Epicurean Chocolates Feasibility Study

Epicurean Chocolates | 1
Ateneo de Davao University
A Project Feasibility Study in establishing a
Chocolate Patisserie in Davao City
“EPICUREAN CHOCOLATES”
In Partial Fulfilment of the requirements in
Accounting 12: Management Consultancy
Submitted to:
Ryan Morales, CPA
Submitted by:
Dexter Val Alonday
Jeanette Amabelle Ansing
Dawn Nicca Aryata
Joshua Rey Cosare
Jasper Nikko Estimada
Maricon Mamaclay
Sweetzel Dyne Morales
Shieldon Vic Pinoon
October 2016

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Acknowledgement
We, the proponents of this feasibility study, would like to express our heartfelt gratitude to
the people who have contributed to the success and completion of this study:
To our Almighty Father, for without Him, everything will not be possible.
To our respective families, for the unfailing financial and moral support.
To Mr. Ryan Morales, CPA, subject professor, for the guidance and insights in our
revisions to make our study a good one.
To Mr. Charlon San Pedro, chef, for his insights regarding our proposed menu and sharing
his knowledge about the workings of a restaurant.
To Mr. Eric V. Mamaclay and Engr. Ely V. Mamaclay, for making the floor plan of our
proposed store.
To Rafski Pastry and Bakery Supplies, for accommodating us in our interviews regarding
the technical aspect of our study.
To Mr. Fernando Lagahit, Regional Head of DBP Davao, for sharing his knowledge
regarding the financial part of our study.
To Alonday Family, for their hospitality in offering their home and resources when we
needed it.
To the administrators of University of the Immaculate Conception, Holy Cross of Davao
College, and Mazda, for allowing us to enter their school and business premises in order to conduct
our survey.
To the respondents, who have willingly given their time to answer our survey questions.
To everyone, who have, in one way or another helped us in our journey.

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TABLE OF CONTENTS
Acknowledgment............................................................................................................................ i
Table of Contents.......................................................................................................................... ii
List of Charts................................................................................................................................ iv
List of Figures.................................................................................................................................v
List of Tables ..................................................................................................................................v
I. Summary of the Project........................................................................................................1
A. Name of the Project .............................................................................................................1
B. Location ...............................................................................................................................2
C. Descriptive Definition of the Project ...................................................................................2
D. Long Range Objectives........................................................................................................3
E. Feasibility Criteria ...............................................................................................................3
a. Market............................................................................................................................3
b. Technical........................................................................................................................3
c. Financial.........................................................................................................................3
d. Socio-economic..............................................................................................................4
e. Organization and Management......................................................................................4
F. Highlights.............................................................................................................................4
a. History of the Project.....................................................................................................4
b. Nature of the Industry....................................................................................................5
c. Problems faced by the industry......................................................................................5
d. Mode of Financing.........................................................................................................5
e. Investment cost and initial working capital ...................................................................6
G. Major Assumptions and Summary of Findings and Conclusions .......................................6
a. Market ...........................................................................................................................6
b. Technical........................................................................................................................7
c. Financial.........................................................................................................................7
d. Socio-economic..............................................................................................................8
e. Organization and Management......................................................................................8

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II. Market Study.......................................................................................................................10
A. Product Description ...........................................................................................................10
B. Market Description ............................................................................................................11
C. Supply ................................................................................................................................13
D. Demand..............................................................................................................................18
E. Price Study.........................................................................................................................32
F. Marketing Program ............................................................................................................35
III. Technical Feasibility...........................................................................................................52
A. The Products ......................................................................................................................52
B. Production Process.............................................................................................................71
C. Production Scheme and Operations...................................................................................76
D. Plant Location ....................................................................................................................78
E. Establishment Layout.........................................................................................................80
F. Machinery and Equipment.................................................................................................83
G. Building and Facilities.......................................................................................................96
H. Raw Materials and Supplies.............................................................................................102
I. Utilities.............................................................................................................................110
J. Waste Disposal.................................................................................................................111
K. Labor Requirements.........................................................................................................112
L. Production Cost................................................................................................................114
IV. Financial Aspect................................................................................................................115
A. Major Assumptions used in the preparation of Financial Statements..............................115
B. Total Project Cost ............................................................................................................117
C. Initial Working Capital Requirements.............................................................................118
D. Alternative Sources of Financing.....................................................................................119
E. Sources of Financing the Project .....................................................................................120
F. Pro-Forma Financial Statements......................................................................................122
G. Financial Analyses...........................................................................................................140
a. Financial Ratios .........................................................................................................140
b. Horizontal and Vertical Analyses ..............................................................................142
c. Capital Budget Analysis ............................................................................................148

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1. Payback.............................................................................................................148
2. Discounted Payback..........................................................................................149
3. Net Present Value .............................................................................................149
4. Internal Rate of Return......................................................................................150
H. Accounting and Control Policies ..................................................................................151
a. Revenue Cycle ........................................................................................................151
b. Expenditure Cycle...................................................................................................153
V. Socio Economic Aspect.....................................................................................................156
VI. Organization and Management Study............................................................................158
A. Basic Considerations in Forming the Organization......................................................158
B. Form of Ownership.......................................................................................................159
C. Key Personnel ...............................................................................................................160
D. Organizational Policy....................................................................................................162
Appendices..................................................................................................................................164
Bibliography ..............................................................................................................................194
APPENDICES
Appendix 1.0. Articles of Partnership..........................................................................................164
Appendix 2.0. Lease Contract......................................................................................................167
Appendix 2.1. Survey Questionnaire...........................................................................................171
Appendix 3.0. Cost of Raw Materials..........................................................................................172
Appendix 4.0. Credit and Debit Card Transaction Path ..............................................................177
Appendix 4.1. Lists of banks for future borrowings....................................................................178
Appendix 4.2. Computation of WACC........................................................................................182
Appendix 4.3 Local Business Tax Matrix ..................................................................................183
Appendix 4.4 Basis for Inflation Rate .........................................................................................184
Appendix 4.5. DBP Credit Terms................................................................................................185

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LIST OF CHARTS
Chart 2.0. Epicurean’s Annual Share in the Overall Demand for Cakes in Units for the Years
2016-2021 ........................................................................................................................................2
Chart 2.1. Epicurean’s Annual Share in the Overall Demand for Cupcakes in Units for the Years
2016-2021 ......................................................................................................................................29
Chart 2.2 Epicurean’s Annual Share in the Overall Demand for Cookies in Units for the Years
2016-2021 ......................................................................................................................................30
Chart 2.3 Epicurean’s Annual Share in the Overall Demand for Ice Cream in Units for the Years
2016-2021 ......................................................................................................................................30
Chart 2.4. Epicurean’s Annual Share in the Overall Demand for Hot Chocolate Drinks in Units
for the Years 2016-2021 ................................................................................................................31
Chart 2.5. Epicurean’s Annual Share in the Overall Demand for Cold Chocolate Drinks in Units
for the Years 2016-2021 ................................................................................................................31
Chart 3.0. Order Processing Flow.................................................................................................70
Chart 3.1. Take-out process Flow..................................................................................................71
Chart 3.2. Production Process........................................................................................................72
Chart 3.3. Order Processing ..........................................................................................................73
Chart 3.4. Raw material Procurement Process...............................................................................74
Chart 3.5. Raw material Receipt Process.......................................................................................75
LIST OF TABLES
Table 2.0. Number of Pastry and Coffee Shops in Davao City for the past five years .................13
Table 2.1. Projected number of Pastry and Coffee Shops in Davao City for the next five years..13
Table 2.2 Respondent’s Response on Whether They Have Health Issues with Chocolate Products
........................................................................................................................................................19
Table 2.3. Weighted Number of Responses for Respondents’ Preference of Premium Chocolate
House ............................................................................................................................................20
Table 2.4. Weighted Percentage of Frequency of Going to Hangout/Study Place/Cafe of
Respondents...................................................................................................................................22
Table 2.5. Percentage of Respondents with Consumption of Products of 1-2 times and More
than 2 times Per Week ...................................................................................................................23

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Table 2.6 Computed Daily and Annual Demand for Each Product...............................................24
Table 2.7 Estimates of market share for a new food business with different levels of competition
........................................................................................................................................................25
Table 2.8. Epicurean’s Share in the Computed Overall Annual Demand in Davao City for Each
Product in Units ............................................................................................................................26
Table 2.9. Computed Percentage of Prospective Customers of a Chocolate House and Target
Market per Week of the Current Year and the Next Five Years
........................................................................................................................................................27
Table 2.10. Overall Demand per Day per Product in Units for the Next Five Years. ..................27
Table 2.11. Epicurean’s Annual Share in the Overall Demand in Units for the Next Five Years 28
Table 2.12. Demand-Supply Ratio Based on Present and Forecasted Demand and Supply .........28
Table 2.13. Comparative presentation of competitor’s price range. .............................................32
Table 2.14. Computed average price floor and average price ceiling. .........................................33
Table 2.15. Changes in the prices of Malagos Chocolates; for the last two years, the prices
increased by 20%. ..........................................................................................................................34
Table 2.16. Computation of Advertising and Promotional Cost ...................................................51
Table 3.0. Summary of Epicurean’s Production Capacity.............................................................77
Table 3.1. List of Raw Materials with Corresponding Descriptions, Shelf Life, Prices, and
Suppliers ......................................................................................................................................110
Table 3.2 Water Rates Data .........................................................................................................110
Table 3.3. Computation of Estimated Monthly Water Bill..........................................................110
Table 3.4. Computation of Total Estimated Monthly Electricity Bill .........................................110
LIST OF FIGURES
Figure 2.0. Market Positioning Map..............................................................................................17
Figure 2.1. Products’ Packaging Layout........................................................................................38
Figure 2.2. Social Media Account’s Layout ..................................................................................44
Figure 2.3. Promotional Poster Layouts ........................................................................................47
Figure 3.0. Suggested Arrangement of Items ................................................................................73
Figure 3.1 Day before opening day ...............................................................................................76
Figure 3.2 Regular Operating days ................................................................................................77

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Figure 3.3. Location Map...............................................................................................................78
Figure 3.4. Front View of Actual Location....................................................................................78
Figure 3.5. Interior perspective of Actual Location......................................................................79
Figure 3.6. Interior perspective of Actual Location......................................................................79
Figure 3.7. Current Floor Plan of the building...............................................................................81
Figure 3.8. Epicurean’s Floor Plan ................................................................................................82

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CHAPTER I
SUMMARY OF THE PROJECT
A. Name of the Enterprise
The name of the enterprise will be Epicurean. Epicurean is rooted from the name of the ancient
philosopher, Epicurus. Epicurus advanced the philosophy Epicureanism, which teaches that the
greatest good is to seek modern pleasures in order to attain a state of tranquility, freedom from
fear, and absence from bodily pain. Epicurean as an adjective, means appreciation of good food
and drink. The proponents have chosen the name because Epicurean, as an enterprise, aims to serve
good food, drink, and service to its clientele.
Epicurean’s logo sports white chocolate bars which form the letters E and C. It symbolizes
Epicurean’s primary ingredient in all the food and drink that it will serve, which is chocolate. The
logo’s dominant color is brown which symbolizes the color of chocolates.

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B. Location
The proponents chose to establish Epicurean in a 150 sq.m. commercial space available
for lease situated at the ground floor of Fabie Building, Poblacion District, Davao City. It is located
in the downtown area – in front of UCCP Church’s Shalom Center, at the back of Gaisano South
Citimall, and few blocks away from Apo View Hotel and People’s Park.
The following are the factors considered in choosing the location. First, the initial capital
outlay in putting up the shop would be lesser. The cost of renovation and monthly rental fee would
be cheaper than the cost of buying a land and constructing a new building. Second, the shop would
be accessible to its customers since it would be situated in the downtown area where several
jeepneys pass. Lastly, the place would be conducive for study, business meetings, hang-out, and
the like because the location of the shop is not crowded nor busy.
C. Descriptive Definition of the Project
The project is proposed by a group of fifth year students of Ateneo de Davao University
enrolled in the course, Bachelor of Science in Accountancy. The proposition is due to the
proponent’s foreseen potential of establishing a chocolate house in Davao City i.e. the advantages
of entering an unsaturated industry.
Epicurean, the name of the business proposed, is a conceptual chocolate house in Davao
City that would be established through a contract of partnership. As a chocolate house, it will offer
products that have chocolate as the main ingredient such as chocolate cakes, cupcakes, cookies,
ice cream, and hot and cold chocolate drinks.
Epicurean would also adopt the concept of a patisserie which would have the products
displayed for easy selection. As a unique concept in Davao City, the business is expected to attract
college or senior high school students, young professionals, and other businessmen. Specifically,
the target market of Epicurean would be those with ages ranging between 15 and 34 and have an
income or allowance ranging between Php 1,001.00 and above.
In Davao City, there is only one known shop with the same concept with Epicurean i.e.
Chocolatier. However, the business would have many indirect competitors such as coffee shops
and pastry shops. The coffee shop industry, especially “homegrown” coffee shops, is continually
flourishing in Davao City (DavaoFoodTripper, 2014). Nonetheless, Epicurean, with something

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new to offer, is believed to have a huge potential of being a successful and profitable business
venture.
D. Long Range Objectives
Within ten years from its establishment, Epicurean aims to:
 be widely known for its premium and quality product and service offering;
 be a major player in the coffee and patisserie shop industry in Davao City;
 create and maintain a loyal customer base;
 be able to produce its chocolates (backward integration);
 maintain if not increase a dominant market share despite potential entries of patisserie
shops in Davao City; and
 have a considerable growth in Return on Assets of 20% per year.
E. Feasibility Criteria
Market
The main concern under this criterion is the capability of the business to introduce
itself to the market. This also concerns the determination of an existing demand for the
products offered by the business. This criterion determines the level of existing competition
in the same and related industries and the capacity of the business to compete.
Technical
Important considerations under technical feasibility are the availability of raw
materials needed for the production especially the seasonality of fruits to be used,
availability of technology relevant to Epicurean’s industry that are affordable and cost-
efficient, availability of spaces for Epicurean’s location, availability of manpower, and its
production capacity to meet demand.
Financial
The Internal Rate of Return (IRR), Net Present Value (NPV), and the Payback
Period are the measures that critically quantify the financial feasibility of the project. Ratios
such as liquidity, leverage and profitability are computed using the projected financial
statements prepared. These factors are affected by the (1) availability and mix of equity

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and debt sources of financing, (2) the computed Weighted Average Cost of Capital
(WACC) and (3) assumptions.
Socio-Economic
The primary considerations in this feasibility criteria are: how the project would be able
to help the people in the community, the government, and the economy of the country. In
line with this, specific activities are to be implemented to achieve the abovementioned
criterion.
Organization and Management
The primary considerations in choosing what type of organization and management
scheme to apply for Epicurean is the sufficiency of initial financing that it could provide to
the entity and how efficient and effective it will be in the implementation of the project. In
addition, the organizational chart used in the business, the policies and standards set are
also considered.
F. Highlights
History of the Project
The idea of a chocolate house emerged after the proponents read an online article
stating that in the present, one of the businesses with high potential for booming is a
chocolate house. The idea was then supported by the latest news about Malagos Chocolate
being awarded with Silver Awards in the 2015 International Chocolate Awards in
Germany. Given that Philippine chocolate is already internationally recognized as good
chocolate, the proponents were convinced of the great potential of establishing a chocolate
house.
The proponents then observed and researched on the popular chocolate houses in
Davao City and found only one which is Chocolatier. The said business is located at
Abreeza Mall, Davao City. The idea that the proponents had in mind for a chocolate house,
however, is in an independent location like most coffee shops and not attached to a mall
or any bigger entities. This made the idea unique and convinced the proponents to pursue
the project. Since there are no existing chocolate houses that positions itself the way the
proponents plan to position their conceptual chocolate house in terms of product

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presentation and offerings, the proponents pursued the project and named the conceptual
chocolate house, Epicurean.
Nature of the Industry
 Description
A patisserie is a type of French or Belgian bakery that specializes in pastries
and sweets. Basically, a patisserie is a pastry shop with the distinction of its product
presentation.1
In Davao, the equivalent types of shop are coffee shops. The coffee and
pastry shop industries pose a tight competition in the market due to the many number
of shops littering the city.
 Role in the economy
The Epicurean Chocolates belongs to the Hotel and Restaurant Industry. Based
on the census conducted by the Philippine Statistics Authority (PSA) on the year 2012,
the Restaurant and Mobile Food Service Activities, under the Hotel and Restaurant
Industry, garnered the highest number of establishments in the country which is
around 70% of the whole industry. With this, the Restaurant and Mobile Food Service
Activities give the highest percentage of employment and highest compensation to its
employees within its industry. It also ranked as the highest income earner and biggest
expenditure spender.
 Products/product lines
A patisserie usually offers sweets such as cakes, cupcakes, cookies, pancakes,
ice cream, and hot and cold drinks. Epicurean will offer all of the mentioned products
with the exception of pancakes.
Problems Faced by the Industry
The chocolate house industry is not yet fully established in Davao City. Hence, it
faces the challenge of introduction to the market. There is no guarantee that businesses in
this industry would garner market acceptance. In addition, chocolate products are also
offered in most coffee and pastry shops which makes the industry prone to being
1
See Figure 3.0

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overmastered by the industry of coffee shops and pastry shops which are continually
thriving in Davao City.
Mode of Financing
Two modes of financing will be used. They are the following:
1. Long term borrowings from banks
2. Capital contributions from partners.
Specific capital structure is indicated in Chapter IV | Financial Aspect of this paper.
Investment Cost and Initial Working Capital
The project will be financed by the capital contributions of the partners and term
borrowings from local banks. The initial working capital will be used to pay for
Epicurean’s tax contributions and regulatory fees for partnership registration. These will
enable the business to operate and assure its customers that they are duly authorized to
open a patisserie.
Also, the initial investment will be used to fund the renovation of the store. It will
require a huge percentage of the initial investment. Moreover, in order for the store to
operate, it will require cash to fund its first two months of operation. These cash will come
from both the initial investment and the operation of the business for the first month.
G. Major Assumptions and Summary of Findings and Conclusion
Market
There is no data available about the historical demand level for Chocolate
Patisserie in Davao City. Hence, the current level of demand in Davao City for the
products offered by Epicurean is computed based on the survey conducted by the
proponents. There are 524 respondents of the survey with ages ranging from 15 to 34 years
old. The share of Epicurean in this overall demand is determined to be 5%. The projected
demand levels for all the products are at an increasing trend.
The projected data about the number of shops supplying similar products with
Epicurean shows no trend. This is made through moving average method.

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The target markets of the entity are senior high school and college students, and
young professionals with ages ranging from 15 to 34 years old having weekly allowance
or income of Php 1,001.00 or more. Chocolate, the main ingredient will be highlighted in
all of Epicureans products. The entity is a service-oriented establishment that provides
quality service to customers and offers chocolate products. The marketing strategy that
will be used to reach the market and secure a competitive position is mainly through the
use of Social Media namely Facebook, Twitter, and Instagram. Printed ads will also be
used by Epicurean for its advertising. The entity aims to attract customers and turn them
into patrons.
Technical
Raw materials of Epicurean needed for baking will come from Rafski Pastry and
Bakery Supplies. The chocolates that will be used as the main ingredient will also come
from the same supplier. Fruits that will be used as ingredients will come from the
Bankerohan wet market.
Orders for raw materials will be made every end of the week for the forecasted
demand of the next week. In cases where materials fall below critical level before the end
of the week, an order should be placed to replenish inventory levels enough for the
remaining days of the week. Shortages will be determined by checking the quantity of raw
materials in the storage room after every end of a work day. Product shelf life will also be
considered when buying raw materials.
Technology needed for Epicurean’s operation are primarily kitchen appliances and
tools such as ovens for baking, chillers for display of products, refrigerator for storage of
raw materials and other finished products not on display, freezer for ice cream display,
blenders for chocolate drinks, and other basic baking tools and equipment such as baking
pans, spatulas, and others.
Baked goods will undergo basic and specialized baking procedures. This process
will be done by the kitchen crews and the chef. Hot and cold chocolate drinks will undergo
heating, stirring, and blending by the front crews. Crews should always be courteous and
offer smiles to the clients.

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Epicurean’s staff will be composed of one chef, four kitchen crews, four front
crews/cashiers, and two shop cleaners. The chef will act as the store supervisor and in-
charge of the daily activities of the establishment as well as its employees.
Financial
Under financial feasibility, major assumptions include (1) all sales transactions are
made in cash, (2) purchases are made in cash and in credit, (3) sales are made evenly
throughout the year, (4) quantity of products sold increases by 2.3% per year based on
projected sales in the market study and (5) and an inflation rate of 4%.
Total capital requirements is P3,262,377.90. Paid-up capital of P660,000.00 will
be sourced from the partners on January 2017 which is 20% of the total capital
requirements. The remaining 80% amounting to P2,640,000.00 will be sourced out from
long-term debt.
For five years of operations, Epicurean has maintained a positive return. Payback
period is approximately 3 years and 5.25 months while return on equity for five years has
an average of 80.74%.
Socio-Economic
The main beneficiary of Epicurean will be the unemployed members of the
community. Epicurean targets to hire college students who are taking up Hotel and
Restaurant Management course and in need of financial help for their studies. Another
activity to help the community is distributing edible left-overs to beggars. Epicurean will
also provide additional revenue to the government through taxes. It will also promote the
locally produced chocolates.
Organization and Management
Epicurean’s form of business will be a partnership. Two partners will pool their
financial resources in order to realize the business. One partner will be a capitalist-
industrial partner and another will be a capitalist partner. They will share in the net profit
of the establishment in a 60:40 ratio with partner A receiving 60 and partner B receiving
40. They will hire a chef which will supervise the kitchen as well as other employees of

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the establishment such as the kitchen crews, front crews/cashier, and shop cleaner. The
Chef will then report to the partners. Also, policies will be established to manage the
business.

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CHAPTER II
MARKETING ASPECT
A. PRODUCT DESCRIPTION
Chocolate is one of the most famous desserts in the world. Every day, many people around
the world eat and crave for chocolate. The types of chocolate products made from cocoa bean
processing that will be used for our products are listed below.
Dark Chocolate: It is the type usually preferred when cooking because it has richer and
more intense flavor. The higher the cocoa solid content of a dark chocolate, the richer and more
intense the flavor you can get (Parragon, 2003). It has a minimum cocoa butter2
content of eighteen
percent (Notter, 2011).
Milk Chocolate: It is usually consumed as an ‘eating chocolate’ rather than used for
cooking. This is because of its creamy, mild, and sweet taste that the milk it contains produces. It
is used for decorations and when a recipe requires for a milder and creamier flavor (Parragon,
2003). Normally, it contains an estimate of 35% fat content. Its composition is 40% sugar, 30%
cocoa beans, 20% milk, and 10% extra cocoa butter (Notter, 2011).
White Chocolate: It is usually used to achieve color contrast when decorating cakes
(Parragon, 2003). It contains at least 20% cocoa butter and 14% milk solids. It also has 3.5% milk
fat and a maximum sugar content of 55% (Notter, 2011).
Chocolate Chips: They are usually used for baking and decorating. They are available in
dark, milk, and white variety (Parragon, 2003).
Cocoa Powder: It can be unsweetened and bitter in flavor or sweetened when mixed with
sugar. It is the powder residue after the cocoa butter has been pressed from the roasted and ground
cocoa beans. When cooking, unsweetened cocoa powder gives off a strong chocolate flavor
(Parragon, 2003).
Epicurean will make use of these types of chocolates to produce and serve a variety of
cakes, cupcakes, cookies, ice cream, hot and cold chocolate drinks.
As the leading producer of cacao in the world, the proponents will use Davao chocolates
in the store’s production. This is to increase Dabawenyo’s awareness about existing quality
chocolates in the region.
2 The natural fat present in cocoa beans. It is yielded by pressing the cocoa mass.

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The products offered will also be incorporated with fruits such as coconut, banana,
strawberry, durian, mango, and orange; nuts such as almond and pistachio; and other
complementary ingredients such as caramel, mocha, matcha, and whiskey.
As a service-oriented entity, Epicurean, will also offer quality customer service to its
customers. The staff will help the customers feel good about their day. From the moment a
customer enters the doors of the store to the time they will leave, Epicurean aims to give them a
comfortable dining experience. A heightened customer service is an important part in influencing
consumer decision whether to return or not.
B. MARKET DESCRIPTION
Epicurean’s general market will be the people of Davao and its tourists, since its location
will be in Pelayo Street, Poblacion District. As of 2010, Davao City has an estimated population
of 1.4 Million (Philippine Statistic Authority, 2013). It is ranked the 4th largest city in the
Philippines in terms of population (Worldatlas, n.d.). With regards to tourists, Davao City had
reached 680,000 visitors as counted by the Department of Tourism from accommodation
establishments in 2010 (Philippine Statistics Authority, 2012). This statistic shows that Davao City
can offer customers to current and potential establishments. Furthermore, the city has young
population. According to PSA, the median age of the population of the city is 24.0 years
(Philippine Statistic Authority, 2013). This suggests that the major customers of businesses in
Davao City will be in that age. Moreover, Davao City is a melting point of its neighboring cities
and municipalities. People from its neighboring cities and municipalities travel to Davao City to
work, to shop, and to do recreational activities.
Epicurean as a patisserie aims to attract college or senior high students, young professionals
and professionals. Due to this, the proponents decided to choose students, primarily senior high
and college students, young professionals and professionals with ages ranging between 15 – 34,
and have an income or allowance ranging between Php 1,001 and above as its target market. As to
the supply of student customers, Davao City provides a great number. Davao City has 20
College/Universities as per www.finduniversity.ph. The most popular colleges and universities in
Davao City are Ateneo de Davao University (AdDU), University of Southeastern Philippines
(USeP), Holy Cross of Davao College (HCDC), San Pedro College (SPC), University of Mindanao
(UM) and University of the Immaculate Conception (UIC). AdDU, SPC, and UIC are the schools

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which are in the high-tuition classification, with tuition ranging from Php 34,000 – 100,000 per
year. While HCDC, UM, and USeP are the schools which belongs to the low-tuition classification
with tuition ranging from Php 14,000 – 40,000 (Finduniversity.ph, n.d.). This data presents the
composition of students in Davao City in terms of allowance and buying power. Furthermore, the
result of the survey of the proponents shows that the usual student’s weekly allowance ranges from
Php 800 to Php 1000 and below Php 800. This represents 64.33% of the total students surveyed,
while the remaining 35.67% has an allowance of Php 1001 and above. This statistic shows that
most of the students have a low buying power. However, this statistic also shows that the 64.33%
is not the overwhelming majority thus allowing the proponents to implement a competitive pricing
strategy.
Davao City presents an impressive number of professional customers. According to the
article of Capon (2015), the employment rate of Davao Region remained stable at 94 percent in
April 2015 as per data from the Department of Labor and Employment (DOLE) 11. Furthermore,
based on the comparative employment status of the Davao Region for 2014 and 2015, employed
Dabawenyos reached 1,914 million of the 2,036 million total labor force. These employed
Dabawenyos are potential customers for every establishment and is a good indicator for businesses
like Epicurean.
As discussed earlier, Epicurean will serve pastries and sweets in Davao City. Consequently,
its major competitors would be pastry shops and coffee shops. In Davao City, pastry shops and
coffee shops are everywhere. Thus, the proponents decided that the point of comparison will be
Maitre Chocolatier, Starbucks, Green Coffee, Lachi’s Sans Rival Atbp. and Dulce Vida as these
are the shops that owns the bigger share of the market. First, Starbucks, a known international
coffee shop with international experience and popular name. Next, Green Coffee, a local coffee
shop which has a vast experience in the Davao City market due to its long years of existence in
the city. Another is Lachi’s San Rival Atbp, a known pastry shop in Davao City which offers cakes
at a low price. Finally, Dulce Vida, a sister shop of Tiny Kitchen, is a pastry shop which offers
premium cakes and delicacies. Despite of the advantages these shops have, the proponents believe
that Epicurean will have an edge against these competitors. According to Chef San Jose, in our
interview, a patisserie is a higher form of pastry of shop and currently there is no patisserie in
Davao City. This distinguishing feature would serve as a competitive advantage to Epicurean
because it would provide a first-mover advantage to the company.

EPICUREAN | 13
C. SUPPLY
Since Epicurean Chocolates (EC) is a type of business that is not yet common in Davao
City, we considered pastry shops and coffee shops as our competitors since these businesses offer
products similar in nature and could be substitutes to Epicurean’s products (e.g. cakes and other
pastries).
Presented below is the number of pastry and coffee shops (in total) which were able to
supply products (such as cakes, ice cream, chocolate drinks, etc.) to the Davao market for the past
five years.
Table 2.0. Number of Pastry and Coffee Shops in Davao City for the past five years
Using the average method of forecasting, we projected the probable number of pastry and
coffee shops in Davao for the next five years, presented below.
Pastry Shops Coffee Shops
2016 1 170
2017 1 171
2018 1 172
2019 1 171
2020 1 171
Table 2.1. Projected number of Pastry and Coffee Shops in Davao City for the next five years
As presented above, supply changes every year, with its number increasing and decreasing
from year to year. These fluctuations, however, do not follow a pattern; hence, the proponents
believe that the average method of forecasting is the most appropriate method in projecting the
supply for the next five years.
Among these establishments currently present in Davao City, the proponents identified five
businesses that they considered as major competitors of Epicurean. These are the following:
Maitre Chocolatier
Maitre Chocolatier is the first boutique cafe in the Philippines which offers a wide array of
High Quality, well known European Chocolate Brands. It has three branches – Manila, Cebu, and
Davao – and one of its branches is located in G/F, Abreeza Mall, J.P. Laurel Avenue, Bajada,
Davao City. The products the store serve to its clients include salads, sandwiches, soup, pasta, rice
Pastry Shops Coffee Shops
2011 2 164
2012 1 164
2013 1 169
2014 1 167
2015 1 175

EPICUREAN | 14
meals, desserts, cakes, drinks, and cocktails, all complemented with chocolates. Aside from
gourmet dishes and desserts, the store also offers chocolate gift baskets and bouquets to its
customers. The proponents considered this as a major competitor since Epicurean would offer
chocolates products, most likely similar to what Maitre Chocolatier offers.
Starbucks
Starbucks is an American coffeehouse chain. Its product offerings include pastries and
sandwiches, and coffee-based, tea, and juice drinks. Currently, it has three branches in Davao City
which have the following locations: (1) Abreeza Mall, J.P Laurel Avenue, (2) SM City, Ecoland,
Matina, Quimpo Boulevard, and (3) SM Lanang Premier, Lanang. The proponents considered
Starbucks as a major competitor since it offers products similar in nature to Epicurean’s products
(pastries, drinks), hence, could be substitutes to chocolate products.
Green Coffee
Green Coffee is a local coffee shop. Like Starbucks, its range of products include pastries
and pasta, and coffee-based, tea, and juice drinks. Currently, it has four branches: three of which
is in Davao City, located in the following areas: (1) F. Torres St., Poblacion District, (2) J.P. Laurel
Avenue, Bajada St., and (3) Ruby St., Marfori Heights; and one branch located along Apokon
Road, Tagum City. The proponents considered Green Coffee as one of the major competitors since
it offers products similar to Epicurean’s and could be considered substitutes to Epicurean’s
chocolate-based products.
Lachi’s Sans Rival Atbp.
Lachi’s Sans Rival Atbp. is a local dessert shop. Aside from the wide variety of pastries it
offers – particularly cakes – the store also offers sandwiches, rice meals, and pasta to its customers.
It has a single branch, located in Ruby St., Marfori Heights, Davao City. This store is considered
as a major competitor of Epicurean since it serves products similar to what Epicurean would be
offering (e.g. pastries and etc.)
Dulce Vida
Dulce Vida is a local dessert shop in Davao City. Aside from cakes and a variety of pastries,
the shop also offers pasta, rice meals, sandwiches, and coffee to its customers. This shop is located
at Tulip Drive Extension, Ecoland Subd., Matina, Davao City. The store also has a branch in Torres
St., Davao City under Tiny Kitchen’s management. The group considered Dulce Vida as a major

EPICUREAN | 15
competitor because of the products it offers, such as pastries, which would also be offered by
Epicurean.
Provided below are SWOT Analyses of Epicurean’s major competitors:
Strengths – Weaknesses
Strengths Weaknesses
Maitre Chocolatier
S1. Wide range of product
offerings
S2. First mover
W1.Popularity is not well
established
W2.Lack of advertisement
W3.Traditional Store Aesthetics
Starbucks
S1. The most well recognized
coffee brand internationally
S2. High quality products
S3. Established name in the
international market
S4. Competitive product prices
W1.Standardized products:
cultural differences
worldwide are not
considered
W2.Lacks product
differentiation
Green Coffee
local market
S2. 24/7 service
S3. Established customer
loyalty: Green coffee is
considered a study hub by
most college students and
preferred among coffee
shops
S5. Competitive product prices
W1.Lacks product
differentiation
Lachi’s Sans Rival
Atbp.
local market (Goodwill)
S2. Product variety
S3. Proper maximization of
their labor force
S4. Affordable product prices
W1.Very small and congested
store place: the place is
small to cater the number of
customers they have daily
W2.Lack some important
amenities such as comfort
rooms.
Dulce Vida
local market
S3. Product variety
W1.Very small store place: the
store could only cater a
small number of customers.

EPICUREAN | 16
Opportunities Threats
Maitre Chocolatier
O1. One of its kind in Davao,
hence, they can monopolize
the market
O2. Davao’s increasing interest
in premium shops
O3. Increasing number of
suppliers i.e. cacao farms
T1. New entrants
Starbucks
O1. Strong brand image as
compared to other coffee
shops
T1. High and growing
competition within the
coffee industry
T2. Dependency in coffee price
fluctuations
Green Coffee
in premium shops
T1. High and growing
competition within the
coffee industry
T2. Dependency in coffee price
fluctuations
Lachi’s Sans Rival
Atbp.
O1. Store expansion: the store
could opt to expand to cater
its high number of
customers
in new products: venture to
new products
T1. High and increasing number
of competitors (both direct
and indirect)
Dulce Vida
O1. Increasing trend in desserts
and pastries
O2. Increasing interest for
premium products in Davao
T1. New entrants in the industry
T2. High number of competitors
in the market (both direct
and indirect)

EPICUREAN | 17
Figure 2.0. Market Positioning Map
Legend:
X Axis: Price
Y Axis: Quality
High Price: X > 130
Low Price: X < 130
High Quality: Frequently Visited by Customers
Low Quality: Not Frequently Visited by Customers
As presented by the market position map above, we position Epicurean in the first quadrant
(High Price, High Quality). We want to establish Epicurean as a Premium Chocolate Shop,
offering varied chocolate-inspired food products with prices competitive to that of the industry.
EPICUREAN
Dulce Vida
Lachi’s Sans Rival Atbp. Green Coffee
Starbucks
Maitre Chocolatier
Low Price High Price
High Quality
Low Quality

EPICUREAN | 18
DEMAND
I. Current Demand
Due to the lack of availability of historical data to determine the overall demand for
the products offered by Epicurean, a survey has been made to 524 respondents. The number
of respondents is 140 more than the recommended sample size by the Sample Size
Calculator. They are composed of randomly selected students and young professionals
aging from 15 to 34 years old in Davao City.
The following factors are taken into consideration in computing for the demand:
1. Health Issues Regarding Chocolate Products
There are people who cannot eat products with chocolates due to their health
implications. Some of these implications may be allergies and tonsillitis among
others. Those whose bodies react negatively to chocolates are those that are least
likely to buy the products involving chocolates.
2. Customer Preference
Varying human preferences challenge businesses to be able to increase
demand. The idea behind this is to find the group of people sharing the same
preferences that the business wants to cater. For a concept like a chocolate house,
only those who like the idea would possibly go in that place. If the chocolate house
offers chocolate cakes but not chocolate ice creams, only those preferring cakes
among those that like the idea of a chocolate house would determine the possible
customers of the chocolate house.
3. Frequency of Patronage and/or Consumption
The number of times a person consumes a product certainly affects the
product’s demand. The more a person consumes it in a day for example increases
the demand for that product in a day as well.
4. Income or Allowance
A person’s income and/or allowance would define that person’s capacity to
purchase the products available.
After taking into consideration the factors stated, a formula was derived to estimate
the overall demand of the products offered by Epicurean in Davao City. The procedure in
arriving at the estimated demand is as follows:

EPICUREAN | 19
1. Determining the Percentage of Prospective Customers of a Chocolate House (X)
Formula:
X = (p-e) hli
Where:
X = Prospective customers of a chocolate house in percentage
p = Survey population in percentage
e = Margin of error in percentage
h = Percentage of respondents who do not have health issues with
chocolate products
l = Weighted percentage of respondents’ preference to go to a
chocolate house
i = Percentage of respondents’ whose weekly income or allowance
is P1001 or more
Application:
Before applying the formula, the following variables to the formula
are obtained first:
1. PERCENTAGE OF RESPONDENTS WHO DO NOT HAVE HEALTH
ISSUES WITH CHOCOLATE PRODUCTS (h):
Response Number of Respondents
Yes 29
No 495
TOTAL 524
Table 2.2. Respondent’s Response on Whether They Have Health Issues with
Chocolate Products
h = No. of Respondents with No Health Issues with Chocolate Products / Total
Respondents
= 495/524
= 94.46%

EPICUREAN | 20
2. WEIGHTED PERCENTAGE OF RESPONDENTS’ PREFERENCE TO
GO TO A CHOCOLATE HOUSE (l):
Table 2.3. Weighted Number of Responses for Respondents’ Preference to Go to a
Chocolate House
l = Weighted No. of Responses / Total Respondents
= 286.50 / 524
= 54.67%
3. PERCENTAGE OF RESPONDENTS’ WHOSE INCOME OR
ALLOWANCE IS MORE THAN P1000
Based on the survey, 185 out of 524 respondents have income or
allowance of P1001 or more. This is 35.31% of the sample population.
4. MARGIN OF ERROR (e):
e = z ∗ √
𝜌(1 − 𝜌)
n
where:
e = margin of error
z*= value at 95% level of confidence (from table of Z*-values of
Selected Confidence Levels)
𝜌 = hli = sample portion
n = sample size
No. of
Responses
Assigned
Weight
Weighted No. of
Responses
Very Likely 223 1 223
Somewhat Likely 160 0.50 80
Neutral 122 0 0
Somewhat Unlikely 5 -0.50 -2.50
Very Unlikely 14 -1 -14
TOTAL 524 286.50

EPICUREAN | 21
Computation:
e = 1.96 ∗ √
[(0.9446 𝑋 0.5467 𝑋 0.3531)][1 − (0.9446 𝑋 0.5467 𝑋 0.3531)]
524
e = 0.0331 ≈ 3%
Hence,
X = (100% - 3%)(94.46%)(54.67%)(35.31%)
= 17.69%
The result shows that 17.69% of the sample constitutes the potential
customers of chocolate house.
2. Solving the Target Market (per Week) in the Population (n)
Target Market (n) represents the group that the business would be aimed.
The target market for Epicurean is obtained by applying the percentage of
prospective customers to the actual population and the product to be defined by the
frequency of going to a chocolate house.
Formula:
n = N x ( X ) x F
where
n = Target market
N = Actual population
X = Percentage of prospective customers of chocolate house
F = Frequency of going to a chocolate house
The following variables to the formula are obtained first:
1. ACTUAL POPULATION (N):
According to results of 2010 Census of Population and Housing,
Davao City has a total population of 1,449,296 with household population

EPICUREAN | 22
of 1,443,890. Out of that, the household population of people aging from 15
to 34 years old is 540,076.
Hence, N = 540,076.
2. FREQUENCY OF GOING TO A CHOCOLATE HOUSE (F):
Respondents
(in %)
Assigned Weight F
Never 0.1145 0 0
Rarely
0.6546 0.125 0.0818
Regularly-Once a month
0.0496 0.25 0.0124
Regularly-Once a week
0.0897 1 0.0897
Regularly-More than once a
week
0.0916 2 0.1832
Table 2.4. Weighted Percentage of Frequency of Going to Chocolate House of
Respondents
Applying the formula target market (TM), the following are the results:
nRarely = 540,076 x 17.69% x 0.0818
= 7,815
nRegularly-OAM = 540,076 x 17.69% x 0.0124
= 1,185
nRegularly-OAW = 540,076 x 17.69% x 0.0897
= 8,570
nRegularly-MTOAW = 540,076 x 17.69% x 0.1832
= 17,503
nTotal = nRarely + nRegularly-OAM + negularly-OAW + nRegularly-MTOAW

EPICUREAN | 23
= 7,815 + 1,185 + 8,570 + 17,503
= 35,073
The total target market (per week) is 35,073.
3. Determining the Total Demand per Day per product in units (Q)
The formula for the total demand (Q) is:
Q = [(nq1-2times)/7](
𝑓
7
) + [(nq>2times)/7](
𝑓
7
)
Where
Q = Daily demand per product
n = Target market
q1-2times = Percentage of respondents with “1-2 times" weekly
frequency of buying the product
q >2times = Percentage of respondents with “More than 2 times"
weekly frequency of buying the product
f = mean of range of frequency of consumption or minimum of
range of frequency of consumption
This formula is derived from Wiley’s demand formula, Q = nqp.
The following information are obtained for the application of the formula:
Table 2.5. Percentage of Respondents with Frequency of Buying of Products of 1-
2 times and More than 2 times Per Week
Respondents in %
(q1-2times)
Respondents in %
(q>2times)
Cake 53.05 3.63
Cupcake 45.61 7.25
Cookies 49.62 17.94
Ice Cream 59.73 20.23
Hot Chocolate Drink 50.19 19.85
Cold Chocolate Drink 47.71 17.37

EPICUREAN | 24
The total demand (Q) in units for each product per day is shown below. The units
of measure referred for the products are “slices” for cake, “servings” for cupcakes, cookies
and ice creams, and “glasses/cups” for hot and cold chocolate drinks.
Qcake = [(35,073 x 53.05%)/7][(
1+2
2
)/7] + [(35,073 x 3.63%)/7](3/7)
= 647 units
Qcupcake = [(35,073 x 45.61%)/7][(
1+2
2
)/7] + [(35,073 x 7.25%)/7](3/7)
= 645 units
Qcookies = [(35,073 x 49.62%)/7][(
1+2
2
)/7] + [(35,073 x 17.94%)/7](3/7)
= 918 units
Qice cream = [(35,073 x 59.73%)/7][(
1+2
2
)/7] + [(35,073 x 20.23%)/7](3/7)
= 1076 units
QHCD = [(35,073 x 50.19%)/7][(
1+2
2
)/7] + [(35,073 x 19.85%)/7](3/7)
= 965 units
QCCD = [(35,073 x 47.71%)/7][(
1+2
2
)/7] + [(35,073 x 17.37%)/7](3/7)
= 885 units
In tabular form, the computed overall daily and annual demand in Davao
City for each product offered by Epicurean is shown below.
Product
Computed Demand per
Day in units
(Q)
Annual
Demand
in units
(Q x 360)
Cake 647 232,920
Cupcake 645 232,200
Cookies 918 330,480
Ice Cream 1,076 387,360
Hot Chocolate Drink 965 347,400
Cold Chocolate Drink 885 318,600
Table 2.6. Computed Overall Daily and Annual Demand in Davao City for Each Product
Offered by Epicurean in Units

EPICUREAN | 25
To determine Epicurean’s share in the overall annual demand in Davao City, the
percentage of the market share of Epicurean is estimated through the table provided by
Food and Agriculture Organization of the United Nations (see Table 2.7) where ranges of
estimates are provided for every combination of the factors: number of other producers of
the product, size of competitors and product range.
All products offered by Epicurean belong to the same combination – “Many” other
producers, “Small” sizes of competitors, and “Similar (S)” product range. Thus, the market
share is estimated between 5-10% from which the proponents selected the smallest of the
range, 5%, as the estimate to be applied.
No. of other
producers
Many Few One None
Size of
competitors
Large Small Large Small Large Small
Product range S D S D S D S D S D S D
Market share (%) 0-2.5 0-5 5-10 10-15 0-2.5 5-10 10-15 20-30 0-5 10-15 30-50 40-80 100
Legend: S = similar products, D = dissimilar products Source: www.fao.org
Table 2.7. Estimates of market share for a new food business with different levels of competition

EPICUREAN | 26
Epicurean’s share on the overall annual demand in units per products is as shown
on the table below.
Product
Annual Demand
in units
(a)
Epicurean’s
Annual Share in the Demand
in units
(a x 5%)
Cake 232,920 11,646
Cupcake 232,200 11,610
Cookies 330,480 16,524
Ice Cream 387,360 19,368
Hot Chocolate Drink 347,400 17,370
Cold Chocolate Drink 318,600 15,930
Table 2.8. Epicurean’s Share in the Computed Overall Annual Demand in Davao City for Each Product in
Units
II. Five-year Demand Projection
The demand computed in Part 1 was for the current year, 2016. However, the
operations will start within the year 2017.
To project Epicurean’s share in the overall demand for the first five years of
operations, the same formula is used and with the following assumptions:
1. The actual population (N) is determined by multiplying the immediately
preceding year’s population with the average population growth rate of Davao City
for 2010-2015 of 2.30% and adding the product to the immediately preceding year’s
population;
2. All other percentages and variables are constant.
Given that the current population (N0) is 540,076, the projected populations for the
next five years (N1, N2, N3, N4 and N5) are computed as follow:
N0 = 540,076
N1 = (540,076 X 0.023) + 540,076 = 552,498

EPICUREAN | 27
N2 = (552,498 X 0.023) + 552,498 = 565,205
N3 = (565,205 X 0.023) + 565,205 = 578,205
N4 = (578,205 X 0.023) + 578,205 = 591,504
N5 = (591,504 X 0.023) + 591,504 = 605,109
Now that the populations for the next five years are determined, by applying the
same formula the overall daily and annual demands for the next five years can be computed.
Table 2.9. Computed Percentage of Prospective Customers of a Chocolate House and Target
Market per Week of the Current Year and the Next Five Years
The projection of total overall demand per day per product in units for the next
five years is shown on the table below.
2016 2017 2018 2019 2020 2021
Cake 647 662 677 693 709 725
Cupcake 645 660 675 691 707 723
Cookies 918 939 961 983 1,005 1,028
Ice Cream 1,076 1,100 1,126 1,152 1,178 1,205
Hot Chocolate
Drink 965 987 1,010 1,033 1,057 1,081
Cold Chocolate
Drink 885 906 926 948 970 992
Table 2.10. Overall Demand per Day per Product in Units for the Next Five Years
Percentage of Prospective
Customers of a Chocolate House
(X)
Target Market
(per Week) in the
Population
(n)
Current Year (Y0) 17.69% 35,073
Year 1 17.69% 35,879
Year 2 17.69% 36,705
Year 3 17.69% 37,549
Year 4 17.69% 38,412
Year 5 17.69% 39,295

EPICUREAN | 28
The overall annual demand for each product in units for the next five years is shown
below.
Table 2.11. Overall Annual Demand per Product in Units for the Next Five Years
Out of the computed overall demand of each product in Davao City for the next
five years, Epicurean’s annual share in the overall demand in units is computed.
2016 2017 2018 2019 2020 2021
Cake 11,646 11,916 12,186 12,474 12,762 13,050
Cupcake 11,610 11,880 12,150 12,438 12,726 13,014
Cookies 16,524 16,902 17,298 17,694 18,090 18,504
Ice Cream 19,368 19,800 20,268 20,736 21,204 21,690
Hot Chocolate
Drink 17,370 17,766 18,180 18,594 19,026 19,458
Cold Chocolate
Drink 15,930 16,308 16,668 17,064 17,460 17,856
Table 2.12. Epicurean’s Annual Share in the Overall Demand in Units for the Next Five Years
2016 2017 2018 2019 2020 2021
Cake 232,920 238,320 243,720 249,480 255,240 261,000
Cupcake 235,440 237,600 243,000 248,760 254,520 260,280
Cookies 330,480 338,040 345,960 353,880 361,800 370,080
Ice Cream 387,360 396,000 405,360 414,720 424,080 433,800
Hot Chocolate
Drink 347,400 355,320 363,600 371,880 380,520 389,160
Cold Chocolate
Drink 318,600 326,160 333,360 341,280 349,200 357,120

EPICUREAN | 29
Chart 2.0 Epicurean’s Annual Share in the Overall Demand for Cakes in Units for the Years 2016-
2021
Chart 2.1. Epicurean’s Annual Share in the Overall Demand for Cupcakes in Units for the Years
2016-2021
10,500
11,000
11,500
12,000
12,500
13,000
13,500
2016 2017 2018 2019 2020 2021
10,500
11,000
11,500
12,000
12,500
13,000
13,500
2016 2017 2018 2019 2020 2021

EPICUREAN | 30
Chart 2.2. Epicurean’s Annual Share in the Overall Demand for Cookies in Units for the Years
2016-2021
Chart 2.3. Epicurean’s Annual Share in the Overall Demand for Ice Cream
in Units for the Years 2016-2021
15,500
16,000
16,500
17,000
17,500
18,000
18,500
19,000
2016 2017 2018 2019 2020 2021
18,000
18,500
19,000
19,500
20,000
20,500
21,000
21,500
22,000
2016 2017 2018 2019 2020 2021

EPICUREAN | 31
Chart 2.4. Epicurean’s Annual Share in the Overall Demand for Hot Chocolate Drinks
in Units for the Years 2016-2021.
Chart 2.5. Epicurean’s Annual Share in the Overall Demand for Cold Chocolate Drinks
in Units for the Years 2016-2021
16,000
16,500
17,000
17,500
18,000
18,500
19,000
19,500
20,000
2016 2017 2018 2019 2020 2021
14,500
15,000
15,500
16,000
16,500
17,000
17,500
18,000
18,500
2016 2017 2018 2019 2020 2021

EPICUREAN | 32
D. PRICE STUDY
The researchers have decided to use competitive pricing as the pricing strategy of Epicurean.
This means that Epicurean will be setting its prices largely based on what the competition is
charging. As of the moment, the only direct competitor, in terms of concept, the group has
identified is Chocolatier. Both Epicurean and Chocolatier are essentially selling the same products
– chocolate-themed. For the indirect competitors, the researchers identified that coffee shops fit
the criteria of satisfying the same customer need Epicurean offers. In Davao City, the two widely
known coffee shops are Starbucks and Green Coffee. The group also identified Dulce Vida as a
competitor as it offers substitute products (in terms of pastries) for Epicurean.
Below is the comparison of competitors’ prices:
Chocolatier
Starbucks
(with large size)
Green Coffee
Espresso Beverages 100-170 70-140
Tea 100-160 160
Chocolate Drinks:
Hot 155-165 125-150 140
Cold 150-160 160-180 145-150
Frappuccino 135-190 130-160
Coffee-Free / Fruit Drinks 140-160 140-170
Freshly Brewed 100-120 90-125
Ice Cream
Cupcakes
Cakes (slice) 176-360 120 95-100
Wines / Cocktails 120-170
Products with chocolate:
Salad 115-188
Pizza and Sandwiches 186-168
Rice meals and Pasta 180-250
Snacks (panini, waffles,
crepe)
128-188
Table 2.13. Comparative presentation of competitor’s price range.

EPICUREAN | 33
Consideration in setting the price
1. Competitors Price Range
Since the group decided to use competitive pricing strategy, the first priority the researchers
consider in setting the price is the competitors’ price range. Computed average price floor and
price ceiling will bear a large percentage on price setting (see Table 2.14). However, it does
not necessarily mean that the price should not go above the price ceiling or go below the price
floor. The proponents will adjust the pricing if necessary.
Table 2.14. Computed average price floor and average price ceiling.
2. Product Cost
After considering the standing of the competitors and the demand of the consumers, it is
important that the selling price remains profitable. An increase in profit margin is possible if
the product is still inside the competitors’ price range and customers’ price range.
Price Setting
Step 1: Price = Cost + Profit margin
Step 2: Compare computed price to competitors’ price range.
Decide if acceptable or not.
Remedy.
Step 3: Final Price
Products Average Price Floor Average Price Ceiling
Chocolate Drinks 145 157.5
Frappuccino 132 165
Coffee-Free / Fruit Drinks 133 175
Cakes 130 193
Wines / Cocktails 120 170
Products with chocolate:
Salad 115 188
Pizza and Sandwiches 132 210
Rice meals and Pasta 180 250

EPICUREAN | 34
Factors Affecting Change in Selling Price
1. Cost
In fixing the price, Epicurean should consider the cost involved in producing and
selling its products. This includes the product costs and period costs. The substantial
increase and decrease of these costs affects the profitability of the company and arises
the need for change in selling price. Presented below are the changes in the prices of
Epicurean’s main ingredient, chocolates. The price of chocolates increased roughly by
20%.
Chocolate
Weight
YEAR 2014 YEAR 2016
Price per Php Price per Kilo Price per Php Price per Kilo
100-gram bar 120.00 - 150.00 -
504 grams 264.00 - 330.00 -
1000 grams 440.00 440.00 550.00 550.00
2000 grams 840.00 420.00 1050.00 525.00
750-gram block 336.00 448.00 420.00 560.00
1600-gram block 640.00 400.00 800.00 500.00
Table 2.15. Changes in the prices of Malagos Chocolates; for the last two years, the prices increased by
20%.
2. Availability of substitute / similar products
Availability of substitute products increases competition in the market. New
entrants in the industry may offer more innovative products or there may be a product
development by the existing competitors. In order for the company to remain
competitive, it should also make product innovations which may directly affect the
product pricing.
3. Change in predetermined objectives
Epicurean should consider the objectives of the firm in fixing its prices. For
example, if the firm plans to have an increase to its return, then it may charge a higher
price and if the firm plans to capture a large market share, then it may charge a lower
price. (Chand, n.d.)

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4. Image of the firm
The change of price of the product may also be determined on the basis of the image
of the firm in the market. In the long run, if Epicurean will be able to establish its name,
it can demand to increase its price as it enjoys goodwill in the market. (Chand, n.d.)
5. Economic Conditions
In establishing the price, the prevailing economic conditions should also be
considered. For instance, during period of prosperity, people are much willing to buy
because they have more money and so, marketers can take advantage of the price setting.
While during recession, consumers have lesser money to spend, and so, prices are also
expected to go down.
E. MARKETING PROGRAM
Marketing is a form of communication between the entity and its customers. It includes
advertising, selling and distributing the products to the people. Moreover, it can be conducted in
various types and techniques.
i. Marketing Practices of Major Competitors
1. Maitre Chocolatier Boutique and Cafe (Davao Branch)
Maitre Chocolatier makes use of social media advertising in promoting their
store. They have a Facebook account which they update from time to time. They are
also featured in different food blogs in Davao. They created a website, www.m-
chocolatier.com, which highlights the products they are selling.
2. Lachi’s Sans Rival Atbp.
Lachi’s rely mostly on word-of-mouth advertising. This advertising scheme
involves the customers of Lachi’s and their sharing of their dining experience in the
store. It is an effective marketing tool because people put more credibility on the
comments of their friends and acquaintances. Lachi’s incurs zero cost with this
advertising. Lachi’s also have a Facebook page.

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Lachi’s is also featured in food blogs and food reviews. When you search
Google for the top pastries in Davao, Lachi’s is usually on the list. Tourists mostly rely
on this method when they are looking for an establishment to visit.
3. Green Coffee
Green Coffee employs social media advertising in promoting their store and
their products. They have a Facebook page that they update once in a while. Word-of-
mouth advertising is also utilized by Green Coffee.
4. Starbucks
Starbucks uses social media advertising in promoting their store and their
products. They have a Facebook page that they update every now and then.
They publicize promos such as “Buy 1, Take 1” schemes and other creatively
thought gimmicks to spice up their customer relations. They also make use of word-of-
mouth advertising.
5. Dulce Vida Bakery + Resto
Dulce Vida rely on word-of-mouth advertising. They have a Facebook page,
although unofficial, in which customers may rate and leave a comment. They received
a 4.8 out of 5-star rating in Facebook. They rely on their customers as they post pictures
of their cakes which attracts new customers to try their products.
They are also advertised in different blogs which highlight their menu like the
davaofoodtrips.com and libotero.com.
ii. Proposed Marketing Program
1. Marketing Mix
 PRODUCT STRATEGY
Epicurean will offer a mixture of product and service to its clientele. It will
serve chocolate products highlighting Davao chocolates. At the same time, it will
also offer quality customer service.
 DISTRIBUTION STRATEGY
This strategy includes decisions about modes of transportation,
warehousing, inventory control, order processing, and selection of marketing
channels (Kurtz, 2012).

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Modes of transportation: Epicurean will make use of motor carriers for the
transportation of supplies. This is done because Epicurean’s suppliers will be
around Davao Region.
Warehousing: Epicurean’s warehouse will be located at the back of the
store3
.
Inventory control: Epicurean applies the JIT (Just-in-Time) Inventory
control Strategy. Just-in-time (JIT) is an inventory strategy companies employ to
increase efficiency and decrease waste by receiving goods only as they are needed
in the production process, thereby reducing inventory costs. This method requires
the Epicurean Management to forecast demand accurately and timely to avoid
supplier dilemmas. (Kurtz, 2012).
This method will allow lowering the inventory costs and at the same time
ensuring that raw materials are available when needed.
Order processing: Orders from Epicurean to the suppliers will be made via
phone calls and through online. Other orders particularly for fruits will be made
directly in the stall of the supplier. Orders from consumers to Epicurean will be
made in the store premises where buyers order directly to the store staff.
Marketing channels: Epicurean will make use of direct selling. The
chocolate products will be made by Epicurean and will move directly to the
consumers of the products.
Packaging: The store highlights the premium quality of their products
through its packaging. They will use materials that are of high quality but with a
reasonable cost. (Please refer to the pictures in the next page to see how the products
are packaged)
3 See floor-plan.

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These cake boxes are
for take-out orders of
cake slices and other
pastries.
This is the standard-
size cake box for a
whole cake
Figure 2.1. Products’ Packaging Layout

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This smoothie cup is
used for take-out orders
of cold beverages. It is
served with a straw and
a cover.
This smoothie cup is
of Hot Beverages. It is
served with a cover.

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This cupcake box is
of cupcakes. A group of
six cupcakes is placed
inside and in a circular
holder for it to be held
safe while being
carried.
This paper bag is used
instead of plastic
cellophanes when
packaging take-out
orders.

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This pastry bag is used
when serving cookies.
Every package will be imprinted with this label highlighting the name, the address and
the contact number of Epicurean Chocolates.

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 PROMOTION STRATEGY
Epicurean Chocolates will make use of Social Media Advertising
particularly Facebook, Twitter, and Instagram to promote the store. The store will
intensify their social media presence by incorporating promos such as a 50%
discount, Birthday Promos, Graduation Promos and etc.
 PRICING STRATEGY
Epicurean Chocolates will apply the competitive pricing strategy.
Competitive pricing is setting a price in comparison with competitors. They will
base their prices on the prices of their major competitors. They may price lower,
equal or higher than their market opponents.
2. Marketing Goal
The proponents aim to make known Epicurean Chocolates to our target market
through effective and cost-efficient methods.
3. Marketing Objectives
 Attract and encourage potential customers to go to the store and become
patrons.
 Create a hype for the store.
 Keep customers and potential customers up-to-date on the activities and promos
of the store.
 Make the store trending in social media sites such as Facebook, Twitter and
Instagram.
4. Marketing Strategies
 SOCIAL MEDIA ADVERTISING
Using social media as an advertising tool creates a high public relations
value for the store with little to no cost incurred. Today, the younger
generations, including students and young professionals, pore over their
gadgets scrolling through Facebook, Twitter, Instagram, Pinterest, and other

EPICUREAN | 43
social media sites. The proponents aim to use this to their advantage in creating
a hype for the store.
The proponents will make a Facebook page for the store and post
quirky, witty, and eye-catching posters in the page. They will also post Promos
that could attract customers such as Graduation Promos, Birthday Promos and
etc. The posters made should be consistent with the theme of the store. The
proponents aim to gather as much as 200,000 hits i.e. people reached, likes and
shares for every post made. The proponents will also make use of the app Social
Media Analytics to locate audience and viewers of the store’s Facebook page.
The proponents will also make a Twitter account where various witty
and quirky chocolate quotes will be posted. Posters that were posted in
Facebook will be posted in twitter as very to cover a larger scope of people.
The proponents will also make an Instagram account for the store.
Photos of cakes, other chocolate products, and Chef Specials will be regularly
posted here.

EPICUREAN | 44
Facebook Account (Desktop View)
Facebook Account
(Mobile View)
Figure 2.2. Social Media Account’s Layout

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Twitter Account (Desktop View)
Twitter Account
(Mobile View)

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Instagram Account (Desktop View)
Instagram Account
(Mobile View)

EPICUREAN | 47
Promotional Poster- Pre-Opening Poster
This poster will be posted 2 weeks before the opening of the store. This will give
customers a 50% discount for all cake purchases if they will like the store’s Facebook,
Twitter, and Instagram accounts. This strategy will give the store more attention and will
make customers get updated by any updates and announcements of the store through
Facebook, Twitter, and Instagram.
Figure 2.3. Promotional Poster Layouts

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Promotional Poster Sample 1.0: Birthday Promo
This Promo will allow customers who are celebrating their birthday to get 50%
discount if they are accompanied by at least 2 other paying customers. The celebrant must
present a valid ID or a birth certificate to be qualified for the discount.

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Promotional Poster Sample 2.0: Graduation Promo
This Promo will allow customers who have recently graduated to be given a 50%
percent discount on all products if they are accompanied by at least 2 other paying customers.
They must present their graduation photo or any evidence that they have graduated for the
recent year.

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 PRINTED ADVERTISEMENTS
The proponents will be posting tarpaulins in different areas of Davao, most
especially in the downtown area so that the passersby would be aware of the store
and of its promos time to time. The proponents will produce at least 50 posters
annually.
5. Content Management Plan
Social Media Promotions
Time Frame Action
Two to three months before store
opening
Launch Social Media Page i.e. Facebook,
Twitter, and Instagram
Every two weeks after Social Media
Page launch
Post promotional posters i.e. what is the
store all about, opening date
One week before store opening
Post promotional posters i.e. promos to be
offered on the opening date
Every month after store opening
Post promotional posters i.e. promos and
sale during the month and on certain events
Printed Advertisements
Two to Three Months before the store
opening
Post tarpaulins within the Davao’s
downtown area, schools, and
establishments.
Every time the store has promos
Post tarpaulins highlighting the promos
near the areas where the bulk of its target
market stays specifically in the downtown
area.

EPICUREAN | 51
6. Advertising and Promotion Costs
Medium Unit Cost Total Annual Cost
Social Media PHP 165/ Boost Annual Number of Posts’
Boost: 50*
50 boost X PHP 165
=PHP 8,250
Tarpaulins PHP 10/ Square Feet Annual Number of
Tarpaulins: 50
50 Tarpaulins X 10 X 3 X 5
= PHP 7,500
TOTAL ANNUAL ADVERTISING COST PHP 15,750
Table 2.16. Computation of Advertising and Promotional Cost
*The number of boost (these are posts that will appear regularly in the news feed
allowing a better chance that people will see the post) will vary every year but a
maximum of 50 boosts is set by the proponents allowing 4-5 boosts monthly.

EPICUREAN | 52
CHAPTER III
TECHNICAL ASPECT
A. THE PRODUCT
Epicurean is a Chocolate Patisserie House located at Fabie Building, Pelayo Street,
Poblacion District, Davao City. It has an inviting atmosphere that will make customers feel
that they are in their own homes. It will also offer attentive and courteous service to its
clientele. It will be open for seven days a week from 10AM-10PM. The customer service policy
of Epicurean is to make sure that every customer will leave the store happy through serving
quality products and crew’s fast response to customer needs.
Epicurean will offer a variety of chocolate products to its clientele. The following are
the product lines of the store:
a) PRODUCT LINES
a.1. Cakes
Cake is an item of soft, sweet food made from a mixture of flour, eggs, sugar, and
other ingredients, baked and often decorated. Cakes can be moist, dense, small, or big. It
can be mixed with dried fruits and nuts or filled with fresh fruit and flavored creams.
Epicurean will offer the following cake products:
White Chocolate Mocha Mousse Mini
Cake

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Black Forest Mini Cake
Chocolate-Covered Strawberry Cake
Banana Bread Tiramisu Mini Cake
S’mores Mini Cheesecakes

EPICUREAN | 54
Triple Chocolate Mousse Mini Cake
Chocolate Whiskey Cake
Almond Joy Cake
Chocolate Espresso Bundt Cake with
Dark Chocolate Cinnamon Glaze

EPICUREAN | 55
Nutella Cheesecake
Chocolate Cake
Honey Comb Cake
Mint Cookies and Cream Cake

EPICUREAN | 56
Mango Mousse Cake
Salted Chocolate Caramel Ice Cream
Cake
Strawberry Chocolate Mousse
Mudslide Cake

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Triple Chocolate Cheesecake
Salted Caramel Milk Chocolate Cake
a.2. Ice Cream
Ice Cream is a sweet, frozen dessert typically made with milk and cream. Deriving
from its name, this cold treat is literally, iced cream. Ice creams are usually French-style or
Philadelphia-style (Arias, 2013). French-style ice cream means that ingredients, which
include egg yolks, are cooked until you have a thick custard before you freeze the mixture.
Philadelphia-style means that there are no eggs and cooking. Due to the egg yolks and
cooking process, French-style ice cream is richer, creamier, and smoother. Ice cream
sandwiches are two cookies with a scoop of ice cream in between.
Epicurean will offer the following ice cream products:
Matcha Avocado

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S’mores Waffle Sundae
Caramel Brownie
Chocolate Waffle Ice Cream Sandwiches
Chocolate Almond Coconut

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Blueberry and Coconut Ice Cream
Sandwich
Salted Caramel Chocolate
Grasshopper Ice Cream Sandwich
Boston Cream Pie

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a.3. Cupcakes
Cupcake is a variation of cake baked in cup-shaped tins. Cupcakes are bite-sized
and does not usually require plate and fork when served.
Epicurean will offer the following cupcake products:
Chocolate Espresso Cupcake
Salted Caramel Cupcake
Chocolate Pistachio Cupcake

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Matcha Cocoa Cupcake
Salted Caramel Chocolate Cupcake
Mint Chocolate Cupcake
Red Devil’s Food Cupcake

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Chocolate Sponge Cupcakes with
Chocolate Espresso Buttercream
Coffee Chocolate Cupcakes with
Bailey’s Irish Frosting
Espresso Fudge Cupcakes with
Chocolate Cream Cheese Icing
Chocolate Banana Cupcakes with Dulce
de Leche Filling

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Double chocolate Cupcakes with White
Chocolate Cream Cheese
Maple Buttercream and Bacon Cupcake
a.4. Hot Chocolate Drinks
Hot chocolate drinks are made from chocolates, milk, and hot water. It could be
added with sweeteners such as brown sugar, honey, or maple syrup if you want to
additional sweetness. Additional spices could be included in the mix to add texture to the
drink. Alcoholic beverages like whiskey or rum could also be added before serving.
Epicurean will offer the following hot chocolate products:
Chocolate Buttered Rum

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S’mores Hot Chocolate
White Chocolate
Melted Hot Chocolate with Sea Salt
Whipped Cream
Coconut Hot Chocolate

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Mocha Latte
a.5. Cold Chocolate Drinks
Similar with hot chocolate drink, cold chocolate drinks are usually made of
chocolate and milk. Chocolate drinks could be smoothies, shakes, lattes, or just plain milk
and melted chocolate mixed with cold water.
Epicurean will offer the following cold chocolate drink products:
Black Forest Smoothie
Chocolate Strawberry Smoothie

EPICUREAN | 66
White Chocolate Latte
Salted Caramel Mocha Smoothie
White Chocolate Mango Smoothie
Chocolate Avocado Smoothie

EPICUREAN | 67
a.6. Cookies
A cookie is a small, flat, sweet, baked good, usually containing flour, eggs, sugar,
and either butter, cooking oil or another oil or fat. It may include other ingredients such
as raisins, oats, chocolate chips or nuts.
Epicurean will offer the following cookie products:
Chocolate Peanut Butter Chip Cookies
Chocolate Sugar Cookies
Chocolate Orange Cookies

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Coconut Oatmeal Chocolate Chip
Cookies
Double Chocolate Chip
Mint Oreos

EPICUREAN | 69
Hot Chocolate Thumbprint
Salted Caramel Dark Chocolate
Cookies
White Chocolate Green Tea Cookies
White Chocolate Lemon Sugar Cookies

EPICUREAN | 70
B. PRODUCTION PROCESS
As a patisserie, Epicurean would have various processes for each for its operation. In the
case of Epicurean, there are four major processes. Under each major processes are sub processes,
which are the activities under each major process. The major processes, together with its sub
processes, are explained in this section.
1. Order Processing
The first major process is the order processing. This major process would provide the
general procedure for processing a customer order. Under this major process are two sub
processes, the dine-in process and the take-out process. The dine-in process is illustrated in
Chart 3.0, which is shown below.
Customer
Counter
Cashier
Front
Crew (FC)
Customer
Shop
Cleaner
1. The customer picks his/her choice of food and gives it to the cashier.
1. The cashier takes the order.
2. The cashier asks the customer whether it would be dine-in or take-out.
3. The cashier repeats the order and confirms it with the customer.
4. The cashier takes the payment.
5. The cashier takes the name of the customer and writes it in both receipts.
6. The cashier gives the receipt to the customer and the other receipt to a front
crew.
1. A FC prepares the order.
2. After the FC finished preparing the order, the FC will look for the customer by
calling out the name that is in the receipt.
3. When the FC finds the customer he/she will check the details of the receipt
(e.g. name, and items ordered) and match it with his/her copy and if it match
the FC will give the order.
1. The customer receives the order and consumes it.
2. The shop cleaner cleans the table and arranges the chairs and gets the plates
and utensils after the customer leave.

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The chart above specifies the general procedures when processing a dine-in order.
There will be several exemptions that might happen between these procedures. Two sample
exemptions would be: first, the Front Crew finds a wrong customer. In this case the Front
Crew would just continue to find the right customer. But if the front crew cannot find the
customer, he/she will place the ordered items in the counter area until a customer asks for
such order. Second, the order received by the customer does not match what he/she ordered.
In this case, the front crew will attend to the concerned customer and replace or add items
that are inconsistent with receipt of the customer.
The next process will be the Take-out process. The Take-out process will be
illustrated by Chart 3.1 below.
The take-out process is similar to the dine-in process except that the front crew, in
preparing the order of the customer, places the order in a packaging and that the customer
does not consume the order in the shop. For this reason, the exemptions stated in the dine-
in process is also applicable in this process.
Customer
Counter
Cashier
Front
Crew (FC)
Customer
1. The customer picks his/her choice of food and gives it to the cashier.
1. The cashier takes the order.
2. The cashier asks the customer whether it would be dine-in or take-out.
3. The cashier repeats the order and confirms it with the customer.
4. The cashier takes the payment.
5. The cashier takes the name of the customer and writes it in both receipts.
6. The cashier gives the receipt to the customer and the other receipt to a front
crew.
1. A FC prepares the order and places it in the take-out package.
2. After the FC finished preparing the order, the FC will look for the customer by
calling out the name that is in the receipt.
3. When the FC finds the customer he/she will check the details of the receipt
(e.g. name, and items ordered) and match it with his/her copy and if it match
the FC will give the order.
1. The customer receives the order and leaves Epicurean.

EPICUREAN | 72
2. Production process
The second major process is the production process. Under this major process are
processes with regards to preparation of display items, preparation of short-order items,
and the dishwashing operation. First is the preparation of display items. In this sub process,
items in the counter chillers are checked, replenished and arranged. The general procedure
in this sub process is shown Chart 3.2 below.
The suggested arrangement of the items in the counter chillers is shown in Figure
3.0. It is suggested that the counter chillers must always be filled up with items so that the
customers will be attracted to the display. For this reason, any missing item in the counter
chiller will then make such item be listed in the list of item/s for replenishment.
The second sub process under this major process, is the short-order process. Under
this process the chef together with the kitchen crews, prepare a short-order item for either
dine-in or take-out. For this sub-process to start the order processing should first take place.
The general procedures in this sub-process is shown in chart 3.3 below
Kitchen
Crew (KC)
1. A KC checks the counter chillers for items to be replenished.
2. The KC then makes a list of item/s for replenishment.
3. The list will then be submitted to the chef.
Chef 1. The chef checks the list of item/s for replenishment and makes a list of
ingredients needed for preparation.
2. The list of ingredients needed for preparation is then given to a KC.
Kitchen
Crew (KC)
1. The KC/s gets the ingredients from the store room based on the list of
2. The KC/s arranges the ingredients in the kitchen ready for cooking/assembly.
Chef 1. The chef will assign tasks to the KCs and supervise their work.
2. After the items are prepared, the chef checks the quality of the items before
putting them in the counter chillers.
Kitchen
Crew (KC)
1. The KC/s arranges the checked items into the counter chillers for display.

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Order
Processing
Chef 1. The chef receives the order from the front crew.
2. The chef makes a list of ingredients needed for preparation then gives it to a
kitchen crew.
Kitchen
Crew (KC)
1. The KC/s gets the ingredients from the store room based on the list of
2. The KC/s arranges the ingredients in the kitchen ready for cooking/assembly.
Chef 1. The chef will assign tasks to the KCs and supervise their work.
2. After the short-order is/are prepared, the chef checks the quality of the items
before giving it to the front crew.
Front
Crew (FC)
1. The FC receives the short-ordered item then serves it to the customer.
Figure 3.0. Suggested Arrangement of Items
Source:https://media-cdn.tripadvisor.com/media/photo-s/07/99/9a/fb/patisserie-vaniye.jpg

EPICUREAN | 74
Instead of the front crew, the chef, together with the kitchen crews are the ones that
will prepare the short-ordered items. In case of a take-out, it is also the chef and the kitchen
crew that packs the short-ordered items.
The last sub-process is the dishwashing operation. This sub-process deals with the
collecting of the used dishes and utensils, washing of the dishes and utensils, and arranging
of the dishes and utensils in the plate rack.
The process would first start when the cleaning crew takes in the used dishes and
utensils to the kitchen. After that, the kitchen crew takes the dishes and utensils and washes
them. Any left overs that are not edible are disposed accordingly and any leftovers that are
still edible are kept in the store room for distribution to the needy. Lastly, the washed dishes
and utensils are arranged in the plate rack.
3. Raw materials procurement process
The third major process is the raw materials procurement process. It has two sub-
processes namely, raw materials ordering and raw materials receipt process.
In the raw materials ordering sub-process, a kitchen crew makes a list of raw
materials to be ordered which in turn will be submitted to the industrial partner who will
contact the suppliers of each raw material. The general procedures of this sub-process is
presented in chart 3.4.
There is an instance where the industrial partner does not contact the suppliers and
vendors to order the raw materials. It is when fruits are purchased directly in the market by
the chef and the kitchen crew.
Kitchen
Crew (KC)
1. A KC checks the level of inventory of raw materials in the store room.
2. The KC then makes a list of raw materials that are in their critical level.
3. The list will then be submitted to the industrial partner.
1. The IP receives the list of raw materials submitted by the KC.
2. The IP then contacts suppliers and vendors to order the raw materials in the
list.
Industrial
Partner
(IP)

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Epicurean will have an authorized list of suppliers for each raw material. However,
in case the supplier runs out of the said raw material/s, the industrial partner will be
responsible in finding a new supplier. For fruits, there is no list of suppliers.
The second sub-process is the raw materials receipt process. Under this sub-process
both the industrial partner and the chef will look unto the raw materials delivered. The
industrial partner will be responsible in checking whether the prices and the quantity
ordered is the same with what was ordered. Meanwhile, the chef will be responsible in
checking the quality of the raw materials. The general procedures of this process are
presented in Chart 3.5 below.
4. Equipment and Shop Maintenance Processes
This major process entails the maintenance of the shop, its furniture, and
equipment. For the maintenance of the shop, a shop cleaner will be hired. This shop cleaner
will be responsible for maintaining the cleanliness of the shop at all times. This includes
collecting the used dishes and utensils and taking it inside the kitchen.
The kitchen crew and the chef will be responsible for the maintenance of the
kitchen. Before leaving the shop, the kitchen crew and the chef should make sure that every
tool that they used had already been cleaned. Through this, the life of the tools will be
prolonged.
1. The supplier delivers the raw materials with the corresponding prices and
quantities.
Chef 1. The chef checks the quality of the raw materials.
2. The approved raw materials are separated from the rejected raw materials.
Industrial
Partner
(IP)
1. The IP counts the approved raw materials and checks the prices for each raw
material.
2. The IP then computes the total amount due to the supplier and pays the
supplier accordingly.
Kitchen
Crew (KC)
1. The approved raw materials are then carried by a KC inside the store room.
2. The KC then arranges the raw materials in the store room according to their
type and qualities.
Supplier

EPICUREAN | 76
Lastly, for the maintenance of the various equipment, a quarterly maintenance will
be done by an outside professional. This is done to prolong the life of the equipment and
to make sure that the quality of the product will be consistent.
C. PRODUCTION SCHEME AND OPERATIONS
Epicurean will operate for seven days a week, from 10:00 AM – 10:00 PM. The proponents
came up with this operating days and hours through a survey of the target market.
Epicurean will use Lean production in producing its products. The proponents proposed
this type of production scheme due to the fact that most of the products of Epicurean have a short
shelf life or is best served when freshly made. Through this, Epicurean will reduce the cost of
spoilage and at the same time give the customers quality products.
In applying Lean production, Epicurean will use batch processing. For example, 5 cakes
will be made every time the number of such type of cake in the counter chiller drops to 5. Through
this, the equipment used for making such cake will be used efficiently and effectively.
This type of production scheme depends heavily on demand of the product because a
product will only be produced if a demand arises. This is due to the pull inventory control system
principle. The pull inventory control system begins with a customer's order, which would then
trigger the production of a product to fulfill the next order. With this strategy, companies only
make enough product to fulfill customer's orders (Hunt, n.d.).
To further explain the production scheme of Epicurean, the proponents prepared a daily
production Gantt chart.
Figure 3.1 Day before opening day
*Includes delivery time, receipt of raw materials, quality check of raw materials, storage of raw materials.
**Please refer to chart 3.0 in the Operation Processes discussion.
***Includes cleaning of the shop, finalizing the setup, making sure everything is ready for opening day.

Epicurean Chocolates Feasibility Study

Epicurean Chocolates Feasibility Study

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Epicurean Chocolates Feasibility Study