CHAPTER II

MARKET STUDY

Introduction

A market research evaluates the level of demand for a product or service on the market. A
market study looks at every aspect of the market that affects how much of a product or service is
demanded. Factors include price, location, competitiveness, buyer bargaining power, and overall
economic activity.

This study encompasses the following topics: needs, supply, demand and supply gap
analyses, marketing strategies, and projected sales. Finding out what the target market's needs,
wants, and demands are is the primary goal of marketing research, which enables businesses to
make the necessary improvements to their products. The exceptional quality of the product helps
to increase customer brand loyalty to the company.

The connection between supply and demand is important because it allows to establish
the prices and availability of the majority of products and services in a particular market. The
demand for a certain product and who wants to buy it are described by market demand. How willing
buyers are to pay a given price to purchase a particular product or service will decide this. Prices rise as
market demand does as well. Prices will fall in tandem with demand. Knowing what customers want and
giving it to them at a reasonable price will help the company forecast sustainable growth in the future.

q Product Description

Chili Avenue’s products are Chili condiments that aren’t just loaded with spice; they’re also loaded
with nutrients. Other major nutrients you’ll find in chili peppers and chili powder include: Vitamin A,
Iron, and Dietary Fiber. Most Filipinos love spicy food, but they would rather use spicy condiments for
individually decided upon spiciness rather than have the food start off as spicy. This is the biggest
difference between Filipino food and that of the rest of Southeast Asia. That is why Chili Avenue
condiments are made to spice up food according to their customer’s taste preference.
Based on the survey, the majority of the respondents, or 81%, agreed that chili condiments are
healthy for them. Eating chili can cause intestinal distress in some people. The symptoms may include
abdominal pain, a burning sensation in your gut, cramps, and painful diarrhea. This is more common in
people with irritable bowel syndrome (IBS). The proponents want to make a suggestion to their
customers that they can control the amount of chili they use to spice up their food without harming
someone’s health.As a result, they offer chili condiments in a variety of flavors ranging from mild to
hot so that the customers will enjoy consuming the products.

Figure 9

Our Products

Our products consist of different condiments for every filipino dining table. Chili sauce, chili flakes and chili
garlic oil.

Chili Avenue’s chili garlic oil products has 5 different flavors: regular chili garlic, chili lite, chilimansi, sweet and
spicy and adobo flavor. The unique flavors are chosen to for every Filipino’s taste, from regular flavor for those
who loves to eat spicy foods, mild one for those who are not to fond of eating too spicy, adobo flavor that
reflects to filipinos famous dish, spicy and sour flavor for those who are craving, and sweet and spicy for those
in good appetite.

It is sold individually by a Specific sizes of the jar container from small, medium and large sizes. There are also
free taste for those who wanted to try it before buying the products.

q Marketing Strategies
Marketing Strategies

E.1. Product Strategies

Youth of today are fond of eating street foods. This will serve as the competitive

advantage of of our business enable to penetrate to the market. The products of Kalye

Ocho are as follow; Balut (4.51%), Adidas (4.01%), Chicken skin (7.02%), Fishball

(15.79%), Isaw (7.77%), Calamares (14.04%), Kwek-kwek (23.56%) and Pork Barbeque

(23.30%). The products will be cooked in its traditional way in able to maintain the original

taste of these foods. But, presentation will be something different. Kalye Ocho wants to

emphasize the importance of aesthetics, appearance and food preparation enable to

attract customers as well as to achieve customers delight through safe and quality

products. For takeout products it will be packed in a L.O plastic with disposable spoon

and fork.

E.2. Place Strategies

Kalye Ocho will be located in the lower ground of SM Bicutan. Sm Bicutan is

considered to be a strategic location for a business because it lies in the intersection of

Parañaque and Taguig City. Though our scope is within Parañaque City there’s a

possibility that people from Taguig City can also be our customers.

Different high schools and universities such as AICS, DASNHS, PUPT, GCA , Goal

Montessori etc. are all near SMBicutan. The location of the business will be accessible

enough to meet the needs of our target market.

Moreover, the place is also near Bicutan Market, People’s Market and other super

markets where we can have easy access regarding the raw materials that we will be

needed in regular operations and even on emergency operation.

E.3. Pricing Strategies

We used cost plus strategy in order to set the price of our products.

The computation would be:

Purchase Cost + Operating Cost+ mark-up=Selling Cost

E.4. Promotion

Based on the responses on the survey, posters (32.58%), website (31.08%)

and flyers (25.31%) are the top three advertising tools that our customers want us to

use enable to reach them.

E.4.1. Poster

Posters will be placed in our store. The design of the poster can able to catch

the attention of the customers because of the information provided as well as its
aesthetic. Chosen colors are pleasing to the eye and will surely boost the interest of

the customers to eat to our restaurant.

Two (2) posters will be produced which are good for three (3) months.

The computation would be:

No. of pcs X Unit Price X No. of times per month

2 X 150 X 1 = Php. 300.00

E.4.2. Website

We are now living in the modern world and surfing to the internet is one of the

easiest ways to have quick access. The proponents will be using free website in order

to reach wider range of possible customers. This will be of great help for them to know

the concept behind Kalye Ocho. It will also provide good communication relationship

in ways that, we will be giving information and they will be giving comments and

suggestions for product improvements and other concerns

E.4.3. Flyers

Flyers can convey wide range of possible buyers for it can be brought to other

places. The store will produce 200 flyers per day. These flyers will be distributed twice

a week or eight (8) times in a month. Flyers will be given in the first three (3) months

of the business until it will get its loyal customers

The computation would be:

No. of Pcs. X Unit Price X No. of times per month

200 X 8 X 8 = Php.12,800

q Market Segmentation

Market Segmentation

A.3.1. Geographic

 Location : SM Bicutan

 Climate : Wet & Dry

 Barangay : Don Bosco

 Region : NCR

 City : Paranaque City

 Density of the Area : Urban

A.3.2. Demographic

 Age : 10-24 years old

 Gender : Male & Female

A.3.3. Psychographic

 Personality : Curious

 Lifestyle : Outgoing, Adventurous

q Market Positioning///

q Target Market///

q Product Strategy….

q Pricing Strategy….

Promotional Strategy….

q Advertising Strategy///

q Competitive Advantage
The business will have competitive advantage in terms of the products being

sold because street foods are usually eaten along the streets. The difference

between our business and street food vendors is that we assure food safety as

well as food quality.

q Channel of Distribution///

q Demand Analysis

A. Demand

It is very essential to know the demand of our products in order to answer our

customer needs and wants. Knowing the demand will help us to determine the trend

for our products. Analyzing the demand thoroughly will give the projection of the total

number of quantity of each product that we are going to produce daily, weekly,

monthly and annually.

Projected Demand

A.2. Projected Demand A.2.1. For the Industry

The annual increase of demand for the years 2011 – 2015 is based on the annual population growth
rate from 2006 – 2010 by 2.94%. The annual projected demand was obtained by multiplying the market
acceptability which is 83.43 to target population and to the frequency of agreement. Based from the
obtained demand, it was distributed again to every product in order to determine its demand.

The projected demand for industry in 2011 – 2015 is as follows:

Year M.A. Target F.O.A. Annual

Population Demand

2011 83.46 184,189 75 11,529,309

2012 83.46 189,604 75 11,868,261

2013 83.46 195,178 75 12,217,166

2014 83.46 200,916 75 12,576,336

2015 83.46 206,822 75 12,946,023

Table 3
Projected Demand for the Industry

A.2.2. For the Products

It is computed by multiplying the projected annual demand of industry to the
percentage of each product based on the survey.

Projected Demand

Street Balut Adidas Chicken Fishball Isaw

Foods (4.51) (4.01) Skin (7.02) (15.79) (7.77)

Year

2011 519,972 462,325 809,357 1,820,478 895,827

2012 535,259 475,917 833,152 1,873,998 922,164

2013 550,994 489,908 857,645 1,929,090 949,271

2014 567,193 504,311 882,859 1,985,803 977,181

2015 583,866 519,136 908,811 2,044,177 1,005,906

Total 2,757,284 4,451,597 4,291,824 9,653,546 4,750,349

 Street Calamares Kwek- Pork Total
Foods (14.04) kwek Barbeque
(23.56) (23.30)
Year

2011 1,618,715 2,716,305 2,686,329 11,529,309

2012 1,666,304 2,796,162 2,765,305 11,868,261

2013 1,715,290 2,878,364 2,846,600 12,217,166

2014 1,765,718 2,962,985 2,930,286 12,576,336

2015 1,817,622 3,050,083 3,016,423 12,946,023

Total 8,583,649 14,403,899 14,244,943 61,137,095

Table 4
Projected Demand for the Products
q Supply Analysis

Supply

Based on the percentage of the population who already availed street foods from

our survey questionnaire, we determined our past supply.

B.2. Projected Supply

The projected supply will help to determine the total satisfied market or the total number
of customers who availed street foods for five years. It was obtained by percentage of purchases
to the target population with 2.94% growth rate to the frequency of agreement and it was
distributed per product to determine the total satisfied market for every product.

B.2.1. For the Industry

Computation of projected supply for product is the same in past supply per product. It
changed only in the target population based on the annual growth rate of 2.94%
 Polytechnic University of the Philippines
18
FEASIBILITY STUDIES – KALYE OCHO
 Year Percentage of Target F.O.A Annual Past
Purchases Population Supply

2011 79.70 184,189 75 11,009,897

2012 79.70 189,604 75 11,333,578

2013 79.70 195,178 75 11,666,764

2014 79.70 200,916 75 12,009,753

2015 79.70 206,822 75 12,361,470

Table 7
Projected Supply for the Industry

B.2.2 For the Products

Street Balut Adidas Chicken Skin Fishball Isaw

Foods

Year

2011 496,546 441,497 772,895 1,738,463 855,469

2012 511,144 454,476 795,617 1,789,571 880,619

2013 526,171 467,837 819,007 1,842,182 906,508

2014 541,640 481,591 843,085 1,896,340 933,158

2015 557,502 495,695 867,775 1,951,876 960,486

Total 2,633,003 2,341,096 4,098,379 9,218,432 4,536,240

 Polytechnic University of the Philippines
19

FEASIBILITY STUDIES – KALYE OCHO

Street Calamares Kwek-kwek Pork Barbeque Total

Foods Supply

Year

2011 1,545,790 2,593,932 2,565,306 11,009,897

2012 1,591,234 2,670,191 2,640,724 11,333,576

2013 1,638,014 2,748,690 2,718,356, 11,666,765

2014 1,686,169 2,829,498 2,798,272 12,009,753

2015 1,735,550 2,912,362 2,880,223 12,361,470

Total 8,196,757 13,754,673 13,602,881 58,381,461

Table 8
Projected Supply for the Products

q Demand and Supply Analysis

Demand Supply Gap Analysis

This is necessary to determine Kalye Ocho’s market share. The gap or the unsatisfied

market is obtained by subtracting the projected demand to the projected supply which

shows the available market for street foods. It also shows the number of persons whom

we need to supply to answer their demand for street foods. We now show the gap for

every product using the data from projected demand and projected supply.
Table 10 will show the demand, supply and gap per product as well as the overall

Total

Year Demand Supply Gap

2011 11,529,309 11,009,897 519,412

2012 11,868,261 11,333,576 534,683

2013 12,217,166 11,666,765 550,402

2014 12,576,336 12,009,753 566,583

2015 12,946,023 12,361,470 584,553

Street Balut Adidas

Foods Demand Supply Gap Demand Supply Gap

Year

2011 519,972 496,546 23,426 462,325 441,497 20,828

2012 535,259 511,144 24,115 475,917 454,476 21,441

2013 550,994 526,171 24,823 489,908 467,837 22,071

2014 567,193 541,640 25,553 504,311 481,591 22,720

2015 583,866 557,502 26,364 519,136 495,695 23,441

Total 2,757,284 2,633,003 124,282 4,451,597 2,341,096 110,501

Street Chicken Skin Fishball

 Demand Supply Gap Demand Supply Gap
Foods

Year

2011 809,357 772,895 36,462 1,820,478 1,738,463 82,015

2012 833,152 795,617 37,535 1,873,998 1,789,571 84,427

2013 857,645 819,007 38,638 1,929,090 1,842,182 86,908

2014 882,859 843,085 39,774 1,985,803 1,896,340 89,463

2015 908,811 867,775 41,036 2,044,177 1,951,876 92,301

Total 4,291,824 4,098,379 193,445 9,653,546 9,218,432 435,114

Polytechnic University of the Philippines

22

FEASIBILITY STUDIES – KALYE OCHO

Street Isaw Calamares

Foods Demand Supply Gap Demand Supply Gap

Year

2011 895,827 855,469 40,358 1,618,715 1,545,790 72,925

2012 922,164 880,619 41,545 1,666,304 1,591,234 75,070

2013 949,271 906,508 42,763 1,715,290 1,638,014 77,276

2014 977,181 933,158 44,023 1,765,718 1,686,169 79,549

 2015 1,005,906 960,486 45,420 1,817,622 1,735,550 82,072

Total 4,750,349 4,536,240 214,109 8,583,649 8,196,757 386,892

Street Kwek-kwek Pork Barbeque

Foods Demand Supply Gap Demand Supply Gap

Year

2011 2,716,305 2,593,932 122,373 2,686,329 2,565,306 121,023

2012 2,796,162 2,670,191 125,971 2,765,305 2,640,724 124,581

2013 2,878,364 2,748,690 129,674 2,846,600 2,718,356, 128,244

2014 2,962,985 2,829,498 133,487 2,930,286 2,798,272 132,014

2015 3,050,083 2,912,362 137,721 3,016,423 2,880,223 136,200

Total 14,403,899 13,754,673 649226 14,244,943 13,602,881 642062

Table 10
Demand Supply Gap Analysis

q SWOT Analysis

SWOT Analysis

Strengths  The location of the business is accessible enough to meet our target market.

 The business will easily catch the interest of the customers for Filipinos are

fond

 The restaurant has its unique characteristics in terms of foods being offered

and other features being presented

 Kalye Ocho will provide alternative foods for those who want to be a spend thrift

 It provides modern communication tools including print ads and website that will

enable to build a connection between the business and the customers

Weaknesses

 The perception of some that street foods are unhealthy and unsafe

 Maintenance of special features of the store is quite costly.

Opportunies

 Street foods are not normally presented in a typical restaurant and this will

serve as an opportunity for the proponents to give a different impact or

approach regarding the kinds of food we cater through safety and quality

assurance

 The business would be the first restaurant that caters street foods in the

location being chosen(SM Bicutan)

Threats  Well-known restaurants within the same vicinity will be the great competitors of

the business.

 The business will be new in the market, it may easily have good market

standing but it may encounter difficulty in terms of sustaining demand of the

customers that may lead to its saturation point or declining stage.