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A. Industry Attractiveness
Number of Competitors
There are a lot of competitors within the food industry. Restaurants and mobile food
service operations led the industry with 4,312 establishments comprising 72.2% of the total
number of establishments. Short-term accommodation activities follow with 1,279
establishments (21.4%) and 285 establishments (4.8%) accounted for beverage-serving
activities. For event catering and other food service operations combined is registered at
95 (1.6%).
Extent to which Business and Environment Trends are Moving in Favor of the Industry
The Extent to which business and environmental trends are moving in favor of the
industry is high (It is equally important to understand the trends in the market. Being
cognizant of trends and leveraging on them is like swimming along with the tide, not
against it. In many cases, it could spell the difference between success and failure. Cuisine
curiosity and authenticity. A recent market study done by De La Salle University revealed
that Filipinos are only willing to patronize a restaurant offering non-mainstream cuisine
(e.g. Latin American, European, or Caribbean) if the chef, proprietor, or face of the brand
hails from that country. Skepticism is high toward Filipino restaurateurs offering exotic
menus.)
Number of Exciting New Products and Services Emerging from the Industry
Number of exciting new product and service emerging from the industry is medium
given that the industry is generally extremely competitive. According to Guine,
Ramalhosa, Valente (2016) New foods, new consumer in their research Today, new
lifestyles, higher incomes and consumer awareness are creating consumer demand for a
year-round supply of high-quality, diverse and innovative food products. “The growing
divide in flavor preferences between millennials and boomers heightens the need for a
product mix that appropriately balances familiarity and innovation,” said Kelly Weikel,
director of consumer insights at Technomic. Creating a small twist on classic recipes with
flavors that particularly appeal to boomers can provide an element of uniqueness without
going too far out of their comfort zone. Firms in the industry continually improve, innovate
and develop dessert products to stay relevant in the industry and to not drown in its
competitive landscape. Consumers in this market are more demanding and have great
expectations. The consumer purchasing patterns of consumers is also a big factor that
affects and motivates firms to introduce new products. Forgoing the familiar, Gen Xers and
millennials are more adventurous when it comes to trying new desserts. Unexpected flavors
can draw in these consumers who are accustomed to eating a wide variety of cuisines.
Existing firms and new entrants are no exception in introducing new product offerings to
attract and satisfy consumers. In addition, the emergence of many new entrants introduces
new products to the market. But despite this, According to Guine, et al. (2016), when it
comes to innovation, the food sector is less changeable when compared to other sectors,
such as high technology. Still, in the past decades much and important developments have
been achieved in several areas related to food and the food industry. In order for new
entrants to survive, they must have a strong concept, a good value proposal (food quality
in relation to price), a favorable location, an efficient supply chain, tight cash and inventory
controls, and enough competitive advantages to compete with the established players in the
industry.
Long-term Prospects
According to Andrew Masigan, the industry is more complicated as rates of closure
is as high as the rate of new openings. Despite this, there are strong long-term prospects in
the industry. The food service industry is seen to expand in tandem with the growing
population and rising incomes. For the year 2020 and 2021, revenues are seen to reach
P637.3 billion and P656.5, respectively. The food service industry will continue to show
tremendous growth over the next few years on the back with the country’s strong, consumer
lead economy. Long-term prospects in this industry is high as desserts falls under a stable
and continually rising industry as well as the population that seeks the demand for desserts
is also increasing.
Degree to which customers feel satisfied by the current offerings in the target market
Today’s firms recognize that customer satisfaction is the key component of the
business ' success and at the same time plays a vital role in increasing the market value.
Customers are usually those people who buy consumer or company goods and services that
meet their needs and wishes. Customers buy products in order to meet their expectations
in terms of money and retains long-term association.
Potential to employ low cost guerrilla and/or buzz market- ing techniques to promote the
firm’s product or services
Since the company Tau Ho is still new to the market, guerrilla marketing may not
be feasible since the company still needs to have intensive and extensive marketing
activities. This is when consumers will encounter the product virtually everywhere, they
go.
The Food and Beverage Service Activities sector in the Philippines is booming. In fact, in
a study presented by the Philippine Statistics Authority, the sector profited PHP368.3
billion in 2016. The aforementioned figure simply shows that the customers in this sector
are in an aggressive buying mood perhaps because of the fact that food is a necessity.
The industry has been fast ranging when it comes to its growth with a gross added value of
more than $2billion and grew by 3.2 percent every year. According to the Philippine
Bureau of Food and drug statistical report is that the number of fast growing industries and
establishment nationwide has always in increase motion. The momentum of the food
industry has always been in neutralize motion given by the statistics and data of our
economic growth rate.
Need for a new firm in the market with your offerings or geographic location
There is a high need for a new firm like Tau Ho in the market with the like of its offerings
or in the geographic location. Over the recent past years, Philippine has emerged as one of
the rapidly growing food and drinks industries in the Asia region. The demand for healthy
food and drinks is surging high because of the following factors: growing affluent
population, rising disposable income, and rising consumer awareness regarding health and
safety concerns. Filipino’s shopping behavior in food category which associate with
healthier food choice has a notable growth (Delayco, 2017). Deocareza (2017) mentioned
in her study that there are already notable shifts in the food and beverage preference of
some filipino consumers towards health and wellness. Glorioso, Gonzales, Avilla, &
Capanzana (2018) also added that healthy eating trend is growing among Filipinos as well
as the popularity of health-conscious food and beverage brands in the country. In addition,
there is recently a rapid growth in the retail dessert industry in the Philippines. Throughout
the year, the hot climate in the Philippines stimulates consumption of cold beverages. “The
change in the lifestyle of Filipinos towards health and wellness is a key insight that brands
can leverage and focus marketing efforts on when introducing their food and beverage
products” (Miraflor, 2017). With summer just around the corner and the fitness trend
booming, brands that can contribute to the health goals and complement the healthy
lifestyles of this emerging market will have a higher chance of penetrating their market.
Extent to which business and environmental trends are moving in favor of the target
market
Compared to 2018, for product food preferences, strong and new foods, snacking, and
health and wellness are still at the center, but in an even higher manner. Consumers want
improved and functional products that promote healthy intestines, fuel their brains, and
help their physical appearance. Generation-Z customers are "fresh eaters" more than
millennials and have a strong interest not only in what the commodity is, but in how and
by whom it is made. Transparency in how and where food is produced. With today's instant
access to information, they will be more inclined to leave it behind if a consumer can’t
understand or find out where and how a product is made and. Throughout 2018, the demand
for Philippine milk tea became even bigger. Through making the use of white pearls and
popping bubbles, CoCo has brought something new to the milk tea lovers. In the meantime,
Serenitea has created a brown sugar line influenced by the popular Philippines: taho. Thai
milk tea, malted milk tea, powdered milk milk tea and packaged milk tea ready-to-drink,
and other developments have also come into play, further reinforcing this trend.
In 2016, the food service industry in the Philippines produced revenues of P535.9 billion
on the back of 84,503 food outlets in the country. This year, with 3,126 more food service
establishments in operation than in 2016, revenues are seen to top P616 billion. Together
with the growing population and rising incomes, the food service industry is seen to
expand. Income is expected to reach P637.3 billion and P656.5, respectively, for the year
2020 and 2021. With this rising occurrence, it will pave the way for more food related
businesses to open.
D. Industry/ Market Feasibility
The market is feasible for Tau Ho given the information gathered about the industry, the
product idea has positive feedback as well as there are many opportunities for the
enterprise. Despite the market’s feasibility, entering the market have a number of risks and
threats that the enterprise has to prepare and anticipate but overall, with the market’s overall
positive response which is based on the buying intention survey and concept idea test that
was executed and prepared. Results of the buying intention survey and concept idea test is
reflected in the first part of this feasibility study.
The suggestion that the researchers can provide to the enterprise is for the enterprise to
look and find for any, if not all possibilities that the enterprise can exploit that would benefit
the enterprise. In addition, the enterprise should also calculate the risks as well as identify
weaknesses and threats that may affect the enterprise negatively and act upon these. In
addition, the researchers recommend the enterprise to focus on continuous market research,
and understand consumer preference and buying behavior as these factors are essential to
product development as well as it in lines with market.
F. Sources
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2016 Annual Survey of Philippine Business and Industry (ASPBI) - Accommodation and
Food Service Activities Sector for Establishments with Total Employment of 20
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Castro, J. &. (2018). Dream Cakes, Mango Float, and More: All the Food Trends in
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Delayco, M. L. (2017, January 27). Has the market become more health conscious?
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