Professional Documents
Culture Documents
Feasibility Study
Feasibility Study
School of Management
Requirement for
Submitted by:
Arayata, Abraham
Consebido, Norman
De Jesus, JB
Hermosa, Lorenzo
Submitted to:
Faculty-in-charge
April 2017
Introduction
Marketing
I. Current Market Situation
A. PSIC Code
Item Code Description
According to the Philippine Standard Industrial Classification Code (PSIC), Pancake House is
classified under Section 1 of Accommodation and Food service activities. Furthermore, it is
under Division 56 which is the food and beverage service activities. It falls under group 561
which is the Restaurants and mobile food service activities. It is under Class 5610 under
restaurants and sub-class 56101 of Restaurants.
B. Describe Industry
Franchising of Restaurants has been a common way of being an entrepreneurship for the
people who wanted to acquire the license of a particular franchise. With enough capital, a
franchisee could ask for the license and permission from the franchisor to grant a branch that
will operate according to the franchisee’s designated location. With the appropriate study
conducted and research regarding the market and the location, a franchise can be very
beneficial to the consumers and business owner if it becomes successful. Franchising, in
addition has been increasing in our country as the Philippines is considered to be the
franchising hub of Asia.
Since the destruction that typhoon yolanda brought to Tacloban, the rise of the city became an
opportunity for business owners to open different types of businesses ranging from real estate
to restaurants. Restaurants being built varies from having their own concept to acquiring the
license of an established brand through franchising. The franchising of a food restaurant has a
room for growth since many brands are not yet established in the city of Tacloban, giving a
particular franchisee the monopoly of the brand if one is to be established. This, as a result, will
give the franchisee the whole market share of the people interested to buy the brand, thus, a
high probability of earning a high income.
Population
The population for Tacloban is 255,489. Tacloban’s population is estimated to increase by
1.73% annually.
Area
Tacloban has a land area of 201.72 km and has 45 barangays. Below is the list of barangays of
Tacloban
Anibong Cabalawan El Reposo Lower Nulata Nula-tula Sagkahan Sagkahan Santo. Niño Tagapuro
Picas Mahayahay
Apitong Caibaan Fatima Magallanes Old Kawayan Sagkahan Salvacion Santo. Tigbao
Village Bliss Nino- GMA
Bagacay Calanipawan GE Palanog Marasbaras Palanog Sagkahan San Jose Sta. Elena Utap
Saging
Basper Camansinay Happy Land Naga-naga PHHC (Seaside Sagkahan San Paglaum Suhi V&G
& Mountainside) Mangga Subdivision
2. Santo Nino Shrine and Heritage Museum One of the many presidential rest houses the
late President Ferdinand Marcos built in his
term, it is said that Imelda Marcos had it
constructed as the first family’s residence in the
city.
4. Paruparong Bukid Nature Conservation A 30 minute drive from Tacloban City, located
Center in Brgy. Lukay Babatngon, Leyte, one can enjoy
kayaking, fishing, butterfly and bird watching in
this wellness center surrounded by green fields
and a great view of the mountains nearby.
5. Sto. Nino Church de Tacloban Also known as the church of liberation, at the
corner of Real and Zamora streets it showcases
the stunning image of Seynor Santo Nino. A
prominent sight/location in the Tacloban
cityscape.
Indirect Competitors
KFC
Mang Inasal
Jollibee
Greenwich
BonChon
DIrect Competitors
Franchisor's Perspective
1. Expansion
It is an opportunity for the Franchisor to expand the name of Pancake House to
the different parts of the country due to the franchisee’s desire to license the name of the
franchise and put it in other regions.
2. Less Expense
Since it will be a franchise, the franchisor will have less expense putting up the
name of Pancake House. The franchisee will be the one to shoulder the expenses in terms of
equipment and operations.
3. Time
It saves the franchisor time because the construction, operation and the
maintenance of the restaurant will be the responsibility of the franchisee.
Franchisee’s Perspective
1. Established Market
It will be easier for the Franchisee when it comes to promoting the products since
the reputation and image of Pancake House is already established and the awareness of the
customers is high.
B. Issues
Franchisor's Perspective
Quality Assurance
One issue is the quality assurance and consistency. Since Pancake House will
be a franchise in another region, it will be hard to keep track on the performance of the
restaurant due to its distance. Though the performance of a franchise can be tracked or
be evaluated through a mystery guest, it can provide inconsistency since a mystery
guest doesn’t evaluate the restaurant’s quality everyday and importantly, the mystery
guest can only evaluate to the extent of the restaurant’s dining area since a guest won’t
be allowed to visit the kitchen area.
Franchisee’s Perspective
Start-up Challenge
The franchisee would have to contest his way to survival since it’s going to be the
first Pancake House in Tacloban. A lot of food businesses are already established in the
area so it would be up to the franchisee on what specific strategies they will use to battle
their competitors. They will need to duly promote their main product, pancakes, to be
worth their money.
Competition
Considering that pancake house would open its first branch in Tacloban, other
food businesses will be a competitor. It is integral in the franchisee’s strategy to capture
its target audience to remain competitive. The company must establish a pleasing and
inviting image to the consumers around the area to compete with businesses that were
already there before their arrival. It would be up to the franchisee on what strategies to
consider in order to compete with other food businesses around the area.
Analysis: Opening a franchise has its positive and negative effects for both the franchisor and
franchisee. For the franchisor, it is an advantage to open a franchise to enable growth and to
spread brand awareness without having to invest a big capital for the location and construction,
etc. but with the exchange of the potential for profitability. The franchisee on the other hand, is
able to have an established brand that, compared to an entrepreneur’s own concept, has a
lower risk of failing. Nevertheless it still would hinder the Franchisee’s ability to develop the
restaurant on his/or her own nor make big decisions regarding the brand’s offerings or image.
They will not be able to innovate and apply his own concepts due to the strict established
policies for the franchise that requires strict compliance.
P99 (solo)
P109 (w/drink)
-Snack size
P130 Very Cheesy Macaroni:
-Chicken Plate
P65
-Snack size w/drink
P150
P90
P80
-Snackbox
P150
-Large Hotshots
-Large Funshots
P50 INDIVIDUAL MEALS:
-Chicken w/Spaghetti
P63
-Tokyo Pepper Steak Rice
Bowl
P107
-1pc. Chicken Meal
P112
P299
P130
P175
P299
P155
CHICKEN:
-Solo pack
P110 -Buddy pack
-Family pack
P110 -Party pack
-Blowout pack
P167 (solo) P282 PASTA:
(Family) -Mediterranean Tuna Pasta
-Carbonara Supreme
-Classic Spaghetti
-Baked Italian Sausage
Penne
P245 - Monster Spaghetti Meatballs
P495
P665
P1098
P1872
- Prima Lasagna
P226
- Seafood Marinara
P203(solo) WHOLESOME COMBOS:
P400(platter) -Bunch of Lunch
P180(solo) -Hero classic
P365(Platter) -Hero Meatball
P226 -Salad, Chicken n’ Pizza
-Super Platter Meal
P222(solo) DESSERTS:
P458(w/2 monster -Banana Peach Sunrise
meatballs) -Banana Split
P491(w/3 monster -Marble Brownie ala Mode
meatballs -Raisin Oatmeal Cookie A la
P216(solo) Mode
P637 (platter) -Sundaes
P257
P197
P163
P163
P192
P267
P199
P179
P199
P109
P59
Unaju
P525
Kuya J. 95-695 Robinsons Creamy Seafood and Corn Soup
Place Tacloban
Pochero Bulalo Tagalog
Chorizo Dinamitas
Sinuglaw
Lumpia Presko
Sizzling Bulalo
Grilled Scallops
Kare-Kare
Sizzling Meals
Pasta
Parfaits
Ice Cream
Soups
Pika-Pika
Filipino Food
Salads
Seafood Platters
Meat Dishes
Sandwiches
Soups
Filipino Cuisine
All-day Breakfast
Seafood
Pancit
Pastries/Desserts
Rice Meals
Calamari
Sandwiches
Noodle Soup
Chinese Food
Rice/Noodle Meals
Market Share
(All estimated Sales are given by the management office of Robinsons Place Tacloban)
Market Demand
Analysis: There are more people during the Weekends compared to Weekdays in the mall.
Total demand is equal to 29092 per month.
Target Market
Positioning Statement
The positioning statement for Pancake House is:
PANCAKES
3 pcs. 179
3 pcs. 195
3 pcs. 195
3 pcs. 205
3 pcs. 205
3 pcs. 215
3 pcs. 220
3 pcs. 220
3 pcs. 265
WAFFLES
ADD-ONS
BREAKFAST
Longganisa 219
Beef Tapa 259
SOUPS
Mushroom Soup 96
Taco Soup 96
SALADS
3 pcs. 255
Large 295
Carbonara 279
Seafood Gambero 309
SPECIAL SETS
SIDE ORDERS
Plain Rice 40
Garlic Rice 45
Toasted Bread 40
Potato Salad 80
French Fries 80
Hash Brown 45
SNACKS
DESSERTS
KID'S CORNER
DRINKS
Decaf Coffee 85
Hot Cappuccino 90
Hot Tea 55
Fresh Milk 75
Calamansi Juice 65
Orange Juice 75
Pinapple Juice 75
Bottled Water 50
Soda in Can 70
Analysis: Based on the latest available products in the Pancake House menu, the company
shows that they have a wide variety of choices for their customers. They offer American,
Filipino, Italian, and Spanish dishes. This current menu is designed for their customers to try
different and unique types of food. Their products are ranging from Php 96 to Php 489 excluding
the desserts and drinks. The restaurant also has a category on the menu wherein customers
can choose a combination of different products which is called the "Special Sets". In addition,
they also offer a different menu suited for children tastes.
Branding
ancake house was recently bought by Max Group Inc. According to the Executive Director
P
and Chief Marketing Officer Jim T. Fuentebella they will be having 15 renovations of existing
Pancake Restaurants and additional 15 new branches.
Max group Inc. decided to bring back the old ambiance of Pancake house restaurant.
They wanted to change it into wood accents, plush furniture and warm lighting. They based their
ambiance from the three words that best describes Pancake House Restaurant, shack
(functionality), shelter (comfort), and shed (accessibility).
For the logo, they also overhauled the logo now shows a new interpretation of its famed
house symbol that complements its old orange background. Max Group Inc. will not change the
color mainly because according to the core of Pancake House these colors represent the spirit
of 1970s. The company wanted to bring back the work culture such as ambiance, logo, and
experience of the customer.
Product life cycle
There are four stages in the product life cycle. The introductory, growth, maturity, and
decline phase. Based on the definitions of these phases, Pancake House falls between the
maturity and the decline stage. When the profit trend becomes flat, it’s an indicator that it’s
already in the maturity stage. Prices will be lowered and advertisements must be increased to
compensate with the loss. It could still generate cash-flow through loyal or repeat customers,
etc.
According to the data gathered, Pancake House is already between the maturity and
decline stage. Even though it’s still generating income, the company is experiencing some
decline. According to the net income ratio of Pancake House last 2013-2014, it plummeted from
4.51% to -2%. The company’s growth is lbeing hindered by its sales since it was the first
restaurant to cater pancakes and waffles to a country accustomed mostly to rice-based food. It
is showed some progress when it purchased Yellow Cab pizza chain back in 2011 with a
whopping P800 million. Although, the company is having small to negative profit as the years
passed. Their financial condition further proved that they are already in the maturity stage
because of their stable profit. Pancake House is not generating huge amounts of income but
rather just enough for the break-even or a small percent increase from the previous. An
example of this is when their total assets grew from P2.89 billion to P2.92 billion as of the year
2012 and 2013 respectively.
Going to the number of branches of Pancake House, their branches increased from 104
in the year 2013 to 114 in 2014. They used strategic planning to set up their branches. Pancake
house considered a lot of factors to establish their location. Since they are focusing in casual
dining and caters to social classes A and B, they put outlets near offices, school, supermarkets
and residential areas. It’s important to them to locate their store where it is easily accessible by
car or by foot traffic. They give less importance in locating near public transports.
Pricing Strategy
Basis of the price
Just like other restaurants Pancake house uses these strategies to set their price and
against their competitors. First, they gather their recipes for each menu item. The recipes
should list specific ingredient quantities, brands and the number of servings the recipe makes.
Second, they should determine the price for every ingredient in all recipes specific to the
quantity required. Include condiment costs such as salad dressings, parmesan cheese or other
toppings commonly added by the customer into the cost structure. If multiple dish options are
provided, base the prices off the highest cost ingredients. Third, they should create a pricing
sheet for each menu item. Summarize the cost of ingredients for each recipe, then divide by the
number of servings each recipe offers. If entrees come with sides, bread or other add-ons,
include the unit serving price with the cost of the entree for a total menu item cost. Fourth, they
add all of their standard monthly expenses. Include labor, rent, cleaning costs, supplies,
insurance and all other routine expenses. If costs fluctuate, use the highest average cost. Fifth,
they determine the average number of customers that come to their restaurant. If they don't
have an accurate count, they substitute the number of entrees ordered for customers. Sixth,
divide the total monthly expense by the average number of customers to determine the amount
of your expenses that each customer order must cover. Seventh, they add the per customer
expense to each menu item on their pricing sheet. A total cost per menu item should be listed at
the bottom of each pricing sheet for reference. Eighth, they determine the percentage of profit
they want to make on each item. They consider testing profit price points by multiplying 1.1 (10
percent), 1.2 (20 percent) or 1.3 (30 percent) by the total expense to illustrate the cost of each
menu item. Compare prices with similar restaurants in the area. Select a profit level that meets
their needs, but is priced competitively. Ninth, they should set menu prices by multiplying your
profit percent markup to the total cost of each menu item listed on the pricing sheets. Lastly,
they update pricing sheets on a regular basis to ensure their profit margins are maintained.
Also, update menu prices as needed.
Place
Pancake House continues to expand its branches through franchise and company
owned stores. If feasible, the Pancake House in Tacloban will be the first branch in the whole
Region VIII, giving the franchisee the whole market of consumers wanting to avail the product of
Pancake House.
Promotion of Pancake House
Promotion is one of the elements of the marketing mix. It is a way a company raises
customer awareness, sales, and brand loyalty. The most common ways of promotion are
through advertising, personal selling, sales promotion, direct marketing, and publicity.
1. Advertisements
Printed Advertisements - This is the most common promotional technique Pancake House uses.
The restaurant is often featured in newspapers, food and lifestyle magazines where the
restaurant is being talked about. Pancake House shares fliers with other Max Group Inc.
restaurants where if you deliver food to your house from any restaurant from the parent
company, they will give you a flier containing the menus of the other brands.
Billboards - Pancake House has also used billboards in the past giving awareness people
passing by highways
2. Sales Promotion
Often times, Pancake House has sales promotion where they sell their products cheaper/ at a
fraction of the normal cost. Currently, they are offering to sell 2 select meals at a fraction price.
Operations
HR Requirements
Restaurant Manager are responsible for overseeing the efficient running, cost-effectiveness of
the restaurant, and for managing their employees. They need to be able to lead as well as work
as part of a team.
Kitchen Supervisor are the employees that are leading a small crowd of kitchen porters and
overseeing the day to day running of the kitchen, including cleaning the equipment, and making
sure that supplies of the restaurant are on check.
Dining Supervisor is responsible for providing food to customers under sanitary conditions as
directed and in accordance with established policies and procedures.
Dining Staff waiter or waitress who are typically part of a wait staff. They serve the food to
customers and take their orders.
Kitchen Staff are responsible for the different operations that happens in the kitchen. They are
responsible in the cooking of the products ordered by the customers as well as maintaining the
quality of the kitchen equipments inside.
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