CHAPTER I.

INTRODUCTION AND BACKGROUND OF THE STUDY

This chapter presents the introduction, the objectives and the brief description and

highlights of the study.

INTRODUCTION

A. BACKGROUND OF THE STUDY

The foodservice industry recognizes millennials as an emerging consumer group and cafés

have been addressing their needs for some time. Cafés store appearance, ambiance and the variety

of services and products being offered, these outlets quickly adapt to changing consumer tastes

and practices. To further serve the needs of millennials, cafés and bars are addressing their

increasingly on-the-go lifestyles. With increasing discretionary spending, consumers have become

more discerning and adventurous when it comes to food choices. This is an opportunity that cafés

will continue to take advantage of over the forecast period. Although specialist coffee shops have

the fewest brands and outlets within the category of cafés, these brands collectively recorded the

strongest growth in 2017, driven by the aggressive expansion of chained specialist coffee shops.

Café establishments primarily sell refreshment drinks, snacks and light meals, with coffee

being their flagship product. These businesses must employ innovative strategies, such as

diversification of menu offerings, to increase sales and remain competitive. The industry’s growth

prospects are dictated by issues such as availability of disposable income in households and

changes in customers’ preferences for meals and drinks. Cafés generate much of their revenues

from coffee, a product that accounted for more than 83 percent of hot beverage sales in 2012,
according to the Small Business Development Center Network. Tea and other nonalcoholic drinks

are also favorites among café customers. However, snacks and light meals contribute significantly

toward the overall revenues of cafes. The coffee and snack shops industry is a $30 billion market

that grew at average annual rates of 2.7 percent between 2009 and 2013, according to a report the

IBISWorld website in 2014. This shows the industry grew at steady rates through those years,

despite the negative impact of the recession that rocked the economy from 2008 to 2010.

Coffee is the second most traded commodity in the whole world, second to crude oil. It is

produced in Latin America, South East Asia and Africa and the main consumers are US and

Europe. It is estimated that 1.6 billion cups of coffee are consumed worldwide “PER DAY”.

The Philippine Coffee Industry Occupies an important place in the world economy, being

widely consumed as the most prestigious beverage. Instant coffee is still more accessible, the

ground and brew sector are still growing. Coffee farmers generally dry their coffee beans and have

them milled through local millers. In the Philippines, coffee farming is dominated by small farmers

with an average farm size of 1-2 hectares. The most common variety is Robusta which accounted

to over 75% production followed by Arabica, Liberica and Excelsa.

In 1880, the Philippines known to be one of the countries in the Coffee Bean-Growing Belt

was the fourth largest exporter of coffee beans, supplying America and Europe, until coffee rust

hit the country `s coffee crop in 1889, reducing coffee production to only one-sixth of the peak in

just two years.

 As Café Industry blooms within the Philippines and in the world, different kinds of cafes

are being put up/ established like Tea Cafés, Coffee Cafés, Hotcakes Cafés, Ice cream Cafés and

Study Cafés. All these are blooming due to the increase demand from the new generation which

we call the millennials. Demand for new, innovative and fresh ideas and concepts of cafés are what

they’re up to. They always look for something good, relaxing, easy, soothing and comfortable

place to stay at.

Students have also preferred environment to study for their lessons, acquire learning, do

their requirements and other matters. Some tend to do it on a library, some are comfortable on their

homes and some are spending their time on cafes on which they’ll study and at the same time relax

on its peace and ambiance. Nowadays, most of the students want to learn and acquire knowledge

in a stress-free environment. They want to learn and relax at the same time which can give them a

brighter peace of mind while studying.

This is the reason why we want to bring into the province a fresh idea of establishing a

study cafe which can cater the demand of people most especially students at a low cost/price in

order to address the needs of people who want a place which is stress-free and less hassle while

studying.

The place where you can study or work, have chill-out moments and be plugged into fast

Wi-Fi, Study Cafe attracts digital nomads trotting around the globe, fledgling start-ups or students,

eclectic entrepreneurs and local professionals who float in their own bubble.
 Here it is possible to walk in, grab a great coffee, plug in and get to work in a cozy and

comfy environment of likeminded souls. The fees definitely won't break the bank and for those

that like to munch whilst they work, there is also food it offers. At Study Cafe, you can actually

reserve your preferred space, walk-ins are welcomed and it is a great spot if you have a group of

cohorts to accommodate. It has cubicles with lights and outlets attached to it if you are studying

or working alone. But it has big tables if you are working in a group and their internet connection

is really fast. Thus, it is a good place for research and meetings. Moreover, the cafe is enveloped

with instragrammable corners which I guess, it makes it very inviting especially for the millennials

which our target market in the study are.

PROJECT SUMMARY

A. NAME OF THE FIRM

The proponents agreed to name the business "Study Buddy". As the name literally

explains, the café is a study café per se and it is meant for those who need a place to ponder, review,

read, hang-out and have meetings (for organizations). They chose the name to give a sense of

friendliness, serenity and a cozy feel to welcome customers into the café. It also needed to be

different to other café names to stand out. “Study Buddy” as a name aims to appeal to the target

market and attract potential customers.

B. LOCATION

The business will operate through a space which is to be rented located at Liberation

Boulevard, Vigan City, Ilocos Sur. It is in front of a basketball court and the road is quite a busy

one on weekdays, people are passing by from time to time. But, there will need to be a renovation

of the place, mainly a construction for a second floor to make it suitable for café use and also

compliment the themes the proponents want in the café.

It is a strategic location since it is near the target market and is near some of the suppliers

and metropolis.

C. OBJECTIVES OF THE PROJECT

The main objective of this study is to test the feasibility, viability and profitability of

establishing a Study Café in the province.

The study also aims:

  To offer high quality product and service to individuals in Ilocos Sur specially in

Metro Vigan at a lower cost than that of the other cafés.

 To give the locals a good ambiance and new theme of a café.

 To give the students, office workers, in broader sense the millennials a new place

to have a good and relaxing time with their peers to be a place for group discussions,

meetings, reading books, a place they can go to study and make projects.

 To offer employment to individuals who are willing and able to render services

which are needed for the operation of the business.

 To help in the growth of the local economy through the payment of taxes in

proportion to the income generated by the business.

 To be a place where millennials can go instead of going to computer cafés.

 And, to get a bigger market share in the industry.

D. BRIEF DESCRIPTION AND HIGHLIGHTS OF THE PROJECT

The business shall be organized as partnership between the proponents who will contribute

money, property, and industry equally to finance the business operations. All the products and

services will be made by the business and some coming from different suppliers with whom the

business will enter into a contract with. “Study Buddy Café” is a café designed to provide foods

(fries, mojos, bread) and drinks (coffee) at a good price in a cozy and relaxing environment. It

aims to create a unique atmosphere through its theme and provide a new experience providing

board games, books, usage of printer for printing purposes, a simple board room for meeting

purposes, and charging outlets for customers to use. The café unlike any other cafés in the locality

will be like a mini library because of the wide classification of books from magazines to novels,
printing services will also be present at the café so with charging outlets as this café was made to

be mainly for students/ professionals to study and to be a place for them to work on their reports

or projects specially when they are far from home, so that they may have a cup of coffee while

doing their work/ task. The café will be open 7 days a week.
 Chapter II.
Research Methodology

This chapter presents the population and sample, data gathering instrument, collection of

data and the statistical treatment of data.

A. Population and Sample

The study is focused on the feasibility of establishing a Study Cafe business in Ilocos Sur

mainly in Metro Vigan, and because of this the proponents opted to use the purposive sampling

method.

Purposive sample is a non-probability sample that is selected based on characteristics of a

population and the objective of the study. Purposive sampling is also known as judgmental,

selective or subjective sampling. This type of sampling can be very useful in situations when you

need to reach a targeted sample quickly, and where sampling for proportionality is not the main

concern.

The respondents were purposely asked about their view on the establishment of the

proposed business venture. The respondents consisted of 150 persons ages 17 and above, within

Ilocos Sur.

B. Data Gathering Instrument

The proponents made use of a questionnaire as an instrument in gathering data for the

analysis of the marketing aspect of the study.

 A questionnaire is a set of carefully prepared and logically ordered questions which is

self-administered by themselves.

C. Collection of Data

The questionnaires will be given by the proponents personally to the respondents for

them to fill up and answer. And later on, to be retrieved, tabulated, analyzed and interpreted.

D. Statistical Treatment of Data

The proponents will use the simple frequency count, percentage and rank distribution

method for the interpretation and analysis of the data gathered.

This formula will be used for further interpretation of the gathered data:

P = ------------ x 100

Where:

P = percentage

F = frequency

n = total number of respondents

 ST. PAUL COLLEGE OF ILOCOS SUR
(Member, St. Paul University System)
2726 Bayubay, San Vicente, Ilocos Sur

STUDY BUDDY CAFÉ

A Study Café

A Feasibility Study on the Establishment of A Study Café

In Partial Fulfillment of the Requirements for the

Degree Bachelor of Science in Accountancy

Submitted By:

Ruiz Kenneth P. Que

Honeyleth G. Visitacion
Fiel Angelo Avila

Submitted To:

Ms. Shantel Mae P. Alquiza

(Instructor)
 Questionnaire

Questionnaire Name(optional): _______________________________

Age: ________ Gender: ______ Course: _______________________

Direction: Put a check (✔) mark on your corresponding answer/s to the following questions.

1. Do you visit Cafés?

Yes No

2. Which Café is your Favorite/s? (maximum of 2 cafés)

Teaza Coffee Break

Infinitea NSCC Bath and Coffee

Aboex Travel Café Thirstday

Mang Cha-a Others: ________________

3. What would attract you to visit a café? (check all that applies)

Ambiance Location

Price Loyalty Schemes

Wide range of food and drinks Others: ________________

4. How often do you visit cafés?

Never Once a month

2-3 Times a month Once a week

2-3 Times a week Daily

5. What do you usually do when going to a café?

Eat Drink

Chat with friends Make Assignment/Project

Surf the Net Meeting

Read Books Relax/ Unwind

Bored at Home Others: ________________

6. Would you be interested in a new study café opening in the city?

Yes No

7. How much are you willing to spend on a drink?

30-50 51-70

71-90 91-110

111-130 131-150

151-170 171-190

8. How much are you willing to spend on food?

50-70 71-90

91-110 111-130

131-150 151-170

171-190 191-210