there would be more customers. Income Income is one factor that dictates the consuming habits of an individual. The greater the income of the people has the greater capacity on availing the services that we are going to offer and the lower their income would mean that their capacity on availing the services that we are going to offer would be limited. Income of different people varies and we can only cater to those who have higher income and so our market is limited to people who can afford to spend their money unwinding in bars.
Le Circuit Mobile Bar | 36
Market Study
Taste and Preference The taste and preference refers to an individual’s interest towards product and services and these interests may vary over time. That is why most of the consumers are attracted to new ideas and innovations, new products. Thus, results to an increase in demand for new products and services. Bars should adapt to these changes by introducing new ideas. Taxes A fee charged or levied by a government on a product, income, or activity. The tax to be imposed on the business is an indirect tax since it is levied in the price of our service. Inflation Inflation is an economic situation where there is a sustained and general increase in prices of all or nearly all of the markets in an economy causing, a decrease in the purchasing power of the Philippine peso. As a result, prices of the services offered will increase because of the increased costs of operations like cost of labor and materials. Competition Establishing a new business is not easy because other firms own the loyalty of customers. It is a thorny step of penetrating the market because the customers have present qualification of the related services. Efforts are needed to convince them to shift their loyalty to the business or earn their fidelity.
Le Circuit Mobile Bar | 37
Market Study
VIII. MARKETING PROGRAM Because of the growing competition in the market, adapting effective marketing program is highly recommended in order for the business to be known and patronized by customers. One of the most popular marketing strategies by the business enterprises in promoting their services is through ment. We intend to our bar through the following: Print ment We will be having an ment in Baguio Midland Courier with its name, address and the telephone number of our business establishment. It will be published twice a month for two issues of the said newspaper. The estimated cost to be incurred is 3,500 pesos. We will also be distributing flyers within the City of Baguio to create awareness among the people and this will encourage them to visit the bar. The estimated cost to be incurred is 4800 pesos. Social Media Most of the business establishments use social media for the promotion of their business because it is very popular to everyone and there will no cost to be incurred. We will be making our own website wherein the people will see the services we offer, our menu, operations, promos, and other details of our business. Social media will also be a way to have relationships with our loyal and prospect customers.
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