BUKO SARAP

Dr. Yanga’s College Inc.

Wakas, Bocaue Bulacan

College of Accountancy

Principles

Of

Marketing

By:

Jesika Mae M. Tendero

Christine Joy D.G. Custodio

Liza T. Salamat

I. Executive Summary

Buko Sarap is a food cart started by enterprising friends namely Christine, Liza and Jesika. It

guarantees quality of a 100% natural juice. Buko Sarap discovered a system that extracts buko

juice in a systematic way wherein the buko is extracted and chilled in a hygienic manner keeping

its freshness and natural elements. Because of the countless benefits of buko, Buko Sarap will

certainly address the needs of people who are health conscious. We solve the problem of

answering to the demand of Buko Juice in a hygienically and modern way, which consist in

chilling the juice soon after it was extracted without needing to add ice or cold water. Buko

Sarap also introducing our freshly blended Buko Shake a new choice to those People who have a

healthy life by offering 100% pure and natural buko meat, on the other hand the fact of

extracting the juice in right moment it guarantees the quality of our products through a new

technology that also allows the conquest and settlement of large sections in the market such as:

shopping center, supermarkets, schools, metro stations and so on. Pioneering is the right word for

this system which consists in extracting, chilling the buko juices hygienically and safely, keeping

its natural properties. This system also favors a practical way of dealing with a product that was

formerly available to consumers only in a marginal way. "ISANG BUKO KA LANG" that is

BUKO SARAP!

II. Company Profile

Mission

The Buko Sarap aims at satisfying the tastes and needs of its consumers in the Filipino

society. The efforts of the Buko Sarap are focused on bringing the most distinctive and

innovative products to the market in Philippines. The main concern of the business is the health

of its customers and thereby it strives to serve hygienic and healthy food along with taste and

quality.

Vision

The motto of the Buko Sarap is “WHAT YOU SEES IS WHAT YOU DRINK”. The vision

is to attain the number one position in providing quality food with international standards, taste

and freshness. The Buko Sarap aims to be a leader in the area of ethics and values in the

continuously growing food industry in the national and international markets.

III.Current Marketing Situation

Competitive Profile Matrix

Our main competitors in this segment are any food outlets within the 300 meter radius along the

Mall. In our location, there are Fruitas, Zagu, Buko Express.

FruitasIn 2002, when Lester Yu put up Lush Corporation a company that serves fresh fruit juices and

other healthy refreshments he knew he would someday go beyond servings drinks. Fruitas is

locally owned franchise who sells Fresh fruits shakes. Fruitas had expanded its operation

nationwide.

ZaguZagu introduces the “Pearl Drink” to the Philippine market. The drink’s uniqueness and the

variety of flavors it offers broaden its appeal to the customers and keep them interested. Taste

and flavor is the essential component, keeping customers coming back for more.

Buko Express

Buko Express is one of the significantly emerging food cart concepts in the market today. Buko

Express starter as an offshoot of Sonia Buko and Native Kakanin Express chain of food carts that

started in 2005 by an enterprising couple.

Porter’s Five Forces Model

HIGH

LOW LOW

HIGH

LOW

Threat of New Entry

The threat of new entrants is HIGH because the product in prone on imitation. Also,

nowadays, entrepreneurs are aiming for product innovation that mainly draws more customers.

Competitive Rivalry

The rivalry among competing firms is LOW because competitors are inconsistent in

identifying our strategy on how to keep the buko in its natural properties which we called

pioneering. Also, our pricing is in consideration.

Buyer Power

The bargaining power is LOW because even though customer switching costs are nearly

zero, the Buko Express does not worry about loyalty because most Filipinos loves the natural

taste of buko especially those who are health conscious.

Threat of Substitution

With so many firms in the quick service, low switching costs, similar products, and

healthier options, the threat of substitutes is HIGH.

Supplier Power

The bargaining power of suppliers is LOW because there are thousands of suppliers of

buko to choose from and select theirs through a competitive bid process. We can switch suppliers

easily and tend to make up a large portion of the supplier’s revenue.

IV. Marketing Mix Analysis

Product and Price

Place

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

5 years after

Promotion

Social Media, Samples and coupons, creative and attractive packages

People

Competence:They possess the required skills and knowledge. They are courteous, friendly, respectful, and considerate with credibility. They are trustworthy, reliable and perform the service consistently and accurately.Responsiveness:They respond quickly to customer requests and problems;

Trained people who can serve their customer in an excellent manner.

Physical Evidences

The outside of the package will attract a first-time buyer; the quality of food will bring buyers

back and purchase more, and also the place where our business is located.

Personalization

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

their loyalty.

V. Comparative SWOT Analysis

SWOT BUKO SARAP Competitors

STRENGTHS

Brand Strengths And

Uniqueness

Product That Tend To Make

Consumers Lifestyle Healthy

Strong Existing Distribution

Channel

Leading smoothie

brand

Consistent growth

Distribution

channels

WEAKNESSES

Lack Of Product Awareness Availability Of Coconut

Juice

Low customer base

OPPORTUNITY

Introduction Of Buko Sarap

Brand Is Attractive To

Consumers

Increase market

share

Emerging markets

Increase product

range

THREATS

Growing Number Of Competitors

Downward Price Pressure

Large Number Of Indirect Competitor

Changing customer

tastes

Brand susceptibility 

BUKO SARAP SWOT

Strengths

BRAND STRENGTHS AND UNIQUENESS – The Company’s brand name is original and attractive to the customers.

PRODUCT THAT TEND TO MAKE CONSUMERS LIFESTYLE HEALTHY – The product contains nutritional benefits to the customers.

STRONG EXISTING DISTRIBUTION CHANNEL – This kind of product usually distributed through stall or carts.

Weaknesses

LACK OF PRODUCT AWARENESS – Though the product is new, it may fail to create the proper awareness towards the target customers.

AVAILABILITY OF COCONUT JUICE – Philippines climate is suitable for the coconut juice. So people can collect juice easily. So it is the weakness of our product to commercialize.

Opportunities

INTRODUCTION OF BUKO SARAP – The Company added some innovations and twist that we want to share or introduce to the target market.

BRAND IS ATTRACTIVE TO CONSUMERS – The product’s unique name seems to be attractive to the consumers.

Threats

Growing Number of Competitors - As the r e i s a g rowth v i s i b l e i n t he beve rage industry, many multinational and national companies are entering in the market to serve the customers. To survive in the industry, Buko Sarap has to face the threats created by these new entrants.

Downward Price Pressure - Increased competition and market-share strategies are perusing beverage companies to decrease their prices. So the profit margin is very low in here.

Large number of indirect Competitor - In the coconut juice, there are lots of indirect competitor. Lots of coconut sellers are available all around. It is easy to collect coconut and its juice. So these coconut sellers are the main threats of our product.

Competitors SWOT

Strengths Leading smoothie brand –It has established itself as a premium brand by charging

premium prices above its other similar specific competitors based on its unique selling point.

Consistent growth – “Philippines fastest growing fruit & shakes smoothies business” Distribution channels – They are currently stocked in over hundred retail outlets

including larger supermarket chains.

Weaknesses Low customer base

Opportunity Increase market share - The market operates in is still growing as more and more

consumers are becoming cautious of the effects of processed goods. This is a clear opportunity for them to cease more of the market.

Emerging markets – Expansion. Increase product range – i.e. vegetable, dairy and whole grain products.

Threats Changing customer tastes i.e. product range/variety becoming repetitive. Brand susceptibility – As the company grows the brand’s values are subject to greater

scrutiny 

VI. Objectives

Our objective is fully professionalized and we have the target to provide service in a

familiar atmosphere and with greater warmth.

To create a strong product awareness.

To provide fun, delicious, appetizing and healthy buko juice while maintaining the

commitment to our consumers.

To achieve an increasing number of loyal consumers.

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

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

VII. Operating Plan

Facilities & Offices

The cart will be at a mall. The licenses and codes' issues are all in order. New equipment will

be purchased and installed by the general contractor.

Hours of Operation 

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

Employee Training & Education

Employees will be trained not only in their specific operational duties but in the philosophy

and applications of our concept. They will receive extensive information from the chef and be

kept informed of the latest information on healthy eating.

Systems & Controls

A big emphasis is being placed on extensive research into the quality and integrity of our

products. They will constantly be tested for our own high standards of freshness and purity. Food

costs and inventory control will be handled by our computer system and checked daily by

management.

Food Production

Most food will be prepared on the premises. The kitchen will be designed for high standards

of sanitary efficiency and cleaned daily. Food will be made mostly to order and stored in large

coolers in the basement.

Delivery

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

and stocked.

VIII. Management Plan

Jesika Mae Tendero, Christine Joy Custodio, Liza Salamat | Owner 

Owners is extremely dedicated and motivated to creating a thriving healthy drink and feels confident in succeeding based on her well-rounded experience, established sound vendor and customer relationships, and strong work ethic.

Owners are graduated from DYCI batch 2014 with a bachelor's degree on Accountancy and Board passers of batch 2015.

Personnel Plan

The personnel plan is included in the table, below. In addition to the owner, there will be one part-time (30 hours/week).

Employees of Buko Sarap will be paid competitively and will receive in-depth store training. Additionally, employees will receive special store benefits including:

30% Store Discount Special monthly bonuses as sales goals are met Paid Holidays Paid Time Off (PTO) based on # of hours worked

Our philosophy is to empower our staff to do the best they can and give them the freedom to do so. Inevitably, they will make mistakes and if they don't make mistakes, they don't learn. I will lead by delegation but I won't let "hang themselves”. We will provide appropriate objectives, guide them throughout the process (utilizing Management by Objectives) and help them make decisions based on the company philosophy. I believe in recognizing good work and letting my staff know that I value and appreciate them when a job is well done. I have confidence my philosophy will not only attract smart and loyal employees, but also develop strong mutual respect, as they will feel that their ideas are valued and that they are respected.

Year 1

Owners ₱20,000

Personnel ₱11,000

Total People 5

Total Payroll per month ₱31,000

Total Payroll per year : ₱ 31,000 x 12 months = ₱ 372, 000

IX. Financial Plan

Start-up Funding

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

Start-up Funding

Start-up Expenses to Fund ₱ 40,000

Start-up Assets to Fund ₱ 65,000

Total Funding Required ₱ 105,000

Assets

Cash Requirements from Start-up ₱ 50,000

Additional Cash Raised ₱ 55,000

Total Assets ₱ 105,000

Liabilities and Capital

Liabilities

Current Borrowing ₱ 0

Long-term Liabilities ₱ 0

Accounts Payable (Outstanding Bills) ₱ 0

Other Current Liabilities (interest-free) ₱ 0

Total Liabilities ₱ 0

Capital

Planned Investment

Jesika Mae Tendero ₱ 35,000

Christine Joy Custodio ₱ 35,000

Liza Salamat ₱ 35,000

Additional Investment Requirement ₱ 0

Total Capital ₱ 105,000

Total Capital and Liabilities ₱ 105,000 

Sales – Buko Sarap is basing its projected sales on the assumption that the first unit will open on July 1, 2020. We have projected sales on the low side using 100,000 per year per cart. We did not factor in any sales growth for subsequent years.

Cost of Goods Sold -- The cost of goods sold was determined by taking actual Profit and Loss statements from various food business concepts and then using our pricing structure and guest counts to arrive at costs.

Management Payroll -- Figures are based upon the use of five managers per unit at our maximum bonus and salary levels. If we use four managers per restaurant, this will lower our payroll.

Fixed and Variable Expenses -- The various fixed and variable expenses were determined by taking actual numbers from several different restaurant concepts.

Marketing Fees -- These funds will be used for the production of various marketing materials.

Advertising -- These funds will be used, if necessary, to maintain our sales at projected levels. If we are running significantly ahead of our sales projections, then these funds may not be necessary.

Management Fees -- We will use these pesos for accounting and payroll services of our firm. As we grow in size, this cost burden will shrink per store due to efficiencies in volume.

Important AssumptionsThe financial plan depends on important assumptions, most of which are shown in the following table as annual assumptions. The monthly assumptions are included in the appendix. Interest rates, tax rates, and personnel burden are based on conservative assumptions. Some of the more important underlying assumptions are: We assume a strong economy, without a major recession. We assume, of course, that there are no unforeseen changes in consumers' tastes or interests

to make our concept less competitive.

General Assumptions

Year 1 Year 2 Year 3

Plan Month 1 2 3

Current Interest Rate 10.00% 10.00% 10.00%

Long-term Interest Rate 10.00% 10.00% 10.00%

Tax Rate 25.42% 25.00% 25.42%

Other 0 0 0

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

Break-even AnalysisVARIABLE COSTS

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

ANNUAL FIXED COSTS1. ₱ 30,000 - Management salaries.2. ₱ 37,000 - Management payroll taxes and benefits.3. ₱ 20,100 - Controllable expenses minus credit card charges and paper/cleaning.4. ₱ 10,200 - Other expenses minus marketing fees, advertising, and management fees.5. ₱ 15,000  - Depreciation.6. ₱ 112,300 - Total fixed costs

Pro Forma Profit and Loss

Month 1 Month 2 Month3

Sales ₱60,000 ₱75,000 ₱100,500

Direct Cost of Sales ₱40,000 ₱45,000 ₱55,000

Other Costs of Sales ₱0 ₱0 ₱0

Total Cost of Sales ₱20,000 ₱30,000 ₱45,500

Expenses

Payroll ₱31,000 ₱31,000 ₱31,000

Marketing/Promotion ₱2,000 ₱2,000 ₱2,000

Depreciation ₱0 ₱0 ₱0

Total Operating Expenses ₱33,000 ₱33,000 ₱33,000

Net Profit (₱11,000) ₱3,000 ₱12, 500