1

DETERMINANTS OF DEMANDS OF KAPENG BARAKO IN HOSPITALITY

INDUSTRY

Chapter I
THE PROBLEM

Introduction

COFFEE INDUSTRY

One of the world’s favorite beverages and a major source of caffeine for many students
and employees, coffee continues to be an integral factor in society’s daily routine.
According to Business Insider, coffee is the second most sought-after commodity in the
entire world, with an industry that is worth over $100 billion across the globe. In terms
of exporting alone, the industry is valued at $20 billion and continues to be on the rise—
on average, 500 billion cups of coffee are consumed on Earth every year. he coffee
industry is growing at a significantly large compound annual growth rate of 5.5%, and
the product is produced almost exclusively in developing nations. Of these regions,
South America ranked as the largest coffee producer, with Brazil producing about 43.2
million bags of coffee. This is about 27 percent of the total 158.93 million bags of coffee
globally produced each year. The major consumer demographics of this industry
represent people ages 19 to 34, and a large reason the coffee market is expanding can
be acquainted with the rise of demand from millennials as their consumption has
increased almost ten percent. In conclusion, the coffee market is currently experiencing
considerable growth in economies around the world, with the rise in urbanization and
the demand for quick, quality product fueling the expansion. The market is expected to
continue to inflate in the next five years, leaving ample room for returns and profit.
(Menke, 2018) (https://globaledge.msu.edu/blog/post/55607/the-global-coffee-industry
) Author: Andrew Menke
Published: 4/19/2018 4:27:35 PM

In the Philippines, you will often hear Liberica referred to as Kapeng Barako. The

term “Barako” is used to refer to the masculine qualities of a male; it is used to emphasise

the strong signature taste of the coffee. By the 1860s, Batangas was exporting coffee to

America through San Francisco. When the Seuz Canal was opened, a new market started

in Europe as well. Seeing the success of the Batanguenos, Cavite followed suit by
 2

growing the first coffee seedlings in 1876 in Amadeo. In spite of this, Lipa still reigned as

the center for coffee production in the Philippines and Batangas Barako was commanding

five times the price of other asian coffee beans. In 1880, The Philippine was the fourth

largest exporter of coffee beans, and when the coffee rust hit brazil and Java, it became

the only source of coffee beans worldwide

The glory day of Philippine coffee industry lasted until 1889 when coffee rust hit

the Philippines shores. That, coupled with an insect infestation, destroyed virtually all the

coffee trees in Batangas. Since Batangas was a major producer of coffee, this greatly

affected the national coffee producton. (https//www.philcoffeeboard.com)

The story of barako in the Philippines dates back 200 years, when it was first planted in a

place called Lipa City in Batangas. Coffee had only recently been introduced to the country by a

Franciscan friar but it quickly grew into thriving industry, and the Philippines became a key

coffee producer.

In the Philippines, “barako” is a name given to a male stud bull or a wild boar, both of

which are recognised as symbols of power and strength. The name “kapeng barako” was given to

the local coffee by farmers because it has a super strong taste and aroma. Barako was so popular

that when the beans were shipped to America and Europe, the price they fetched was five times

higher than other coffee varieties from Asia.

Then, in the 19th century, disaster struck: the country’s crops were hit by a disease known

as coffee leaf rust. This greatly affected production and eventually farmers were forced to

abandon their coffee bushes and focus on other crops instead. Liberica is relatively uncommon
 3

globally, accounting for less than two percent of commercially produced coffee worldwide.

Despite barako’s distinctive taste profile, in the Philippines it can be particularly hard to find a

pure, wild liberica bushes.

This is partly for practical reasons. Barako bushes grow up to 17 metres high and have large

branches that require a lot of land. Some farmers cut down their barako trees and replaced them

with robusta, a species that requires much less maintenance and is more resistant to diseases.

Others who still own barako farms are replacing their bushes with shorter, hybrid coffee trees that

are easier to harvest.

And then there’s the problem with demand. Barako has difficulty finding its way onto the

menus of mainstream coffee outlets in the Philippines. Many speculate it’s because barako is

popular with the older generation, since that’s all they knew back in the day. Also, this crowd

generally liked their coffee strong and bold, complete with that extra kick.

As of today, Lipa is still one of the countries prime locations when it comes to

Liberica coffee. The high altitude coupled with the excellent climate and soil sets the

coffee from Lipa apart from other Liberica varieties. Due to quantities of Liberica coming

from Batangas, most coffee in the province is referred to as Barako. The majority of the

rare, exotic coffee is found in Lipa as well as other high altitude areas within the region.

For many Filipinos, barako is a drink of the past. Young ones might remember it as their parents’

favourite pick-me-up in the morning. But on the back of growing interest from roasters and

stockists, barako looks like it will find its niche in the coffee world – both inside and outside of
 4

the Philippines. (https://theprimadonnalife.com/kapeng-barako-the-endangered-philippine-

liberica/)

Hospitality industry is a bountiful web of opportunity and one of the world’s

largest and fastest growing industries. It is defined as an institution that provides service

to people away from home . These services offer food and beverage, and lodging. Food

service enormously contributes to the hospitality industry. Almost everywhere . there are

food and beverage service establishments . The demand for food and beverage are

obviously high , since it is one of the necessities in the daily living.

Under the Hospitality Industry, food and beverage industry is one of the most

rapidly growing industries after the food industry. People can’t live without food. The

food and beverage sector grew out of simple origins: as people travelled from their

homes, going about their business, they often had a need or desire to eat or drink. Others

were encouraged to meet this demand by supplying food and drink. As the interest of

others became the food or beverages, most often travellers visit one place because of their

food or beverages.

We drink coffee not just to get a dose of stimulating caffeine. People now drink it

for experience and appreciation. Nowadays, Coffee is seen as a craft, a product of artistry,

and a source of pride for its origin. Knowing where your coffee came from is

understanding its personality. In the Philippines, local growers have gained worldwide

recognition for the specialty coffee that they have produced.

(http://primer.com.ph/blog/2017/07/29/types-of-coffee-that-grow-in-the-

philippines/,2017)
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The reputation of Lipa in Batangas, known as coffee Granary of the Philippines,

procedures the popular “.Kapeng barako” strong coffee considered fit only for strong

men. Real barako is actually Philippine Liberica, one of the world’s re owned bestselling

tasting coffees. It is known for its particularly strong taste, powerful body and distinct

aroma.Cantos, JR(2009).

It takes its name from “barako” the tagalog word wild boat because these

creatures are rather fond of dinning on the plants leaves and berries. “Kape” is the

tagalog term for coffee, the native Filipino language. The finding “ng” to form

“kapeng” is used as a suffix when referencing a subject. In English term “kapeng

barako” simply means barako coffee. Barako grows in the cool lush hills and low

mountains scattered across the tropical Philippine archipelago grown and produced as it

has been for centuries, each bean is painstakingly handpicked and meticulously sorted by

families that have grown barako for generations.

Most of the studies reveals that boosting the growth of coffee businesses

have positive effect on the tourism industry. This is the reason why the government

has been pushing for the expansion of coffee plantations in provinces where it has

been known to thrive. NABCOR or the National Agri-Business Corporation was

assigned by the Department of Agriculture to jumpstart the expansion.

This objective of the researchers was to know status of Kapeng Barako in terms of

consumers demand with in hospitality industry in Lipa City , Batangas. The researchers
 6

chose this topic to know what is the current status of Kapeng Barako after the evident

declining stage of this product . after the “ Coffee Capital of the Philippines” was

transferred to the Cavite. This study will also give the researcher an insight about the

problems regarding the Coffee Industry in Lipa city, Batangas. This will also serve as the

basis for the cross-referencing for the future researchers.

Furthermore, the result of this study will be beneficial to Batangas State

University specifically to the College of Accountancy Business Economics and

International Hospitality Management in enriching the curriculum in preparing the

students in terms of the theories and principles that can contribute to the school’s

mission in attaining academic excellence.

Statement of the Problem

This study aims to determine the current status of Kapeng Barako’s growth in

terms of demand with in the Hospitality Industry in Batangas

Specifically, this study seek answers to the following questions:

1. What is the profile of the respondents in terms of ;

1.1. age

1.2. sex

1.3 .occupation
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1.4 purpose of visit

2. How the following factors determine the demand of kapeng barako in hospitality

industry ;

1.1 customer’s preferences

1.2 prices

1.3 sensory evaluation

3. Is there a significance difference between the consumers assessment on the factor’s

that determine the demand of kapeng barako when grouped according to their profile.

4.Based on the result, what

Theoretical Framework

Demand theory is an economic principle relating to the relationship

between consumer demand for goods and services and their prices in the market.

Demand theory forms the basis for the demand curve, which relates consumer

desire to the amount of goods available. As more of a good or service is available,

demand drops and so does the equilibrium price. Demand theory highlights the

role that demand plays in price formation, while supply-side theory favors

the role of supply in the market.

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Demand theory is one of the core theories of microeconomics. It aims to

answer basic questions about how badly people want things, and how
demand is impacted by income levels and satisfaction (utility). Based on
the perceived utility of goods and services by consumers, companies
adjust the supply available and the prices charged.

Built into demand are factors such as consumer preferences, tastes,

choices, etc. Evaluating demand in an economy is, therefore, one of the
most important decision-making variables that a business must analyze if it
is to survive and grow in a competitive market.

The Demand Curve

A demand curve shows the relationship between the price of an item and the
quantity demanded over a period of time. There are two reasons why more is
demanded as price falls:

1. The Income Effect: There is an income effect when the price of a good
falls because the consumer can maintain the same consumption for less
expenditure. Provided that the good is normal, some of the resulting increase in
real income is used to buy more of this product.
2. The Substitution Effect: There is a substitution effect when the price of
a good falls because the product is now relatively cheaper than an alternative
item and some consumers switch their spending from the alternative good or
service.

Conceptual Framework

The conceptual framework illustrates the main thrust of the study. It consists of

the researchers’ stance on the problem after being exposed to various theories that have

bearing on the problems.

To better understand the study, it is necessary to consider the research paradigm of this

work. The input-process-output (IPO) presentation used to describe the outline of the

study as illustrated in Figure 2.

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Figure 2
Conceptual Paradigm

The first box is the Input that the factors affecting the demand of Kapeng Barako

within hospitality industry in terms of taste pattern of customer , number of consumers

in market, and price of goods or service and also the determinants of the status of

Coffee Supply in terms of number of suppliers, technology, and cost of production.

The second box is the process, the construction of questionnaire, survey and

correlation analysis between the respondent the assessment of demands and efficiency of

supply.

Research Hypothesis
 10

This study is guided by the null hypothesis statements that there is significant

difference difference between the consumers assessment on the factor’s that determine

the demand of kapeng barako when grouped according to their profile

Scope and delimitation of the Study:

The main focus of this study is to identify the determinants of demands of Kapeng

Barako in the Hospitality Industry. Specifically, this study is intended for the Hotel

,Restaurant and Kapeng Barako consumers. The difference between the consumer’s

assessment. In addition, this study will determine what course of action maybe suggested

to further strengthen the Kapeng Barako demands. Finally, this study will determine the

implication of findings of the study to the local government unit of Batangas.

The descriptive method will be used as the research methodology. In addition, the

instrument to be used was a self-constructed questionnaire and an interview in order to

get respondent’s assessment on the demands of kapengbarako within hospitality industry

in Lipa City, Batangas. Different reference materials will be used to come up with the

questionnaire.

The study will the manager of an establishment under the hospitality industry who

can monitor tzhe existing demands in the market in Lipa City and any person who is

considered as as consumer of Kapeng Barako product in Lipa City.

Significance of Study:

The result of this study could benefit the following:

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To the Kapang Barako Farm and Farmers, the result of this study may be use as basis

by the possible action that they could implement to cope up with the demand within the

market of hospitality industry. also the possible solution to increase the current demand in

the market. This is also for the knowledge and awareness of the community about the

factors that could increase the demands.

To the Tourism Unit of Lipa City, this will help them to assess how they could help

the current growing hospitality industry of Lipa City to promote the KapengBarako.

To the Hospitality Industry Establishments, the result of this study could help them

determine the possible action they could to increase the demand within their

establishment by determing of factors affecting the current demand in kapeng barako.

To HRM students and HM students, as a learners and future hoteliers and

restaurateurs the result of this study will increase their knowledge about the current

situation of the hospitality establishment. This could help to determine problems that they

may encounter in the future, and this will become a motivation to study hard .

Finally, to the future researchers, the result of this study will serve as a baseline data

and reference for the related studies that they will make. It can be reliable source of

information for their new research.

Definition of Terms:

Coffee. Beverage brewed from the roasted and ground seeds of the

tropical evergreen coffee plant of African origin. Coffee is one of the three most-popular
 12

beverages in the world (alongside water and tea) and one of the most-profitable

international commodities.(Blumberg,2015) It is used as the subject of the study.

Hospitality Industry. It is a major contributor to the national economy and to the

generation of employment with a potential for future growth that cannot be relevant

elsewhere(Dalo,2015). In this study Hospitality Industry refers to the food and hotel

establishments.

Liberica. Is harder to come by in the coffee world these days, but this varietal has

an important place in the world’s coffee history.In 1890, coffee rust decimated over 90%

of the world’s Arabica stock. Scrambling to find a solution, farmers and government

agents alike turned to the Liberica plant; the first country to try this was the Philippines

(which was a U.S. territory at the time). This decision greatly helped the Philippines’

economy as they were the only coffee supplier for a time.(Hutson,2016) In this study the

word Liberica , it is a variety of coffee , refers to KapengBarako which is mostly grown

in the City of Lipa,.

Demand. It is an economic principle referring to a consumer’s desire and

willingness to pay a price for a specific good or service. Holding all other

factors constant, an increase in the price of a good or service will decrease

demand and vice versa.(Kenton,2019). In this study it refers to the consumer’s need for

coffee .
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Supply. It is a fundamental economic concept that describes the total amount of a

specific good or service that is available to consumer.(Kenton,2017). In this study it refer

to the coffee production rate which is available to the local market.

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Chapter II

REVIEW OF RELATED LITERATURE

This chapter presents the review or literature that provided the researchers the

insights and information to write the present study. This part also discusses the

similarities and differences between the present undertaking and the reviewed studies

Conceptual Literature

The researches reviewed different literature about kapeng barako in hospitality industry.

Determinants

The determinants of demand are factors that cause fluctuations in the economic demand for a
product or a service. A shift in the demand curve occurs when the curve moves from D to D₁,
which can lead to a change in the quantity demanded and the price. There are six
determinants of demand.
These six factors are not the same as a movement along the demand curve, which is affected
by price or quantity demanded. A shift can be an increase in demand, moves towards the right
or upwards, while a decrease in demand is a shift downwards or to the left.
https://www.intelligenteconomist.com/determinants-of-demand/ By Prateek

Agarwal Last updated Jul 21, 2019

An increase or decrease in any of these factors affecting demand will result in a shift
in the demand curve. Depending on whether it is an inward or outward shift, there
will be a change in the quantity demanded and price.

1. Normal Goods
When there is an increase in the consumer’s income, there will be an increase in
demand for a good. If the consumer’s income falls, then, there will be a fall in demand.

2. Change in Preferences
If there is a change in preferences, then there will be a change in demand.
For example, yoga became mainstream a couple of years ago, and health enthusiasts
promoted its benefits. This trend led to an increase in demand for yoga classes.
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3. Complimentary Goods
When there is a decrease in the price of compliments, then the demand for its
compliments will increase. Complementary goods are goods you usually buy together,
like bread and butter, tea and milk. If the price of one goes up, the demand for the
other good will fall. For example, if the price of yoga classes fell, then there would be
an increase in demand for yoga mats.

4. Substitutes
An increase in the price of substitutes will affect the demand curve. Substitutes are
goods that can consumers buy in place of the other like how Coca-Cola & Pepsi are
very close substitutes. If the price of one goes up, the demand for the other will rise.
For example, if meditation classes became more expensive, then there would be an
increase in demand for yoga classes.

5. Market Size
If the size of the market increases, like if a country’s population increases or there is
an increase in the number of people in a certain age group, then the demand for
products would increase. Simply put, the higher the number of buyers, the higher the
quantity demanded. For example, if the birth rate suddenly skyrocketed, then there
would be an increase in demand for baby products.

6. Price Expectations
When there is an expectation of a price change, this means that people expect the
price of a good to increase shortly. These people are then more likely to purchase
sooner, which would increase demand for the product. For example, if people are
expecting the price of a laptop to fall, then they will delay their purchase until the
price lowers.

3.demand - Demand is simply the quantity of a good or service that

consumers are willing and able to buy at a given price in a given

time period. People demand goods and services in an economy to

satisfy their wants, such as food, healthcare, clothing, entertainment,

shelter, etc. The demand for a product at a certain price reflects the
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satisfaction that an individual expects from consuming the product.

This level of satisfaction is referred to as utility and it differs from

consumer to consumer. The demand for a good or service depends

on two factors: (1) its utility to satisfy a want or need, and (2) the

consumer’s ability to pay for the good or service. In effect, real

demand is when the readiness to satisfy a want is backed up by the

individual’s ability and willingness to pay.

Hospitality industry. According to Carino et al, (2013), the Hospitality Industry

compises of business that provide accommodations, travel food and beverage and

entertainment to the travelling public. It is the largest and fastest growing industry

in the world

Demand. According to Amadeo(2019), Demand drives economic

growth. Businesses want to increase demand so they can improve profits. Governments

and central banks boost demand to end recessions. They slow it during the expansion

phase of the business cycle to combat inflation.

Taste Pattern of Consumers. Taste and Preferences have direct relation to demand.

If one’s taste is in favor of the product, the higher will be the demand for it. (Payomo et.

al,2012). According to Nadathur et. al, food preferences drives our daily food choices.

The important factor for food enjoyment are flavor and tastes, though cost is a major
 17

driver in consumer choice. Genetics, culture, and the environment affect our tastes,

including liking or aversion to certain foods. In this study it refers to the Consumers

perspective in terms of taste.

When the public’s desires, emotions, or preferences change in favor of a product,

so does the quantity demanded. Likewise, when tastes go against it, that depresses the

amount demanded. Brand advertising tries to increase the desire for consumer goods.

(Amadeo,2019)

Different people have different tastes, and these will be reflected in the fact that they may

have very different preference orderings over the same goods and services. Economists leave to

other disciplines, such as psychology and sociology, the study of the source of these preferences.

We take consumer tastes or preferences as given, or, as economists say, as exogenous, which

means that they are determined outside the economic system.(Cooter et al, 2016)

The quantity demanded at each price would be different if other things that might affect it, such

as the population of the town, were to change. That is why we add the qualifier that other things

have not changed to the definition of quantity demanded.

Price of goods or Services. In general, if a reduction in the price of one good

increases the demand for another, the two goods are called complements. If a reduction in

the price of one good reduces the demand for another, the two goods are called

substitutes. These definitions hold in reverse as well: two goods are complements if an

increase in the price of one reduces the demand for the other, and they are substitutes if

an increase in the price of one increases the demand for the other. Doughnuts and coffee

are complements; tea and coffee are substitutes.

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Price is both the money someone charges for a good or service and what the

consumer is willing to give up to receive a good or service.

Price is also that which you, a consumer, has to give up in order to receive a product or

service. Price does not necessarily always mean money. Bartering is when you exchange

goods or services in return for goods or services. For example, I teach you English in

exchange for you teaching me about graphic design. In that case, I give up my time and

knowledge. Essays, UK. (2018).

Number of consumers in a market. It has a direct relation to demand. The more

the number of buyers the higher the demand. (Payomo, et al 2012)

Coffee Supply. According to BusinessMirror (2018), the Philippines consumes as

much coffee as countries such as the United States, Brazil, Japan and the European

union(EU) , the country is also looking to be one of the top producers of top-grade coffee

around the world.

The President Duterte on March 7, 2017, signed the Philippine Coffee Industry

Roadmap 2017-2022 to boost the country’s domestic coffee outpur in the next five years

– a huge lift for coffee farmers , producers and traders.

Trade Secretary Ramon M. Lopez said the country’s current coffee output is

pegged at 37,000 tons a year, but with Philippine Coffee Roadmap, the country is

expected to raise coffee production to 214,626 metric tons (MT) by 2022. This will bring

the country’s coffee self-sufficiency level to 161 percent from the current 41.6 percent. In

this study , Coffee production in Lipa city, Batangas will be evaluated.-

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Number of suppliers. It has a direct relation to supply. The more number of

sellers, the higher the supply.

Technology. Innovation markets emergence is a larger phenomenon than

innovation creation. In addition to a new product, breakthrough innovation creates new

markets as well (Crawford 1992). Technology can affect the supply; infact supply curves

are drawn assuming a given technology. Over time, technology available may change, so

if good manufacturing technique is followed then supply curve will always shift towards

higher production. For example the supply for Walkman’s were high during the mid-

nineties and even in the early 2000 but at the advent of MP3 Players and i-Pods the

demand for them dropped as well the prices of those products and supply eventually

wiped them out of the market.

Improvement in technology (techniques of production) enable firms to produce

units of outputs with fewer resources. Because resources are costly, using fewer of them

lowers production costs and increases supply. Example: technological advances in

producing flat-panel computer monitors have greatly reduced their cost. Thus,

manufacturers will now offer more such monitors than previously at the various prices;

the supply of flat-panel monitors has increased.

For economies, technological advance occurs over a theoretical time period called the

very long run, which can be as short as a few months or as long as many years. Recall

that in our four markets models(pure competition, monopolistic competition, oligopoly,

 20

and pure monopoly), the short run is a period in which technology and plant and

equipment are fixed. (McConnell, 2009)

Cost of Production Several product terms need to be defined to show these relationships.

Total product(TP) is the total quantity of output produced. Marginal product (MP) is the

change made in total product from a change in a variable resource input. Average product

(AP), or productivity, is the total product per unit of resource input. The law of

diminishing returns determines the manner in which the costs of the firm change as it

changes its output in the short run. As more units of a variable resource are added to a

fixed resource, beyond some point the marginal product from each additional unit of a

variable resource will decline.In the long run, all resource employed by the firm are

variable resources. Long-run production costs are all variable costs. As the firms expands

its output by increasing the size of its plant, average total cost tends to fall at first because

of the economies of scale, but as this expansion continues, sooner or later, average total

cost begins to rise because of the diseconomies of scale. The long-run average total cost

curve shows the least average total cost at which any output can be produced after the

firm has had time to make all changes in its plant size. Graphically, it ismade up of all the

points of tangency of the unlimited number of short-run average total cost curve.

Kapeng Barako The Philippines is one of the few countries that produces the

four varieties of commercially-viable coffee: Arabica, Liberica(Barako), Excelsa and

Robusta. Climatic and soil conditions in the Philippines – from the lowland to mountain

regions- make the country suitable for all four varieties.

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In the Philippines, coffee has a history as rich as its flavour. The first coffee tree

was introduced in Lipa, Batangas in 1740 by a Spanish Franciscan monk. From there ,

coffee growing spread to other parts of Batangas like Ibaan, Lemery, San Jose, Taal and

Tanauan. Batangas owed much of its wealth to the coffee plantation in these areas and

Lipa eventually became the coffee capital of the Philippines.

By the 1860s, Batangas was exporting coffee to America through San Francisco.

When the Seuz Canal was opened, a new market started in Europe as well. Seeing the

success of the Batanguenos, Cavite followed suit by growing the first coffee seedlings in

1876 in Amadeo. In spite of this, Lipa still reigned as the center for coffee production in

the Philippines and Batangas Barako was commanding five times the price of other asian

coffee beans. In 1880, The Philippine was the fourth largest exporter of coffee beans, and

when the coffee rust hit brazil and Java, it became the only source of coffee beans

worldwide

The glory day of Philippine coffee industry lasted until 1889 when coffee rust hit

the Philippines shores. That, coupled with an insect infestation, destroyed virtually all the

coffee trees in Batangas. Since Batangas was a major producer of coffee, this greatly

affected the national coffee producton. In two years, coffee production was reduced to

1/6th its original amount . By then Brazil had regained its position as the worlds leading

producer of coffee. A few of the surviving coffee seedlings were transferred from

Batangas to Cavite, where they flourished . This was not the end of Philippines coffee

growing days, But there was less area allotted to allotted to coffee because many farmers

had shifted to other crops. (https//www.philcoffeeboard.com)

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Coffee is the second most- traded commodity in the world and is grown in 50 countries

along the equatorial zone called the Bean Belt, located between latitudes 25 degrees north

and 30 degrees south. Interestingly the Philippines lies within the bean belt.

Due to this advantageous location and favorable , although tropica;, climate the

countryproduces four varieties of coffee: Robusta , Arabica, Excelsa and Libera, Also

called as Kapeng Barako.

industry.gov.ph BusinessMirror ,(2018)

Research Literature

There are several studies made in the past that are related to the present study. The

literature from these studies provide relevant information for completion of this study.

According to Kim Lonescu (2019) The next foundation for specialty coffee must

consider not only the needs of the buyers and the challenges they face but also the needs

of growers and the realities of coffee production. They need structural work to reevaluate

and re-value coffee with the entire supply chain and its stakeholders in mind. Beginning

with the unresolved economic pressure producers confront daily as they navigate both

specialty and commercial markets and continuing on to encompass social and

environmental costs that have been valued only to the extend to the price problem may

depend on many factors, solving it will unquestionably depend on all of us to being able

to change.

According to (Yap et al. 2018) Coffee is known as a beverages to be savored and

enjoyed. Such coffee’s popularly has grown to the centuries, it can be safely assumed
 23

someone, somewhere is savoring cup a mug or any of coffee’s delightful and delicious

preparation at almost every hour of the day. From down to dust.

According to Davis(2015) Promotion are designed to increase sales the duration

of the promotion, with the hope that some of the customers acquired from the

promotions, special offers like limited time discounts, sales volume etc. increase but

margins in each product sold decrease. Promotion should generate additional sales

volume however, the greater challenge is doing so profitably at the time of planning

promotions, actual results will inevitably differ from the plan therefore it should review

the actual promotion results with the same analytical rigor applied in the planning stages.

The study of Gaytano et al.(2014) Hospitality and Tourism is often described as

“the pleasure industry” or “the welcome industry”. It’s an industry where communication

is the key Feature. It’s alo an International industry and will involve a range of inter-

cultural encounter. It is the act of kindness in welcoming and looking after the basic need

of guest or strangers, mainly in relation to food, drink and accommodation. It refers to the

relationship process between a guest and a host.

According to studies conducted by Ibanez et al.(2014) about the assessment of

Government Support to the Coffee Industry.” Government support for coffee plantations

and consultation with the industry players, this program addresses indentified problems

such as low volumes of production, poor quality, unstable market conditions, and low

income of coffee farmers per hectare. The LGU initiatives formulated include technology

generation, improvement of coffee varieties for yield and quality competitiveness,

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development of farming systems, pest management, post harvest, utilization and

biotechnology.

There is no doubt that the technological advances can play an important role in

lowering production costs as well as contributing in other areas such as quality

improvement and plant protection. Nevertheless technological advances require

investment. Both in maintaining an adequate research and extension infastracture and in

terms of capital expenditure and appropriate use of improved inputs. Both these areas

are jeopardized under price conditions(Osorio,2002). The intervensions will increase the

present yield level of 400 kg of coffee beans per hectare to 800-1,000 kg. The increase in

yield of coffee farms brought about by the technological interventions and the production

in new areas will translate to about P1.36 billion worth of coffee beans per year.

According to Kombenjamas et al. (2011) price can also be the indicator of level,

quality and therefore seen as customers own perceived value. The price is the amount of

the money customers have to pay obtain the product. However consumers are willing to

pay higher price, the recognize how much value they place on the benefits they received

from the product that equals the value.

Carolino et al. (2011) with the effective marketing strategy some food service

establishment attract customers due to their effectiveness in promoting thei place food

items sold and service. Some people are very chossy about the places where they eat.

They usually base their selection on the cleanliness of the establishment and how the food

is prepared.
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Palowski (2010) Coffee is one the most popular beverages in the world. Studies have

found evidence it can be good for everyone, boosting liver health and playing a role in

preventing cancer.

According to the study of Acedera et al. (2009), Despite the competent demands of

kapeng barako, many farmers still refuse to plant and harvest kapeng barako. As a result,

kapeng barako is now in danger of extinction. .Because of these premises, there are some

programs, like the save the Barako campaign, which aims to advance the consistency of

its production, and its endorsement to the premium market. The campaign continuously

exerts a lot effort to raise public awareness about the potentials of Kapeng Barako. They

also promote “barako” to be the people’s choice of brew.

Carranza et al.(2010) based on their findings, the odor Intensity of all foods were judged

to have a stronger odor when they had color compared with when they had no color.

Aroma Quality all food and beverage were judged to have a better smell when they had

no color.

The study of Opperman and Chon(2009) Tourism as the sum of the phenomena

and relationships arising from the interaction among tourist, business suppliers, host

government, host communities, origin governmental organization, in the process of

attracting, hosting and managing these tourist and other visitors. There is

interdependency between the various segments of tourism, travel,lodging, food service

and recreation.The coffee industry experience birth, growth, maturity and decline.
 26

According to Perault(2010) product life cycle may vary in the length of time it

stays in a certain stage. There is no exact time that a product takes to move through its

life cycle. How long a whole product life cycle takes and the lengths of each stage vary a

lot across products.

In the study of Arias et al.(2011) found out that the employment and revenue

from the coffee business in Lipa City in the province of Batangas has its effect on its

economic status. They recommended that the government should focus on the

contribution of coffee business especially in terms of economic effect and to be able to

extend assistance to encourage investment.

According to Faustino in her study started to take root during the four terms of

Gobernadorcillo Galo de los Reyes. He was energenetic man, wealthy and respected by

the people. When first elected in1808, he obliged local farmers to plant coffee, promising

punishments to those who disobeyed. During his third term in 1822, he required existing

plantations to expand and men from all barrios to make farm tools.

Synthesis

The study of Pawel Nowicki, PhD and Tadeusz, Prof. These study are relevant to

the present study, it discussed the consumer behaviour at the food market The attitude of

a consumers towards food depends on many attributes which affect in different ways on

their preferences lead to acceptance and the selection of some products and rejecting

others. It includes places of purchase and factors influencing the choice of buying food,

and the factors determining the behavior of buyers of food products.

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The study of Reece and O’ Grady, the promotional tools were composed of all

communication designated to stimulate the mind of the customers to patronize the goods

and services. The greatly helped in the development of the establishment and increased

the level of awareness. New quality products in good relation with the customers and

promotional tools helped maintain its marketability

In the article of JR Cantos of WOW Batangas Publication is related to the present

study because he discussed what is the Kapeng barako in the province of Batangas, also

the status of it. Col. Katigbak said that there’s no other coffee farm like Batangas. Cantos

article stated the rise and downfall and our effort for rejuvenation of Kapeng Barako in

Batangas.

The studies of Dongges et al. is similar to the present study because they studied

they different support given by the government to it’s constituent but on the other

perspective, their study is more on coffee industry and focuses on the whole agricultural

industry and the economic status of a country.

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Chapter III

RESEARCH METHODS AND PROCEDURE

This chapter describes on how the data will be collected and analyze in a

systematic way. It aims to ensure that research procedure is conducted in an appropriate

way for better understanding and evaluating the result of the research. It has been

classified into few sections which include research design, respondents of the study,

sampling design, data gathering instrument, data gathering procedure, and statistical

treatment of data.

Research Design

The researchers used the descriptive type of research to analyze the data to be

gathered. The researchers preferred to use this type of research in order to access the data

of Hospitality establishment in Lipa City. It was able to establish the concept related to

determining the consumers demand of Kapeng Barako in the Hospitality Industry of Lipa

City .

The purpose of descriptive research is to get an accurate determination of factors

affecting the consumers demand of Kapeng Barako. The researchers will use this kind of

research to get first hand data from the respondents so as to create rational conclusions

and recommendations for the study. With this, the researchers utilized quantitative

approach since the study involved percentage in determining the factors of consumers

demand in terms of Taste pattern of customer, Incomes of consumers, Price of Goods or

Service and Number of consumers in a market.

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Data Gathering Instrument

The researchers read some material like journals, books, unpublished thesis, and

gathered information through the help of internet. The question was based on the problem

and objective of the study. The researcher will used a self-constructed questionnaire

The researchers divided the questionnaire into two parts. The first part of the

questionnaire is the factors affecting the consumer’s demand of kapeng barako in

hospitality industry in terms of; Taste pattern of customer, Incomes of consumer, Price of

goods or services and numbers of consumers in a market

The second part was the determine the efficiency of supply in terms of; number of

suppliers , technology and cost of production

Data Gathering Procedure

After the approval of the title, the relevant information, studies and literature in

different articles, book, journals, paper review, electronic data and other researchers from

different local and foreign authors were gathered by the researchers which help them in

their study. The researchers started gathering relevant information and facts from

different book and thesis made by local and foreign authors and they also used electronic

references for the information needed. The researchers visited libraries in Batangas State

University JPLPC Malvar Campus and Batangas State University Main Campus library

to come up with comprehensive information which contributed in development of the

paper. The researchers consulted other people who were experts in the field to come up

with a good research material.

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Respondents of the study

The study will the manager of an establishment under the hospitality industry who

can monitor the existing demands in the market in Lipa City and any person who is

considered as a consumer of Kapeng Barako product in Lipa City .

The population of this is compose of 144 Food establishments and 18 Hotel

establishment in Lipa City.

The respondents of the study were one-hundred (100) customers in selected coffee

shop in Lipa City, Batangas; Coffee Shop A, Coffee Shop B, Coffee shop C, Coffee shop

D, and Coffee shop E.

According to Fraenkel and Wallen (2009), sample should be a large as a

researcher can obtain with a reasonable expenditure of time and energy. A recommended

minimum number of subjects is one-hundred (100) for a descriptive study, 50 for

correlational study, and 30 in each group for experimental and causal comparative study.

Sampling Design

The researchers will use non-probability sampling design as quota sampling

design and convenience sampling design in selecting the respondents. Quota sampling

method is a non-probability sampling design wherein the assembled sample has the same

proportion of individuals in the entire population with respect to know characters, traits

of focused phenomenon (Castillo, 2009). The researchers used this sampling design in

selecting respondents in selected coffee shop in Lipa City, Batangas. The researchers

targeted total population of one hundred (100) consumers.

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Statistical Treatment of Data

After gathering the necessary data from the respondents, the data from the

respondents, the data gathered were going to be tabulated, tally and analyze. Moreover,

the data that were going to gather will be subject to the following statistical treatments.

Weighted Mean and Composite Mean. This is use to determine the respondents’

assessment on the palatability factor influencing customer behavior on selected coffee

shops in the Lipa City, Batangas.

Frequency and Percentage. This is use to determine the profile of the respondents in

terms of age, sex, occupation and purpose of visit.

Analysis of Variance(ANOVA). This is use to test if there is significant difference

between the consumers assessment on the factors that determine the demand of kapeng

barako when grouped according to their profile.

T-test. This is use to determine if there is significant difference between the means of two

group which may be related in a certain feature