CHAPTER II

REVIEW OF RELATED LITERATURE AND STUDIES

2.1.1 RELATED LITERATURE

FOREIGN LITERATURE

A. Start a Small Bakery Business

Many people dream of owning and running their own small business in hopes of becoming their own
boss. They also hope that their independence can give them more flexibility to earn money without
depending on a full-time employment. Some fail in their efforts as soon as they realize that it is not
as simple as they thought it would be. Starting and operating a business takes a lot more hard work
than just dreaming.

Step 1

Decide which type of bakery business you would like to operate. You can opt to sell only cakes or
breads, muffins, donuts and other baked goodies. You may choose to sell combinations of specialty
cakes and baked goods. Some open bakeries to make specialty cakes or cakes for special occasions
only such as for weddings and birthdays. Determine if you will just sell the goods "to go" or allow
people to sit down and eat. In addition, determine if you will be serving hot and cold beverages
along with the baked goods.

Step 2

Lay out a business plan. Decide on the name of your business. Decide if this will be a single
proprietorship, partnership or corporation. Register your business with the State and obtain a permit
or license to operate. Inquire for more information from the Service Corps of Retired Executives
(SCORE) for tips and assistance on how to start your own small bakery. SCORE is a Resource Partner
with the U.S. Small Business Administration (SBA). Visit score.org for more information.

Step 3

Decide on the location. The location size should be enough to accommodate baking ovens, baking
racks, baked goods shelves, storage, counters, tables and chairs. Consider the restrooms in the plan.
If you plan to operate a coffee shop-type bakeshop where people can eat, you would need to add a
public restroom. If it is just going to be a bakeshop where you will sell baked goods to go, you may
only need a small one for you and your staff only. Check with your state or town for requirements.

Step 4

Know your state and town's health regulations. Make sure your location will pass the inspection.

Step 5

Check on the costs of equipment you will use. Some equipment may cost several thousands of
dollars; therefore, shop around and compare prices before you buy. Bakery Solutions (Bakesol) is a
company that specializes in bakery equipment, parts and accessories. You will find most baking
items used to operate your bakery from this shop. Visit bakesol.com for more details.

Step 6

Obtain financing from a bank. Inquire about small business loans offered though SBA (Small Business
Administration). You would need enough to cover purchase of equipment, appliances, furniture, and
lease of location, renovation, start-up costs and up to six months worth of employees' salaries.
Budget for ingredients, utilities, insurance and other miscellaneous operating costs.

Step 7

Gain experience while you plan for your future. Any business does not grow overnight; you would
need to plan and have a long-term goal. While planning your business you can work for an
established bakery. Don't expect them to give you all the information that you need from the ground
up; however; you can learn how to use baking equipment and how to serve customers. You may also
train as a pastry chef from a culinary school to learn other baking techniques that you did not learn
from home.

Step 8

Hire workers. You may need food servers or waitstaff. Determine how many you need to help bake,
serve and handle the register. You may need one or two experienced bakers to work with you, a
person operating the counter and register, one to two waitstaff.

Step 9

Get ready to open for business. Advertise your opening day by posting ads on newspapers and
posting or handling out flyers. You can also host a charity event and give out baked goods with your
label attached. Hand out business cards and flyers to the attendees.

Source: http://www.hcareers.com/us/resourcecenter/tabid/306/articleid/650/default.aspx

B. Business Objectives for a bakery

Bakeries sell perishable comfort food -- sweet and tempting offerings that appeal to a broad target
market. Bakery products are also extremely perishable; many customers have grown to expect
bakery businesses to offer product that is baked fresh daily, making it challenging to meet demand
without wasting inventory. Business objectives for a bakery should include building a broad and
committed customer base and developing a business model that brings in enough income to cover
your expenses despite a potentially high level of waste.

Revenue

A bakery can increase its revenue through advertising and promotions such as offering deals on
specific items on different days of the week. You can add to sales totals by carefully monitoring and
adapting to demand, paying attention customer flow as well as sales patterns. Many changes that
bring in additional revenue require little or no monetary outlay, such as adjusting your hours to be
open when you are likely to be busiest or creating displays that tempt customers to buy additional
product.

Income

Business income is the amount left over after subtracting deductible expenses from sales revenue.
To achieve the objective of maximizing income, your bakery must minimize waste without running
out of popular items. Because customer demand is rarely consistent, it is nearly impossible to avoid
waste altogether. However, keeping careful records of which items sell fastest enables you to
predict some sales patterns. You can achieve additional accuracy by paying attention to variables
that affect sales patterns, such as holidays and weather.

Margin
Because the bakery business model of selling optimally fresh offerings creates so much potential for
waste, bakeries should closely monitor profit margins, or the percentage of sales that exceeds
operating expenses. Shop around for low prices on ingredients, but don't compromise quality for the
sake of price if your customers hold you to a high standard. Introduce efficiencies that enable you to
produce more in less time, such as consolidating processes, eliminating bottlenecks and achieving
economies of scale.

Reputation

Building a strong reputation is essential to a bakery's objective of attracting a loyal clientele and
generating a consistent sales volume. Build your reputation by producing high-quality products and
maintaining excellent customer service. Although it is tempting to sell product that is less than
perfect to minimize waste, these sales may cost more in the long run by compromising your bakery's
reputation. Develop a specialty, and practice until you are an expert.

Source: http://yourbusiness.azcentral.com/business-objectives-bakery-14092.html

C. About the Bakery Business

Types

Bakeries can range from small artisan businesses, specializing in one or two items, to large industrial
bakeries that supply food retailers with packaged baked goods, according to A Touch of
Business.com in the online article, “How to Start a Bakery.” Franchise bakeries create baked goods
with access to the brand recognition, customer base and mentorship opportunities available after
paying regular franchise fees. Bakeries may also venture into catering opportunities; for example,
delivering hot muffins and donuts and fresh orange juice to business offices before important
meetings. Bakeries sometimes specialize in just one or two items, such as wedding cakes or bagels
prepared according to kosher standards. You can also start a bakery specializing in baked goods for
pets, according to Style Career in the online article, “Pet Bakery.”

Licensing

Bakeries will require permits to operate, including a business license, tax identification number,
retail license and food permit, according to “How to Start a Bakery.” Check with local agencies to
learn about area requirements and regulatory guidelines. In California, for example, the baking
industry is regulated by the Department of Alcoholic Beverages.

Equipment

You’ll need to purchase or lease a variety of equipment to begin a bakery business, according to
“How to Start a Bakery.” This includes mixers, ovens, packaging materials (such as white paper bags
or folding doughnut boxes) and raw materials for creating baked goods. Dine-in customers will
require tables and chairs to enjoy your croissants, pastries and cookies. Bakery businesses also need
standard office supplies, including business cards, telephone, fax machine for submitting bids,
computer, accounting software and printer.

Pricing Considerations

Retail bakeries can be affected by rapid price changes for key ingredients, necessitating the need to
raise prices for customers, according to Edward Lee in the 2008 article, “Adjust Your Bakery
Business,” on Modern Baking.com. Some bakeries take such opportunities to educate customers
about the relationship between the cost of soybean oil or eggs and their daily strudel, according to
the article, even asking customers to sign petitions related to farm legislation. Consider promoting
one item that will always remain the same price. For example, $1 day-old baked goods or $1 cups of
coffee.

Source: http://smallbusiness.chron.com/bakery-business-4683.html

D. Woodstock Bakeshop: Finding Triumph in the toil

By: Danica Smithwick

Before opening his bakery’s doors, Matt Childress spent several years racing cars competitively.
Because of his competitive background, he grew up knowing he didn’t want to work a “normal job.”

He took his love for vintage aesthetic, his mom’s cake recipes, and his dad’s idea for a name—
Woodstock Bake Shop—and ran with it. September 11, 2012 he opened for business on Inns dale
Cove in Jackson.

In those early months, Matt said there were more rough days than easy ones—from hiring friends
who disappointed him to just being patient with the drudgery of starting a new business, it was
more of a struggle than he expected.

“I made a ton of mistakes,” he said. “It takes a long time and a lot of persistence to build a business.
I’m a very competitive person, so I knew I was going to figure it out. I just didn’t know how long it
would take to figure it out.”

Matt wasn’t prepared for the downtime at the end of the day as a young entrepreneur, according to
his dad Dale. Just twenty-two years old at the time, he would often come home and start to question
himself. Am I really prepared for this? What happens if I fail? “In the beginning, we would have days
where ten or fifteen people would walk through the doors,” Matt said. “Now it’s a few hundred
every day. You just have to hang in there for the first two or three years.”

Matt said he learned that those in his sphere of influence—although they would never admit it—
weren’t always rooting for him to succeed. People didn’t want him to be more successful than they
were, he said.

One thing that helped him stick with it was avoiding social media. Both strangers and friends would
talk negatively about his plans on Facebook, and it took him a long time to learn to ignore it, but
ultimately he refused to let those people tear him down. Now twenty-five years old, Matt has
learned from his mistakes and seen his business expand to three Jackson locations in just three
years. He’s also seen his own confidence level grow and his love for business develop.

In addition to the original Inns dale location, Woodstock has a booth downtown at the farmers'
market and recently launched a spot at Jackson State Community College.

“A lot of people thought we had deep money somewhere, but it was a big risk,” he said. “We took a
leap of faith, and it worked. I like to just commit to something and then figure out the rest later.
Sometimes you make mistakes, but sometimes you make great decisions.”

— Matt Childress

Source: http://www.ourjacksonhome.com/blog/2015/10/2/o1xt86w6n35b7p45bj5jpjhbsqpyl1
E. Business Objectives for a Bakery

By: Kim Durant, Demand Media

Some bakeries specialize in breads or cakes.

Starting or running a bakery will likely challenge even the savviest businessperson because profit
margins on baked goods tend to be relatively low and ingredient pricing fluctuates depending upon
the price of fuel and commodities. Setting measurable business objectives with deadlines will help
you draw a road map to success with your bakery, whether you are launching a gluten-free cupcake
service or a storefront bakery in a strip mall.

Location

One of your early objectives in starting a bakery should be to find a location that satisfies your
specific needs, which will vary according to what kind of bakery you are starting. For example, if you
are starting a storefront bakery that will rely heavily on foot traffic, you will want to find a space in
an area with a lot of pedestrian traffic. If you are starting a boutique mail-order bakery specializing in
baked goods safe for people with peanut allergies, you will need to find a nut-free commercial
kitchen to rent.

Start Date

Set your official business start date as one of your business objectives. Setting a specific date for your
bakery opening will not only help make it more "real" in your mind, it will also give you an extra
nudge to keep moving on your plans in order to make that deadline. Plan an event to make your
bakery's start date extra special. For example, you could hold a private tasting for invited local food
critics and bloggers, followed by a community party with free mini-cupcakes or a discount on your
offerings.

Profit

Make a goal to reach a certain level of profit in a certain period of time, allowing for the momentum-
gathering that many new businesses need in their first few months. Or you could set your objective
to reach a certain sales figure. For example, you could follow the example of David Arrick, founder of
The Butch Bakery, who originally aimed for $5,000 per month in sales, according to "Entrepreneur"
magazine.

Community Service

Establish an objective related to serving the community in which your bakery will be located, such as
donating breakfast items to a local women's shelter or starting a baking apprenticeship program for
underprivileged teens. This objective would be particularly appropriate if you are a staunch
community activist or if you plan to make your commitment to community service part of your
bakery's brand image.

Source: http://smallbusiness.chron.com/business-objectives-bakery-21392.html

Author: Mark Baguio

2.1.2 RELATED LITERATURE

LOCAL LITERATURE

A. BAKERY IN THE PHILIPPINES

Baked Goods

TRENDS

 Innovation remains vital for baked goods companies to address the need of consumers for
variety, which can be more pronounced in packaged food. The development of new
products is directed either towards creating something healthier or something better
tasting. Innovation, however, is no longer limited to pastries, cakes or bread loaves as even
the popular local bread, pandesal (salted bread), is being reinvented. A hotdog-flavored
pandesal, for instance, is now available through Gardenia Philippines Inc. A healthier variant,
meanwhile, can be bought through the bakery chain, Pan de Manila, which created a
malunggay (horseradish) pandesal. The Food and Nutrition Research Institute, on the other
hand, is promoting the selling of yellow pandesal, which contains squash puree, in public
schools to help address the problem of malnutrition among children.

COMPETITIVE LANDSCAPE

 Artisanal players which led the category in 2013 with a value sales contribution of 48%
sustained its lead in 2014 with a 47% value share. The proximity of neighbourhood bakeries
to households gave artisanal goods an edge over packaged/industrial baked goods as they
were more accessible to consumers. Also, some bread, like the popular pandesal, is best
consumed hot after baking as it tends to harden as it gets cold. As such, artisanal bakeries
are the preferred sources of freshly baked bread and pastries if one is available nearby. The
customization possible through unpackaged/artisanal cakes, meanwhile, made it the
preferred option, especially for more special occasions.

PROSPECTS

 Innovation is expected to remain an important part of major players’ operations to sustain

and improve their value share. This is also expected to help improve the growth of baked
goods over the forecast period, which is projected to post a constant value CAGR of 2%,
slightly outpacing its constant value performance over the review period. Aside from
creating healthier baked goods, adding flavor especially to plain bread, such as pandesal, is
expected to help drive purchases. Not only do tastier baked goods address consumers’
needs for variety, but will also afford them savings in both time and money as they can
forego the use of spreads or fillings.

Source: http://www.euromonitor.com/bakery-in-the-philippines/report

B. How to start a bakery business (Turn their love for pandesal into a thriving business by starting
your own bakery)

By Entrepreneur Sataff
With bread being the country’s second staple after rice, the bakery business is one of those ventures
that are sure to bring multiple returns with just a minimal investment. By taking the time to learn
the craft, you too can start your own bakery business and potentially make good money out of it.

A TICKET TO PROFITS

Take the case of former bus inspector Godofredo Molde, 45, who has pocketed P500,000 in just a
year of selling pandesal. Armed with P150,000 in startup funds and a lot of guts, he took the plunge
of starting his own business - and came out on top. He has parlayed his bold investment to foot
house repairs and acquire a delivery truck for his growing business.

"I used my P150,000 capital in acquiring the three small pandesal stores of my friend’s brother, and
that included some goodwill money for the recipe and training. I have added another store since,"
he said.

The revolving daily capital for the four stores, he said, is only P7,000. Molde decided to concentrate
on pandesal because its market is more predictable and the stores only need to stay open from 5 am
to 9 am. 

One of his stores, sells P6,000 worth of pandesal daily during weekends, and P4,000 during regular
days on the average. According to him, pocketing a cool P2,000 profit is the norm for each of his
bakeries.

A PROFITABLE BUSINESS

Ric Pinca, executive director of the Philippine Association of Flour Millers (Pafmil), agrees that
indeed “baking is a rewarding and profitable business.”

“Bread is the country's second staple and everyone eats bread. Though consumed mainly as
breakfast and snack fare, bread is also taken at lunch, usually as burgers and even dinner time. Bread
is a convenience type of food. You don’t have to sit and have a formal dinner just to eat bread. In
fast food shops, you may get your bread right at the counter and you even don’t have to call a waiter
to serve you.”

Bread, he added, may be consumed while walking, riding a bus or even while whiling away time
anywhere.

But while the bakery business is a profitable one, Pinca said it is also a demanding profession. Aside
from investing money, he said a good amount of time, patience and study is required if one is to put
up a successful bakery business.

SET UP YOUR OWN BAKERY

 Pinca shared these tips on how you too can start a bakery business from scratch:

 1. Study the business

Before you put up a bakery, you must first learn how to bake. Many people make the mistake of
putting up a bakery without first knowing how bread is baked. It is not enough that you hired bakers
to do the work, you must also know the baking process so that your bakers would not give you a
run-around.
A month of training is enough especially if the training program you enroll in has plenty of hands-on
activities, meaning you are asked to bake and not just sit and listen and watch the demonstrations.
There are a lot of training centers and culinary schools offering baking courses.

But the best baking courses are offered by the flour mills themselves. And more often than not,
these courses are offered free of charge to prospective bakers as part of the company's marketing
efforts. So get in touch with any of the local flour mills and ask for their training schedules.

2. Look for a good location

A food business like a bakery depends on high human traffic. Look for a location where people
congregate like a market, near a school, a bus or jeepney terminal or even a tricycle terminal and put
up your bakery there. The people that populate your area are your target customers. 

3. Suit your products to your customers

If your bakery is in Tondo, then your products should suit the people of Tondo. Do not produce
pastries like apple streudels or Italian Rye Breads or Belgian cookies because these products are not
the type that people in Tondo consume. These products are for the shopping mall crowd. Try
producing pan de sal, Monay, tasty breads, ensaymada etc. These are bakery goods that people in
Tondo are familiar with and regularly consume. Also, these are products they can afford.

4. Start small

It is better to start small especially if you are new in the business. If the business grows, then it will
be easy for you to expand, rather than start big and downsize later. Suit the type and size of
equipment you will buy to the volume of products you want to produce. Remember, you should not
produce more than you can sell. 

5. Buy the right sized equipment

Do not get a mixer with a one bag of flour capacity if your oven can only take in eight plantas or 160
pcs of pandesal at a time. One bag of flour normally produces 1,880 pieces of pan de sal weighing 25
grams each. Get technical help from equipment dealers. Do not just deal with one. Get the best offer
and technical advice you can get.

6. Maintain product consistency

Make sure that your bread tastes the same today as it did yesterday and as it would tomorrow.
Customers return to buy bread when they like its taste. Do not give them a different tasting bread
when they return because they will either complain or not return anymore. 

7. Be good to your employees

Take good care of your employees and give them the right salary. If your employee is happy, they
will take care of your business and make sure that your customers are happy too. A happy customer
will always return and buy more. And you are assured that your business will grow.

Source: http://www.entrepreneur.com.ph/startup-tips/how-to-start-a-bakery-business
C. Why not a bakery business?

Filipinos love to eat bread and the business minded should keep this in mind. Pandesal is the usual
breakfast fare most Pinoys can’t do without before starting their days. Snacks are usually a few slices
of bread taken with coffee, soft drinks or fruit juice. An aspiring bakery businessman should
therefore have these two products in his list and expand from there.

Other Pinoy favorites are ensaymada, pan de coco, monay, and mamon, while the more affluent
ones may opt for cinnamon rolls, French bread, hamburger buns and other more sophisticated and
therefore, costlier stuff.

The enterprising baker must know his market and tailor-fit his products to the kind of customers he
caters to. A bakery in Tondo, for example, must have products geared for the Tondo market and not
for the more sophisticated Makati or Greenhills crowd.

From one sack of flour, and using the most common formula for the production of loaf bread, a
baker can produce 81 loaves weighing 550 grams each. Total cost of materials, packaging and
overhead cost is P2,536.13. At a selling price of P40 per loaf, gross revenues will add up to P3,240 for
a gross margin of P703.87 per bag.

For pandesal, gross earning per sack of flour is even bigger due to the lower cost of pandesal flour
and less ingredients to be used. Each bag of flour produces 1,800 pieces of pandesal weighing 25
grams each. At P2 per piece, total sales is P3,600 for a margin of P2,517.63 per sack. From these
gross earnings, the baker must deduct the cost of manpower, rentals and of course, taxes to be paid.

The prospective bakery businessman must, however learn how to bake before jumping into the pan,
so to speak. In fact, any businessman worth his salt must first learn the trade he wants to invest in
before pouring in his hard earned money. One must not depend entirely on hired hands to run the
business. This is particularly true in baking.

The best place to learn baking the commercial way is at the PAFMIL Baking Center at the DSWD Jose
Fabella Compound, Correctional Road in Mandaluyong City. This baking school is run by the
Philippine Association of Flour Millers (PAFMIL) and is staffed by well-known and competent baking
instructors who have many years of experience of baking instruction. Visiting instructors from the
flour milling and bakery industries also come in to impart knowledge and valuable inputs.

Aspiring bakery businessmen or those who wish to be employed as bakers must take the Basic
Commercial Baking Course, a 20-day program designed to equip trainees with a combination of skills
and knowledge in baking. Each student is required to produce bread every day and critique his
production so that he could improve and produce better bread the next day. Only 25 students will
be taken each class and the course will be offered only four times a year.

Source: http://www.philstar.com:8080/agriculture/633662/why-not-bakery-business

D. A good rise: What the future holds for the Philippine baking industry

As writers of a book on Philippine breads, my co-author Jenny Orillos and I were treated to a glimpse
of the state of the baking industry in the country at the Bakery Fair, a three-day event held at the
World Trade Center from January 30 to February 1. And from what we saw at the fair and up close in
bakeries as we did research for the book, the future certainly looks bright for Philippine baking.

In our visits to several panaderia all over the country in the last three years, we saw how corner
bakeries have embraced new technologies slowly but surely, and have finally begun regarding baking
as the science that it actually is. The days of using empty milk cans and plastic pitchers to measure
ingredients are fading slowly. Digital weighing scales are now widely used. Recipes that were passed
on from baker to baker by mouth and memory are now written and serve as exact guides to ensure
quality. And the most humble panaderia have since begun to offer a wider variety of breads, both
traditional and modern.

Of course, the panaderia is still where you’ll find local bread staples—pandesal, pan de putok,
Spanish bread, pan de coco, ensaymada, monay, kalihim and the like. And bakeries in the far-flung
provinces are where you’ll see that traditional baking methods are very much alive.

Like in Argao, Cebu, where the Visayan celebratory cake, torta, is still made using tuba (coconut
toddy), pork lard, an obscene amount of egg yolks, mixed by hand in a palanggana and baked in a
hudno, a clay oven fired using dried coconut husks.

Or in Camalig, Albay, where Bernardita Martillana has been baking the vanishing Italian panettone-
like bread marcasotes for nearly 50 years using a rather primitive method of steaming in a kuron (a
huge clay pot) on top of banana bark.

Adapting and modernizing

But our trips also yielded unique finds—the chocolate cinnamon babka (Panaderia Dimas-alang,
Pasig), the dragonball (Candon Bakery in Ilocos Sur), fancy filled doughnuts that rival those of the big
donut chains (Luzon Bakery in Legazpi City, Albay), French bread (Vietville in Palawan), Nutella- and
Speculoos-flavored ensaymada (Baby Pat Breads and Pastries in Laguna)—that show an industry
adapting to changing times and trends.

As even traditional bakeries have shifted to modern techniques and the use of better equipment and
technology, it has become easier to standardize recipes and thereby open themselves up to
expansion via franchising. The success of bakery chains like Julie’s Bakeshop, Panaderia Pantoja and
Pan de Manila are proof of this.

These days, with emerging foreign bakery chains like Bread Talk and Erik Kayser exposing Filipinos to
a wider array of bread choices, local bakeries have also found the need to step up. They invest in
product creation and in enhancers and flavorings that help improve the shelf life and quality of their
products as well as in the latest mixers, kneaders, ovens and equipment that keep production times
short and costs low.

Seminars by product vendors and the US Wheat Associates and events like the Bakery Fair organized
by bakery associations like the Filipino-Chinese Bakery Association, Inc. (FCBAI) have helped move
the industry further ahead by imparting the latest baking techniques.

Henry Ah, president of FCBAI, also acknowledged the presence of a new breed of bakers trained in
classic techniques in culinary schools as a boost to the industry.

Ah envisions more professionally-run bakeries that can produce superior products at par with what
the world has to offer. And our showing at the recent World Pastry Cup in Lyon, France, where three
Filipino pastry chefs emerged 12th among 21 finalists and won the Scupted Ice special award, lends a
clear testimony to Filipino baking artistry.
From one generation to the next

As ownership of long-standing bakeries have changed from generation to generation, we have also
seen how well the heirs have risen to the challenge of ensuring that the legacies passed on to them
will last. Mark Sanchez of Silay’s iconic El Ideal Bakery, Anthony Pantoja of Panaderia Pantoja, Sandra
Ng of Iloilo’s 119-year-old Panaderia ni Pa-a, Michael Sy of Cebu’s La Fortuna Bakery and so many
young people like them have vowed to preserve our baking traditions while bracing themselves for
the winds of change that constantly descend upon the industry they grew up in.

For instance, new owner Wilson Lee Flores has harnessed the power of social media to breathe new
life into Kamuning Bakery (since 1939), the only one that still makes the legendary pandesal de suelo
(bread baked directly on the suelo, or floor of the oven). Its presence on Facebook, Instagram and
Twitter has helped to double its sales. Kamuning Bakery has now become a full-fledged bakeshop
offering modern custom cakes along with the classic egg pie and cookies like bodigos, apas, lubid-
lubid and more.  And young customers have since “discovered” the bakery, wanting a taste of the
breads of old.

Indeed, as can be seen at the recent Bakery Fair attended by thousands of visitors who soaked up
new information about Philippine baking, things do seem to be looking up for the industry—for
bakery owners, newbie pastry chefs, the lowly panadero, as well as the mom-preneurs and home
bakers who sell their products online and in weekend markets.

To them, baking has been and will always be more than something that literally and figuratively puts
food on the table. It is a source of inspiration. It is an enduring passion from which they reap the
sweetest and most satisfying rewards. With them, we can rest well, knowing that the local baking
industry is in good, eager and more experienced flour-dusted hands. — BM, GMA News

Source: http://www.gmanetwork.com/news/story/440170/lifestyle/food/a-good-rise-what-the-
future-holds-for-the-philippine-baking-industry

2.2.1 RELATED STUDIES

FOREIGN STUDIES

A. All You Knead id Dough (A profitability analysis of the bakery of a retail store)

Abstract

Background and research problem: Over the years, companies have developed advanced systems
made to measure and control the profitability of their sales. One industry that has put a lot of
confidence in highly developed control system is the retail industry. These systems provide
important information about sales and margins for every product in the assortment range of the
company. What the systems do not always take into account is that different products require
different amount of indirect resources to be sold. The owner of the Exclusive Store Sweden knows
that the bakery sector of his store has shown an excellent profitability for a long time, according to
the gross margin of his accounting system. In spite of the excellent margin, he worries about the
trustworthiness of the figures. The owner thinks that he wants to know what his margins produced
in his management system and he wants to know what his margin would look like if he was to
include all of the costs related to the products of the bakery.
Results and conclusions: The thesis shows that information from a gross margin based method of
calculation can be misleading in a sector of a retail store that requires a relatively high amount of
indirect resources. Information of the profitability of different products can be misleading when
different products consume different amount of indirect resources.

Further Studies: One way to investigate further is to analyze the profitability in other sector of a
retail store that consumes a relatively large amount of resources; for example the fruit sector or deli
counters. To further investigate the usefulness of the Gross margin based method, similar studies
should also be made of other retail stores.

The store of the study uses a paste bakery process to produce their bread. Different retail stores use
different kinds of baking processes and it would be interesting to evaluate the methods of
calculations in other type of bakeries.

Introduction

This chapter presents the background and the problem of the stud. The problem is discussed and the
purpose of the study is defined. There is also a short description of the restrictions of the study.

Background

The purpose of management accounting is to direct an organization and its decision makers towards
a certain economic goal, which could be profitability, sales, cash flow, customer satisfaction or value
for money.

To affect an organization by management accounting, the process needs operating business data
and management control measures are divided into three groups:

 Formal management control measures

 Organization structure

 Less formal management control measures

The formal group of management control measures includes methods like product calculation,
budgeting and result planning.

Organizations can apply product calculation in several different situations, for example during pricing
and cost control. When an organization adopts this kind of formal management control, each
calculation situation is unique; in other words there is no universal product calculation. Because of
this, the principle of product calculation is that every unique calculation situation will decide the
shape of a specific calculation. This is why every situation in which calculation is performed should
include relevant economic consequences.

Even though all relevant economic consequences should be included in every calculation situation, it
is not always possible to do so because of the complexity of the factors affecting the calculation. As a
result, many product calculations have been simplified. Users of simplified calculation methods put
more focus on factors that provide relevant financial implications, in other words, factors which are
economically important.

One example of companies, which adopt advanced calculation systems, can be found in the retail
industry. What companies in the retail industry have in common is that they are the end of the
supply and have a great deal of different products; therefore, they apply advanced control system to
be able to monitor sales and determine key ratios of their vast supply of products. The control
systems are advanced in the way that they keep track of a wide range of products but the calculation
methods are simplified in order to cover all of the products in the assortment range.
Method

This chapter starts with a description of the research method of the study. The chapter is focused on
describing the methods used to collect empirical data. The empirical data is later analyzed with an
activity-based method of costing presented in the theoretical findings. The result of the analysis is
compared to the result of the analysis is compared to the result of a gross margin based method of
costing.

Conclusions

This first part of this chapter discusses the result of the analysis and addresses the purpose of the
study. The second part highlights some of the problems identified in the analysis and presents some
suggestions to address the problem. The chapter ends with some suggestions for further research.

The gross margin approach, which is a common method of calculating the margins in the retail
industry, is a suitable method when calculating the margins of goods that do not include value-
adding activities. This case study shows that the gross margin method can be misleading when the
objects of calculation are products that require value-adding processes; hence more indirect costs.

The case study analysis was made with an activity based approach. The activity based approach
made it possible to see how different products consume different amounts of indirect resources of
the store. By using the activity based approach new costs were identified that had not been related
to the bakery before.

The gross margin approach showed an outstanding margin of the bakery of 46 percent, but it did not
include any indirect costs. The margin acquired by using the activity based approach shows a
negative margin of 6 percent.

The main reason for the different result of the two methods is that one of the methods includes
indirect costs and one does not, the difference in result is most evident in the paste product group
where the gross margin method shows a margin of 48 percent and the activity based method shows
a negative margin of 12 percent.

Source: https://gupea.ub.gu.se/bitstream/2077/26518/1/gupea_2077_26518_1.pdf

B. Competitive Dynamics In The Irish Bakery Industry

Abstract

This dissertation explores a stream of research within Strategic Management called Competitive
Dynamics. The aim of Competitive Dynamics research is to develop empirically robust predictive
models of how organizations compete through an analysis of the actual competitive actions they
undertake. The early research into competitive dynamics allowed researchers to develop accurate
descriptions of the manner and context of how competitive actions across various industries and
services occurred. The early research then developed into explorations of the factors that influence
the decisions made by managers and business owners. Such factors as resource endowment,
organizational size and age all play influential roles in the decisions manager make with regard to
competitive strategies and actions. This dissertation attempts to explore the manner in which senior
managers of Irish bakeries develop mental models of the competitive environment, what motivates
them to engage in competitive activity and what capabilities their organization possess to engage in
competitive actions. The Awareness-Motivation-Capability model (AMC) developed by Chen (1996)
is a framework on which research into the competitive cognitions of managers can be formulated
and a focus of this dissertation. The influence of the resources an organization possesses and the
strategic group it is part of all influence the awareness, motivations and capabilities of the
organization’s decision makers. The author through this research has developed a model of
competitive dynamics that also incorporates the Resource Based View of the Organization. The
author through this research process has also identified a new aspect of competitive dynamics that
the author has referred to as the transmission or conduction of competitive tensions from one
strategic group to another and across industries

Introduction

Overview of Competitive Dynamics Research

A vital element of strategic management research for a number of decades has been to try and
understand and predict the competitive behaviors of firms. Competitive dynamics research is the
study of the series of competitive moves and counter moves organizations engage in with the aim of
enhancing profitability, market share or industry position and ultimately firm performance (Ferrier,
Smith & Grimm, 1999). By studying the series of competitive interactions organizations use and the
resulting counter moves by competitors, competitive dynamic research scholars aim to identify
commonalities that can help predict the type, level, range and scope of competitive actions. Within
the study of competitive dynamics a central theme to have emerged from the literature has been
the analysis of competitors and also to develop the ability for organizations to identify competitors.
Competition is a fact of everyday business but with the rapid development of technology and the
increasing pace of globalization, businesses are now faced with ever higher and intense levels of
competition. The traditional strategic management models that allowed businesses to frame
corporate and business level strategies now have to deal with the impact of hyper-competitive
markets where the actions of competitors to try and whittle away a firm’s competitive advantage
(D’Aveni, 1995) is ever present. The area and processes of competition have been addressed by the
fields of industrial economics, analysis of industry structures (Porter, 1980) and more recently by
Game Theory (Branderburger & Nalebuff, 1996). Competitive dynamics research on the other hand
is a relatively new area of research that focuses on the series of actions and reactions of competitive
firms and how this interplay of empirically measurable actions affect firm performance as opposed
to the purely logical modelling of potential outcomes derived from the formerly mentioned fields
(Chen & Miller, 2012). The roots of competitive dynamics as a research area can be traced back to
the early works of Josef Schumpeter and then later by the Austrian school of economics.
Schumpeter’s theory of creative destruction essentially describes how all firms that earn above
normal profits or are industry leaders are exposed to the pressures of competition and innovation.
The persistence and consistency of competitive pressures on organizations was described as a
“perennial gale of creative destruction”. Schumpeter’s main argument was that no firm was safe
from the pressures of competition and that for any organization to try and maintain its position as an
industry leader it must understand the consequences of its competitive actions and the resulting
reactions of competitors (Schumpeter, 1934). The main focus of competitive dynamics research has
been on the analyses and study of the competitive moves between a focal firm and its competitor.
This dyadic approach to understanding competitive behaviors is a key attribute of the current
competitive dynamics research. An emergent strand of competitive dynamics research has been
with focus on antecedent cognitive workings within the management teams in how they generate
perceptions of the competitive forces their businesses face. The Awareness- Motivation- Capability
model (AMC) within the competitive dynamics literature as described by Chen (Chen, 1996, Chen,
2007) examines these three key variables that influence the competitor’s actions and possible
responses. In general the model examines how management teams perceive the competitive
environment they are part of and how this influences the firm’s choice of competitive moves.
Objectives of this Dissertation

The aim of this dissertation will be to gain an insight into how senior managers of a number of Irish
bakeries perceive the competitive environment their businesses form part of, what motivates them
to engage in a single or series of competitive actions and what capabilities they possess to engage in
a particular competitive move. By using the AMC model as a framework and structure by which to
investigate these key drivers of competitive activity, the author wishes to investigate the tools and
methods’ used by Irish bakery managers in generating perceptions of its competitive environment by
looking at the mechanisms they use to stay aware of competitors’ actions, understanding the
reasons and motivations behind conducting a series of competitive moves and what resources and
capabilities they possess relative to the organizations size and age. The reason for the author’s
choice of the bakery industry as a subject area for research is due to a number of factors. These
include: 1. The author has worked in the bakery industry in Ireland for approximately 15 years and
has strong trade knowledge and an understanding of some of the challenges the bakery industry in
Ireland faces. 2. The author is a qualified baker and bakery technologist with access to a number of
senior managers in bakeries through the country. This facet could provide some insightful and useful
data that can help bakery managers with their formulation of competitive actions. 3. To the best of
the authors knowledge there is currently no existing literature that has examined the cognitive
process of Irish bakery management teams in relation competitive action formulation.

Research Methodology

Introduction

The aim of this chapter of the thesis will be to explain the design and the methodology of the data
collection process. The intention of this methodology chapter will be to set out how and why the
author has chosen the methods he has for the research on competitive dynamics within the bakery
industry in Ireland. This thesis aims to be a set of comparative case studies of how bakeries in Ireland
form perspectives of the competitive landscape, what motivations elicit initiation of a competitive
actions and if the stock of resources the company currently possesses influences the competitive
actions chosen.

The author will first state the objective of the empirical research, the author will then set out the
design of the research activity, how it will be conducted and the rational for doing so, how the
author identified the cases that were chosen, the process of collection of the data and the analysis of
the data. The author will also address the underlying philosophical, ethical considerations of this
research.

Chapter Conclusions & Summary

The overall aim of this chapter of the research dissertation is to outline to the reader the rational of
the methodology undertaken in this research. The author has addressed what research is and why it
important. The author has also further defined the role of qualitative research and its relevance to
this dissertation.

The author then explored the varying philosophical views of research and how the choice of
approach would influence the design and planning of this dissertation. Accordingly the most suitable
approach to this research would be through the use of a subjectivist’s perspective due to the
intrinsic properties of competitive dynamics research and its historical roots in the subjectivist’s
approaches of the Austrian school of economics.

The author then set out the proposed design of the research with Fig. 7 showing a descriptive model
of how the research would be conducted. The author set out his rational for choosing a case study
analysis of a number of different bakeries and why he felt this was an appropriate method of
research for this dissertation. The researcher then lay out how the samples were chosen. This was
based on the need to gain a range of perspectives from the bakery community and those with
varying scales of resources available to them to conduct competitive actions. The criteria for
choosing the samples that the researcher did were lay out in this chapter as well.

The final part of the research methodology chapter described the range of questions that were to be
asked in open ended interviews with the managers of the organizations that were chosen. The
author also gave consideration to any potential ethical issues that may have emerged during the
research process. Up to the point of writing this dissertation, so such issues were identified.

Source: http://trap.ncirl.ie/2034/1/davidcoghlan.pdf

C. Pre-Feasibility Study (Bakery and Confectionery)

Introduction to Scheme

‘Prime Minister’s Youth Business Loan’, for young entrepreneurs, with an

Allocated budget of Rs. 5.0 Billion for the year 2013-14, is designed to provide

subsidized financing at 8% mark-up per annum for one hundred thousand

(100,000) beneficiaries, through designated financial institutions, initially by the

National Bank of Pakistan (NBP) and the First Women Bank Ltd. (FWBL).

Small business loan up to Rs. 2 million with tenure up to 8 years inclusive of 1

year grace period, and a debt : equity of 90 : 10 will be disbursed to SME

beneficiaries across Pakistan, covering; Punjab, Sindh, Khyber Pakhtunkhwah,

Baluchistan, Gilgit Baltistan, Azad Jammu & Kashmir and Federally Administered

Tribal Areas (FATA).

Executive Summary
Bakery and Confectionery business is growing in both urban and semi-urban

areas. This pre-feasibility study encompasses the bakery business located in

commercial neighborhood surrounding and middle income residential localities.

Major products include cakes, snacks, sweets, nimko, biscuits, bread and

general confectionery items, which will be sold to target customers of the vicinity.

The sales outlet will be supported by an in house production facility. Selections of

adequate product mix and business location, supported by marketing efforts are

the critical success factors.

This Bakery & Confectionery business will be started as sole proprietorship with

an investment of Rs. 2.04 million. This project is based on 90% debt and 10%

equity ratio. Projected NPV, IRR and Payback of this project are Rs. 8.29 million

51% and 2.77 years respectively. The business will provide employment

opportunity to 06 individuals including the owner manager.

Brief Description of Project & Product

The proposed Bakery and Confectionery shop is a small scale project with a

production area and sales out-let. It will be equipped with basic machinery and

fixtures. The production area will require covered area of 2,700 sqft and the

outlet will be established on 900 sq.ft. The sales outlet will remain open for

business for 16 hours per day around the year.

Product mix will include cakes, snacks, sweets, nimko, biscuits, bread and

general confectionery items. This merchandise will be prepared and acquired

according to the demand of local customers and in quantities directly proportional

to expected sales.

Maximum sales are expected during Eid seasons and in winters. First year

revenues of the project are estimated to be Rs 11.24 million. It is expected that

production growth rate will be 5% per annum along with 10% per annum increase

in sales price.

Critical Factors

 Background knowledge and experience of the entrepreneur in the bakery

business.

 Induction of trained human resource for production of requisite items.

 Maintenance of quality and hygiene standards.

 Pricing strategy & understanding requirements of the target customers

 Decor presentation and layout of the shop and products.

 Location considerations for easy access of the customers.

Installed & Operational Capacities

As mentioned, the sales of bakery items are 70 % of total sales revenue. The

installed capacity of bakery depends on the variety of the products being

produced. Installed capacity of major production items is cakes 23,785 pounds,

40,470 pieces of snacks, 6,035 kgs of sweets and nimko, and 5,325 kgs of mixed

biscuits.

Starting capacity utilization is 70% of the installed capacity growing at the rate of

5% per annum.

Potential Target Market

Areas having presence of middle income groups in the smaller cities will be an

ideal location for opening sales outlet of the business. Ideally, production facility

of the workshop should be located alongside the sales outlet; however, if the

rental costs are a constraint, production facility can be established at a distant

economical location. In such a case, higher transportation costs may need to be

factored in.

Smaller cities with growing middle income group such as Sargodha, shekhupura,

Gujrat, Sukkur, Hyderabad, Nowshehra, Charsadda, Quetta, Khuzdar and Gilgit

are some of the prospective cities for setting up this business.

Project Cost Summary

A detailed financial model has been developed to analyze the commercial

viability of Bakery and Confectionery business under the ‘Prime Minister’s Youth

Business Loan’. Various cost and revenue related assumptions along with results

of the analysis are outlined in this section.

The projected Income Statement, Cash Flow Statement and Balance Sheet are

attached as annexures.

 Project Economics

All the figures in this financial model have been calculated for estimated sales of

Rs. 11.24 million in the year one. The capacity utilization during year one is

worked out at 70% with 5% increase in subsequent year’s up to the maximum

capacity utilization of 95%.

Project returns are based on the margins of the items sold. Profitability of the

business is highly dependent on raw material cost. Moreover, in bakery or food

item businesses the probability of wastage is higher, hence the reduction of

wastage through demand and supply analysis will play a vital role in profit

maximization. In this regard, efficient supply chain management will be an

appropriate strategy for this venture.

Another crucial factor for the success of this project is to maintain the hygienic

standards and clean environment to avoid customer complaints.

 Space Requirement

The space requirement for the proposed bakery and confectionary unit mainly

includes the production hall, store room and a retail outlet. For this purpose it is recommended that
a rented place of maximum 3,600 sqft (i.e. 2,700 sqft for

production space and 900 sq.ft for outlet) would be acquired on rent basis in the

vicinity of newly developing housing societies in the major cities. The production

space and bakery outlet could be acquired at separate places. However, it

should be ensured that both the facilities are located closely for easy supply of

produced goods to the outlet.

 Machinery and Equipment Requirements

The required machinery is easily available in the local markets. Used and new

machinery can be purchased from different whole sale markets including Lahore,

Karachi, Peshawar, Gujranwala, etc. These requirements are based on the

proposed production plans as mentioned elsewhere.

 Furniture & Fixtures and Other Equipments

In addition to the above plant machinery and equipment, following necessary items will be required
for the proposed venture.

 Human Resource Requirement

The owner of the business is recommended to personally manage the operations of the proposed
venture. Additionally, Above HR composition shall be engaged in order to manage the operational
affairs of this project under the supervision of the owner, Appropriate experience for chef and
salesmen would be required.

 Utilities and Other cost

An essential cost to be borne by the company is the cost of electricity and gas.

The electricity expenses are estimated to be around Rs. 50,000 per month,

Whereas, gas expenses are estimated to be Rs. 500,000 / year (including both

Natural gas and LPG at 100% capacity utilization). Considering the non

Availability or low pressure of natural gas alternate burning fuels i.e. LPG, wood

or kerosene oil may need to be considered. Advance procurement of raw

Materials and packing material for at least 03 days along with 02 days finished

goods stock level will be maintained for uninterrupted sales of goods, at the

production and outlet facility

Source: http://www.smeda.org/index.php?
option=com_phocadownload&view=category&download=923:bakery-confectionery&id=99:food.

2.2.2 RELATED STUDIES

LOCAL STUDIES

A. Feasibility Report on Bakery and Confectionery

Introduction

This particular feasibility is regarding “Bakery & Confectionery” The project feasibility may form the
basis of an important investment decision and in order to serve this objective, the document/study
covers various aspects of project concept development, start-up, production, marketing, finance,
business management.

Steps Considered Before Investments

 Number of customers

 Cites and area of country

 Potential of customers

 Selection of right location

 Project Brief

Major products in this case would be cakes, snacks, sweets, biscuits, bread and general items

A combination of 2 outlets, one in a low-income area and another in a posh area, is used in this
study along with 27% sales to other bakeries at trade discount of 15 %.
Project Capacity

Project Capacity cannot be based on machinery capacity. The proposed bakery outlet will be working
from 6.00-am morning to 12.00 midnight. These outlets determine the factory timing for production.
It is proposed that 2shifts are necessary for production. For the proposed project, oven of 7x7x10
feet with 8 rotating stands having 5 trays on each stand is used. So the oven capacity will be: 60-kg
biscuits in 30 baking minutes at a temperature of 150 degree centigrade. 120 pieces of large Pizza in
20-25 minutes at a temperature of 150 -180 degree centigrade. Number of working days has been
taken as 365 with average 2 shifts per day.

Conclusion

This study is conducted about making products in the bakery. Using machinery in making breads,
biscuits, snacks and general items could help the owner lessen the expenses for the salary that may
be given to the workers. But the variable cost for the electricity and other utilities expense may be
higher than the normal rate.

Source: http://www.slideshare.net/nakulagrawal11/feasibility-report-on-bakery-confectionery

B. Veggie Bread

Introduction

A healthier variety of breads are what we are in the cognizance. For this brand perception that we
formalize we would like to linger the interest of the buyers and also the consumer with our version
of Veggie Breads. We would like to introduce varieties of flavors that consumer that would not
normally taste with the following flavors that we would like to propose: malunggay (horseradish),
ampalaya (bitter gourd), talong (eggplant), kamatis (tomatoes) etc.

Nowadays, people would choose an artificially made food product that has a less healthy nutritional
content over the conventional foods that is said to be “good for our health” that is available in the
market. Promoting a healthy and convenient way of eating by introducing varieties of Veggie Breads
to the public consumers would also benefit not just the consumers with the health nutrition content
it have but also helps the Filipino farming industries in the country as well.

Background of the Study

We make this product proposal for the purpose that we want to serve our valued customers in a
new product dishes that we give them a healthy food that will enjoy not only for adults but also for
the young ones. We add special ingredients for our product such as malunggay. We would like to
introduce varieties of flavors that consumer would not normally taste of the bread. Nowadays,
people would choose an artificially made food product that has a less healthy nutritional content
over the conventional foods that is said to be a “good for your health lifestyle” that is available in the
market. Promoting a healthy and convenient way of eating by introducing varieties of Veggie Breads
to the public consumers would also benefit not just the consumers with the health nutrition content
it have but also helps the Filipino farming industries in the country as well they will encourage.

Statement of the Study

This feasibility study is intended to evaluate the feasibility of selling “bread” with vegetable flavored.

Specifically, it aims to evaluate and analyze the following areas:

 The Technical aspect of the study

 Product Description
  Product Process

 Equipment/Materials

 Plant Location

 Plant Lay-out

 The Marketing aspect of the Study

 General Business Condition

 Competitive Condition

 Target Market

 Demand

 Product

 Pricing Strategy

 Promotion

 Packaging

 The Financing aspect of the study

 Capitalization

 Sources of Funds

 Total Sales

 Total Expenses

 Income Statement (5years projected)

 Balance Sheet (5years projected)

 Cash Flow Statement (5years projected)

 Return on Investment

 Ratio Analysis

 The Management aspect of the study

 Form of Ownership

 Structure

 Job Analysis

 Company Policies
  The socio-economic aspect of the study

 Contribution to the government

 Contribution to the society

Conceptual Framework

The technical study of the project comprises product description, product process, equipment and
materials, plant location and plant layout. In this area, it discusses on how the product “Veggie
Bread” is produce, what ingredients and equipment’s are needed, and where will the researchers
going to put the said business and its layout.

The marketing study covers the general business condition, competitive condition, target market,
demand, supply, product, pricing, strategy, promotion, and packaging. This area talks about the
structured questionnaire floated to the respondents and the result determines the demand and
supply and for the researchers to know whether their product will penetrate the target market.

The financial study shows the capitalization, sources of funds, total sales, total expenses, income
statement, balance sheet, cash flow statement, return on investment, and ratio analysis. This area
discusses if the business is profitable or not. In addition, it serves as a guide for the researchers to
know if the transactions within 3 years are increasing.

The management study shows the form of ownership, the structure of the business, job analysis and
company policies that the researchers had formulated.

The socio-economic study shows the contribution of the study to the government and to the society.
This area proves that the business existed not only for profit purposes, but also for the improvement
of the welfare of the people.

Sources and Methods of Collecting Data

The researchers have gathered data through the primary data. The primary data gathered by giving
away a structured questionnaire to selected students in different departments of Capitol University.

Technical Study

This study discusses about the process of production and the activities of the business. It states also
the machineries and equipment used in production and other aspect regarding bringing the raw
materials into finished products ready for trade. Plant layout, size and structures are all presented
for the purpose of identifying the business operation. Also product specifications the product
processes using the flow chart. The list of machinery, tools and equipment are enumerated with
their corresponding cost, raw materials and plant fund sources are also cited.

General Business Condition

All bakery products and ingredients thereof shall be stored, handled, transported and kept so as to
protect them from spoilage, contamination, disease and unwholesomeness. Boxes and other
permanent receptacle or containers for the storing, receiving or handling of bakery products shall be
so placed and constructed as to be beyond the reach of contamination from streets, alleys and
sidewalks and from animals and shall be kept clean and sanitary by the bakery.

There shall not be used in bakery products or in the ingredients thereof any ingredient or material,
including water, which is spoiled or contaminated or which may render the product unwholesome,
unfit for food or injurious to health.
Every room used for the manufactured of flour or meal food products shall have the furniture in a
clean and sanitary condition, and screened against flies, shall have plumbing and drainage facilities,
together with suitable wash basins, wash sinks and toilets or water closets, which shall be kept in a
clean and sanitary condition. The said toilets or water closets shall be in rooms having no direct
connection to any room in which bakery products or ingredients are prepared, stored handled or
displayed.

In connection with every bakery, suitable room shall be provided for the changing and hanging of
the wearing apparel of the workers or employees, which shall be separate and apart from the work,
storage and sales rooms, and shall be kept in a clean and sanitary condition.

No person shall sit or lounge or be permitted to sit, lie or lounge upon any of the tables, shelves,
boxes or other equipment or accessories used in connection with the production, preparation,
packing, storing, display or sales of bakery products in a bakery.

No live animals or birds shall be kept in any building or part thereof used as a bakery for such
production, preparation, packing, storing display or sale of bakery products.

Before beginning the work or preparing, mixing or handling of any ingredients used in the
production of bakery products, every person engaged in such work shall wash the hands and arms,
and after using toilets or water closets, every person therein engage shall wash the hands and arms
thoroughly and then rinse in the clean water, and for this purpose the owner or operator of the
bakery shall provide sufficient facilities and post notes to this effect.

No owner or operator of a bakery shall require or permit any person affected with any contagious,
infectious or other disease or physical ailment which may render such employment detrimental to
the public health, nor any person who refuses to submit to an examination, to work therein.

Employees shall be prohibited from smoking while preparing and baking veggie bread products.

Product Description

The Veggie bread is made by baking malunggay “horseradish plant” bits in the dough of flour and
water added with flavors. The added malunggay bits in the dough these will serve as invaluable
nutrients added to our breads and have a cheap price and are easy to bargain in the market.

The product will come in four flours and will be sold on differentiated price. Below are the
descriptions of the four proposed bread flavors.

 Peanut Bread – Peanut butter bread with a small amount of chopped roasted peanuts offers
delightfully surprising crunch and with a sliced malunggay minced mixed in the dough to put
a healthy touch to it.

 Ensaymada – Sweet bread is one large snail-like coil dusted in sugar with a sliced malunggay
minced mixed in the dough to enhance a healthy touch to it.

 German Bread - A dense, whole grain loaf with sesame seeds for a dense, moist loaf and
with a sliced malunggay minced mixed in the dough to add a healthy trace to it.

 Croissant – A buttery flaky pastry named for its well-known crescent shape. Croissants are
made of layered yeast-leavened dough with a sliced malunggay minced mixed in the dough
to enhance a healthy touch to it.

Materials and Equipment

  Dough Mixers – A dough mixer is an appliance used for householder or industrial purposes.
It is used for kneading large quantities of dough. It is electrical, having timers and various
controls to suit the user’s needs.

 Oven – An oven is a thermally insulated chamber used for heating, baking or drying of a
substance and most commonly used for cooking. Kilns and furnaces are special-purpose
ovens, used in pottery and metalworking, respectively.

 Roller – The dough roller has the three rolls arranged in a vertical stack and too make a sheet
of rounded dough, gently hands pat a dough ball (or chunk of dough) to flatten it.

 Bread Slicer – A bread slices a larger amounts of bread in the shortest time possible. A slicing
machine will make this job effortless, not to mention the fact that an electric slicing machine
saves you a lot of time.

Marketing Study

This study will help to know the marketing aspect of the business. The marketing aspects will cover
the following: General Business Condition, Tabulation of Results, Target Market, Demand, Product,
Promotion, Marketing strategy, Pricing strategy, Promotion and Packaging.

For the business to prosper, it should be given time and effort. The proponent of this business must
have desired creativity so as to be able to provide quality service its customers. The fulfillment of the
needs and wants of its customers or target market must be the key objective of the recommended
business.

In every project, feasibility marketing aspect is will-thought-out the most important since it requires
inconspicuous analysis of the business total demand and supply.

Marketing Strategy

The first strategy is market penetrate. Veggie bread is committed to improving the customer
experience in ways they believe few in the industry have done.

This business plan to execute a broader marketing strategy, not simply to build name recognition
and awareness but also to build deeper relationship with the target customers whom they believe
will help promote the brand. To reach the target customer group, we use a mix of the following
marketing methods: radio, billboards, social networking, television and in-store sampling. Expect to
continue to increase media impressions as they strive to build deeper relationships with their
customers. We believe marketing represents an opportunity to create additional competitive
advantage and brand awareness.

The next strategy is market development. The expansion into Filipino has made them subject to
Filipino economic conditions, particularly currency exchange rate fluctuations and political factors,
either of which could have an adverse effect on the financial condition and results of operations. If
veggie bread, expands into other foreign markets, will be subject to other foreign economic
conditions and political factors including taxation.

Methodology

This chapter describes and discusses how the researchers will gather the necessary data and
information that will be used in the entire study. It describes who will be the respondents and focus
of the research. This also shows the procedure of source of data and methods of collecting data; the
chapter also discuss the type of research, research design, and the research locale where the study
will be conducted and description for our product and the outlook of the industry and the size of the
industry, target market, market segmentation and presentation, in marketing and sales activities,
detailed of our product and services description that we will going to apply to our business and the
competition in the market.

Source: http://www.slideshare.net/bryanoculam/feasibility-study-veggie-bread

C. Tinapay Festival: Potential Tourist Attraction in Batangas

Abstract

This study was conducted to assess the Tinapay (bread) Festival in Cuenca, Batangas. Specifically,
this research determined the development strategies of community-based tourism in terms of
planning, organizing, directing, and controlling; evaluated the effects of development of community
based tourism Tinapay Festival in Cuenca; proposed an action plan in promoting tourism in Cuenca.

The study used descriptive method with the survey questionnaire as data gathering instrument
which was administered among 100 respondents. The results of the study revealed that the
respondents agreed that in order to achieve the success of the Tinapay Festival, there must be
careful planning, organizing, directing and controlling. Most of the respondents are 60 government
officials and 40 locales who agreed that the community involved and the committee in charge
proved their incomparable teamwork which made the Tinapay Festival successful. They developed
great teamwork through fair distribution of task resulting to respect and trust of the residents.

Introduction

An entire global industry of festivals and events has evolved and developed since the early 1990s.
The phenomenal growth, coupled with increased customer awareness and choice, requires the
industry to manage the sector effectively and efficiently to ensure sustained development and
growth in the future. On a global basis there are unprecedented interests in festivals and events – at
international and national level, in cities and towns, villages and hamlets, and in rural and coastal
areas.

Festivals and events can help promote their destination and attract tourists. They can be viewed as a
new form of tourism in which to anchor economic prosperity and development. The image of a
destination, product or service can be enhanced or damaged by the success or failure of a festival or
event. The characteristics of festivals and events are unique with different levels of operating costs
and they fall into both the not-for-profit and profit-making categories. Their purpose varies. Some
have an entertainment and educational remit and can be used to bring different communities
together while others can be used for business promotion. Some festivals and events can be arts
related, while others can focus on other forms of culture such as sport. They can range from small-
scale, locally based events, to large international festivals (Yeoman et al, 2004).

Cuenca is located in the Southern Tagalog Region. The location of the municipality in relation to Taal
Lake and the rolling steep terrain makes it a potential tourist area. The natural attractions in Cuenca
Batangas can be potential tourist spot destinations due to the human activity to be experienced and
enjoyed by both local and foreign tourist. The different natural attractions which can be found in
Cuenca, Batangas are in Mt. Maculot, a 949 feet in altitude, a man-made tunnels forged along the
mountain slopes, Grotto of the Blessed Virgin Mary a 750 ft. in altitude, cemented pathways going to
14 stations of the cross and 1,500 cemented steps leading downward to Taal Lake shore area in
Barangay Don Juan, (a good view of the Volcano island where beach resorts can be developed).

The Tinapay Festival in Cuenca puts the spotlight on the hardworking bakers or panaderos of the
place, the reason why the town claimed the title “Home of the Bakers”. The festival includes bread
making contests and festive parade to present the finished product of the bakers. It is celebrated
sometime in June, Camo (2013). They showcased development of other people of Cuenca through
the industry. Professionals grew a number from bakeries. “Mega Monay”, “MalakingSemada”,
“MalakingPandesal”, and “PinoyPandesal” were launched and displayed in the parade.

With the cooperation of Municipality of Cuenca, one of the stakeholders, Mr. Luisito Chavez holds
the Tinapay Festival. The municipality planning and development department are the ones who
organize the program to be used in celebration of Tinapay Festival. The owners of the bakeries
sponsor the pastries/breads to be displayed and distributed during the event.

The researchers decided to conduct as a study on Tinapay Festival in the municipality of Cuenca not
only to attract tourists and boost the economy but beyond everything else, it is for the residents of
Cuenca to gain sense of pride in what culture they have and also to be aware about the Tinapay
Festival which is only present in Cuenca.

Objectives of the Study

This study aimed to assess the Tinapay Festival in Cuenca, Batangas. More specifically, it determined
the development strategies of community-based tourism in terms of planning, organizing, directing,
and controlling; evaluated the effects of development of community-based tourism Tinapay Festival
in Cuenca; and proposed an action plan in promoting tourism in Cuenca.

Method of Research Design

The researchers made use of descriptive method in the study to assess the Tinapay Festival in
Cuenca. Descriptive Research Design is a valid method for researching specific subject as long as the
limitations are understood by the researchers (Shuttleworth, 2008).

Conclusions and recommendation

The respondents agreed that the activities during Tinapay (Bread) Festival had reliable planning,
organizing, directing, and controlling. The effects of Tinapay Festival are the tourism revenue
generated by the event and this will also result to boosting tourism in Cuenca. The proposed plan if
implemented will surely make the Festival successful.

For the Municipal Planning and Development Department, they should motivate the people to take
part in celebrating this festive planning and safe flow of Tinapay Festival. The local government of
Cuenca may be open to possible investors for the place to be promoted widely all over the
Philippines or around the world in order to increase our local and foreign tourist. The Municipal
Planning and Development Department involved should formulate and implement some promotions
for the Tinapay Festival for there are still localities in Cuenca who are not aware in their participation
of Tinapay Festival in Cuenca, Batangas. The Department of CITHM should spearhead and participate
in the celebration of Tinapay Festival. For the future researchers, a similar study may be conducted
using another set of variables.

Source:
http://www.academia.edu/7311088/Tinapay_Festival_Potential_Tourist_Attraction_in_Batangas_Ph
ilippines