Market

Study

Market Study | 8
Introduction

Marketing is the link between a society’s material requirements and its economic

patterns of response. Marketing satisfies these needs and wants through exchange

processes and building long term relationships. It is the process of communicating the

value of a product or service through positioning to customers. Hence, marketing is an

essential part of a business because it identifies and analyses its target customer’s demand

with an aim to create a profit for the business. It is therefore imperative that market study

be given a primary consideration.

The market study for Pitch-dark restaurant will determine if the proposed business

will most likely be a success or a failure. The market wherein the restaurant will be

located will need a thorough analysis since the nature of this market will most assuredly

impact the business on various aspects of its operations.

Name of the service

Pitch-dark is a restaurant where you can dine in complete darkness. It is a dark

dining restaurant that offers a unique, multi sensual dining experience while enhancing

your senses of taste, smell, touch, and hearing. The business name “Pitch-dark” means

unilluminated, lightless and devoid of or deficient in light or brightness.The restaurant’s

dining area where the customers will be seated and enjoy their chosen gourmet meal is

literally in pitch darkness and the surrounding is impenetrable to sight, thus, the name

Pitch-dark.

Pitch-dark restaurant will seat you in a pitch-black dining room where you will be

guided by attendants wearing infrared goggles that have been specially trained to serve

Market Study | 9
meals in the dark, casually and comfortably offering guidance and reassurance for sighted

guests.

This business allows you to willingly plunge into a world of sensitivity you have

never experienced before, taking you through a journey of taste, sound and touch, all in

the dark.

Dining in the dark restaurant started from Zurich Switzerland in 1999. The idea

for the restaurant came from dinner parties held in Rev. Spielmann’s home. Blind

himself, he would sometimes blindfold his sighted guests to give them a chance to

experience the world of the blind. What Spielmann’s sighted guests found was that the

blindfolds heightened their sense of taste and smell and made their dining experience

more enjoyable. From then on, the idea of a dining in the dark restaurant became popular

not only in western countries but also paved its way in New York, Los Angeles and even

in Asian countries.

Market Study | 10
Properties of the Service

The business will offer different foods and drinks for a reasonable price without

impairing its quality. The restaurant will serve scrumptious menu that will make every

customer come back and try our very own food all over again and to experience the thrill

and excitement in dining in the dark.

Uses of the Service

Pitch-dark is a restaurant that will tantalise you into a new culinary experimentand

delights. It is devoted in giving an extraordinary dining adventure to customers by seating

them in a pitch black dining room where they can’t see at all and guided only by our

attendants.

The restaurant will offer customers that pleasant alternative to eating at home,

ordering take out from their local fast food dispenser or visiting their drive through.

Pitch- dark restaurant will provide the customer’s need for that quiet stylish quality

restaurant where we know that well-prepared food and good service will always be

excellent and the experience unforgettable. Customers will just enjoy sitting down in the

nice comfortable and pleasant surroundings of the restaurant and dining on good quality

food at a leisurely pace, leaving behind the hustle and bustle of daily life.

Users of the service

The business will offer its services to most people ages 15-60. The restaurant

mostly targets students, young adults and professionals who are residing in Baguio City.

Market Study | 11
The restaurant also caters to the tourists and travellers who come to Baguio City for their

vacation.

Geographical Location of the Business

One major consideration in determining the best location for the business is its

accessibility. To serve immediately the target market, the proponents decided to

commence business in Camp John Hay, Baguio City. Though it is not in close proximity

to the central business district, it is accessible by cars and jeepneys. Camp John Hay has

been a tourist hotspot in Baguio known for dense pine forest, breath taking mountain

scenes, lush gardens adorned by lovely flowers and charming picnic spots. Various

indoor as well as outdoor leisure and recreational facilities also await for the activity

seekers. The place is a perfect getaway for vacationers who want to relax and unwind.

Demand Analysis

Demand is the principle that describes a consumer’s desire and willingness to pay

a price for a specific good or service. Demand analysis is used to study the desire of

consumers for a particular product or service. It is also used to identify who wants to buy

a product or avail a service, how much they are likely to pay for it, how many units they

might purchase if goods, and how often for services, and other factors that can be used to

determine product design, selling cost, and advertising strategy for a product or service.

The demand was based on the total population of individuals with age ranging

from 15 to 60 residing in Baguio City. Since food is one of the primary needs of human

beings and that Filipinos are fond of eating, we lowered our market age range to 15

Market Study | 12
because we find the teenagers today as very inquisitive in trying new things as we are the

first to introduce the dining in the dark restaurant here in the Philippines and we

considered 60 years old because we are not offering strenuous activities for them but the

experience and delicious food.

Analysis of the Results

The following questions were asked from the residents of Baguio City and with

the corresponding analysis of the results.

1. Do you go to a restaurant?

Table 1 shows the result for the question “do you go to a restaurant”.

Three hundred eighty nine (389) out of four hundred (400) respondents are going

to restaurants while eleven (11) said that they do not go to a restaurant.

Table 1. Number of respondents who go and do not go to a restaurant

Yes No Totals

Totals 389 11 400

in % 97.25% 2.75% 100.00%

2. What factor(s) make you go to a particular restaurant?

Table 2 shows the result for the factor or factors that make the respondent

go to a restaurant. The primary factor is the reasonable prices of food and services

which yielded to 72.25%, second is the ambiance in the restaurant with 52.00%,

followed by 51.75% of accessibility of the location, then the accommodation they

Market Study | 13
 are getting from the staffs yielding 42.50%, and, after that is the unforgettable

experience they will value in going in a restaurant which is 24.50%. Other factors

would be hungriness, popularity of the restaurant, and for the reason that the

restaurant offers good and satisfying food, resulting to a 4.25% of the total

respondents.

Table 2. Factors that affect the respondents to go to a restaurant

accessible accommodatin ambianc reasonable unforgettabl other

location g staffs e prices e experience s
Totals 207 170 208 289 98 17
in % 51.75% 42.50% 52.00% 72.25% 24.50% 4.25%

3. How often do you go?

Table 3 gives the result regarding the frequency of going in a restaurant by

the respondents. Out of four hundred respondents, 33.16% said that they are going

once in a month, 27.51% are going twice a week, 27.25% are going once a week,

6.94% are going everyday and, only 5.14% are going once in a year.

Table 3. Frequency of going in a restaurant by the respondents

once a twice a once a once a

everyday Totals
week week month year
Totals 27 106 107 129 20 389
in % 6.94% 27.25% 27.51% 33.16% 5.14% 100.00%

4. Are you willing to go to our restaurant?

Market Study | 14
 Table 4 shows the result of the respondents’ willingness to go and try

dining in a dark restaurant, which is the “Pitch-dark”. Three hundred forty one

(341) or 85.25% of the total respondents are willing to go while fifty nine (59) or

14.75% are not.

Table 4.1Number of respondents who are willing to go in our restaurant

Yes No Totals
Totals 341 59 400
in % 85.25% 14.75% 100.00%

Demand Population

The demand population is computed using the following formula:

= 341 favourable respondents* projected population * frequency of people willing to

400 total respondents go in Pitch- dark
Table 4.2Demand Population

%of People
Population Demand
Year Frequency willing to go in
(15-60) Population
our restaurant
8,88
2007 201,441.00 51.73 85.25% 3,548.10
9,24
2008 209,614.11 51.73 85.25% 3,982.06
9,61
2009 218,118.82 51.73 85.25% 9,039.98
10,009
2010 226,968.60 51.73 85.25% ,315.21
10,415
2011 236,177.44 51.73 85.25% ,425.14
Historical Demand

Market Study | 15
 The method used in predicting the demand for the service is based on the method

that gives the least computed standard deviation.

Table 4.3Summary of standard deviationsof the methods used in projecting

demand

Summary

Method Standard Deviation

Arithmetic Straight Line 19,851.09

Arithmetic Geometric Curve 12,867.45

Statistical Straight Line 12,738.61

Statistical Parabolic Curve 10,509.80

Historical Demand

Year Yc
2007 8,871,108.88
2008 9,250,021.26
2009 9,631,597.87
2010 10,015,838.71
2011 10,402,743.77

Computation of Historical Demand

Statistical Parabolic Curve

Year y x x2 x4 Xy x2 * y
2007 8,883,548.10 -4 16 256 (35,534,192.40) 142,136,769.60
2008 9,243,982.06 -2 4 16 (18,487,964.13) 36,975,928.25

Market Study | 16
2009 9,619,039.98 0 0 0 - -
2010 10,009,315.21 2 4 16 20,018,630.41 40,037,260.82
2011 10,415,425.14 4 16 256 41,661,700.56 166,646,802.25
Total 48,171,310.49 40 1600 7,658,174.45 385,796,760.93
A b x C x2 Bx
9,631,597.87 191,454.36 -4 333.03 16 (765,817.44)
9,631,597.87 191,454.36 -2 333.03 4 (382,908.72)
9,631,597.87 191,454.36 0 333.03 0 -
9,631,597.87 191,454.36 2 333.03 4 382,908.72
9,631,597.87 191,454.36 4 333.03 16 765,817.44

cx2 Y Yc Y-Yc (Y-Yc)2

5,328.46 8,883,548.10 8,871,108.88 12,439.22 154,734,071.59
1,332.12 9,243,982.06 9,250,021.26 (6,039.20) 36,471,911.59
- 9,619,039.98 9,631,597.87 (12,557.88) 157,700,431.18
1,332.12 10,009,315.21 10,015,838.71 (6,523.50) 42,556,052.90
5,328.46 10,415,425.14 10,402,743.77 12,681.37 160,817,047.00

Totals 552,279,514.25

Projected Demand

The above computation shows that the Statistical Parabolic Curve method has the

least standard deviation. Therefore, it is proper to use the same for projecting the future

demands.

Market Study | 17
 Projected Demand

Year Yc
2012 10,792,313.07
2013 11,184,546.61
2014 11,579,444.37
2015 11,977,006.36
2016 12,377,232.59

Computation of Projected Demand

Projected Demand
Year A B x b*x
9,631,59
2012 7.87 191,454.36 6 1,148,726.17
9,631,59
2013 7.87 191,454.36 8 1,531,634.89
9,631,59
2014 7.87 191,454.36 10 1,914,543.61
9,631,59
2015 7.87 191,454.36 12 2,297,452.33
9,631,59
2016 7.87 191,454.36 14 2,680,361.06

x2 c cx2 Yc
11,9 10,792,3
36 333.03 89.04 13.07
21,3 11,184,5
64 333.03 13.85 46.61
33,3 11,579,4
100 333.03 02.89 44.37
47,9 11,977,0
144 333.03 56.16 06.36
65,2 12,377,2
196 333.03 73.66 32.59

5. For our main course what would you choose?

Market Study | 18
 Table 5 represents the result of what the respondents would like to eat as

their main course. Respondents most preferred seafood which resulted 36.00%,

followed by chicken meat which yielded insignificant difference of .50% with that

of the seafood. Third most preferred would be beef with 32.50% and then

vegetables with also insignificant difference with that of the beef, 31.75%. In

contrast with what the researchers have gathered in their interviews in the

different restaurants, pork is rated as the least of the preferred main course as

yielding 20.75%. The choices enumerated in the questionnaire do not actually

yield significant differences. Some of the respondents wanted pasta and exotic

foods.

Table 5. Respondents' choice(s) of main course

Pork beef chicken Seafood Vegetables others

Totals 83 130 142 144 127 4

in % 20.75% 32.50% 35.50% 36.00% 31.75% 1.00%
The percentages represent what the respondents wanted. Since, some of

the respondents wanted more than one of the choices given, the result of the

percentages do not equal to 100% instead, every main course’s percentage is

based on 100% of the respondents willing to go in our restaurant.

6. How often do you want to go in our restaurant?

Table 6 shows the frequency of willingness of the respondents to go and

try dining in a dark restaurant, “Pitch- dark”. Out of all the respondents, 38.71%

Market Study | 19
 are willing to go once in a month, 24.93% will go once in a week, 16.42% will go

twice in a week, 15.25% are going once in a year, and 4.69% are willing to go

daily.

Table 6. Frequency of going in our restaurant by the respondents

once a twice a once a once a

everyday Totals
week week month year
Totals 16 85 56 132 52 341
in % 4.69% 24.93% 16.42% 38.71% 15.25% 100.00%

7. How much are you willing to pay for our food and service?

Table 7 represents the amount the respondents are willing to pay for the

food and services that will be offered in the restaurant. Most of the respondents

are willing to pay for within the range of Php 100 – Php 249, yielding 65.40%.

Table 7. Respondents' willingness to pay for our food and services

P100 – P250 – P500 – P750 – P1,000 &

Totals
P249 P499 P749 P999 above
Totals 223 70 34 8 6 341
in % 65.40% 20.53% 9.97% 2.35% 1.76% 100.00%

Supply Analysis

Rivalry refers to the degree to which firms respond to competitive moves of the

other firms in the industry. Competition among existing restaurants may manifest itself in

Market Study | 20
a number of ways such as price competition, new services, increased levels of customer

service, warranties and guarantees, advertising, better distribution channels, and so on.

The number of restaurants in Baguio City was provided by the permits and licenses office

of the City Hall. There are 113 restaurants that are in operation. Among them, 12

restaurants were surveyed through interviews and floated questionnaires.

The restaurants were asked three questions such as the number of branch/es they

have in Baguio City, the average customer they accommodate per year and the best seller

main course they offer. The following table represents the responses of the restaurants.

Name of Branch/es in the Average Customers Best Seller Main

Restaurant Baguio per Day Course They Offer
Kitaw Sushi 1 20-25 Seafood
Seafood
Marios 1 100-150
Vegetables
Pork
O' Mai Khan 1 300-400
Vegetables
The Voyager 1 150 Pork
Hillstation 1 150-250 Pork
Barrio Fiesta 1 100-300 Pork
Dencio's 2 200 Pork
Max's 1 180-250 Chicken
Seafood Island 1 200-400 Pork
Classic Savory 1 200 Chicken
Giligan’s Restaurant 1 150 Pork

Market Study | 21
 Seafood
Beef
Solibao 3 100 Seafood

Most of the restaurants surveyed have no branch in Baguio City but some of them

have hopes and plans of expansion. The customers per day of almost all the restaurants

are ranging from 150 – 250 customers. The customers they cater depend upon the season

of Baguio City. They accommodate 200 and above customers during peak seasons like

summer vacation, occasions in Baguio City specifically Panagbenga, cold season, and

etc. However during lean seasons they only cater to 50 – 150 persons. The best seller

main course for most restaurants is pork. Filipinos are fond of different dishes of pork

especially when they are tender and juicy. Competitors have their own tactics and

schemes on how to attract customers.

The table below shows the anticipated supply of restaurants.

Year Supply Population

2007 6,693,507
2008 7,028,183
2009 7,379,592
2010 7,748,571
2011 8,136,000

In the period of 5 years there will be a projected population of 8,136,000that will

supply and satisfy the demands of customers.

Market Study | 22
Historical Supply

The following table presents the summary of the methods used for projection.

Summary
Method Standard Deviation
Arithmetic Straight Line 22,926.72
Arithmetic Geometric Curve 14,683.19
Statistical Straight Line 14,712.50
Statistical Parabolic Curve 12,138.59

Each method used yielded different projected values. The method which

capitulate the lowest standard deviation of each method is probable to turn up to have the

best estimates. Thus, the Statistical Parabolic Curve was utilized in determining the

historical supply and projected future supply.

Historical Supply

Year Yc

2007 6,679,172.77
2008 7,035,094.79
2009 7,394,093.74
2010 7,756,169.61
2011 8,121,322.39

Computation of Historical Supply

Statistical Parabolic Curve

Year y x x2 x4 xy x2 *y
6,693,507. (26,774,029.
2007 33 -4 16 256 34) 107,096,117.36

Market Study | 23
 7,028,182. (14,056,365.
2008 70 -2 4 16 40) 28,112,730.81
7,379,591.
2009 84 0 0 0 - -
7,748,571. 15,497,142.
2010 43 2 4 16 86 30,994,285.71
8,136,000. 32,544,000.
2011 00 4 16 256 00 130,176,000.00
36,985,853. 7,210,748.
 Total 30   40 1600 11 296,379,133.88

a b x c x2 Bx
7,394,093. 180,26 (721,07
74 8.70 -4 384.62 16 4.81)
7,394,093. 180,26 (360,53
74 8.70 -2 384.62 4 7.41)
7,394,093. 180,26
74 8.70 0 384.62 0 -
7,394,093. 180,26 360,53
74 8.70 2 384.62 4 7.41
7,394,093. 180,26 721,07
74 8.70 4 384.62 16 4.81

cx2 Y Yc Y-Yc (Y-Yc)2

6,153.84 6,693,507.33 6,679,172.77 14,334.56 205,479,733.73

1,538.46 7,028,182.70 7,035,094.79 (6,912.09) 47,777,018.36

- 7,379,591.84 7,394,093.74 (14,501.90) 210,305,161.19

1,538.46 7,748,571.43 7,756,169.61 (7,598.18) 57,732,288.95

Market Study | 24
 6,153.84 8,136,000.00 8,121,322.39 14,677.61 215,432,134.12
      Totals 736,726,336.34

Projected Supply

The above computation shows that the Statistical Parabolic Curve method

has the least standard deviation. Therefore, it is proper to use the same for projecting the

future supply.

Projected Supply

Year Yc

2007 8,489,552.10
2008 8,860,858.73
2009 9,235,242.29
2010 9,612,702.76
2011 9,993,240.16

Computation of Projected Supply

Projected Value
Year A B x b*x
180,2
2012 7,394,093.74 68.70 6 1,081,612.22
180,2
2013 7,394,093.74 68.70 8 1,442,149.62

Market Study | 25
 180,2
2014 7,394,093.74 68.70 10 1,802,687.03
180,2
2015 7,394,093.74 68.70 12 2,163,224.43
180,2
2016 7,394,093.74 68.70 14 2,523,761.84

x2 c cx2 Yc
1
36 384.62 3,846.15 8,489,552.10
2
64 384.62 4,615.37 8,860,858.73
3
100 384.62 8,461.52 9,235,242.29
5
144 384.62 5,384.59 9,612,702.76
7
196 384.62 5,384.58 9,993,240.16

Demand – Supply Analysis

The market share was based from the normal capacity of Pitch-dark for the year

over the total unsatisfied demand. The established market share for the first year of

operation is 4.76% based on the normal capacity of the restaurant for one year.

It is assumed that the supply will increase by three percent (3%) every year due to

the fast phase of innovation and evolution of service providers such as restaurants.

Unsatisfied Market
Year Demand Supply demand share Target Market

2013 10,792,313.07 8,489,552.10 2,302,760.97 4.76% 109,611.42

2014 11,184,546.61 8,860,858.73 2,323,687.88 4.76% 110,607.54

2015 11,579,444.37 9,235,242.29 2,344,202.08 4.76% 111,584.02

2016 11,977,006.36 9,612,702.76 2,364,303.60 4.76% 112,540.85

Market Study | 26
 2017 12,377,232.59 9,993,240.16 2,383,992.43 4.76% 113,478.04

Supply and demand are the backbones of a market economy. Demand refers to

how much (quantity) of a product or service is desired by the buyers. Supply represents

how much the market can offer. The reflection of supply and demand is price. They

describe how prices vary as a result of the equilibrium between product availability at

each price (supply) and the desires of those with purchasing power at each price

(demand). Considering these concepts are imperative in understanding the market

economy in which many resource allocation decisions are made.

Based from the table, the demand is greater than the supply. The proponents

therefore conclude that the study conducted can create a market that is innovative. The

researchers can generate its share in the market from the services that will be rendered to

satisfy demand.

Price Study

 Main course: Pork

Pork Humba
Description Cost
1 lb. pork 90
3 cloves garlic 1
1/3 cup vinegar 6
1/4 cup brown sugar 7
1/4 cup soy sauce 5

Market Study | 27
1 bay leaf 1
1/4 tsp pepper 2
1 tsp oil 2
Salt 0.25
3 potatoes 20
Egg 18
Total 152.25
Divide by: serving size 3
Total 50.75
Add: cost of Rice 12.5
Total 63.25
Add: Direct labor 9.86
Total 73.11
Add: Overhead 4.20
Total Cost 77.31
Multiply by:Mark up 1.25
Total 96.64
Multiply by: VAT rate 1.12
Total Php 108.23

 Main course: Beef

Beef curry
Description Cost
1 lb sirloin 112.50
3 tbsp butter 15
1 onion 5
2 tbsp flour 5
1 cup milk 20
1 tbsp curry 5

Market Study | 28
salt and pepper 2
1 tbspworcestershire sauce 10
Total 174.5
Divide by: serving size 3
Total 58.17
Add: Rice 12.5
Total 70.67
Add: Direct labor 15.44
Total 86.11
Add: Overhead 6.57
Total Cost 92.69
Multiply by: Mark up 1.25
Total 115.86
Multiply by: VAT rate 1.12
Total Php 129.76

 Main course: Chicken

Oriental Chicken Barbeque

Description Cost
2 pound chicken 125
2 teaspoon salt 1
1/2 cup soy sauce 7.5
1 tbsp ginger 2
2 cloves garlic 2
3 tbsp sugar 5

Market Study | 29
1/4 tsp red pepper flakes 1
1/2 tsp black pepper 1
1/3 cup sake 15
2 tbsp lemon juice 4
1 cup olive oil 20
Total 183.5
Divide by: Serving size 4
Total 45.88
Add: Rice 12.5
Total 58.38
Add: Direct Labor 15.44
Total 73.82
Add: Overhead 6.57
Total Cost 80.39
Multiply by: Mark up 1.25
Total 100.49
Multiply by: VAT rate 1.12
Total Php 112.55

 Main course: Vegetables

Chopsuey
Description Cost
1/4 kilo pork 45
1/4 kilo chicken liver and gizzard 31.25
1/4 kilo cauliflower 17.5
1/4 kilo string beans 10
1/4 kilo snow peas 15
1/4 kilo cabbage, cut into squares 7.5
2 stalks of leeks 5
3 stalks celery 10

Market Study | 30
5 cloves garlic 2
2 onions 10
1 carrot 6
1 piece red bell pepper 6
1 piece green bell pepper 6
2 tablespoons of cornstarch 5
2 cups chicken stock (broth) 10
3 tablespoons of sesame oil 8
3 tablespoons of patis (fish sauce) 3
4 tablespoons of corn oil or vegetable oil 5
Salt 0.25
Total 202.5
Divide by: Serving Size 5
Total 40.5
Add: Rice 12.5
Total 53.00
Add: Direct Labor 15.09
Total 68.09
Add: Overhead 6.42
Total Cost 74.51
Multiply by: Mark up 1.25
Total 93.14
Multiply by: VAT rate 1.12
Total Php 104.31

 Main course: Seafood

Baked Tahong
1 kilo tahong with ginger 75
1 cup cheese 20
2 tbsp. Garlic 1
1 tbsp. Mayonnaise 5
1 tbsp. Butter 5

Market Study | 31
 1 tbsp. Bagoong 3
Worcestershire sauce 10
liquid seasoning 5
1/2 cup bread crumbs 15
Total 139
Divide by: Serving Size 3
Total 46.33
Add: Rice 12.5
Total 58.83
Add: Direct Labor 17.11
Total 75.94
Add: Overhead 7.28
Total Cost 83.22
Multiply by: Mark up 1.25
Total 104.03
Multiply by: VAT rate 1.12
Total Php 116.51

Beverages

Beverage Cost Mark up Price

Ice tea 25.00 1.3 Php 32.50
Coca-cola regular 25.00 1.3 Php 32.50
Coca-cola diet 25.00 1.3 Php 32.50
Coca-cola light 25.00 1.3 Php 32.50
Sprite 25.00 1.3 Php 32.50

Market Study | 32
 Royal 25.00 1.3 Php 32.50

Pricing entails a delicate balancing strategy. It is a crucial decision that any

business faces. Higher prices may result in higher revenue per unit but it drives down unit

sales. Lower prices may capture a wide market but may sacrifice the quality of the

service. Some services offered in the market have already established their prices. As for

Pitch-dark, bringing a new twist in the restaurant business, it is a great challenge to set its

own prices. If the prices are set high, there might be a tendency that only few people will

patronize the service. However, if the prices set are low, the company’s cost would not be

covered and some might think that the quality of the service is also low. In setting the

price of the service, proper planning of improved market shares to have a fair return on

investment should be considered. Moreover, having a product or service with reasonable

prices could be a great start in introducing an improved and innovative service in the

market given the number of customers providing an edge to its popularity in the market.

Considering the different factors that affect the restaurant’s profitability including

the average selling price of the competitors, it is decided upon that the selling prices of

the food we offer will be P 108.23, P 129.76, P 112.55, P 116.51, and P 104.31 for pork,

beef, chicken, seafood, and vegetable respectively. The price is affected by the quantity

that is market price of the ingredients used that is pork, beef, chicken, seafood, and

vegetable, additives or seasoning used. Also, it is affected by the quality of service

provided for the management. The restaurant will use a 125% mark-up based on cost.

The price of the beverage will be separated from the cost of the food we will offer. Every

Market Study | 33
beverage has a cost of P 32.50, with a mark – up of 130% based on cost.The mark-up of

the food and beverage would cover the business’s expenses and provide for its income.

Market Program

Marketing is a business function that identifies consumer needs, determines target

markets and applies products and services to serve these markets. It also involves

promoting such products and services within the marketplace.

Marketing is integral to the success of a business, large or small, with its primary

focus on quality, consumer value and customer satisfaction. A strategy commonly

utilized is the Marketing Mix. This tool is made up of four variables known as the "Four

P's" of marketing. The marketing mix blends these variables together to produce the

results it wants to achieve in its specific target market.

1. Service

Pitch-dark restaurant, the name, aptly entails the service it aims to offer,

that is with regard to food and beverage industry. It is an establishment which

offers a unique dining experience through its concept of dark dining and prepares

tasty food and beverages to its customers.

2. Place

Business location plays a vital role and a key to successful operations and

overall growth. The business will operate in Camp John ay Baguio City to easily

capture the target market of the business which are the residents of Baguio City

Market Study | 34
 and tourists who are taking their vacation leave in Baguio. In addition, Camp John

Hay is a strategic location for the business because the place is a tourist hotspot in

Baguio because of its grand hotels, golf course, eco-trail hiking, butterfly garden

rappelling and picnic areas. It is a perfect getaway for those who are longing for

cool climate and tranquil atmosphere.

3. Price

The price that the restaurant offers would be “reasonable enough”

provided that the services and experience offered to the customers is really worth

it. The cost needed for building the restaurant and the services it provides will

also form part in determining the price to be charged. Price is an important factor

in determining the market demand for the service and the basis of customer’s

decision whether to avail the service or not. Setting a price that is too high or too

low will - at best - limit the business growth. At worst, it could cause serious

problems for sales and cash flow. Hence it is imperative that the price must

correspond to the facilities and services that the business provides.

4. Promotion

Service improvements are to be adopted in order to increase the business’s

market share such promotions and advertising. Promotions and advertising will

help a lot in making the service to be known and enhance the demand of the

service.

 Print ads

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 Newspapers are very much accessible to our target market because

they read news for them to get updated to the recent events and

happenings around them. Midland Courier will be utilized to inform our

target about our business since it is the most read newspaper in Baguio.

The cost of a one eight size print ads is P480/week. The firm will avail the

promotion for three months.

 Brochures and flyers

Brochures and flyers will also be of help for the whole target

market to inform them about the newest dine-in the dark concept

restaurant.1,000 pcs.of flyers at P5.00 per piece. Giving of flyers will be

done along Session Road, Baguio City because it is where most people are

passing by. This will quite ensure that the target market will be informed

about the existence of the restaurant.

 Radio Advertising

The restaurant will also advertise in local radio stations specifically

in K- lite Baguio. Radio ads will give a clear picture as to what dining in

the dark restaurant is including the details and information about the

restaurant.The cost of radio advertising per 15 seconds is P300. The

restaurant will avail of radio advertising eight times in a month for a

period of three months. The total cost of advertising is P 7, 200. 00.

 Websites

Websites is also created where the customers can ask queries about

the restaurant, the menus, and the prices for the corresponding menus.

Market Study | 36
Factors Affecting the Demand

The researchers have taken into account some factors that could affect the demand

for future opportunities and threats.

1. Demand

Bargaining power of the Buyer

At times, the ability of a consumer to procure goods and services depends upon

their income and budget. He can become sensitive to his expenses when his income

decreases thus reducing his ability to purchase. Buyers can also pressure businesses to

provide quality service and lower prices. They can as well as impinge on the competitive

environment of businesses and their ability to achieve profitability.

Population Growth

Population growth has a direct relationship with demand, as the population

increases, demand will also tend to increase. It is because as the population grows, there

will be more consumers and more needs have to be filled.

Consumer’s taste and preferences

Consumers are particularly capricious about the variety and style of goods and

services that they patronize. The greater the desire to be in possession of a good the more

likely will people are to buy the good. Trends also influence the wants of the consumers.

Goods and services that are popular this year might have the tendency to have no demand

next year. That is why as the environment and economy changes, so as demand.

Market Study | 37
Urban Developments

Baguio City, where the business will be located, is an urbanized area

whereindevelopments and improvements are always executed and realized. In that case,

more tourists – foreign and local and investors might be attracted and interested in the

City, making more opportunities for a bigger and successful market.

Prices of Substitutes

Substitute products are defined as something that can be used instead of a

particular good or service. The competitive vigor of closely-related substitute products

has a great impact to sellers. The presence of readily available and competitively priced

substitutes places an upper limit on the prices restaurants can afford to charge without

giving customers a reason to switch to substitutes and thus eroding their own market

position.

Marketing tools

Superior marketing strategies such as advertisements and promotions increase

sales revenue because customers will be knowledgeable about the service. It is an

essential tool for business success because it will convey its existence and purpose.

Effective endorsement tools bring about natural inquisitiveness of customers to avail new

and innovative services like dining in the dark restaurant.

2. Supply

Development of Substitute Products

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 Similar businesses emerge and compete with other industries offering substitute

products or services. The lower are the prices of substitutes and the higher the quality and

performance of substitutes, the more intense are the competitive pressures posed by

substitute services. It also entails a decrease in demand and a possible threat as customers

can switch to other restaurants thus reducing the inflow and return of investment of Pitch-

dark.

Threats to new entrants

New entrants in the industry pose a great threat because they are a major force

which shapes the competition. It can require the competitor to come in a large scale,

risking strong reaction from existing competitors or alternatively to come in a small scale

accepting a cost disadvantage. It can decrease the unit cost of the service thus reducing

the revenue.

3. Price

Inflation

Inflation is an increase in supply of currency or credit relative to the availability

of goods and services, resulting in higher prices and a decrease in the purchasing power

of money and other financial asset with fixed values, creating serious economic

distortions and uncertainty. Inflation results when actual economic pressures and

anticipation of future developments cause the demand for goods and services to exceed

the supply available at existing prices or when available output is restricted by uncertain

productivity and marketplace constraints. When the purchasing power of money

decreases, there is a tendency for the consumer public to shift or find alternative products

to suit their budget.

Market Study | 39