Ujeong Mate Café

Feasibility Study

Submitted to:

April Kate Fernandez- Valesno, CPA

Submitted by:

Jay Ann N. Aguilar

Jaycel P. Ampan

Jean Rose T. Bustamante

Dave Jones R. Guinita

Mary Grace V. Quisol

 I. SUMMARY OF PROJECT

A. Name of firm- Ujeong Mate Café

B. Location: head office/ factory- The café’ will be situated at the student loving
site of the canteen
C. Brief description of the project- A high demand of quality coffee products and
a place for meditation or clearing up and relaxing your mind is the reason for
this study to be proposed. Ujeong Mate Café is purely inspired by Korean
Culture which is one of the trends nowadays. We are proposing for a coffee
shop or café that will serve different kinds of coffee that the customer
themselves can choose they’d prefer.

1. History of business

Ujeong Mate Café was the very first cafe to offer books for reading in the
University. Established in 2020, they serve exclusively homegrown coffee (Sagada,
Kalinga, and Benguet Roasts), bringing a taste of Baguio to the Maginhawa Community.
They opened the library café with the intention of giving everyone, especially under
privilege student, opportunity to read books and a place to read, sips, and dine. Most
customers are group of students and as well as teachers hanging out during weekends
and young professionals who choose the café as a meeting place due to its vibrant and
comfortable seating and cuisine that’s on the quirky side.

2. Nature or kind of industry

Ujeong Mate Café is a coffee shop tailor-fit for students and professionals who
like to do their research or studying outside the university. Their comfy chairs and
barkada-sized snacks are just some of the factors that make their café a popular
hangout for young people.

3. Type of organization

The Ujeong Mate Café will be an association. This type of organization is faster
and easier creation of business.

4. Officers of the business and their qualifications

Manager

 Must be a graduate of Hotel and Restaurant Management with working experience

of at least 2 years in managing services.
 Good communication skills
 Must have the ability to cope up under pressure
 Excellent customer and training service skills
 Good accounting skills

Custodians

 At least High School graduate with 5 months of working experience in restaurant

industries
 Must be a flexible one to have initiative
 Good communication skills
 Must be alert and active
 NC holder for Bartending and Barista

II. ECONOMIC BENEFITS

A. GENERAL MARKET DESCRIPTION

1. Market Description

The market merely matters and will depend on the possible number of enrollment
population of University for it is located inside the campus. However, it is somewhat a
good target customer which would lead to a high profit margin. Employees and
undergrads are potential target since they are the most active market in coffee just like
the students, academic faculties, other employees and visitors.

Since, these following target consumers shows base on the market research the
most likely to buy coffee products. Moreover, coffee consumption is universal across
different income, categories and mostly depends on the University campus will provide
access to the targeted customer audience.

2. Demand

For the past ten years, market consumption of coffee increases up until now.
As per result of some research, in terms of liquid beverage equivalents, coffee is among
the most consumed beverage worldwide with roughly 42.6 liters per person and year
(12.6 liters of roast coffee and 30 liters of instant coffee).

The major consumer of this product are those middle age individual specially
those at work. Through coffee it relieves stress and enable them to make their day more
better.
 For the next 5 years we assume that more individual would love and enjoy
the aroma of coffee. Moreover, the project itself would grow more, create new taste of
coffee, and develop the facility as what is the trend of another generation.

3. Supply

One of the most important thing in doing business is the supply of

products. As we come up with a project pertaining to a Cafe or a Coffee shop we
tend to look or search best coffee supplier in the Philippines. We choose our
supplier only in the Philippines so that our target consumer will discover how
great is a Filipino made coffee, to embrace our own culture and to help Filipino
coffee planters spread their products and allow everyone to taste the sweet
sensational aroma of coffee in the Philippines. Here are some expected supplier
locally:

Mount Apo Civet Coffee Inc.: The coffee producer is best known for its Civet
Coffee product which is processed from beans found in the excrement of civet
cats. They are also known for producing Arabica coffee that is naturally-grown
from the volcanic soil of Mt. Apo.

Monk’s Premium Blend: This coffee blend is produced by the Benedictine monks
at the Transfiguration Monastery in Bukidnon, Philippines. The monks create a
blend of Arabica and Robusta which is then packaged as ground or whole
beans. Bukidnon is an ideal place to grow Arabica and Robusta coffee because
of its high altitude and cool climate and its soil which is rich in the concentration
of potash and phosphates.

Coffee for Peace: The company produces its Arabica beans in Mindanao and is
known for its social efforts in resolving conflicts between certain Migrants and
Bangsamoro farming communities in Mindanao. The company has received
several awards and recognitions both from local and international award-giving
bodies for their business and social efforts.

SGD: SGD offers coffee beans that are produced in Sagada. The founder of the
company partners with farmers in Sagada to plant their coffee trees in their
lands, when the beans ripen it is then sold to the company at premium prices.
SGD is particular in offering Typica, a sub-type of Arabica beans which can be
found in the mountains of Cordillera.

Some of the factors that influence the supply of a product are described as
follows:
 i. Price: Refers to the main factor that influences the supply of a product to
a greater extent. Unlike demand, there is a direct relationship between the
price of a product and its supply. If the price of a product increases, then
the supply of the product also increases and vice versa. Change in supply
with respect to the change in price is termed as the variation in supply of a
product.

Speculation about future price can also affect the supply of a product. If
the price of a product is about to rise in future, the supply of the product
would decrease in the present market because of the profit expected by a
seller in future. However, the fall in the price of a product in future would
increase the supply of product in the present market.

ii. Cost of Production: Implies that the supply of a product would decrease
with increase in the cost of production and vice versa. The supply of a
product and cost of production are inversely related to each other. For
example, a seller would supply less quantity of a product in the market,
when the cost of production exceeds the market price of the product.

In such a case the seller would wait for the rise in price in future. The cost
of production rises due to several factors, such as loss of fertility of land,
high wage rates of labor, and increase in the prices of raw material,
transport cost, and tax rate.

iii. Natural Conditions: Implies that climatic conditions directly affect the
supply of certain products. For example, the supply of agricultural
products increases when monsoon comes on time. However, the supply of
these products decreases at the time of drought. Some of the crops are
climate specific and their growth purely depends on climatic conditions.
For example Kharif crops are well grown at the time of summer, while
Rabi crops are produce well in winter season.

iv. Technology: Refers to one of the important determinant of supply. A better

and advanced technology increases the production of a product, which
results in the increase in the supply of the product. For example, the
production of fertilizers and good quality seeds increases the production
of crops. This further increase the supply of food grains in the market.
 v. Transport Conditions: Refer to the fact that better transport facilities
increase the supply of products. Transport is always a constraint to the
supply of products, as the products are not available on time due to poor
transport facilities. Therefore even if the price of a product increases, the
supply would not increase.

In India sellers usually use road transport and the poorly maintained road
makes it difficult to reach the destination on time the products that are
manufactured in one part of the city need to be spread in the whole
country through road transport This may result in the damage of most of
the products during the journey, which can cause heavy loss for a seller.
In addition the seller can also lose his/her customers because of the delay
in. the delivery of products.

vi. Factor Prices and their Availability: Act as one of the major determinant of
supply. The inputs, such as raw material man, equipment, and machines,
required at the time of production are termed as factors. If the factors are
available in sufficient quantity and at lower price, then there would be
increase in production. This would increase the supply of a product in the
market. For example, availability of cheap labor and raw material nearby
the manufacturing plant of an organization would help in reducing the
labor and transportation costs. Consequently, the production and supply
of the product would increase.

vii. Government’s Policies: Implies that the different policies of government,

such as fiscal policy and industrial policy, has a greater impact on the
supply of a product. For example, increase in tax on excise duties would
decrease the supply of a product. On the other hand, if the tax rate is low,
then the supply of a product would increase.

viii. Prices of Related Goods: Refer to fact that the prices of substitutes and
complementary goods also affect the supply of a product. For example, if
the price of wheat increases, then farmers would tend to grow more wheat
than nee. This would decrease the supply of rice in the market.

Competitive composition

Markup Pricing
 Markup pricing, or cost-plus pricing, is done when you know all costs
associated with producing one cup of coffee. Beans, water, cream and sugar
make up your cost of goods sold. Labor and other overheads such as rent and
utilities comprise your remaining costs to produce. Total these costs for a period
and divide by the number of cups sold. Add a percentage for profit, the markup,
and you have your per-cup price. While this is an excellent exercise to
understand how fixed and variable costs affect profit, market conditions will
probably influence your pricing strategy more directly.

Competitive Pricing

If you are lucky enough to be the only place in town that sells coffee,
you are a price setter; that is, you have comparative freedom to charge whatever
you want. In practice, you will have competition and what they charge will have a
bearing on your price. Two approaches are penetration pricing and skim pricing.
Penetration pricing is also known as undercutting. You charge less than
competitors to lure customers away. Skimming refers to charging a little bit more
than the competition, perhaps to establish your coffee as a premium product.

Demand Curve Pricing

Demand curve pricing looks at your customer base. In simplest terms,

as you raise the price of your coffee, demand for it will fall, and lowering your
price will bring in new clients. As you saw with competitive pricing, this is not
always the case when customer perception is altered as in the premium product
scenario. Other factors affecting demand curve strategies are things like
convenience and location. Using demand curves may require market surveys
and other customer feedback methods.

Loss Leader Pricing

Charging less than cost on a cup of coffee is a recipe for disaster if

coffee is your main product. However, if you have a new line of breakfast
sandwiches, for example, you may include a cup of coffee at a low price to
encourage purchase of the higher-margin sandwich. A car repair shop may offer
coffee at low or no cost to encourage customers to choose them over a
competitor. Though not profitable on its own, the cup of coffee leads customers
to other high-margin purchases.
Menu Pricing

Espresso 55 pesos Café Latte 75 pesos

Strong Espresso 60 pesos Vienna Coffee 55 pesos
Short Black 55 pesos Frappuccino 70 pesos
Cappuccino 60 pesos Mocha 65 pesos
Macchiato 55 pesos Milk Tea 65 pesos

Espresso

Ingredients Amount Total Cost

Shot Espresso Coffee 1 shot 3.00
Water 1 cup 0.30
3.30/serving

Cappuccino

Ingredients Amount Total Cost

Shot espresso coffee 1 shot 3.00
Steamed milk ½ cup 7.50
Milk foam ½ cup 3.75
14.25/serving

Short Black

Ingredients Amount Total Cost

Shot espresso coffee 1 shot 3.00
Water 1 cup 0.30
3.30

Café Latte

Ingredients Amount Total Cost

Milk 1 ¼ cup 18.75
Flavored syrup 2 tablespoons 2.10
espresso 1 (1.5 fluid ounce) jigger 3.00
23.35/serving

Macchiato
Ingredients Amount Total Cost
Espresso 1 jigger 3.00
Chocolate milk 1/3 cup 5.00
Syrup 2 tablespoon 1.43
Sugar 1 tablespoon 0.55
Vanilla extract ¼ teaspoon 0.07
10.05

Mocha

Ingredients Amount Total Cost

Milk 1 cup 15.00
Cocoa 1 tablespoon 0.68
Brown Sugar 1 tablespoon 0.70
Ground Coffee ½ tablespoon 0.59
Vanilla Extract ½ teaspoon 0.14
17.11/serving

Frappuccino

Ingredients Amount Total Cost

Espresso 1 jigger 3.00
Chocolate milk 1/3 cup 5.00
Flavored Syrup 2 tablespoons 2.25
Sugar 1 tablespoon 0.55
Vanilla Extract ¼ teaspoon 0.07
Ice cubes ¾ cup 0.31
11.18

Milk Tea

Ingredients Amount Total Cost

Tea ½ cup 8.00
Milk ½ cup 7.50
Flavored syrup 2 tablespoon 2.10
Ice cubes 1 cup 0.41
18.01/serving
 Filipinos are said to be the top 5 coffee consumer around the world.
Thus, many company imported coffee product from different countries. However
in this project we would offer coffee products purely made in the Philippines, so
that Filipinos may embrace Filipino products. Black coffee is not just for old
people while coffee has indeed exploded in popularity among millennial in the
past couple of years, there has been an existing notion that they still prefer
blended drinks and Frappuccinos, and that only “true” coffee lovers (e.g. oldies)
prefer black coffee. But according to coffee farmer and furniture designer Butch
Acop, in the last few years, millennial have actually been the biggest consumers
of black coffee. “Young people nowadays have definitely realized that they don’t
need to add creamer or sugar to make coffee taste great.” Besides, coffee has
many benefits. Studies have shown that it can prevent heart disease and delay
aging. As the research shows that millennial was one of the biggest consumer of
black coffee which a Filipino made product it indicates a great target profit in
dealing this project. Though, many coffee shop built for the past years but this
project is somewhat an advantage because of its location that could easily be
access among students and teacher inside the University.
Sample Questionnaire:

Kindly put check to the following rate base on what you prefer

Questions Average Satisfactory Good Excellent

How do you find our product?

How was the customer service

received?

How do you find our other products?

Please rate the variety of our

products.

How do you find our company

overall?

How likely you would purchase the

same or other product from us?

How likely would you recommend our

products to others?

1. How much price do you expected from the coffee?

o 55-65 o 75-85
o 65-75 o 85-100

2. Do you prefer take out service?

o Yes
o No

3. Would you like to access free Wi-Fi from the café?

o Yes
o No

4. Do you expect any promos and discounts?

o Yes
o No
5. What do you think the best tool for advertising for promoting products?

o Leaflets o Social media

o Flyers o Website
o Posters o E-mail
o Business cards o Others

6. Do you regularly use social media? If so what social media do you use?
o Yes
o No

o Facebook o Twitter
o Instagram o Others
o YouTube

7. What product would you like to pair up with the coffee?

o Cake o Rice cake (bibingka)

o Bread o Banana cue

8. Do you want personalized packaging?

o Yes
o No
o Others (please specify)

9. Based on the given menu above, what flavor you liked the most?

o Espresso o Macchiato
o Cappuccino o Mocha
o Short Black o Frappuccino
o Café Latté o Milk tea

10. In a day, how many cup/cups of coffee consume?

o 1 o 3
o 2 o 4
o 5

o Others (please specify)

11. In a month, how often you visit a coffee shop?

o 1-3
o 4-6
o Others (please specify)