Chapter I

Introduction

According to British Broadcasting Corporation (BBC), first Karaoke Machine was

invented by a Japanese musician named Daisuke Inoue in 1971 but a Filipino inventor named

Roberto Del Rosario holds the machine’s patent and also developed a Karaoke Sing-Along

System in 1975.

Karaoke is ten times popular in Asian countries especially in Japan and Philippines as

stated in USA Karaoke website. It is also said that compare to United States, Karaoke is much

cheaper in Asian countries and it has unlimited song choice.

Spending time in the Philippines and not encountering a Karaoke is almost impossible. A

website known as Phil Life (Live the Pinoylife, love the Pinoy life), said that no matter where

you are around the globe you will find that every home owned by a Filipino have a Karaoke

System of often substituted with the term “videoke”. They also suggested that scheduling on a

Karaoke Television (KTV) bar is best when they are on a vacation.

Singing becomes a central part of pop culture in the Philippines and even San Pableños

are not exempt from it. Thus, the researchers got much interested on the feasibility of

establishing KTV Resto-Bar in P. Laurel St. San Pablo City, Laguna

The central problem of this study is the evaluation of the viability of establishing a KTV

Resto-Bar in San Pablo City.

Objectives of the Study

The main objective of this study is to determine the viability and feasibility of

establishing a KTV Resto-Bar in San Pablo City.

Specifically, the objectives from the point of view of the different functional areas of

management are as follows:

Marketing Study

1. To discuss the nature of the primary and secondary products and services

2. To determine the demand and supply for the products and services and the proposed

venture’s market

3. To formulate marketing plan and strategy for a successful day-to-day business operation.

Operations/Production or Technical Study

1. To find out the procedures that affects the operations of the business in the most

economical and productive way.

2. To determine the necessary equipments, furnitures and fixtures, intended location,

building requirements and most efficient plan for the establishment of a KTV Bar in San

Pablo City.

3. To decide on the most applicable business hours and the conceptual capacity of the

proposed business.
 4. To determine the certain costs to be incurred of the business operations.

Organization and Human Resource Study

1. To decide on the most appropriate and accurate form of ownership.

2. To identify the legal requirements needed in this field of business.

3. To determine the number of qualified people to run and manage the business.

4. To develop compensation and bonus package that will keep and motivate the people in

the business to work harder.

Strategic Management Study

1. To develop the mission, vision, objectives and goals for the proposed business.

2. To develop effective action plan for the proposed business.

3. To set standards and strategic evaluation to review the operations of the proposed

business.

4. To set back-up plans and exit plan just in case the assumptions do not work as proposed.

Financial Study

1. To make realistic expectation that will guide in the preparation of financial statements

2. To make an estimate of total investment required in implementing the business

3. To search for financing resources that is possible in yielding low interest.

4. To determine the financial return of the business after the preparation of financial

statements

5. To analyze the activities that leads in the success of the business

1. To manage and examine the operations of the business so as to be responsible to the

stakeholders.

2. To offer a just compensation to the stakeholders.

3. To provide jobs to qualified individuals residing in San Pablo City.

4. To generate more income for the society.

Significance of the Study

The results of the study will be a great benefit to the following:

To the customers, this study will give them an opportunity to experience the new and

upgraded KTV bar in the most convenient price and most satisfying way.

To the future investors, this study will serve as a guide to those who are interested in

establishing the same kind of business and employ the given data in implementing the business

in the future.

To the future researchers, this study can be use as their source and references for future

related studies inline with planning to establish or research about a KTV bar or same kind of

business.

To the society, this study will help to increase the economical aspect of San Pablo City

by establishing this new kind of business in the area. In addition this business will help to atleast

decrease the unemployment rate in San Pablo City.

The main purpose of the study is to determine the viability of establishing a KTV Resto-Bar

in San Pablo City. The researchers will use the data that will be gathered from survey

questionnaires, interviews, and observations.

The proposed business can provide different amenities and serve food to the clients

depending on their choice. The study will utilize the available information during the period to

fulfill the objectives in marketing, technical, organization and human resource, strategic and

financial aspects of management.

The financial statements are projected only up to five years from the start of the business.

All activities and financial projections are made based on the five-year period to minimize the

effects of changes in long-term projections. Other data and projections beyond the five-year

period are not scope of the study.

The target market of this study are the youth and young adults and in line with this, there

are certain limitations like, clients aging eighteen years old and below cannot enter the KTV

Resto-bar from 10:00 pm to 4:00 am due to their curfew and they cannot order alcoholic

beverages. In addition, the business cannot also accept any students during their class hours.

Some information is limited due to availability and confidentiality of records especially

trade secrets.
 Chapter II

Related Literature

Karaoke

Karaoke is an art form originated in Japan. Karaoke music is the instrumental song

without vocal part. It is played using karaoke systems to enjoy singing along with lyrics. It is one

of the best hobby activities because it can add fun to any kind of social gathering. On the other

hand, it can also be a great companion to celebrate loneliness.

The earlier prototype of the karaoke kiosk was developed by a Japanese musician,

Daisuke Inoue in 1971. Therefore, he was the first person to realize the commercial potential of

karaoke music. He started leasing out his karaoke machines. In those days, leasing out karaoke

machine was considered as an expensive lifestyle activity. However today, the karaoke systems

and music is quite an affordable affair.

Karaoke seems to be a really good ice breaker. When people may not normally socialize

with each other, it appears that when an individual get up and sing, it somehow opens the way to

a conversation. Often a person is congratulated on how well they done when they come off stage

and a conversation may begin. It is also an excellent tool to build confidence in children. Most

children love to sing and will express themselves through song. Some are quite shy however,

having the music to follow seems to give them confidence, as though they are not alone when

they are before the audience.

Most of us who have enough courage to sing out loud in front of a crowd during karaoke

events know how much fun it can be. But according to Lloyd Hall (2018) there are also

numerous other advantages that it provides.

1. Stimulates the Brain

One of the advantages of signing from karaoke is that it will boost the brain.

Singing is not easy as it appears since it requires the singer to use his brain to

think. Secondly, when you are singing, you need to follow particular lyrics,

melody, and rhythm; this implies that you have to use your brain to coordinates

all these activities.

When you are signing from karaoke, you will try to beat the competition by

singing well. You will make good use of your chords, and other technical aspects

of singing that are related to the brain.

2. Relieves Stress

If you are looking at some of the best ways of reducing stress, then sing from

karaoke. Singing makes people happy and helps people express their emotions. If

you are tensed, and you begin singing, you will realize that the tension will go

away thus leaving you relieved.

It has also been established that during singing, endorphins are released in our

bodies which help in reducing both stress and anxiety. Singing along to your

favorite karaoke tune will slow down your heartbeat and help you breathe

properly.
3. Express Emotions and Feelings

Singing from karaoke will also help you to express emotions and feelings. Most

people, who usually rise to sing during the karaoke, typically choose their favorite

tunes. They pick songs that they connect with well.

When they are singing to their favorite karaoke tunes, they will be able to express

their emotions and feelings. Expression of feelings and emotions is highly

recommended since it makes us free beings.

4. Showcasing your Talent

If your talent is singing, karaoke provides you with precisely that. We have great

singers who do not get great platforms to perform. If you are such a kind of a

person and you are looking for a great platform to show the world that you can

sing, the karaoke sessions are ideal for you. You could easily land yourself a

recording contract if you impress the music producers who are in attendance.

5. It’s a perfect excuse to move your body.

If you motivate yourself not only to sing but also to dance to the sound of the

music, the benefits for your health will be twofold thanks to the “exercise” you

have realized during the karaoke session. Free yourself, let your feet take control

and make the stage yours!

6. It is a perfect way of socializing.

At karaoke bar everybody is welcome, families with children, groups of friends,

couples… even you can motivate yourself to go out on the stage on your own and

you will feel embraced by an atmosphere of music and fun to spend an

unforgettable night.
Karaoke Business

A special peculiarity of the karaoke business is its economic “versatility” – karaoke will

produce profit at places having absolutely different status: both in a fashionable restaurant

located in the central part of a city and in a little café in the suburbs. Karaoke is also of demand:

in a restaurant, in a night club, in a children’s café and even in entertainment complexes.

1. In a restaurant

In a restaurant, karaoke is a logical follow-up of the guests’ rest after a dinner.

2. In a night club

In a night club, karaoke is an interesting solution in addition to the dance floor.

Well, sometimes guests come to their favorite night club in “non-dancing” spirits.

3. In a children’s café

In a children’s café, karaoke is a full-featured amusement and teaching program

for children of different ages. In a playing form, karaoke helps children to learn

both native and foreign languages as well as to develop their vocal skills.

4. In entertainment complexes

In entertainment complexes (ski resorts, cruise liners, sanatoria etc.), karaoke is a

supplementary component for diversifying the leisure of the resting guests.

Karaoke Culture in the Philippines

It is an understatement to say that Filipinos love karaoke. Almost every Philippine home

has a karaoke machine or a Magic Sing microphone – a digital mic that turns your television into

a karaoke machine. It’s almost always a feature at birthday and holiday parties. And scores of

bars and restaurants offer karaoke or videoke

joined the market with their own versions of karaoke machines. The karaoke industry is a

lucrative market as the machines are used in gaming centers, bars, nightclubs, and karaoke

establishments across the country. Because of the popularity of karaoke machines in the

Philippines, many businesses made the move towards renting out their machines.

However, karaoke is not the only term people use to mean karaoke. Most especially in the

Philippines, there are a few other names associated with the word karaoke.

Sing-along

Sing-along, also called community singing or group singing, is an event of singing

together at gatherings or parties, less formally than choir singing. One can use a song book.

Common genres are folk songs, patriotic songs, hymns and drinking songs. Children across the

world usually sing nursery rhymes together. Sing-along can be based on unison singing, or on

singing in harmony (different parts).

Minus one

Minus one is common to Filipinos as a term that means "instrumental" as in the

instrumental version of a music track. In the Philippines, "minus one" tracks would most likely be

used for karaoke. Minus one is a karaoke song track which means that only the lead singer is

missing. These often contain background and/or harmonizing singers. Instrumentals are music

only with no background vocals.

An instrumental is a musical composition or recording without lyrics, or singing, although

it might include some inarticulate vocals, such as shouted backup vocals in a Big Band setting.

The music is primarily or exclusively produced by musical instruments. An instrumental can

exist in music notation, after it is written by a composer; in the mind of the composer (especially

in cases where the composer herself will perform the piece.

Related Studies

VIP karaoke rooms are a new trend in karaoke business development. Their availability

at karaoke clubs is reasonable in cases when the main karaoke hall is completely filled in such

circumstances creation of VIP rooms gives a guest a possibility to sing karaoke in a separate

space without having to wait for their turn in queue. Private karaoke rooms are excellent to

conduct family and corporate events and give an opportunity to utilize the internal space of the

entertainment place more efficiently, turning its shortcomings into advantages.

Nature of the business

Establishments in the karaoke bar industry basically offer karaoke entertainment along

with food and drinks. There is potential for success in this industry, and according to Mack

(2012), as more music became available for karaoke machines, more people within the industry

saw karaoke as profitable form of lounge and nightclub entertainment. Many Filipino restaurants

and bars local and abroad have karaoke machines which allow customers to sing. KTV bars are

also popular where friends and officemates rent and sing karaoke inside multiple soundproof

rooms to allow individual groups to sing undisturbed.

which means that a large group of friends will visit you. What is more, given its extended nature,

it is a great way not to just create new set of regulars to visit your bar. Businesses with unique

approach to the market provide an excellent opportunity for KTV bar to be successful.

Location

According to Coronado (2016), music bars, KTV bars, food parks, etc. are popular

nightlife in Manila, a place where much of the workforce is concentrated. There are also some

cities there that are known for cheaper pubs and bars as well as family-friendly activities. KTV

bars are found anywhere in the city where students, young professionals and families usually

celebrate or unwind. Considering the location, the proposed business could also be profitable for

having a location that is somehow similar to Manila where there are also KTV Bars.

Target market

On the survey conducted by the researchers in Bacolod, the study shows that 88% of the

respondents are interested in going to KTV Bars and most of them are students aged 16-21 years

old. The study was also discovered because of the researcher’s experiences where in KTVs are

mostly enjoyed by teenagers and young adults. This means that the proposed business could also

be profitable for having similar target customers same in the study.

In an article by Profitable Venture Magazine (2017), a close observation of the trends in

the industry shows that patrons of karaoke bars have increased dramatically among American

and European youths in recent years because of the social atmosphere it creates, and because

many young adults believe karaoke bars can give them the pleasure they will get by attending

expensive musical concerts.

Pricing Strategy

The price of each karaoke room will depend on the size of the room, the amenities

included, and the number of hours used by the customers. The price will be kept below the

average market rate for all the clients, in addition a special discount will be offered to regular

customers.

TYPE OF ROOM PRICE AMENITIES

Big room (30 persons): Php 10,000.00 consumable for  One (1) 42’ LCD TV

three (3) hours  Dance floor

 Laser and lighting

effects

 Wireless microphone

 Private Restroom

 Piano
Medium Room (15 persons): Php 550.00 per hour room  Dance floor

charge  Wireless microphone

charge

*NB: This pricing was done based on what is obtainable in the industry in assumption that there won’t be
any major competitor offering the same product and quality within the same location. Please note that
this pricing might be lower and higher at the same time.
Sales and Marketing Strategy
 Since the proposed KTV Bar will be established near San Pablo City Plaza, there is no

need to pay adverts on Local TV channel and radio stations or even local newspapers. One

unique selling proposition that the KTV bar has is a friendly environment and offer non alcoholic

beverages, in addition there is also a separate area for smoking, so that non-smoker customers

will not be bothered. We are also going to adopt marketing strategies used by other businesses

similar to KTV Bars to ensure that we do not only attract customers but also generate sales from

them. Here are the examples of marketing strategies that we are going to adopt are:

 Conduct a grand opening

 Sending an introductory letter together with the brochure of the services and products we

offer

 Position the signage and banners at strategic places around San Pablo City

 Create a loyalty plan that will enable us to monitor the regular customers and offer them a

rewards or special discounts

Sales Forecast

When it comes to KTV bar business, you will always attract customer if the KTV bar is

cozy, relaxing, well stocked, and located in a profitable place. Attracting customers means

attracting revenue for the business.

Since the proposed KTV Bar will be located near San Pablo City Plaza, and will offer

budget friendly rooms, it will surely attract customers thus it will meet the set target of

generating enough income from the first six months of operation and grow the business and

gather more customers. The sales projections are based on gathered data on the field and some

similar businesses around San Pablo City.

 Second Fiscal Year; Php 1,000,000.00

 Third Fiscal Year; Php 1,500,000.00

*NB: This projection was done based on what is obtainable in the industry in assumption that there
won’t be any major competitor offering the same product and quality within the same location.
Please note that this projection might be lower and higher at the same time.

Success and Risk Factors

Success Factors

Strengths are often generally internally generated and consider as a advantages for the

company over it rivals in the market. The main strength of the KTV bar is the location near

Laguna Colleges which constitutes students and other residents which offers customer that needs

to be satisfied. Since the target customers are youth and young adults, the business offers up to

date song selections which selected from various languages such as Tagalog, English, Korean

and Japanese.

It gives an opportunity to the customers to experience the new and upgraded KTV bar in

the most convenient price and satisfying way. Aside from the foods offered, the modern interior

designs and ambiance of the bar can capture the interest of the customers. It relates to popular

culture, what people are into these days. Lastly, the KTV bar is able to generate highly predicted

revenue on a nightly basis as well as on weekends.

Opportunities such as new buildings being built around the area will give a chance to

attract more customers. Pop culture differs with time, changes through generation continuously.
It has been a challenge for every business entity to keep with this trend but along with

challenges, more opportunities and platforms were open to expand business strategies. For

example nowadays, social media platforms had been effective in reaching markets, introducing

products in a variety and massive customers in a more convenient way. Hiring of suitable staffs

for the job may help in decreasing unemployment rate in San Pablo City. Other way for a

business to expand is hosting life events. Once the business became successful the owner may

seek to develop additional locations and may be open for franchising in the future.

Risk Factors

Establishing a new KTV business has its own weaknesses to. One of the most common

weak points of a business is being new in the market, profit is still undeterminable this time for

they are still not known to the people and they haven’t created their own name in the market yet.

It is also difficult for them to get sponsors or raise funds for this kind of business. For the

products offered weak point, the food, alcohol, or any snacks that would be offered in the KTV

bar may be already available and be bought by the customers in the market. The business can

also cause a high operating expenses, examples are for maintaining the equipments regularly,

rental expenses for the place, keeping the place sanitation, etc. Lastly, having limited customer

base is also a weakness. Students, the people and residents nearby is the only possible customers

of the business, this will limit the profit that the business can acquire.

For the threats which the business may encounter, one of them is having several nearby

competitors in the area, this can limit its growth and the chance of being known of the business.

For the business operations, as the business increases the operating costs are also set to increase.

The new KTV bar is at a disadvantage if the competitors decide to lower the prices of the

products they offer to attract and maintain their customers. Changes in regulations and prices of
the products can also be a threat to the business. One of the main products of a KTV business is

alcohol, regulation like liquor-ban and the increasing prices of the alcohol may affect the

profitability of the business. Lastly, the emerging technology can also be a threat. Gadgets like

smart phones, laptops and even television can now let people experience a portable KTV at home

or anywhere. This improvement in technology can greatly affect as a threat to the business.

Definition of Terms

Karaoke - a form of entertainment, offered typically by bars and clubs, in which people take

turns to sing popular songs into a microphone over pre-recorded backing tracks.
 Chapter III

Sources of Data and Instrumentation

The possible customers will be the primary source of information of this study. The

proponents of this study will use survey questionnaire as their research instrument to gather and

collect information from the respondents since face to face interview and observation would not

be possible during pandemic.

Research Design

The study uses the quantitative approach of research employing the descriptive method of

research to assess the socio-demographic profile of the respondents such as age.

The descriptive method will be used in the study as the study aims to gather relevant

information about present existing of the study. It also consider as a purposive process of data

gathering, analyzing, classifying, tabulating about prevailing conditions, practices, beliefs,

processes, trends, and cause-and effect relationships and then adequate and accurate

interpretation about such data with or without aid of statistical treatment.

Data will be gathered using validated researcher-made questionnaire. The questionnaire is

divided into two parts used in the identification of the demographic profile and the perceptions

and expectations of future customers of KTV Bar.

In directing this research, the study centers around young adults and middle-aged

adults citizens of San Pablo City where one hundred (100) citizens fill in as the respondent of the

study.

The respondents will provide information by filling out the survey questionnaires and

series of face to face interview and observation prepared by the researchers of the study.

Stratified sampling technique was used in conducting the survey, wherein the

researchers divide the entire population into different subgroups then randomly select the sample

from the different subgroups.

Data Gathering Procedures

In accomplishing this study, the following procedures were considered: The first step

focused on the identification of the customer’s perception that affects the viability of establishing

a KTV Bar in San Pablo City, Laguna. After constructing and completing the questionnaire, the

researchers have it validated as the instrument to be used in conducting the survey.

Next, the researchers made a request letter for the approval to conduct the said study in San

Pablo City, Laguna. Upon approval, the researchers retrieved the request letter and proceeded in

administering the survey.

The researchers disseminate the survey forms through online platforms and were

answered by 100 respondents from the residents of San Pablo City, Laguna. Lastly, after the data

gathering, the researchers collected the surveys that have been submitted and will proceed to the

tallying of scores to apply the statistical treatment to be used with the study.
 Analysis of Data

The researchers were not able to conduct an experiment nor gather data for the reason

that it is not possible to have close contact with the possible respondents of the research.

Conducting a survey, an interview and observation are the methods that are supposed to

be applied to collect data from the respondents. The researchers provide their main research

questions to be able to gather data.

The analysis method that is supposed to be applied is descriptive statistics where in it will

help the researchers to summarize the data and find patterns. The data that gathered will be used

in judging the feasibility of the study.