Académique Documents
Professionnel Documents
Culture Documents
Proponents:
Mandapat, Ryan M.
Rodriguez, Dominique S.
Melendez, Heidi F.
Sison, Hazel D.
Research Adviser:
Table of Contents
Executive Summary .................................................................................................................. 4
I. Introduction ............................................................................................................................ 6
A. Company Overview ....................................................................................................... 6
B. Vision ............................................................................................................................. 9
C. Mission .......................................................................................................................... 9
D. Objectives ...................................................................................................................... 9
E. History.......................................................................................................................... 10
F. Products ...................................................................................................................... 10
G. Location Profile ............................................................................................................ 14
H. SWOT Analysis............................................................................................................ 15
II. Industry Analysis ................................................................................................................ 20
A. Industry Overview ........................................................................................................ 20
B. Supply .......................................................................................................................... 22
C. Demand ....................................................................................................................... 23
D. Porter’s Five Forces Model .......................................................................................... 25
D.1 Bargaining Power of Suppliers .......................................................................... 25
D.2 Bargaining Power of Customers ........................................................................ 26
D.3 Threat of New Entrants ..................................................................................... 28
D.4 Threat of Substitutes ......................................................................................... 29
D.5 Competitive Rivalry between Existing Players ................................................... 31
E. Competitors’ Profile ...................................................................................................... 32
F. Suppliers’ Information................................................................................................... 39
III. Review of Related Literature ............................................................................................. 42
IV. Marketing Feasibility ........................................................................................................ 45
A. Consumer’s Analysis ................................................................................................ 45
B. Marketing Mix ........................................................................................................... 49
V. Technical Feasibility .......................................................................................................... 58
A. Production Process .................................................................................................. 58
B. Flowchart of Activities ............................................................................................... 62
Mandapat, R., Rodriguez, D., Versoza, J.E., Frialde, A.J., Melendez, H.,Sison, H.,Soriano,S.M., Talagtag, P.A 2
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Mandapat, R., Rodriguez, D., Versoza, J.E., Frialde, A.J., Melendez, H.,Sison, H.,Soriano,S.M., Talagtag, P.A 3
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Executive Summary
The Ice Creamistry Hub is an ice cream enterprise that showcases flavors representing
the best products of Pangasinan. Included in its formulation is the infusion of liquid nitrogen that
has a temperature of -321˚F enabling to flash freeze the ice cream mixture. The business will be
Extension, Dagupan City. Its target market comprises of the students, families and working
professionals with middle to high income. The business is guided by its vision statement which
is “Ice Creamistry Hub envisions to be the leading and most popular ice cream shop in
Pangasinan.” In attaining this, its mission statement is “To delight and serve customers with the
finest quality liquid nitrogen ice cream that comes in a wide variety of flavors promoting the best
of Pangasinan.”
Understanding the market, the business is to be classified in the Frozen Food Industry
particularly in the Frozen Dessert Industry. Selecta is the leading player in this industry having
80 percent of the market share.Also, establishments of Liquid Nitrogen Ice cream businesses
such as Iscreamist and Seventh Element in Metro Manila have emerged having students and
The supply and demand analysis in its target market both show equal amounts when it
comes to the traditional ice cream. However, due to the infusion of liquid nitrogen, the analysis
will differ. This is supported by an interview conducted with the Seventh Element disclosing a
Ice Creamistry Hub hub’s target market comprises high school and college students in
Dagupan City aging from 12-21 years old and working people aging 22-50 with middle to high
monthly allowance or income. Various kinds of flavors like Classic Flavors, Premium Flavors
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and Best of Pangasinan Flavors will be offered. The business will set its price using
valuebasedpricing ranging from Php75-Php90 per (8oz cup). It will be adopting a direct
Product preparation begins before business hours in order to make the mixture. When
the shop opens, customers make an order. Their desired mixture is infused with liquid nitrogen
and served.
Different promotional activities will be engaged throughout the year. This would include
transit ads, lamp post banners, social media, coupons and free taste. Since business is still
unknown, the first year would incur much advertising cost as compared to the following periods.
The business will be operated and managed by Hazel Sison and Heidi Melendez. These
partners are capable in running the business because of their experience in making ice cream
and being witness to the actual process of making liquid nitrogen ice cream. Also, they have
acquired substantial business concepts during their collegiate years and will attend trainings,
The company has its estimated initial investment of Php797,612.57 which mainly
consists of machineries and equipment, materials and ingredients, business requirements and
pre-operating expenses, and leasehold improvement, and other operating expenses. The net
incomes for year 1 to year 5 are PHP 507,181, PHP 605,866, PHP 455,418, PHP 506,771
Given these necessary information and carefully studying the business’ industry and
market, it gives an understanding of the competitive landscape. Through this, the business will
reasonably be able to cope up with the changes in the market and in meeting its customers
Therefore, the proponents have reason to believe that this business study is feasible.
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I. Introduction
The Ice Creamistry Hub is an ice cream shop that showcases flavors representing the best
products of Pangasinan. Included in its formulation is the infusion of liquid nitrogen. Liquid
nitrogen is a liquefied gas that has a temperature of -321˚F which enables it to flash freeze the
ice cream mixture. Utilizing this liquid nitrogen makes the ice particles smaller, thus resulting to
The purpose of this study is to provide new and healthy flavors to customers while
enjoying the smoke caused by liquid nitrogen. Offering made to order ice cream, customers can
have their own customized ice cream instantly. Through the distinctive flavors, taste and
experience that will be offered, the business is confident that it will be something that customers
will come back for and will be a chance in gaining their loyalty in the long run.
To help the customers feel better and be relieved from their daily struggles, the business
will make the ambiance of the place fun and relaxing. The establishment has designed its
interior in a way that gives customers a sense of enjoyment and relaxation. It has implemented
some of the basic concepts of interior design which includes balance, harmony and unity,
A. Company Overview
The Ice Creamistry Hub is a local business that aims to bring the best of ice
cream from the different cities and municipalities in the province of Pangasinan. Flavors
to be offered includes “Mango Tango” featuring the sweet carabao mangoes of San
Carlos City, “Sea Salt Caramel” from the municipality of Dasol, “Maiz con Keso”
showcasing the sweet corn of San Jacinto and “Pandan con Leche” from Mapandan.
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Also, during the rainy seasons it offers its limited-edition flavors such as Strawberry-
Jalapeno.
province. In its pursuit of providing its consumers a healthier and freshly made ice
cream, the enterprise has liberated itself from the traditional methods of ice cream
preparation. Rather than using machines, it will utilize liquid nitrogen with -321 degrees
Fahrenheit. With its very low temperature, it can freeze the ice cream in few minutes
lessening the formation of ice crystals which results to a creamier and denser ice cream.
The business will be classified as part of Frozen Food Industry particularly in the
Frozen Desserts Industry. It will be organized and managed by the proponents in the
form of a general partnership. Further, the business will be located inBurgos Extension,
Dagupan City near the EDNAS School and University of Luzon. The proponents
consider this place as a strategic location since it is near not only to the company’s
suppliers but also to other establishments like schools, universities, hospitals and
different business enterprises. The potential size of the market will include families,
Figure 1.1 Company logo ingredient which is the liquid nitrogen. The
enterprise portrays in its logo the business’ name with an ice cream scoop above. From
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the logo, smoke can be seen coming out of the ice cream. This is in depiction of the
Php800,000 and will yield an approximate 12% annual return on capital. According to
Joaquin Soriano, owner of the Seventh Element Ice cream shop, he was able to recover
INITIAL INVESTMENT
NOTE: For the extensive breakdown of the initial investment, see the Financial
Statement.
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B. Vision Statement
Ice Creamistry Hub envisions to be the leading and most popular ice cream shop
in Pangasinan.
C. Mission Statement
To delight and serve customers with the finest quality liquid Nitrogen ice cream
D. Objectives
General:
The business aims to gain the majority share of the ice cream market in
Pangasinan.
Specific:
media.
market.
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E. History
got the idea of flash freezing the ice cream with the use of liquid nitrogen, a chemical he
was familiar with from working in his lab. This was the start of the “ice cream of the
future”, which was frozen by spraying ice cream mix into a cryogenic freezer. After then,
the “mad scientists” discovered their breakthrough invention and have made a better
homemade ice cream than they ever had before. Upon the discovery of this liquid
nitrogen ice cream, and a year thereafter, a new ice cream shop called the Blue-Sky
Creamery opened its ice cream parlor in Ankeny, Lowa to try the innovative way of
As time passed by, people have loved the new taste and experience of eating
their ice creams. By having a stable standing in the market, it established its first
franchise store in Minnesota. Also, with the increasing demand for their unique ice
cream, they expand their market in different nations by offering different varieties of ice
F. Products/Description
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responds by using fresher ingredients that prevent the need for emulsifiers and
The method of preparing the ice cream differs from other establishments. The
common way of making ice cream involves the use of large machines, but for this ice
reaching -321 degrees Fahrenheit. Due to its very low boiling point, it has the ability to
fast freeze anything that it comes in contact with. With this, the ice cream mixture can be
frozen within 5 minutes. Having this setup, the enterprise is able to prepare freshly made
It starts with a liquid base composing of milk, cream, sugar and salt. Thereafter,
other ingredients are added that vary according to flavor. The liquid nitrogen is mixed
along with the mixture for it to freeze. The ice cream is then served immediately to
consumers in a cup.
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Here are some of the distinctions of Liquid Nitrogen Ice Cream from other ice cream:
Illustration
Freezing
Mandapat,
Table 1.2 R., Rodriguez,of
Difference D.,Liquid
Versoza,Nitrogen
J.E., Frialde, A.J.,other
from Melendez, H.,Sison, H.,Soriano,S.M., Talagtag, P.A
Ice Creams 12
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Freezing Period
Freezing Point
-321 degrees 15 degrees 7 - 12 degrees
(Fahrenheit)
The integration of liquid nitrogen in making the ice cream poses numerous
benefits attributable to the ice cream. First, this unique procedure allows the fat and
water particles to remain small resulting to a creamier, smoother and tastier ice cream.
Second, due to it’s on the spot preparation, preservatives are avoided in the formulation
liquefied gases’ characteristic can be used to let the customers experience smoky and
misty ice cream eating by dipping the ice cream toppings in the liquid Nitrogen. These
gives the customers an opportunity to interact while indulging with the ice cream and to
Another feature of Ice Creamistry Hub’s liquid Nitrogen is its flavors. The
business will divide its product line into three segments based on their flavors. The first
segment are the classic flavors which will mainly composed of the vanilla, chocolate,
cheese and ubeflavors. Another segment is the premium flavors like the Cookies and
Cream, Double Dutch and Rocky Road. And lastly, the best of the Philippines flavors
which will include “Mango Tango” of San Carlos City, “Sea Salt Caramel” of Dasol, “Maiz
con Keso” of San Jacinto, and “Pandan con Leche” of Mapandan. Also, to lessen the
effects of slack season during rainy days, the business will be offering a limited-edition
flavor such as Strawberry-Jalapeno. With these variations of flavors, the customers can
better enjoy and satisfy their taste as well. Also, it provides the customers a different way
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G. Location Profile
Dow
ntow
n
Figure 1.4 Target Location of the business (left: aerial view; right: front view)
The proponents decided to rent for a commercial space where they will start and
operate their business. The agreed location is in Burgos Extension, Dagupan City,
Pangasinan. The commercial building, which is owned by Dr. Adanhas a land area of 40
commercial space has a monthly rental of Php15, 000. It is a good location given that it
is located along the road wherein public transportations usually pass by making it very
accessible to people who wants to try the liquid nitrogen ice cream. Moreover, it is a
strategic location since it is near to the company’s suppliers and to its target market
which comprises the families, students of different schools and universities and working
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H. SWOT Analysis
STRENGTHS
Commercial ice creams undergo a two-step process. It begins the freezing of ice
cream to a semi-solid state and then place it in a commercial freezer to fully freeze the
rest. With the used of liquid nitrogen, the process becomes simpler with its flash freezing
feature. It will not be placed in a freezer for several hours because it is able to freeze the
ice cream mix instantly. As compared to other ice cream parlors, the business will be
able to reduce inventory handling cost. It will allow the customers to choose their own
flavors and they can view the actual process of preparing their ice cream.
Appealing Atmosphere
The ice cream parlor’s interior design is aimed to give customers a fun and
exciting environment to stay especially for those customers who wants to be relieved
The establishment has designed its interior in a way that gives customers a
sense of enjoyment and relaxation. It has implemented some of the basic concepts of
interior design which includes balance, harmony and unity, proportion and scale, and
color. Balance relates to the equal distribution of visual weight in a room by balancing a
room with heavy objects or multiple light objects that are visually equal. Harmony and
unity is the showcasing of a common style and theme through the use of color schemes
to unify a collection of spaces. Proportion and scale is ratio and size of elements relative
white, black, yellow and blue. Due to the small area of the store, white is helpful in
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creating the illusion of space. White may also give the impression that it is much higher
than it is and can give an invigorating freshness. Black gives an elegant and
sophisticated air designing the shop. It puts a light or neutral background color. Yellow is
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Geographic Location
equipment and materials needed in the business operation. It is also near the main
target markets who are the students and employees with medium to high
income/allowance.
WEAKNESSES
The business has only few potential suppliers of liquid nitrogen within the target
location which includes the MEGASCO and DRL Libunao in Calasiao, Pangasinan. The
business also considers those distant suppliers such as Consolidated Industrial Gases
Instrumentation Center (NCIC) in Ateneo de Manila University. Due to its limited supply,
the enterprise will create and maintain a good supplier relationship. This will be done by
avoiding rushing orders that will frustrate the suppliers, paying on time, bringing up
concerns and problems immediately to their attention and by having a direct and regular
Liquid Nitrogen which is extremely cold can rapidly freeze skin tissues, frostbite
and eye fluid if improperly handled. In order to avoid such circumstances, the maker and
preparer of liquid nitrogen ice cream will observe due care and proper precautionary
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measures like wearing gloves and making sure that the liquid nitrogen evaporated for
OPPORTUNITIES
According to the Canadean Intelligence’s Research (2016), the ice cream market
in the Philippines has been growing for the past few years. The volume consumptions
are expected to grow from 97.1 million kilograms in 2014 to an estimated 133.7 million
conducted by the proponents 299 out of300 persons favored ice cream and majority of
them are buying ice cream once a week. The business will take advantage of this
opportunity by making further efforts in penetrating the market to establish the brand
According to new Pulse Asia survey (2016). Filipinos were found to be health-
conscious at the end of 2015 with three out of five individuals citing staying healthy an
urgent personal concern. The company can capture great benefit from this opportunity
through building awareness in the market about its product being made from fresh
Seasonality of Product
Ice cream is consumed all year long, with summer being its peak period. In this
season, this gives the enterprise an opportunity to sell more than in usual operations.
During this peak season, the company will be able to maximize its sales.
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THREATS
Since there are already established ice cream parlors like the Ice Cream House
and Shaper’s Creamery that operates in the target market, most of them already gained
customer loyalty. The business will mitigate this threat by focusing on providing
customer value and satisfaction. This can be done by introducing the Pangasinan’s Best
such as Mango Tango Ice Cream from San Carlos City, Maiz con Keso Ice Cream from
San Jacinto, and Pandan con Leche Ice Cream in Mapandan. The enterprise will also
service are to be provided by personnel. The business will also provide its customers a
relaxing ambiance the customer can enjoy will eating their ice cream.
patterns and crave for new flavors. In response to this, the establishment would have to
innovate its product in a way that continuously satisfies the costumers need and wants.
Adapting to these kinds of changes is essential for the business to continue operating.
Examples of these innovations is integrating the ice cream into other forms such as the
Seasonality of Product
where demand is at its highest, while in rainy seasons there is a decline. This serves as
a threat to the establishment due to the potential decrease it has on sales. The business
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complimentary products such as freshly baked pastries and pizzas and distributing
coupons.
A. Industry overview
particularly in the Frozen Desserts Industry. The frozen desserts industry mainly
comprises products such as regular and low-fat ice cream, frozen yogurt, frozen tofu,
and sorbets.
According to the
Canadean Intelligence’s
37.60%. During the intervening period, the Compound Annual Growth Rate (CAGR) is
In the Philippines, Selecta and Nestle are the two well-known players in the Ice
Cream Market. Selecta, which is owned by the Philippines-based RFM Corporation, was
started in year 1948 as an ice cream parlor in Manila. It was known for always being
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ahead in product innovation by creating new flavors. On the other hand, Nestle was
founded by Henri Nestle in 1867. It first created infant foods as a substitute for mothers
who could not breastfeed their babies. Over the years, its product range expanded which
includes coffee, milk, beverages, non-dairy creamer, food, infant nutrition, ice cream and
chilled dairy. In 1960, Nestle capitalized on ice cream due to the increasing number of
Between them, Selecta is currently the most dominant ice cream brand. Nestle
was the former leading brand in the Philippines but was later outshined by Selecta after
According to Jose Concepcion III, the president and CEO of RFM Corporation, their
sales boost from the combined impact of El Niño and the usual hot weather during
summer. He also emphasizes that improvements in their supply and distribution system
supported the growth momentum in sales and profits. Moreover, other commercial ice
Aside from the established ice cream companies that provide commercial ice
cream in the market, there are also small scaled ice cream parlors. At the top of the list
are Carousel Creamery, Gelatissimo and Merry Moo who are taking the Manila area by
storm as each establishment offers their customers their own unique blend of ice
creams. Carousel Creamery mainly offers crepes and waffles that go with 101 flavors of
ice cream which includes Blueberry Bingsu, Nut Cluster, Keso my Ube, and Pinipig
Crunch. Gelatissimo on the other hand, was known for its Chocolate Truffle, Burnt
Caramel & Pecan and Lychee. Lastly, Merry Moo’s best seller, Sea salt caramel, has
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essential in order for a business to continue operating indefinitely. To be set apart from
other ice cream parlors, establishments such as Kiss the Ice located at Recto Avenue,
Ice Cream Laboratory at SM City Fairview, Joseph’s Craft Ice Cream at Main Wing
Shangri-La Plaza, Iscreamist at Magiting Diliman, and the Seventh Element at Gastro
Park Pasig have integrated the Liquid Nitrogen in making and serving their ice creams.
As early as 2011, they are of the first establishments to introduce the liquid
B. Supply
The proponents gather information on the supply and demand of ice cream
through the Internet. However, since the information about ice cream in Dagupan City is
very limited, the researchers conducted an interview with the Department of Trade and
Industry and with different people who are engaged in the ice cream business like,
sorbets manufacturer, commercial ice cream wholesaler, and Ice Cream kiosk vendors
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5,406 kilograms
TOTAL
C. Demand
The demand was derived using the amount given by the interviewees during the
Nestor Ice Cream, the amount of ice cream they supply is usually equal to the
what keeps the customers in coming back and makes their ice cream to be sold out.
In addition, Mr. Edstrada mentioned that they are also receiving special orders but
since it is not on a regular basis its amount cannot be easily quantified. He also
pointed out that they only make half of their normal production during rainy seasons
820 kilograms
Nestor Ice Cream
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On the other hand, Ms. Evelyn B. Liwag, a wholesaler and dealer of Gold Delight
Ice Cream, said that they based the amount of ice cream they supply on the orders
they received from different retailers. She also said that orders usually drop on about
Based from the information gathered, the proponents conclude that there is no
significant gap between the demand and supply of ice cream in the target market.
However, since the business’ product is different from the other kinds of ice
Table 2.2 Approximate amount of demand in the target market
creams offered in the market, the proponents conducted an interview with the Seventh
Element, a liquid nitrogen ice cream parlor located at Brgy. Kapitolyo,Pasig, Metro
Manila. Based on the interview, it was noted that the approximated supply of 1,260
kilograms per month was exceeded by the approximated demand of 1,512 kilograms
16.67%
83.33%
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Figure 2.2 The gap between the supply and demand of Seventh Element's Liquid Nitrogen ice cream.
Aside from the interviews, the proponents also conducted a survey in its target market to
have additional information about the consumer’s insight in eating ice cream. Based on the
survey, 299 out of 300 people like ice cream. Further, the respondents were also asked about
the liquid nitrogen ice cream. Among the population, 96% have not yet tried the Liquid Nitrogen
In this Porter’s Five Forces, Ice Creamistry Hub may experience the effects of
external factors at varying intensities. To minimize the negative impact, the business will
implement strategies to cope up with the competitive market. Ice Creamistry Hub’s five
The main components of making the liquid nitrogen ice cream includes
sugar, vanilla, heavy cream, fresh milk, fresh fruits and liquid nitrogen. The
ITEM COST
(As of November 2017)
Sugar P50-P100 per kilogram
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found in grocery stores and public markets. The potential suppliers of the
Supermarket. Since they are highly available in the local market, it makes the
Calasiao and Ingasco in Caloocan City will be alternatives. This causes the
assessed to be high since the critical aspect of making the product lies within the
supply of Liquid Nitrogen which makes the product different from the other.
Creamistry Hub will create and maintain good supplier relationship. This will be
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Among all, the most important tool to build a strong relationship with the suppliers
and will prevent delays and mistakes in making decisions. Having the way in
dealing with them allows both parties to quickly communicate and share
documents and other information. Also, it enables both parties to work together
buying ice cream which includes price, flavors, brands and the health benefitsthat
most affects the customer’s buying decision with regards to an ice cream is the
flavor. This will be a good opportunity to the business since it will offer a new
variety of flavors which can satisfy the needs and wants of a customer.
Hub’s Liquid Nitrogen ice cream has plenty of substitutes in the market which
mainly includes those other kinds of ice creams like the commercial ice creams
and sorbets. This abundant supply of substitutes lowers the customer’s switching
cost causing them to easily change from one product to another. Despite of this,
the number of ice cream consumers is bigger than the number of suppliers in the
target market.
The business will reduce the high customer bargaining power by building
up brand loyalty through product development. This will be done by first informing
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the target market about the existence of the business and the products it will
offer. Through advertising, the business will build awareness to consumers about
its product and what makes it different among other ice creams.
since it is one of a few that offers liquid nitrogen ice cream. Despite its
able to provide better customer value and gain customer loyalty such as creating
different agricultural products, the business offers the new flavors showcasing
the popular product inherent from the province’s different cities and
carabao mangoes of San Carlos City, “Sea Salt Caramel” featuring the
municipality that lives on salt, Dasol, “Maiz con Keso” showcasing the sweet
corns of Sto. Tomas, San Jacinto and “Pandan con Leche” from the
the ice cream like making it an ice cream cookie sandwich and ice cream smore.
The ice cream smore can be dipped in liquid nitrogen to give customers a misty
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The economies of scale are the cost advantage that arises with the
increased level of production. This can be utilized during the further operating
efficiency and expansion of the venture. Brand loyalty on the other hand is the
with other competing products. Further, the initial investment is the required
capital to start a business. Lastly, the payback period is the length of time
Being the first establishment to offer liquid nitrogen infused ice cream in
the province of Pangasinan, it has lowered the potential threat of new entrants
Utilizing the First Mover Advantage, the enterprise is able to establish its brand
and gain customer loyalty without much dilemma with competitors for the time
being. By gaining their loyalty, customers will continually seek for the business’
products. Having built up brand identity, the enterprise may consider expanding
its operations and thereby, placing itself in a position that better exploits the
economies of scale.
However, in terms of the initial investment and the payback period, it has
a high threat level. The venture has a relatively high estimated initial investment
of Php800,000.
increases the threat of new entrants since it is likely to attract potential rivals to
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scale, thereby decreasing average unit cost. This would allow the company to
increase its profit margin and have more allowances in fixing prices, which would
be helpful against new rivals entering the market. To lessen the impact of
There are several substitutes of liquid nitrogen ice cream in the market.
Substitute products are products from another or same industry that offers similar
benefits to the consumer like the product produced by the firms. Therefore, the
business considers the yogurt, frappe and milk shakes as its substitute since
they also give almost the same wholesome refreshment as ice cream. However,
the main substitutes of the Ice Creamistry Hub are the businesses and
establishments which also offer ice cream. These consist of commercial ice
creams like Selecta, Nestle, Magnolia, Arce Dairy and Carmen’s best and ice
cream parlors such as Ice Cream House, Shapers Creamery and BLW 14.
relatively low which creates a lower risk and cost for customers on switching
products than those substitutes thus decreases the threat of substitutes. With
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these numerous substitutes, low switching cost and product quality, the overall
To minimize this threat, the company will revolve its strategy through
featuring the best of Pangasinan and continuously improvingthe ice cream like
products. This constant innovation will add value and benefits to customers. Also,
utilizing liquid nitrogen to freeze ice cream results to creamier, smoother, and
denser ice cream which provides higher quality compared to others. By then, it
helps the business to create brand loyalty which helps prevent switchovers to
other substitutes.
Dagupan City being the target location, the business will be competing
with numerous ice cream parlors. These include the Ice Cream House, Shapers
Creamery and BLW 14. Also, ice cream distributors and whole sellers heighten
the competition which comprises the Selecta, Nestle, Magnolia, Arce Dairy,
Carmen's Best and Nestor Ice Cream that are available in malls or cafes. Similar
with ice cream that gives indulgence and delight, the business will be facing with
indirect competition as well. These are the YohFroz and White Hat that offers
frozen yogurt, Flyers Hub and Sweet Bite that mainly provide frappe and
milkshake. Lastly, these also include Yellow Tree Cafe, Trueblends and other
cafes that chiefly deliver milkteas. Given these several competitors, the
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competitive rivalry of Ice Creamistry Hub is high. Customers can easily shift their
demands to those competitors with low cost, leading to a smaller market share.
With the high competition, buyers can go elsewhere if they are not satisfied with
In order to lessen the rivalry with those existing players, Ice Creamistry
Hub will establish a strategy that can increase its competitive advantage. This will
be done by providing the utmost satisfaction and customer value through product
will make an effort to better understand unmet customer needs and work towards
improve the form of the ice cream like making it an ice cream cookie sandwich
and ice cream lollipop that can be both dipped in liquid nitrogen to give
customers a misty and smoky breath. It will also continue to develop new flavors.
On the other hand, the business will also use the strategy of focus
wherein it selects a segment or group of segments in the industry and tailors its
strategy in serving them. This strategy is important to identify and retain those
E. Competitors’ Profile
The business considers two kinds of potential competitors: Direct and Indirect.
Direct competitors offer a product or service which is interchangeable with our product
and indirect competitors are the substitutes or alternatives to our product. The following
businesses are considered competitors because it can significantly affect our business in
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flavors in an ice cream stick format. Figure 2.3 Selecta Ice cream
It has come out with multiple flavors in a pack the new 3 in 1 plus one, the first
ice cream pack offers four flavors. Selecta has new and different flavors such as
Buco Pie con Leche. Its prices range from P89 to P245, depending on its size
and flavors. Selecta is the Philippine’s number one ice cream brand. Its ice
cream was well known for its creaminess, authentic flavors and unique gold can
new and exciting flavors like cookies and cream, chocolate almond fudge and
Temptation (Tickle Me Vanilla, Double Dutch Day Cream, Cookies and Cream),
Nestle Drumstick. Nestle ice cream prices range from P25 to P255.
Nestle’s ice cream products delight customers with options for every
Label (Double Dutch, Rocky Road, Dulce de Leche, Cramy halo-halo, Quezo
Primero, Butter Sweetcorn, etc.), Magnolia Chocolait Ice cream and Magnolia No
Sugar Added (vanilla and raspberry). Magnolia ice cream prices range from P220
to P345.
distinct taste by making ice cream the old- Figure 2.6 Arce Dairy Ice cream
fashioned way. Its ultimate best sellers are Pistachio, Blueberry Cheesecake,
Durian, Atis Delight, and Green Tea which are all available in Chef Distrito,
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located at Tapuac District, Dagupan City. Its ice cream prices range from P70 to
Arce Dairy has maintained a clean reputation for making quality ice
cream, proven by several awards given to them. It also scientifically proven that
its ice cream products are much healthier compared to the leading ice cream
brands. However, its products are poorly distributed, making it available to limited
dairy product. It offers several ice cream Figure 2.7 Carmen’s Best Ice cream
flavors such as Salted Caramel, Butter Pecan, Cookie Dough, Tahitian Vanilla,
and Malted Milk. Its ice cream prices range from P350 to P380 depending on the
flavors.
The secret to their ice cream’s taste is that they produce their own milk
and get only the best ingredients for their ice cream, proven by several awards
given to them.
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of flavors such as, bukopandan, ube, Figure 2.8 Nestor Ice cream
vanilla, strawberry, ampalaya, malunggay etc. Nestor Ice cream only cost P20
per cup.
of flavors like, green tea matcha, Figure 2.9 Shapers Creamery Ice cream
matcha strawberry ice, and matcha&oreo ice cream. Shapers Creamery’s ice
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Dagupan City. It offers low fat, sugar free and gluten free ice cream. In addition,
this shop also offers delectable and affordable ice creams. However, their staffs
are not accommodating. Its flavors include ube, macapuno, mango, chocolate
marble and etc. Its prices range from P15 to P250 pesos depending on the size
formulation in soft- served ice cream. It offers different ice cream products such
as bear cone, choco dip and sundae fudge. Its products range from P30 to P45
Indirect Competitors
White Hat is a frozen yogurt shop which is located at MacArthur Highway, Lucao
District, Dagupan City. White Hat has three new lines of drinks, which are
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all made with fresh yogurt that are healthy and delicious. First is the Fruity
Smoothie line which includes kiwi, strawberry, banana, mango, and blueberries
flavor. Second is the Signature Blends line, which includes different flavors such
Pie, Blueberry/Grape, and Peanut Butter Banana. Lastly, the Creamy Treats line,
which consist of Cookies & Cream, Caramel Cream, Chocolate Cream, and
Almond Cream. Its prices range from P100 to P240 and P20 to P55 for additional
toppings. Also, it offers an ice cream from real fresh milks that makes it creamy
and delicious. This shop has pleasant and elegant ambiance that attracts
customers.
YohFroz is a frozen yogurt shop and food service distributors having its location
in Tambac District, Dagupan City. It offers tasty and nutritious ice cream that
contains 98% fat free and low calories. It serves Yoh-gurt parfait with the blend of
and other fruitful blends. Its price ranges from P125 to P135.
FOSS Coffee is located at Tapuac District, Dagupan City. It offers a high quality,
beverages. The shop also provides excellent customer service. The main flavors
include Almond Roca, Black Forest, Caramel Macchiato, Coffee Jelly, Espresso
Sip ‘n Slice is a café located at Burgos Ext. Tapuac Dist., Dagupan. It is one of
across the University of Pangasinan.It offers monster drinks that are very sweet
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from its chocolates to fruit flavors. They also have huge bottomless iced teas in a
variety of flavors.
Dagupan City. It offers blended frappe costing from P90 to P150, yakult series
costing from P95 to P110, milk tea blends costing from P60 to P110 and green
suitable place to study, to relax and to get rid of stress. It offers Green Tea Iced
Teas, Personalitea, Classic Milk Teas, Tea Creations and Lites which costs P60
District, Perez St and Mayombo District. It offers Milk tea costing from P35 to
P70, Popping Yogurt Tea costing from P70 to P80, Frappes costing from P90 to
Chocolate Frappe, Crème Brulee Frappe, Antonino's Milk Tea and Choco Bam
Milk Tea.
Yellow Tree is the breakthrough of Chester Tan, whose passion made him start
up his own coffee shop located at Tapuac Road, Dagupan City. Despite of the
competition, Yellow Tree was able to compete in the market. It offers Hot
Classics ranging from P60 to P110, Coffee based- Hot or Iced ranging from P80
to P125, Frappes ranging from P115 to P135, Non-coffee blends ranging from
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F. Suppliers’ Information
To make its products, the needed inputs will be purchased from its potential
suppliers. The business chose these suppliers because of their accessibility and
lower price compared to the other suppliers. These include the following:
Avenue, Dagupan City and it is now operated by George Lim and his wife Alicia
Gapuz. They saw the strong demand in school, office supplies and plastic products.
Therefore in 1991, Lim Pan expanded to Lim Pan Commercial which mainly sells
products for printing press, school and office supplies; while, Lim Pan Trading sells
bakery supplies, plastic bags and packaging materials. It is also a trusted partner of
bakeries, markets, restaurants, home bakers, schools and even government offices.
Inputs which include the disposable cups and spoons will have a price ranging from
P50 to P120 per package. The business chose LimPan trading as its supplier
because it offers lower cost and it is nearby the target location of the business.
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operation for the past decade providing the best service and value to its customers.
It has 13 retail centers which offer a wide selection of food products, household
home accessories and etc. Supplies to be purchased are milks and sugars which
price ranges from P50 to P60 per kilo for sugar, P30 to P100 for vanilla, P250 to
P350 per liter for heavy cream and P80 to P100 per liter for fresh milk.
The business will buy fruits in this market because it is more affordable
and have the same quality as to those fruits offered in the Supermarkets.
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owned by the Cuna family and sells various gases such as oxygen, nitrogen,
argon, carbon dioxide and hydrogen and which has been in operation for more
than fifty years. The price of this liquid nitrogen is P750 per tank and this tank
can contain 135 lbs. per square inch liquid nitrogen. The tank that will be used to
store the liquid nitrogen has a price of P6000 which is refundable. Aside from the
Caloocan City. And for the other supplies, the business considers supermarkets
Liquid Nitrogen
Liquid nitrogen, also known as LN2, is a colorless, odorless nitrogen found in its lowest
temperature. (Brodwin, E.) It can be used for a variety of things such as a coolant for
computers, in medicine to remove unwanted skin, warts and pre-cancerous cells, and in
cryogenics. Nowadays, it is also used by food makers in preserving food and even in creating
Professor Peter Barham, from the University of Bristol's School of Physics, says liquid
nitrogen is "simply the harmless gas nitrogen, which has been cooled to such a low temperature
that it becomes a liquid". (Arya, S.) It has an extremely low boiling point of -196 Fahrenheit. Due
to its tendency to vaporize in low temperatures, the gas it emits is frigid. This makes it suitable
for freezing ice cream in an instant. A benefit in freezing ice cream faster is that it causes
smaller ice crystals to form making a smoother and silkier texture. (Greenblatt, A.)
different texture than any other ice cream, it feels like a new experience, like a new treat”
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(Kapoor, A.) Liquid nitrogen also gives a lower melting point allowing the ice cream to melt
Despite the benefits it gives with regards to ice cream consumption, certain precautions
should still be considered. Nitrogen liquid can be dangerous. (Grossman, E.) The intense cold
from liquid could cause frostbite or cryogenic burns if it is not used, and handled, properly. It is
essential that all the liquid used in food or drink preparation has evaporated before it can be
safe for consumption. Nitrogen should not be ingested when in its liquid state. According to
Professor Barham, using liquid nitrogen in cooking is fine as long as safety measures are taken.
In the 4th century B.C., the origin of ice cream can be traced to Romans making ice and
milk concoctions. It continually evolved having different recipes as it spread through China,
Europe, Italy and the French Courts. It then made its way to the United States. During 1700-
1812, famous Americans began serving it to their guests. Among them were George
In 1999, a campus festival was held where Will Schroder and T.J. Paskach, two
graduate students created a flash freeze ice cream machine with the use of liquid nitrogen.
(Rohrig, B.) Having brought their machine to the fair, they eventually opened the Blue-Sky
Creamery in 2002.
Ice Cream
Commercial ice creams make use of emulsifiers and stabilizers rather than using natural
ingredients. (Thompson, V.) This can be an issue with customers that are health conscious.
Having the liquid nitrogen can turn this issue around. Due to its rapid freezing ability,
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preservatives can be avoided and instead have fresher ingredients be used in the mixture since
Ingredients of ice cream essentially include milk, cream and sugar. Another important
ingredient in this cold treat is air. Air composes thirty to fifty percent of the ice cream’s volume.
(Schroer, E.)The air added to the ice cream is called overrun. This is not to cheat customers into
purchasing less for every peso spent, but it has something to do with the ice cream’s density.
This causes the ice cream structure to be porous which allows customers to scoop it smoothly
rather than having to scoop through a high-density ice cream that may be hard as a brick. Also,
it affects how fast ice cream melts. High dense ice creams melt slower but are usually harder.
A question that often arises is “What is the difference between gelato and ice cream?”.
Other than gelato being the Italian word for ice cream, the three factors that draw the line
between the two is fat, air and serving temperature. In the ice cream mixture, more fat is used to
get in between water particles as it freezes, avoiding large ice crystals to be formed. During its
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faster churning process, more air is whipped in to create a lesser dense texture. With regards to
temperature, it stored much cooler. It may seem that these differences seem to be minor, but it
does have an impact on the taste and texture of both treats. Comparing both, some have
concluded that gelato has more flavor and a softer elastic texture than ice cream.
A. Consumer’s Analysis
1. Target Market
marketing strategy. For Ice Creamistry Hub, Dagupan City will be its main target
According to the 2015 Philippine census, the population of Dagupan City is 171,
Php 268.7 Million and 90.7 percent were spent for general public services. Further, people
in this place are fond of eating and staying at restaurants, coffee shops, and other food hubs
The proponents segmented its target market into three which mainly comprises of
high school students aging from 12-17, college students aging 18-21 years old and
employed or working people aging 22-50 with middle to high monthly allowance or income.
The proponents consider them as their target market because people of these ages are
usually the ones who experience a lot of daily stressful activities. According to some
students, they are normally stressed out by the quizzes, examinations, portfolios, projects,
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term papers, recitations and so many other school activities. Some employees on the
otherhand said that what usually stresses them out are not only their office works but also
family matters. These people need some stress relievers to be free from all the exhausting
school/office works and activities. Further, most of these people are outgoing and
adventure seekers who always want to have fun and enjoy different things.
The business aims to serve these students and workers who are under emotional strain
or tension such as stress by providing them with a calm and relaxing environment and liquid
nitrogen ice cream which can help improve their emotional state. Based on a research by
neuroscientists at the Institute of Psychiatry in London, they have discovered that eating ice
cream affects the pleasure center of the brain and that it has an immediate effect on parts of
the brain that are activated the same way during times when people enjoy themselves.
4%
Having this information helps the management in planning with regards to how many
customers will be going to the shop, how to market the product to increase their frequency
of consumption, when to purchase supplies and how much staff are needed for a certain
Further, the respondents were also asked for their reason of going to ice cream shops.
Majority (59%) of the respondents said that they usually go to ice cream shops to relax and
Figure 4.2: Customers reason of going to ice
cream shops
enjoy, 25% of them is just for ice cream, while 9% of them is to meet friends, and the
remaining percentage is for other reasons like dating, business and others. These answers
15%
For the type of order, 54% of the respondents
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Figure 4.3: Customers maximum willingness to pay Since Ice Creamistry Hub is an upscale
for an ice cream
ice cream shop, the respondents were also asked if how much they are willing to spend for
a cup (8 oz) of ice cream. 83% of the respondents answered Php51-Php100 while 15%
chose P101-P150 and only 2% replied Php151-Php200. With this information, the
For the factors considered in buying ice cream, flavors ranked as the customers’ first
priority, followed by price, health benefits and brand of ice cream respectively. Moreover,
Cookies and Cream is the most favorite flavor of customers followed by Rocky Road,
Double Dutch, the classic flavors and the best of Pangasinan Flavors. So, the business will
The respondents were also asked if they are familiar with liquid nitrogen ice cream
and if they had already tried it. Of the population, 23% are already familiar with the product
however, only 5% of them have already experience it. This signifies that almost a quarter of
the population is aware of the product existence and it is a good thing for the business
because it already has a potential market even before making promotions about the product.
Further, 87% of the respondents want to try the Liquid Nitrogen Ice Cream. While most of
723
Health Benefits
Health Benefits
Brand 933
Brand
Flavors Flavors
534
Price
Price
700
0 200 400 600 800 1000
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the remaining 13% who does not want to try think that it is dangerous and expensive.The
business can convince this last portion of the population to buy the product by presenting
the benefits that these individuals can gain from the product and not simply focusing on the
features that the product provides. The features are what the product can do whereas
Based from the customer demand obtained, the following production timetable is produced:
PRODUCTION TABLE
Total
Production FEB (Units) MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN
FLAVORS Production
MIX
2500 3750 3750 3750 2500 2500 2500 1250 1250 2500 3750 2500 32500
Vanilla 11% 275 413 413 413 275 275 275 138 138 275 413 275 3578
Classic Flavors Chocolate 15% 375 563 563 563 375 375 375 188 188 375 563 375 4878
Ube 9% 225 338 338 338 225 225 225 112 112 225 338 225 2926
Rocky Road 16% 400 600 600 600 400 400 400 200 200 400 600 400 5200
Premium FlavorsDouble Dutch 13% 325 487 487 487 325 325 325 162 162 325 487 325 4222
Cookies & Cream 18% 450 675 675 675 450 450 450 225 225 450 675 450 5850
Pandan Con Leche 7% 175 262 262 262 175 175 175 88 88 175 262 175 2274
Best Of
Mango Tango 4% 100 150 150 150 100 100 100 50 50 100 150 100 1300
Pangasinan
Maiz Kon Keso 2% 50 75 75 75 50 50 50 25 25 50 75 50 650
Flavors
Further,
Sea Saltbased
Caramel on the
5%
actual
125
count
187
made
187
by
187
the125proponents
125 125
in
62
its 62
target
125
shop
187
location,
125 1622
it
Figure 4.5: Ice Creamistry Hub’s Annual Production Time Table
is during 5:00 to 7:00 pm when huge number of people passes by. With these statistics, the
proponents estimated that a greater number of customers will be entering the shop during
1. Product
Ice cream is a mixture of milk, cream, sugar, and other ingredients that has been
commonly frozen into a soft, creamy delight through traditional processes like churning and
freezing. However, liquid Nitrogen is used nowadays by some food aficionados due to its
convenience and various benefits. Because of its fast-freezing ability, it circumvents the
pitfall of the normal freezing process thus eliminating grainy texture of the ice cream. Also, it
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gives exact taste of ingredients and flavors which is not the case with freezing it in the
traditional way. The traditional preparation adds the icy, watery taste to it. Lastly, flavors can
be custom-made with fresh ingredients on the spot thus eliminating the need for artificial
coloring or preservatives used in normally prepared ice cream. It then leads to a healthier,
Ice Creamistry Hub will offer ice creams that will come into different flavors
generallygrouped into three which are Classic, Premium and Best of Pangasinan Flavors.
Ube since it is already been around for a long time. Also, based on observation most of the
ice cream lovers still gravitate toward choosing it. On the other hand, premium flavors such
as Rocky Road, Cookies and Cream and Double Dutch will be offered also in order to
elevate the craving of those people who are tired of eating classic flavors and want some
combination of flavors. However, to differentiate the business in other ice cream shops, it will
be offering the best of Pangasinan flavors namely the Sea Salt Carmel, Mango Tango,
MaizKonKezo and Pandan Con Leche. This is inspired by the eagerness to feature and
promote the different products of the province. These flavors were chosen because they can
be perfectly matched to the ingredients of the ice cream. In addition, their seasonality is not
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These ice creams will be made by first preparing the necessary ingredients which
includes fresh milk, condensed milk, heavy whipping cream, salt, fresh fruits, mix-ins like
nuts, cookies, chips, marshmallows and other toppings, and of course, the liquid nitrogen.
After that, the ingredients which vary according to the flavor of ice cream will be mixed in a
large stainless-steel mixing bowl. Then, the liquid nitrogen will be poured out into the ice
cream mixture while continuously stirring it. The stirring of the mixture and pouring of liquid
nitrogen is continued until a consistent creamy mixture is achieved. Finally, the ice cream
In order to keep customer coming back, the Ice Creamistry Hub will be focusing in two
aspects: product and experience. For the product, offering liquid nitrogen ice cream has an
edge over other ice creams. First, they are made and served fresh without any kind of
preservatives required to store them. It results to a rich and flavorful ice cream. Second,
because of its creamy texture since liquid nitrogen helps break the ice crystals to such small
size that it leads consistency to the entire texture of the ice cream. Lastly, the process of the
ice cream is faster than any other method of making the ice cream. Indeed, by the infusion
of liquid nitrogen in the ice cream process boost the quality of the Ice Creamistry Hub’s ice
cream. While for the experience, the business will catch the attention of the customer
through the use of liquid nitrogen itself. Nowadays, simple scooping is not cool enough
anymore. Bringing liquid nitrogen in the production process of ice cream will give a wow
factor that creates even more excitement for customers. It gives a thrilling customer
experience because of the vaporous smoke that fills the shop with a scientific and futuristic
feel as customers watch their sweet treat being prepared. It is not something that is
expected but customers will definitely love it. They will be excited on taking pictures or
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2. Price
Ice Creamistry Hub will use the value-based pricing strategy because the product gives
value to customers since it comes along with it the experience that the business offers.
Liquid nitrogen ice cream is different compared to the other traditional ice cream parlors
because it is infused with liquid nitrogen which makes the ice cream healthier, creamier,
smoother, and denser. This is reflected in the price of the product which makes it seem
expensive. Presently, an ice cream parlor called The Iscreamist, is selling different products
infused with liquid nitrogen. Here are some of its products, one is the Dragon's Breath
S'mores which is initially looked like regular graham crackers with wafer and marshmallow
filling but turns into a smoking frozen delight when dipped in liquid nitrogen, its selling price
is Php79 per four pieces of smore. Next is the French Macarons, it is an ordinary macaron
with a stick which is served with glasses of liquid nitrogen, and once the macarons are
dipped, it sizzles and instantly freezes, its price is Php120 per two pieces of macaron. For
the business, it will set the selling price of the liquid nitrogen ice cream at Php75 per cup for
the Classic flavors, and Php90 per cup for the Premium and best of Pangasinan flavors. The
Premium and Best of Pangasinan flavors have higher price than Classic flavors because it
gives higher value to the customers based on the survey conducted. Moreover, the
Strawberry Jalapeno flavor that will be offered during rainy season only will be set at a price
of Php100 per cup since it has the highest cost and it gives more enjoyment to customers
during this season. This pricing is based on the survey conducted which the respondents
were asked if how much they are willing to spend for a cup of ice cream and 83% of them
answered a price ranging from Php51 to Php100. Also, the selling price set by the business
will be sufficient to cover the cost of the product, other business costs and still give a
reasonable return.
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3. Place
Dagupan City
University of Luzon EDNAS School
National HS
Current Number
6, 000 2, 000 6, 000
of Students
The building is owned byDr. Adanhaving an area of 40square meters. The terms and
CONSUMER CHANNEL
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wherein the business will be serving its product directly to final consumers.
3. Promotion
Since Liquid Nitrogen Ice cream is unknown to most locals, several promotions will be
executed by the company to inform the public about the business’ existence and the
products it offers. These promotions include the following and will be handled by the
marketing manager.
These are used on modes of transportation such asjeepneys, which is done by placing
the advertising material on top of the public vehicles. It is highly effective as an advertising
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tool because of its exposure and mobility. This is to be done a month before the opening of
These have an estimated cost of P72 for a 3X2X12 square foot jeepney top ad. The
business will be using 12. To assemble this, wood and wires are also needed which cost
P70 per jeepney ad. These are based on the prices offered by Sights and Sites.
ITEM COST
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Sights and Sites, an established advertising company. This is to be done a month before
Social Media
way of informing a mass of people with little to no cost. The business can make use of
Facebook and Instagram in establishing a connection with customers and in keeping them
updated as to new product offerings, special events and promos. The business will have its
own page that will make regular and monthly posts which the general manager will take
charge of. They can also boost the Facebook page so as to reach more users. This would
cost P80 for a post that lasts for two days. Business policy states that the management will
engage this service twice a month throughout the year. It can also use the services of
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compendium about Dagupan. This would have the company incur an annual cost of P3000
Issuing Coupons
incur about P5 inclusive of paper and the printing. A piece of paper can produce 8
coupons. The estimated cost for the whole year would be P600 for the year.
to make purchases from the shop since there will be a flavor that is not normally offered.
The business can also offer complementary products of ice cream such as freshly baked
pastries and pizzas, which is also ideal to eat during rainy weather.
Free Taste
customers.
proposed new flavors will be given as a free sample to customers and people passing by the
shop. This aims to promote the shop and product and also gain feedback on the proposed
flavor.
V. TECHNICAL FEASIBILITY
A. Production Process
The business production will begin once the order was made by the customers. The ice
creams will be made on the spot after the customers have chosen their desired flavors. The
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STEP 1: Prepare all the main ingredients to be used in the storage room for making the ice
cream base and the additional ingredients which will vary according to the flavor of the ice
1. Main ingredients
2. Other ingredients:
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The following are the corresponding measurement of each ingredients which can
Pinch of salt
STEP 2: In a large stainless-steel mixing bowl, combine the main ingredients which comprise of
the heavy whipping cream, fresh milk and sugar and the other ingredients which mainly consist
of different flavorings and fruits. Mix up the ice cream mixture until it is slightly condensed.
Note: Add a pinch of salt into the mixture to control its sweetness while mixing.
STEP 3:Prepare liquid nitrogen to be used. Two liters of liquid nitrogen will be enough in making
sixteen (16) servings of liquid nitrogen ice cream. Put in a container called dewars.
STEP 4: Put the ice cream mixture in the commercial ice cream mixer. Mix it again while
pouring gradually the liquid nitrogen. Keep adding small amount of liquid nitrogen until you
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STEP 5: Scoop the ice cream and put it in an eight (8) ounce cup. Add toppings or mix-ins
according to the customers’ desire. By then, the liquid nitrogen ice cream is ready to be served.
Dine In To Go
B. Flowchart
Figure 5.8of Activities
Final Product
Production Process
Mixture of Ice
Cream Base
Storage of
Mixture
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LEGENDS
Pre-Production Events
Production Packaging
The production process will have three stages comprising of the pre-production,
The pre-production process involves making the ice cream base by mixing together
heavy whipping cream, fresh milk and sugar. The mixture will then be stored in the refrigerator
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Upon the receipt of the customer’s desired flavor, additional ingredients are mixed with
the ice cream base. After making the appropriate mixture, liquid nitrogen is added to freeze the
The frozen mixture is put in an 8-ounce cup, adding toppings at the customer’s
Expenditure cycle
Supplier/ Storage
Vendor
Receipt of Cash
Goods Disbursement
LEGENDS
Entity Recording
Events
The management will monitor inventory levels to avoid stock outs. As the inventory
approaches the reorder point, purchases will be made to its suppliers for the needed materials
and ingredients; and this starts the expenditure cycle. The General Manager communicates and
transacts with different suppliers at the lowest possible cost. Purchase orders will be used to
verify these purchases. Upon receipt of goods, the General Manager will then match the
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purchase order with the quantity and quality received. After assuring the goods received, the
Cashier who’s in charge of cash collections and disbursements will prepare the payments which
will be forwarded to the suppliers and the transaction will be recorded by the bookkeeper in the
Revenue cycle
Sales
Collection
LEGENDS
Entity Recording
Events
The customer’s order initializes the revenue cycle. Upon receipt of the order, the cashier
will then process the customer orders. After filling the order, the cashier will have to billed the
customers and will issue a customer’s receipt. Subsequently, the sale will be recorded by the
bookkeeper in the journals and post it to the ledgers. Afterwards, the food service crew who is
responsible for making and preparing ice cream, will start making the desired ice cream flavors
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of the customers. After finishing the product, food service crew will immediately serve it to the
customer.
C. Gantt Chart
December January February March April May June July August September October November December January
Activities 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 412 3 4 1 23 4 1 23 4 12 34 1 23 4 1 2 3 4 1 2 3 4 12 3 4 1 2 3 4 1 2 3 4
Business Registration and Application
Renovation of the building
Design of shop
Purchase of Furniture and Fixtures
Purchase of Equipments
Purchase of liquid nitrogen
Purchase of Ingredients
Purchase of materials
Production
Advertising
Selling of Products
Research and development
Seasonal Gimmicks
Public Relation( Charity Events)
Preparation of monthly financial report
Preparation of annual financial statement
The above table shows the schedule of different activities to be done in putting up the
business. To be a duly registered business, Ice Creamistry Hub will submit its necessary
documents for registration and application for about two months starting from December to
January. However, the renovation of the rented building will take one month beginning in the 1st
week of December. One month is enough since it is only a shop size establishment having an
area of 108 square meters. The purchase of the furniture and fixtures, equipment together with
the designing of the shop will be done from the 1st week to the 2nd week of January.
Activities that can affect the daily operation of the business will include thepurchase of
liquid nitrogen and other ingredients, materials like paper cups and spoons, and the production
of liquid nitrogen ice cream itself. The business will start its operation in the first week of
February and it will be open from 4pm to 10pm since at this time, students from schools and
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In order to maintain the good taste and quality of the ice cream and to avoid spoilage,
proper and organized time schedule for the purchases of the materials and ingredients is
needed. Those perishable ingredients like fresh fruits, creams and milks will be purchased twice
a week, during Mondays and Thursdays. On the other hand, those materials (e.g. paper cups
and spoons) that can be stored in a longer period of time will be purchased only twice a month,
every 1st week and 3rd week, during Mondays. Moreover, using a two large liquid nitrogen tanks,
the refilling process of the liquid nitrogen will be done approximately every 3 rd week of the
month. This refilling process is just an estimate since it may still vary depending on the actual
The business will be conducting different promotional activities throughout the year. This
includes the use of transit ads, lamp post banners, social media, coupons and free taste. The
first year would incur much advertising cost as compared to the following periods since the
business is still unknown. There will be a free taste of the ice cream during the first opening of
the shop. Transit ads will be used during the initial five months of operations. Lamp post
banners will be used before and during the month of opening. Social media would include the
boost feature in Facebook and the services of the well-known Facebook page, What’s Up
Dagupan. The boost will be used throughout the year whereas for the What’s Up Dagupan will
be used for nine posts during the year. Coupons will be distributed during the months of June,
With regards to research and development, it will be done during August and September
where newly developed flavors will be given to customers as a market test and to also gain their
feedback.
Further, in order to have a good public relation, the business will also conduct charity
event like giving free ice cream to less fortunate children during Christmas day. Lastly to monitor
thetrend of the business within a year, it will provide and maintain a monthly financial records
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and summary of its operation, and produce the annual financial statement at the end of the
year.
D. Facility Layout
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The proponents decided to rent a commercial space where they will start to operate
their business. The location is located at Burgos Extension, Dagupan City, Pangasinan. The
commercial building rented measures 3 meters high. It has a total land area of 40 square
meters. Its length measures 10 meters and width are 4 meters which can accommodate 20 to
30 customers.
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Figure 5.11 Ice Creamistry Hub’s service (upper-left side), production area (right side, and storage
room (lower-back of production area)
The space allotted for production and service area measures 3.7 meters by 1.9 meters.
In this area they will give their orders and payment.Afterwards, they are to move besides the
counter proceeding to production area where they are able to see how the liquid nitrogen ice
cream is made. At the side of the production area is the storage room where the basic
ingredients and materials are stored. The storage room measures 1.9 meters by 1.5 meters.For
the liquid nitrogen tank, it is located at the rear side of the production area.
The Ice Creamistry’s customer area measures 8.6 meters by 2.1 meters. In this area the
customers will be able to see how the liquid nitrogen ice creams are made and take their time in
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E. Initial Investment
257,570for machineries and equipment, P 285,892 for materials and ingredients, P11,155.60 for
business requirements and pre-operating expenses, P 212, 093. 50 for Leasehold Improvement
and Php30,901for other operating expenses. To cover this, the partners will be contributing a
total of Php800,000 which will be divided by Php106,667each for capitalist partners and
The following is the breakdown of the total investment required in this business:
EQUIPMENT
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29- Nov- 17
Ice Cream
3 P 120 P 360
Dipper
CSI Warehouse
29- Nov- 17
29- Nov- 17
Liquid
3
Nitrogen P 434 P 1, 302
Dewars
MEGASCO Corp.
2
Liquid Caranglaan, Dagupan
(160L P 10, 000 P 20, 000
Nitrogen tanks City
/tank)
7- Nov- 17
Enigma Technologies
Speaker 1 P 2, 574 P 2, 574
02- March- 18
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Enigma Technologies
Laptop 1 P 15, 280 P 15, 280
02- March- 18
MATERIALS
29- Nov- 17
121 packs
Plastic spoons P25/pack P3,025 Limpan Commercial
(50
Pcs/Pack) Dagupan City
INGREDIENTS
Heavy
Whipping 377 Liters P 187.35/L P70,630.95
Cream
CSI Grocery Store
29- Nov- 17
MEGASCO Corp.
Liquid Caranglaan, Dagupan
5 tanks P24,000 P120,000
Nitrogen City
(160 L)
7- Nov- 17
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Chocolate 65 bottles
P95/bottle P6,175
(750 g) Limpan Commercial
Dagupan City
04- Dec- 17
Vanilla 17 bottles
P26 P442
(375mL)
Limpan Commercial
Dagupan City
Marshmallows 1 kg P140/kg P140
04- Dec- 17
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Note: Ingredients and Materials quantity computed above is based on the estimated production in the first two months of
operation
Table 5.3 Business Requirements and Pre-Operating Expenses
TOTAL P 11,155.60
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TOTAL Php30,901.00
F. Economies of Scale
Figure 5.13 Economies of Scale consumption will increase from 97.1 million to 133.7 million
kilograms. The increase in output causes the total cost to be allocated to more units. Thereby,
causing a decrease in average unit cost. Both total cost and production increase annually, but
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A. Management Team
Ice Creamistry Hub is in the form of General Partnership which is composed of eight
general partners and three hired employees. It will be operated and managed by Hazel Sison
and Heidi Melendez. These partners are capable in running the business since they have
gained theoretical knowledge in business concepts. Also, having different background in their
The General Manager position will be assigned to Ms. Hazel Sison who is responsible
for overseeing the administrative functions of the businesssince she takes part in managing
their family business which revolves around transportation services of public utility jeeps. This
serves as a training ground for her to develop leadership and communication skills as she
learns to delegate tasks to different individuals and to interact with them at the same time. She
also has small money earning engagements such as being the supplier of motor oil for their
jeepney drivers’ and also a small lending service to increase her personal income.She also has
small money earning engagements such as being the supplier of motor oil for their jeepney
drivers’ and also a small lending service to increase her personal income.However, Ms. Heidi
Melendez will be the Marketing Manager as she possesses strong analytical and project
management skills. During these years, she is frequently looked upon as good in creating,
managing and coordinating activities in various group school activities like Market Day. She has
also excellent spoken and written communication skills and ability to lead and motivate her
team, which are crucial skills and responsibilities for a good marketing manager.
Moreover, having attended trainings with Mr. Oliver Timonera, owner of Iscreamist made
the partners to acquire a practical knowledge in making the liquid nitrogen ice cream. Also, in
order to be more competent in managing the business, the partners will be attending different
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(DOST), Department of Trade and Industry (DTI) and other organizations related to the
business.
In addition, the company will hire a cashier who is responsible in cash collections and
disbursements. It will also employ two service crews who are capable in all around service such
as preparing ice cream, dishwashing, others. They must have ability to work under pressure and
remain calm even during those rush hours. The General Manager will be in charge in
conducting trainings with these service crews to gain sufficient practical knowledge and
experience. This will be done by teaching them the proper procedures in making the liquid
nitrogen ice cream and by instructing them the proper precautionary measures like wearing
gloves and making sure that the liquid nitrogen evaporated for 3-5 minutes before serving to
B. Organizational Structure
General Manager
Ms. Hazel Sison
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within a budget
-Prepare financial
reports and payroll
every 30th of the month
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D. Shifting Schedule
General
3pm-10pm Day off 3pm-10pm Day off 3pm-10pm Dayoff
Manager
Marketing
3pm- 10pm Day off Day off Day off Day off 3pm- 10pm
Manager
Cashier 3pm- 10pm 3pm- 10pm 3pm- 10pm 3pm- 10pm 3pm- 10pm 3pm- 10pm
Food Service
3pm- 10pm 3pm- 10pm 3pm- 10pm 3pm- 10pm 3pm- 10pm 3pm- 10pm
Crew 1
Food Service
3pm- 10pm 3pm- 10pm 3pm- 10pm 3pm- 10pm 3pm- 10pm 3pm- 10pm
Crew 2
Ice Creamistry Hub will start its operation every 4 pm until 10 pm. The Marketing
Manager will work every Monday and Friday, to plan and develop marketing strategies for the
company. Also,she is responsible for implementing and coordinating marketing campaigns with
On the other hand, the General Manager will work every Monday, Wednesday, and
Saturday to check the conditions of its sales and review feedbacks from its customers in order
to make necessary steps in improving the quality of its products and services. He is also
responsible in checking the inventory and supply needed in the operation. However, the Food
Service Crew will set up the shop and prepare the ice cream mixture before opening. When the
shop starts to open, the service crew (1) is in charge in making and preparing the liquid nitrogen
ice cream while the service crew (2) is responsible in serving the ice cream and cleaning the
Every Monday and Thursday, one of the crew is in charge in buying ingredients for ice
cream such as the fruits. Each crew will be given a one day off per week.
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This part of feasibility study is reviewed and evaluated by Mr. John Sidfrey F. Soriano, CPA.
A. Financial Assumptions
a. Operating Assumptions
a1.) Sales
Using the result of the conducted survey, the following sales mix is
formulated:
SALES MIX TABLE (Units)
Total
Production FEB (Units) MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN
FLAVORS Production
MIX
2410 3614 3614 3614 2410 2410 2410 1205 1205 2410 3614 2410 31325
Vanilla 11% 265 398 398 398 265 265 265 133 133 265 398 265 3446
Classic Flavors Chocolate 15% 361 542 542 542 361 361 361 181 181 361 542 361 4699
Ube 9% 217 325 325 325 217 217 217 108 108 217 325 217 2819
Rocky Road 16% 386 578 578 578 386 386 386 193 193 386 578 386 5012
Premium FlavorsDouble Dutch 13% 313 470 470 470 313 313 313 157 157 313 470 313 4072
Cookies & Cream 18% 434 651 651 651 434 434 434 217 217 434 651 434 5639
Pandan Con Leche 7% 169 253 253 253 169 169 169 84 84 169 253 169 2193
Best Of
Mango Tango 4% 96 145 145 145 96 96 96 48 48 96 145 96 1253
Pangasinan
Maiz Kon Keso 2% 48 72 72 72 48 48 48 24 24 48 72 48 627
Flavors
Sea Salt Caramel 5% 120 181 181 181 120 120 120 60 60 120 181 120 1566
It is projected that the annual sales of 31,325 will have an increasing trend
It is also anticipated that the sales will increase at a rate of 50% during
peak seasons (e.g. summer and holiday season). However, it will also
decrease with the same percentage during rainy seasons. This information
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is based on the interview conducted with different ice cream shop owners
The sales mix is constant; this assumption is cited so as to use the simple
The business will only accept cash payment; therefore, Trade Receivables
of the recipients will redeem the 10% discount that comes along with it.
a2.) Production
It is assumed that ending inventory will be 20% of the next period sales.
The amount of production per flavor is based on the results of the survey
conducted. This is the basis used to compute the unit cost for each flavors
of ice cream. The product cost consists of direct materials and overhead.
a3.) Expenses
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that are complementary to ice cream. This will be done by giving free
taste to the customers in order to notify them that a new product will be
available at the shop. The enterprise will set up a fund of Php10,000. The
business has considered this a line item within the cash account.
Marketing
includes transfer ads, lamp post banners, coupon, social media and free
partnership agreement.
b. Investing Assumptions
The business will adopt the straight-line method in depreciating its assets andwill
not assign any salvage value to its assets. Useful life generally ranges from 5 to
15 years depending on the fixed asset. The table shows the useful lives of
method.
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c. Financing Assumptions
c.2) Equity
capitalist and capitalist-industrial partners. There will be four capitalist partners and
which will mainly comprise of the 80% of the partnership’s total initial investment.
The capitalist-industrial partners will equally share the remaining 20% of the initial
capital requirement. It is also agreed that each partner will only be allowed to have
B. Financial Statements
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Ice Creamistry Hub
Statement of Changes in Partners' Equity
Initial Investment PHP 106,667 PHP 106,667 PHP 106,667 PHP 106,667 PHP 80,000.00 PHP 80,000.00 PHP 106,667 PHP 106,667 PHP 800,000
Add: Share in Net Income Note J 52,898 52,898 52,898 52,898 76,898 112,898 52,898 52,898 507,181
Less: Withdrawal 10,667 10,667 10,667 10,667 8,000 8,000 10,667 10,667 80,000
Ending Capital PHP 148,898 PHP 148,898 PHP 148,898 PHP 148,898 PHP 148,898 PHP 184,898 PHP 148,898 PHP 148,898 PHP 1,227,181
Year 4 Year 3 Year 2
Beginning Capital PHP 148,898 PHP 148,898 PHP 148,898 PHP 148,898 PHP 148,898 PHP 184,898 PHP 148,898 PHP 148,898 PHP 1,227,181
Add: Share in Net Income Note J 65,233 65,233 65,233 65,233 89,233 125,233 65,233 65,233 605,866
Less: Withdrawal 14,890 14,890 14,890 14,890 14,890 18,490 14,890 14,890 122,718
Ending Capital PHP 199,241 PHP 199,241 PHP 199,241 PHP 199,241 PHP 223,241 PHP 291,641 PHP 199,241 PHP 199,241 PHP 1,710,330
Beginning Capital PHP 199,241 PHP 199,241 PHP 199,241 PHP 199,241 PHP 223,241 PHP 291,641 PHP 199,241 PHP 199,241 PHP 1,710,330
Add: Share in Net Income Note J 46,427 46,427 46,427 46,427 70,427 106,427 46,427 46,427 455,418
Less: Withdrawal 19,924 19,924 19,924 19,924 22,324 29,164 19,924 19,924 171,033
Ending Capital PHP 225,744 PHP 225,744 PHP 225,744 PHP 225,744 PHP 271,344 PHP 368,904 PHP 225,744 PHP 225,744 PHP 1,994,714
Beginning Capital PHP 225,744 PHP 225,744 PHP 225,744 PHP 225,744 PHP 271,344 PHP 368,904 PHP 225,744 PHP 225,744 PHP 1,994,714
Add: Share in Net Income Note J 40,120 40,120 40,120 40,120 64,120 100,120 40,120 40,120 404,960
Less: Withdrawal 22,574 22,574 22,574 22,574 27,134 36,890 22,574 22,574 199,471
Ending Capital PHP 243,290 PHP 243,290 PHP 243,290 PHP 243,290 PHP 308,330 PHP 432,134 PHP 243,290 PHP 243,290 PHP 2,200,203
Beginning Capital PHP 243,290 PHP 243,290 PHP 243,290 PHP 243,290 PHP 308,330 PHP 432,134 PHP 243,290 PHP 243,290 PHP 2,200,203
Year 5
Add: Share in Net Income Note J 43,963 43,963 43,963 43,963 67,963 103,963 43,963 43,963 435,704
Less: Withdrawal 24,329 24,329 24,329 24,329 30,833 43,213 24,329 24,329 220,020
Ending Capital PHP 262,924 PHP 262,924 PHP 262,924 PHP 262,924 PHP 345,460 PHP 492,883 PHP 262,924 PHP 262,924 PHP 2,415,886
Total Liabilities and Partners' Equity PHP 2,491,276 PHP 2,869,076 PHP 3,236,935 PHP 3,447,665 PHP 3,558,201
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Vanilla PHP 75.00 3446 PHP 258,434 PHP 271,356 PHP 284,923 PHP 299,170 PHP 314,128
Classic Flavors Chocolate PHP 75.00 4699 352,410 370,030 388,532 407,958 428,356
Ube PHP 75.00 2819 211,446 222,018 233,119 244,775 257,014
Rocky Road PHP 90.00 5012 451,085 473,639 497,321 522,187 548,296
Premium Flavors Double Dutch PHP 90.00 4072 366,506 384,832 404,073 424,277 445,491
Cookies & Cream PHP 90.00 5639 507,470 532,844 559,486 587,460 616,833
Pandan Con Leche PHP 90.00 2193 197,350 207,217 217,578 228,457 239,880
Best Of
Mango Tango PHP 90.00 1253 112,771 118,410 124,330 130,547 137,074
Pangasinan
Maiz Kon Keso PHP 90.00 627 56,386 59,205 62,165 65,273 68,537
Flavors
Sea Salt Caramel PHP 90.00 1566 140,964 148,012 155,413 163,183 171,343
TOTAL SALES 31325 PHP 2,654,821 PHP 2,787,562 PHP 2,926,940 PHP 3,073,287 PHP 3,226,951
Less: Output tax 3/28 329,281 345,745
Adjusted Sales PHP 2,654,821 PHP 2,787,562 PHP 2,926,940 PHP 3,402,568 PHP 3,572,696
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Vanilla PHP 43.60 3446 PHP 150,236 PHP 157,748 PHP 165,635 PHP 173,917 PHP 182,613
Classic Flavors Chocolate 46.12 4699 216,709 227,544 238,921 250,867 263,411
Ube 46.42 2819 130,871 137,414 144,285 151,499 159,074
Rocky Road 49.26 5012 246,894 259,238 272,200 285,810 300,101
Premium Flavors Double Dutch 45.00 4072 183,253 192,416 202,037 212,138 222,745
Cookies & Cream 46.89 5639 264,392 277,612 291,492 306,067 321,370
Pandan Con Leche 50.55 2193 110,845 116,387 122,206 128,317 134,732
Best Of Pangasinan Mango Tango 59.20 1253 74,178 77,887 81,782 85,871 90,164
Flavors Maiz Kon Keso 47.95 627 30,041 31,543 33,120 34,776 36,515
Sea Salt Caramel 47.73 1566 74,758 78,496 82,421 86,542 90,869
TOTAL DIRECT MATERIALS 1,482,176 1,556,285 1,634,099 1,531,968 1,608,567
Factory Equipment Depreciation (MOH) 20,933 20,933 20,933 20,933 20,933
Indirect Labor (MOH) 242,542 249,818 257,313 265,032 272,983
TOTAL COST OF GOODS SOLD PHP 1,745,652 PHP 1,827,037 PHP 1,912,346 PHP 1,817,934 PHP 1,902,483
EQUIPMENT UNIT PER UNIT COST TOTAL COST SALVAGE VALUE USEFUL LIFE METHOD DEPRECIATION EXPENSE
FACTORY EQUIPMENT
Refrigerator 1 PHP 19,995 PHP 19,995 0 15 Straight Line PHP 1,333
LN2 Dewars 3 434 PHP 1,302 0 5 Straight Line 260.40
Commercial mixer 3 27,900.00 PHP 83,700 0 5 Straight Line 16,740.00
Blender 2 6,500 PHP 13,000 0 5 Straight Line 2,600.00
SUBTOTAL 20,933.40
OFFICE EQUIPMENT
Laptop 1 15,280 PHP 15,280 0 10 Straight Line 1,528.00
Air Conditioner 2 50,000 PHP 100,000 0 10 Straight Line 10,000.00
Stereo Speakers 1 1,500 PHP 1,500 0 5 Straight Line 300.00
Leasehold Improvement - - 212,093.50 10 Straight Line 21,209.35
Right of Use Asset - - PHP 1,324,815.67 - 10 Straight Line 132,481.57
SUBTOTAL 165,518.92
TOTAL PHP 1,771,686 PHP 186,452
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APPLIANCES ITEMS WATT USAGE(days) Cost COST PER MONTH (26 DAYS)
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Cost
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
1.Transit Ads Execution
Jeepney Top Ad PHP 72
Wire and Woods 70
Jeepney Accomodation 500
Transit Ads Execution/ Jeep 642
Number of jeeps 12
Total Cost PHP 7,704 0 0 0 0
2. Lamp Post Banners
Banner PHP 180 PHP 180 PHP 180
Wood and Wire 60 60 60
240 240 240
Quantity 100 50 50
Total Cost PHP 24,000 0 12,000 0 12,000
3. Social Media
Boost (2 days) 80 80 80 80 80
Frequency 24 12 12 12 12
1920 960 960 960 960
0
What's Up Dagupan (P3000
per 3 posts) 3000 3000 3000 3000 3000
Frequency 3 2 2 2 2
9000 6000 6000 6000 6000
Total Cost PHP 10,920 PHP 6,960 PHP 6,960 PHP 6,960 PHP 6,960
4.Coupons
Paper with print (8 pcs per 1
whole) 5 5 5 5 5
Pcs of Paper 40 40 40 40 40
200 200 200 200 200
Frequency 3 2 3 2 3
Total Cost PHP 600 PHP 400 PHP 600 PHP 400 PHP 600
5. Free Taste
Average costof Ice cream 13.39
Samples 100
Total Cost PHP 1,339 0 0 0 0
TOTAL ADVERTISING EXPENSE PHP 44,563 PHP 7,360 PHP 19,560 PHP 7,360 PHP 19,560
MISCELLANEOUS EXPENSE
Fire extinguisher 1850
Garbage Fee 500
Occupational Tax 540
TOTAL 2890
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AMORTIZATION TABLE
DATE CASH PAYMENT (A) INTEREST EXPENSE (B)
AMORTIZATION (A-B) CARRYING VALUE
BEGINNING - 6% - PHP 1,324,815.67
YEAR 1 PHP 180,000.00 PHP 79,489 PHP 100,511 1,224,305
YEAR 2 PHP 180,000.00 PHP 73,458 PHP 106,542 1,117,763
YEAR 3 PHP 180,000.00 PHP 67,066 PHP 112,934 1,004,829
YEAR 4 PHP 180,000.00 PHP 60,290 PHP 119,710 885,118
YEAR 5 PHP 180,000.00 PHP 53,107 PHP 126,893 758,225
YEAR 6 PHP 180,000.00 PHP 45,494 PHP 134,506 623,719
YEAR 7 PHP 180,000.00 PHP 37,423 PHP 142,577 481,142
YEAR 8 PHP 180,000.00 PHP 28,869 PHP 151,131 330,011
YEAR 9 PHP 180,000.00 PHP 19,801 PHP 160,199 169,811
YEAR 10 PHP 180,000.00 PHP 10,189 PHP 169,811 0
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input for evaluating and measuring the business’ health. It falls into different categories
Liquidity Ratio
QUICK RATIO
Formula Year 1 Year 2 Year 3 Year 4 Year 5
Quick Assets 883240 1446352 1999466 2398219 2694029
Current Liabilities 146,332 153,918 357,103 489,237 518,596
6.04 9.40 5.60 4.90 5.19
Quick Ratio
With the increasing trend of quick assets and current liabilities, quick ratio has a
fluctuating trend. It indicates that the business will have excess cash in the first two
year and will be more liquid in meeting its current obligation as they fall due. However,
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since the business will be subject to income tax in third year and VAT in fourth year,
the increase in current liabilities will be greater as compare to the quick asset.
Current Ratio
CURRENT RATIO
Formula Year 1 Year 2 Year 3 Year 4 Year 5
Current Assets 906042.3 1470294.9 2024606.0 2421787.9 2718776.4
Current Liabilities 146331.8 153918.0 357102.5 489236.7 518596.0
6.2 9.6 5.7 5.0 5.2
The business has a fluctuating trend of current ratio. It is due to the increasing
amount of current assets and current liabilities from year 1 to year 5. The increase in
year 1 to year 2 implies that the business has a lower risk in meeting its current
obligations. Therefore,it will be a good indicator for the creditors in assessing their
risk.
INVENTORY TURNOVER
Formula Year 1 Year 2 Year 3 Year 4 Year 5
Cost of Goods Sold 1745652 1827037 1912346 1817934 1902483
Ending Inventory 22,803 23,943 25,140 23,569 24,747
76.55 76.31 76.07 77.13 76.88
Inventory Turnover
The business has a fluctuating trend of Inventory turnover. The decline on the
first three years of operation is due to the higher increase in ending inventory as
compared to the cost of goods sold. On the other hand, the increase during the fourth
year is due to the business being subjected to VAT which increases the cost of
purchases. This ratio shows efficiency of the business in selling its inventory.
ASSET TURNOVER
Formula Year 1 Year 2 Year 3 Year 4 Year 5
Net Sales 2653194 2786477 2925313 2742921 2879579
Total Assets 2,491,276 2,869,076 3,236,935 3,447,665 3,558,201
1.06 0.97 0.90 0.80 0.81
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Asset Turnover
The business has 1.06 asset turnover in year 1 decreasing to 0.85in year 5. It
signifies that the business is not utilizing the resources efficiently during the first
four years of operations. However, during the fifth year the decrease has stopped
Solvency Ratio
DEBT TO ASSET RATIO
Formula Year 1 Year 2 Year 3 Year 4 Year 5
Total Liabilities 1,264,095 1,158,747 1,242,221 1,247,462 1,142,315
Total Assets 2,491,276 2,869,076 3,236,935 3,447,665 3,558,201
0.5 0.4 0.4 0.4 0.3
Debt to Asset Ratio
The continuous decrease in Debt to Asset Ratio indicates that the business’
Profitability Ratios
PROFIT MARGIN
Formula Year 1 Year 2 Year 3 Year 4 Year 5
Net Income 507181 605866 455418 404960 435704
Net Sales 2653194 2786477 2925313 2742921 2879579
0.19 0.22 0.16 0.15 0.15
subjected to VAT and Income Tax in later years and the fluctuation of
advertising throughout the years. Theincreasing ratio means that the business is
more efficient in converting sales into actual profit each year. The decrease on
the other hand indicates the adverse effect of income tax and VAT.
RETURN ON EQUITY
Formula Year 1 Year 2 Year 3 Year 4 Year 5
Net Income 507181 605866 455418 404960 435704
Total Equity 1,227,181 1,710,330 1,994,714 2,200,203 2,415,886
0.41 0.35 0.23 0.18 0.18
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Return on Equity
The decreasing trend indicates that the partners’ return is becoming lesser
RETURN ON ASSET
Formula Year 1 Year 2 Year 3 Year 4 Year 5
Net Income 507181 605866 455418 404960 435704
Total Assets 2,491,276 2,869,076 3,236,935 3,447,665 3,558,201
0.20 0.21 0.14 0.12 0.12
Return on Asset
During the first two years of operation, the company experienced an increase on
return on asset which indicates that company performed well in making a profit
from the capital it has invested in fix assets. However, it decreased and
stabilized starting from year 3 to year 5. This decrease is due to the VAT and
Other ratios
cost of capital = 6%
Cost of Capital
IRR == 6%
78.64%
IRR = 7.64%
Payback Period = 1.16
The business’ positive Net Present Value indicates that the return is greaterthan the
cost. Also, since the Internal Rate of Return is greater than the cost of capital, it is a good
investment.
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IX. APPENDICES
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APPENDIX A
(Date)
___________________
(Address)
______________________________
______________________________
Sir/Madam:
We, the 4th year students of Kingfisher School of Business and Finance, are currently taking a
business research/feasibility study as part of the requirements in the Bachelor of Science in Accountancy
program. Our proposed business is about liquid nitrogen ice cream parlor which aims to provide the
market a new way of making and eating ice cream.
In this regard, we would like to conduct an interview with you or with your personnel who can give
us data/information about the quantity of ice cream your business supplies in the market and the quantity
demanded by customers on weekly basis. Further, we would want to know how and where you obtain the
supplies needed in making your ice cream.
Rest assured, the information and data provided will remain confidential and will be only used for
this study. Your insights and recommendations will help us to further improve our study.
Thank you!
Respectfully,
HEIDI F. MELENDEZ
Group Leader
Contact No: 0946-732-0510
Noted:
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APPENDIX B
(Date)
__________________
Respectfully,
HEIDI F. MELENDEZ
Group Leader
Contact No. 0946-732-0510
Noted:
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APENDIX C
General Partnership
ARTICLES OF PARTNERSHIP
OF
That we, theundersigned partners,allof legal age, residents and citizens of the
Philippines, have on this day voluntarily associated ourselves together for the purpose of
forming a limited partnership under the following terms and conditions and subject to existing
used in Frozen food industry particularly in Frozen dessert industryand shall transact business
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ARTICLE II. Business Purpose:That the purpose for which this partnership is formed is
ARTICLE III. Principal Place of Business:That the principal place of business of this
ARTICLE IV. Term of Existence:That this partnership shall have a term of 5 years from
and after the original recording of its Articles of Partnership by the Securities and Exchange
Commission.
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the amount of Eight Hundred Thousand Pesos (P800, 000),Philippine Currency, contributed in
NameAmount Contributed
That no transfer of interest which will reduce the ownership of Filipino citizens to less than the
ARTICLE VII. Sharing Ratios:That the profits and losses of this partnership shall be
divided and distributed equally to each partner after bonuses and salary allowances.
ARTICLE VIII. Management:That this partnership shall be under Hazel S. Sison, as General
Manager, who shall be in charge of the management of the affairs of the company. She shall
have the power to use the partnership name and in otherwise performing such acts as are
necessary and expedient in the management of the firm and to carry out its lawful purposes.
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ARTICLE IX. Undertaking to Change Name: That the partners undertake to change the name
notice or directive from the Securities and Exchange Commission that another corporation,
partnership or person has acquired a prior right to the use of that name or that the name has
IN WITNESS WHEREOF, we have hereunto affixed our signatures this day of ______ 2018, at
Dagupan City.
___________________ _______________
___________________ ________________
NOTARY PUBLIC
Series of 20 ______
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APPENDIX D
CONTRACT OF LEASE
And
_________________, a corporation duly formed under the laws of the Philippines and engaged
PREMISES- LESSOR hereby leases to LESSEE and LESSEE hereby leases from LESSOR
approximately _____________ (__) square meters more or less of total land area, as is
as the “Premises”.
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USE OF THE PREMISES- The Lease is for the purpose of operating a commercial or retail
business which the corporation is engaged in. The LESSEE, at his own expense may put up
improvements upon prior consultation and written approval of the LESSOR within the premises
hereby leased for the purpose of storage, retail, wholesale and commercial in nature and not for
any purpose whatsoever. It is being expressly agreed that if, at any time during the existence of
this lease and without the previous written consent of the LESSOR, the said premises are used
for the purposes other than what is stated, the LESSOR has the option of either terminating the
lease or collecting increased rental as deemed appropriate from the date of diversion of use of
TERM OF THE LEASE- The term of this Lease Contract is for a period of _________ (___)
years, renewable for an unspecified duration at terms mutually agreeable to both parties,
the LESSOR has the right to collect any remaining rentals corresponding to the unexpired
portion of the LEASE period, or until such time a new LESSEE comes.
This LEASE shall not be deemed extended or renewed beyond the period time above-
mentioned for any cause or reason whatsoever and unless the parties agree in writing to extend
or renew or enter into a new Contract to Lease upon such terms and conditions acceptable to
them, the possession of the Premises by the LESSEE or any persons claiming rights through
the LESSEE, after the expiration of the term thereof, shall be illegal.
Any renewal or extension of this Contract must be expressly agreed upon by the
LESSOR and LESSEE in writing and under no circumstances can such renewal or extension be
For this purpose, the LESSEE shall notify the LESSOR to the latter’s office in writing, of
this intent to renew or extend the Contract at least sixty (60) calendar days prior to the
expiration of the Leased period, or any extension or renewal thereof, provided, however, that
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the notice as aforesaid does not in any way vest unto the LESSEE the right to demand for such
RENT- The monthly rental shall be scheduled as follows, inclusive of the twelve percent (12%)
Expanded Value Added Tax (EVAT) adjustable corresponding to the subsequent and
substantial tax policy changes by the local or national government, with an escalation of five (5)
percent after two (2) years as illustrated below. All payments must be made only through
cash/check. Without necessity of demand, the LESSEE shall pay the monthly rental within the
first five (5) days of each calendar month, at the office of the LESSOR.
a) PENALTIES- Payment made after the said date shall be subject to a penalty charge of 5%
per month.
b) WITHOLDING TAX- The LESSEE shall furnish the LESSOR with the original and two
copies of its certificate of creditable income tax withheld at source BIR Form 2307, not later than
5 days after the end of each month. Failure to submit the documents shall authorize the
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c) BOUNCING CHECKS- Issuance of checks with no sufficient funds for three (3) instances
shall compel the LESSEE as having pre terminated the contract and as such the security
d) NON-PAYMENTS OF RENTS- Failure of the LESSEE to pay the rentals herein agreed
upon for two (2) consecutive months shall be ground for termination of this Contract of Lease
and upon which the LESSEE obligates itself to vacate and clear the premises in such
SECURITY DEPOSIT and ADVANCE- upon signing of the Contract of Lease, the LESSEE
shall make a Three (3) months deposit and Three (3) month advance rental in the total amount
and faithful performance of each and every term, provision, covenant, and condition of this
lease, except that said deposit shall not constitute or substitute payment of any rent.
The deposit, which is non-interest bearing, shall remain intact during the entire term of this lease
and shall not be applied as payment for any monetary obligations of the LESSEE under this
contract, and shall be refunded to the LESSEE upon completion of the lease.
a) The amount deposited shall answer for any unpaid accounts of the LESSEE at the
expiration of the contract as well as for any damages which the LESSOR or any of its
employees, agents or guests might suffer by reason of the wrongful acts or actuation,
negligence, and or malfeasance of the LESSEE. It shall not be applied to pay for the last
b) Any unappropriated amount of such deposit shall be refundable to the LESSEE within
c) In the event that the LESSEE terminates its contract before its term expires, the deposit
shall be deemed forfeited and refundable, regardless of the reason for its pre-termination and
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d) The LESSEE shall pay an advance payment equivalent and applicable to the twelve
(12) months with post dated check dated every _____th of the month of the lease starting
_____________________ or ______ days after signing of contract. The one (1) month advance
rental is applicable on the 12th month of the year of contract. Subsequent post-dated check
payments shall be collected by the LESSOR on an annual basis on the first month of the next
subsequent year.
SUBLEASE AND OR TRANSFER OF RIGHTS- The LESSEE shall not directly or indirectly
assign, sublease, sell, transfer, convey, mortgage, demolish or in any manner dispose of or
encumber its right under the contract in whole or in part or any interest thereto be conferred on
anyone.
RIGHT TO INSPECT LEASED PREMISES- The LESSOR or its authorized agent shall, by
previous notice to the LESSEE, have the right to enter the leased premises at any reasonable
CARE OF THE LEASED PREMISES- The LESSEE shall examine the Leased Premises before
taking possession thereof, and LESSEE’s entry into possession shall constitute conclusive
evidence or admission by the LESSEE that as of the date thereof, the said Premises were in
good order and satisfactory tenantable condition. The LESSEE hereby binds itself to keep and
maintain the same in such condition as a prudent person shall do under the circumstances,
ordinary wear and tear expected. The LESSEE shall at its own expense, improve and maintain
the Leased Premises clean and free from rubbish and dirt at all times, store all trash and
garbage in proper containers and not burn any trash and garbage in or about the Leased
SECURITY & SANITATION- The LESSOR shall ensure the security of the premises and
provide a security guard for the whole commercial establishment where the leased premises are
located. The LESSOR must also ensure regular collection of garbage through the barangay
garbage collector or any private entity which shall be to the account of LESSOR. The LESSOR
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also agrees to make the septic tank of the leased premises bigger in order to accommodate
INSURANCE TAKEN BY THE LESSEE- The LESSEE shall be required to insure at his own
account any LESSOR approved permanent structure or structures constructed within the
premises with the LESSOR as co-benefactor against fire or total loss of property. The LESSEE
although not required, is also allowed and authorized to insure its own property taken inside the
leased premises, provided that the LESSOR shall be notified in advance of any and all kinds of
The LESSEE shall be responsible for securing all the necessary governments permits and
licenses for the operation of its business and all costs thereof shall be its sole account. Copies
of the said permits and licenses or any renewal date thereof shall be furnished to the LESSOR
not later than fifteen (15) days from the start of the LESSEE’s business and every renewal date
shall be introduced by the LESSEE on the leased premises unless with prior written consent
and approval of the LESSOR. Any such permanent structures, if approved and allowed, shall be
upon the option of the LESSOR registered under the co-ownership of both LESSEE and
LESSOR. Furthermore, the LESSEE shall bear the full cost of the annual real estate taxes of
such structures until expiry of lease contract and full cost of transfer of ownership to LESSOR
UTILITIES AND SERVICES- The LESSEE shall be responsible for the installation and
maintenance costs of its own electric current, telephone, water, security and other utility
services in the Leased Premises for the duration of the lease. The LESSEE shall also clear all
accounts with all concerned utility companies upon pre-termination or expiration of contract.
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REVISION OF LEASE CONTRACT- Both parties may revise this lease contract after six (6)
months to one (1) year in the event that LESSEE assigns the business with a newly-registered
business name.
LESSOR: LESSEE:
_________________ ___________________
___________________ _____________________
ACKNOWLEDGEMENT
BEFORE ME, a Notary Public for and in the Cities and Province of _______________ this
Known to me and to me known to be the same persons who executed the foregoing Contract of
Lease consisting of __ pages including this page of the acknowledgement and they
acknowledge to me that the same is their free and voluntary act and deed.
WITNESS MY HAND AND NOTARIAL SEAL on the date and in the place first above written.
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Series of _____.
APPENDIX E
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APPENDIX F
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APPENDIX G
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APPENDIX H
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APPENDIX I
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SURVEY FORM
GENDER:Female Male
OCCUPATION:
Student Unemployed
Employed/Working Retired
DAILY INCOME/ALLOWANCE:
P50-P150 P251-350
P151- P250 P351 above
3. How much are you willing to pay the maximum amount for a cup of ice cream?
Php20 – Php50
Php51 – Php100
Php101 – Php150
Php151 and above
5. What is your favorite ice cream flavor? (Please rank from 1-3 with 1- being the highest and 3- being the
lowest)
__Classic Flavors (e.g. Vanilla/Ube/Chocolate/Keso)
__Premium Flavors (e.g. Cookies and Cream/Rocky Road/Double Dutch)
__Best of Pangasinan Flavors (e.g. Pandan Con Leche/Sea Salt Caramel/Mango Tango/Maizkonkeso)
Mandapat, R., Rodriguez, D., Versoza, J.E., Frialde, A.J., Melendez, H.,Sison, H.,Soriano,S.M., Talagtag, P.A 116
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Take-out
Delivery
8. What factors could make you become a loyal customer of an ice cream shop? (Please rank, with 1- being
the highest and 7- being the lowest)
__Comfortable environment
__Ice cream taste
__Good service
__Price
__Distance
__Free WiFi
__With Parking Area
Yes
(If yes, how did you know it? ______ )
No
11. Have you already experience ice cream infused with Liquid Nitrogen?
Yes
(If yes, Where? ___________________________)
Not yet
If not yet, why?
o Availability
o Pricing
o Not familiar at all
o Others, please specify__________________
No
If no, what are the possible reasons?
o I think it’s dangerous to try
o It’s quite expensive
o Distance
o Others, please specify______________________
APPENDIX J
Mandapat, R., Rodriguez, D., Versoza, J.E., Frialde, A.J., Melendez, H.,Sison, H.,Soriano,S.M., Talagtag, P.A 117
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TABULATION
TOTAL
Age
12-18 yrs. Old 118
19-25 yrs. Old 107
26-35 yrs. Old 49
36-50 yrs. Old 21
51 and above 5
Occupation
Student 200
Unemployed 0
Employed/Working 99
Retired 1
Monthly Income/Allowance
1500-4500 183
4501-7500 26
7501-10500 33
10501-20000 40
20001-30000 13
30000 and above 5
Questions
3. How much are you willing to pay the maximum amount of a cup (8 oz.) ice cream?
Php51- Php100 248
Php101- Php150 45
Php151-Php200 5
Php201 and above
1
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Classic Flavors
Vanilla 1554 6
Ube 1572 5
Chocolate 1015 8
Premium Flavors
Cookies and Cream 943 10
Rocky Road 1167 9
Double Dutch 1255 7
8. What factors could you make you become a loyal customer of an ice cream shop?
Comfortable environment 910 5
Ice cream taste 665 7
Good Service 824 6
Price 1048 4
Distance 1481 3
Free Wifi 1468 2
With Parking Area 1846 1
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Meet friends 27
Business 3
Just for ice cream 74
Others 5
11. Have you already experience ice cream infused with liquid nitrogen?
Yes 13
No 39
I think it's dangerous to try 18
APPENDIX K
Mandapat, R., Rodriguez, D., Versoza, J.E., Frialde, A.J., Melendez, H.,Sison, H.,Soriano,S.M., Talagtag, P.A 120
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PIE GRAPH
Occupation Age
0% Student 12-18
2%
yrs.
7% old
Unemploye 19-25
33% d 16% 39% yrs.
old
Employed/ 26-35
67% Working
36% yrs.
0% old
Retired
1 4% 10501-20000 0%
61%
9% 20001-30000
100%
Comfortable environment
Ice cream taste
7%4% 18% Good Service
11%
Price
14% 25% Distance
21% Free Wifi
With Parking Area
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0%
0%
13% Yes No
87%
I think it's
dangerous to try
0%
18% 0%
11. Have you already 3% It's quite
45% expensive
experience ice cream 0%
infused with liquid 34%
Distance
nitrogen?…
0%
0%
Others, please
0% 0% Yes
4%
Not yet
96%
0% 0%
Yes No
23%
77%
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APPENDIX L
Person (Daily)
Monday Tuesday Wednesday Thursday Friday Saturday Weekly Total Monthly Total
4:00-5:00 537 589 560 602 524 427 3239 12956
5:00-6:00 844 797 887 698 579 714 4519 18076
6:00-7:00 800 743 712 759 624 722 4360 17440
7:00-8:00 493 559 539 521 463 420 2995 11980
8:00-9:00 397 409 411 380 364 212 2173 8692
9:00-10:00 213 249 182 173 183 164 1164 4656
3284 3346 3291 3133 2737 2659 18450 73800
236544
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APPENDIX M
Business Permit
Mandapat, R., Rodriguez, D., Versoza, J.E., Frialde, A.J., Melendez, H.,Sison, H.,Soriano,S.M., Talagtag, P.A 125
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Mandapat, R., Rodriguez, D., Versoza, J.E., Frialde, A.J., Melendez, H.,Sison, H.,Soriano,S.M., Talagtag, P.A 126
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APPENDIX N
Nerissa Ice Cream House Tambac District, Dagupan Ms. Nerrisa Sarmiento Capito
City
Charay Ice Cream Station Pantal, Dagupan City Ms. JanetttTaneo Cruz
Sikat Ice Cream Manufacturing Herrero, Dagupan City Mr. Romulo PanganibanPanopio
Nestor Ice Cream Malued District, Dagupan City Mr. Edwin Estrada Cusi
Mary’s Ice Cream Pantal, Dagupan City Ms. Mary Angeline Castro
Fernandez
Ice Cream House PoblacionOeste, Dagupan Mr. Cloyd Peter Petenio Lalas
City
Shanel Ice Cream Pantal, Dagupan City Ms. Sheila Marie AbarabarOrbon
Sikat Ice Cream Manufacturing Pantal, Dagupan City Mr. Albert Anthony TolentinoOrbon
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APPENDIX O
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X. References:
Arya, S. (2016, August 4). Dragon’s breath dessert recipe, science behind frozen treat,
plus, safety precaution. Retrieved from https://www.morningnewsusa.com/dragons
breath-dessert recipe-science-behind-frozen-treat-plus-safety-precaution-2394720.html
BBC News, (2012, October). Who What Why: How dangerous is liquid nitrogen? Retrieved from
http://www.bbc.com/news/magazine-19870668
Brodwin, E. (2013). The Secret to Ultrasmooth Ice Cream Liquid Nitrogen. Retrieved from
https://www.scientificamerican.com/article/secret-ultra-smooth-ice-cream-liquid-nitrogen/
Euromonitor International(2016, July) Ice cream and frozen desserts in the Philippines.
Retrieved from http://www.euromonitor.com/ice-cream-and-frozen-desserts-in-the-
philippines/report
Mandapat, R., Rodriguez, D., Versoza, J.E., Frialde, A.J., Melendez, H.,Sison, H.,Soriano,S.M., Talagtag, P.A 129
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Falkowitz, M. (n.d.). What's the difference between gelato and ice cream? [Web log post].
Retrieved from http://sweets.seriouseats.com/2012/07/whats-the-difference-between
gelato-and-ice-cream.html#comment-anchor-216361
Greenblatt, A. (2013). Science in A Scoop: Making Liquid Nitrogen Ice Cream. Retrieved from
http://www.npr.org/sections/thesalt/2013/04/17/177614580/science-in-a-scoop-making
liquid-nitrogen-ice-cream
Grey, M. J. (2004, March 22). Fun and ice cream, too. The Philippine Star.
Retrieved from http://www.philstar.com:8080/business-usual/243532/fun-and-ice-cream-
too
Grossman, E. (2015, February 25). How emulsifiers are messing with our guts (and making us
fat) [Web log post]. Retrieved from http://civileats.com/2015/02/25/how-emulsifiers-are
messing-with-our-guts-and-making-us-fat/
Grossman, S. (2014, August 28). Here's how ice cream will look—and taste—in the future
TIME. Retrieved from http://time.com/3045643/heres-how-ice-cream-will-look-and-taste
in-the-future/
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just-food.com. (2010, April 7). Just the facts - ice cream in the philippines | Food Industry
Analysis | just-food. Retrieved from https://www.just-food.com/analysis/just-the-facts-ice-
cream-in-the-philippines_id110524.aspx
Radiant Insights. (2016). Consumer and market insights: Ice cream in the Philippines.
Retrieved from https://www.radiantinsights.com/research/consumer-and-market-insights-
ice-cream-in-the-philippines
Schroer, E. (2016). Food Science Club Makes Ice Cream from Liquid Nitrogen. Retrieved from
http://www.iowastatedaily.com/news/article_a90d2fac-85d2-11e6-a5e8
fbdb78600c10.html
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