CHAPTER I: Background of the product Introduction Filipinos are genuinely fond of eating and gatherings, celebrating every important event of their lives. These celebrations also reflect the relationship and unity of Filipino families. The tradition and traits were already depicted by the historical roots of the early Filipinos even before the colonization of different nationalities. And through the years of innovation and technology, the needs of Filipinos changed over time. The existing generation were able to cope to the fast phase lifestyle of the people in their environment. And with such, Convenience plays a major role, aside from other key factors in customer satisfaction. Convenience is already a must with every service that will be delivered. That’s the main reason why several merchants like one-stop shops, fast food chains, catering services, are continuously growing. And as Filipinos rejoice every significant event with their family or friends, the search for convenience, good planning, excellent service, quality food and stylish presentation will be the major factors to consider an event a successful one. Hence, more and more people are turning to the services of professional caterers for weddings, private dinner parties and corporate events for good reason. It takes a lot of preparation and planning to run successful event or party. With the help of a professional catering service, you can save yourself from the tedious food preparation and just spend the time with your family and guests. The history of catering and fine cooking trades dates back in the 4th millennium BC. It all started in China but the culture of grand eating and drinking was already important during the prosperous years in old Egypt. However, the catering trade only emerged from the commonly practiced hospitality, which was always free, when the first real hostels and inns were built in ancient Greece.
The catering industry was then widely spread in Germany from 14th to 15th century and this had drawn the attention of legislators. The improvement of transport, technical innovations, population increase, and sudden rise in the trade of travel and tourism gave gastronomy a quick shift which made it a very important factor for national economy. (http://EzineArticles.com/3614281) Caterer, as defined in Merriam-Webster dictionary is one who supplies the viands of an entertainment. The word “cates” means provision that is usually considered to be more special and daintier than home productions. “Acatour” is a purchaser or a purveyor of provisions or one who provides or prepares delicacies. . Although catering has been considered a “service for the wealthy,” it is now in demand for many occasions. Through time, Catering service does not only provides food but are increasingly providing a wider array of event planning services such as decorations, equipment hire (tableware, linen, tables and chairs), staffing and event coordination. A caterer will work with you to develop an innovative menu to match your event or celebration's theme, your food tastes, and importantly, your budget. Also, there are several variations according to locations, the types of meals to be served, which define the service and equipment you will have to provide.
Currently, the catering sector is dramatically growing. Before, the market was limited only to high-income consumers but now, it has expanded to the lower-income groups. Perhaps it is because food plays an integral part in the Filipino's way of celebrating. It is a culture that traverses all income classes. In addition, many people do not want the hassle of preparing and would rather pay someone to do it. Food catering also appeals to the consumers since it brings prestige and stature to an event. These trends present huge opportunities for the catering businesses even in the coming years. (Africa,2010).
Statement of the problem The purpose of the study is to determine the feasibility of starting a Catering Service in Los Banos, Laguna. This aims to acquire information for a proposed business in order to gain a clear rationale of basic factors in marketing which includes the strengths and weaknesses of such venture. As well as, the opportunity and threat that is presented by the environment. Data will be collected through observational research method and a survey distributed to potential customers in Los Banos, Laguna. Objectives of the study The following questions will be answered after the completion of the research: 1) What area can be identified as the market area of the proposed catering services? 2) Which of the chosen locations is the most desirable one based on site selection guidelines? 3) What is the customer profile of individuals who seek catering services, such as population size, consumer spending patterns and average household income, frequency of executing functions or events, etc? 4) Who are the competitors of the proposed catering services and how are they doing? 5) Will the proposed catering business be able to gain profit with the proposed pricing, operation hours, the estimated functions in a year, and estimated controllable and uncontrollable expenses? 6) How soon will the catering business gain a return of investment? Review of Related Literature Culture is a robust influence on family roles (White & Klein, 2008) and functioning (Harkness & Super, 2002; Tseng & Hsu, 1991). And for Filipino Culture it is always connotated with ‘fiestas’ and family gatherings.
Fiestas (Spanish word for party or
festivity, turned pista in the dialect),truly pervade the lives of Filipinos after all, it represents not only the largely Catholic population of the country but is an acknowledged national traditional occasion conjuring images of banderitas (flaglets), carrozas
(processional
carts),
marchingbands,
and
a
surfeit
of
food.
Generally, it is the extravagance and lavishness in the celebration of these fiestas that is almost always noted. This extravagance is all the more evident in the food: the famous kiping or thin, multi-colored translucent rice wafers shaped like leaves that adorn the façade of every Lucban house; and the pan de san Nicolas bearing the image of the saint; and the fresh carabao’s milk pastillas (which used to be served only during fiestas); and certain cakes, rellenos and every imaginable rice products. And due to the extravagance of this event that It comes as no surprise then why most Filipinos are also neck-deep in financial debts after such celebrations. (Alba, 2009) Set as an example, the festivities conducted in Los Banos, Laguna from the feast of the Patron Saint San Isidro to the ‘Banamos’ festival which celebrates a toast to to the hot spring bath and the founding anniversary of the Municipality of the town as well. There’s no doubt that such event will require a large scale food preparation and even a huge amount of time in planning and organizing the fiesta. With such circumstances, Catering Services would be greatly needed. During these times, families and organization may opt to hire a catering service to prepare and handle the event. Looking into the catering industry in the Philippines, it is definitely something to look forward to as indicated in the final results of the 2009 Annual Survey of Philippine Business and Industry (ASPBI) conducted nationwide recorded a total of 14,998 Hotel and Restaurant establishments in the Philippines. As shown in Figure 1, Restaurants, bars, canteens and other drinking and eating places garnered the highest number of establishments at 13,348 or 89.0 percent. Hotels, camping sites and other provisions of short-stay accommodation comprised the remaining number of establishments with 1,650 or 11.0 percent. Such data only entails the huge market of the service. The catering service is responsible not only for preparing the food but also setting up the dining area and waiting tables and where required setting up the stage and décor depending on the client requirements. A caterer may serves food with wait staff at dining tables or sets up a self-serve buffet. The food may be prepared on site or shipped in but often some combination is deployed depending on the menu and facilities at the site.
A catering company or specialist is expected to know not just food preparation, but how to make it attractive. For example a wedding requires working with the entire theme or color scheme of the wedding including stage setup, background props, entrance, reception, seating arrangement etc. Much catering is sold on a per-person basis, where adding additional people is a flat price per person. Keeping the cost of the food and supplies below this (flat rate) is required to make a profit on the catering. However caterers have the option to offer fixed menus or flexible ones depending on the variety of food they can offer and the related costs that they can bear. (David J Kahan. Crave Catering Melbourne.Article; http://EzineArticles.com/? expert=David_J_Kahan) The type of catering services required may vary upon the theme of the event or gathering or as requested by the host. Such events can then be classified into three categories: corporate functions, social gatherings, and miscellaneous events. Corporate events refer to company or business meetings, annual stakeholder meetings, conventions, trade fairs, or parties. Social events include baptisms, birthdays, weddings, anniversaries, Christmas parties and even funerals. Meanwhile, government meetings, sports team assemblies, gathering of religious and fraternal organizations fall under the miscellaneous events category. Corporate functions can have as many as 6,000 guests while social and miscellaneous events can vary from about 50 to 400 persons. A typical catering event starts with consultation with the client to plan the type of event, guest count, venue, and special food requests. In addition, the caterer may also handle the decorations, flower arrangements, facility rentals, entertainment, photography, and even pastries or the dessert buffet. Afterwards, the caterer produces a detailed proposal of the event. The proposal should include the menu, presentation, decor and entertainment details. The focus is on selecting from a variety of foods to best suit the occasion and the time of event. Some people may prefer a Filipino, Chinese, Indian, Italian, Japanese or a
classier menu with a sophisticated atmosphere. The services can be an off-premises catering where the food is prepared away from the venue. It can also be an on-premises catering with meals served and prepared at the event location. Off-site catering has more operational hurdles during events. Caterers consider the distance from the warehouse to the venue, weather forecast, and even the temperature at the venue since food is highly perishable. (Africa,2010) According to Manfred Ketterer as stated in ‘How To Manage a Successful Catering Business’, he mentioned the numerous advantages of an off-premise catering. First, most off-premise caterers require some form of advance deposit prior to an event. This deposit provides the caterer with some security if the event is canceled and also can be used to purchase some or all of the food and supplies for the party. There is no need for large amounts of capital to get started, since most off-premise catering operations begin by using the existing kitchen facilities of a restaurant, club, hotel, church, or other licensed foodservice business. Food and supply inventories, as well as operating costs, are much more easily controlled, because clients must advise the caterer in advance as to the number of guests that are expected. Off-premise caterers need buy only the amounts necessary to serve the event, unlike a restaurant where there is a large variation from day today regarding the number of patrons and their menu selections. Off-premise catering generates additional revenues for existing operations like hotels, clubs, and restaurants. They can generate even more profit by providing other services—rental equipment, flowers, décor, music, entertainment, and other accessory services. Both the client and the caterer have expectations regarding the outcome of the party. These expectations should be clearly spelled out in a written contract. Payment for an event is normally made directly to a manager or owner, eliminating a middleman, whether it’s a wedding planner, on-site food and beverage director, or one of the caterer’s own staff members. This form of direct payment provides for better cash control and fewer folks to share the profit. Advance forecasting is more accurate for off-premise caterers, because parties are generally booked weeks, months, or years in advance.
Moreover, each part of the country has seasonal swings, which make revenue forecasting somewhat easier. For example, in the South the summer months are generally less busy, but in the North these are the busy months. Off-premise events generate tremendous amounts of free word-of-mouth advertising, which can produce future business without the necessity of advertising. Many off-premise caterers feel that satisfied guests at one party will either directly or indirectly book another party by speaking favorably to friends and co-workers about the event and the caterer. In other words, one party can create future parties. The Presentation of an event also considers how the client wants the event to look and run – the kind of tables, chairs, and place settings as well as the formality. For instance, the client may opt for self-serve buffets or have waiters and waitresses served at tables. Decorations offered by caterers can vary from simply providing the table, venue settings, and centre pieces to accentuating more sophisticated decorations such as waterfalls, fountains, plants, lights, and dance floors. Caterers can provide the entertainment or book something that suits the event. Some options include a disc jockey, a live band, a singer or instrumentalist, a comedian or even clowns. In 2007, the Bureau of Small and Medium Enterprise Development (BSMED) of the Department of Trade and Industry (DTI) released a guide for starting a catering business as a part of its "Sulong Kabuhayan, Sulong Pinoy" Program. The investment mainly includes equipment, tools and other paraphernalia. It indicated that a catering business which can cater to about 75 persons needs an investment of at least P500,000. Assuming there are 12 catering services per month, the business can have a payback in four months, assuming a 40% mark-up. This is ideal scenario, and the values could vary from one caterer to the next.
In addition, the caterer needs to allocate funds for the operating costs which varies for each event. The operating costs include the cost of raw materials, indirect cost and overhead cost Amidst the strengths of the said business, the catering industry faces certain challenges as well, which include keeping up with the latest facilities and trends in the business, as well as ensuring food safety. Food safety starts with acquiring the best raw material such as meat, herbs, vegetable and spices. Mr. Tamayo said that one of the most important aspects of food catering is building relationships not just with clients but also with suppliers. Catering deals with food, and getting the quality and volume of the raw materials is like the fuel of the business. The profitability of caterers depends on cost controls and effective marketing. It is also labor-intensive because operations are not a rigid 8-hour shift but could run for 24 hours. Tamayo's Catering, for instance, hires about 300 waiters per day. (Africa,2010) Scope and Delimitation of the study This study deals with the market feasibility of establishing a Catering Service business in Los Baños, Laguna. The study aims to make the results as reliable and as accurate as possible but recognizes that there are certain limitations that could affect the accuracy of the data obtained. Stated as follows: 1. Figures derived are limited to the options provided in the questionnaire. 2. Distributed questionnaires are limited to 50 correspondents which were set by the authors of the study. 3. Correspondents are selected thru Random Sampling. 4. Area of sampling may be limited to the main Los Baños City proper. 5. Data gathered for Operations costing is solely based on the average of the current prices available in the market and cost may fluctuate in time. Also, information is limited to the selected merchants/suppliers interviewed.
Significance of the study The feasibility study offers assistance to the concerned group below. The Future Entrepreneurs This study has significance to individual/s who wants to venture in Catering Services which will provide source information regarding the industry. Also, it showcases a good analyzation of strengths and opportunities in executing such business in the future.
The Researchers The scope of the study assists students in the integration of theoretical concepts with realistic data in which will provide a more profound understanding of the market and business strategies involved. And it also feeds the students with the experience and knowledge in which they can apply for the future jobs they indulge with.
Conceptual framework
Definition of Terms Advertising Plan- An outline of what goals an advertising campaign should achieve, how to accomplish those goals, and how to determine whether or not the campaign was successful in obtaining those goals. Advertising Research - Research conducted to improve the efficacy of advertising. It may focus on a specific ad or campaign, or may be directed at a more general understanding of how advertising works or how consumers use the information in advertising. It can entail a variety of research approaches, including psychological, sociological, economic, and other perspectives.
Brand - A name, term, design, symbol, or any other feature that identifies one seller's good or service as distinct from those of other sellers. The legal term for brand is trademark. A brand may identify one item, a family of items, or all items of that seller. Catering - is the business of providing foodservice at a remote site or a site like a hotel, public house and other various locations. Cost Efficieny - For a media schedule, refers to the relative balance of effectively meeting reach and frequency goals at the lowest price. Demographics - Basic objective descriptive classifications of consumers, such as their age, sex, income, education, size of household, ownership of home, etc. This does not include classification by subjective attitudes or opinions of consumers. End User - The person who actually uses a product, whether or not they are the one who purchased the product. Market Profile - A summary of the characteristics of a market, including information of typical purchasers and competitors, and often general information on the economy and retailing patterns of an area. Marketing Mix - The levels and interplay of the elements of a product's or service's marketing efforts, including product features, pricing, packaging, advertising, merchandising, distribution, and marketing budget; especially as these elements affect sales results. Promotional Mix - Using several different types of communication to support marketing goals which include Advertising, Personal selling, Publicity, and Sales promotions. Quantitative Research - A method of advertising research that emphasizes measurement of incidence of consumer trends within a population. Questionnaire - A document that is used to guide what questions are to be asked respondents and in what order, sometimes lists the alternative responses that are acceptable.
