CHAPTER III

ECONOMIC ASPECT

A. MARKET DESCRIPTION

The target market of the project will mostly be Ilocano employees, students and other

individuals living within the province and near places. Local tourists as well as foreign tourists

are also the target.

Studies reveal that there is a need for spa services in the province seeking for relaxation

to get away from stress from work, school and life problems. Employees need time to escape

the stress brought about by the paper works and reports that they had done in the workplace.

Students want to get away from stress due to the exams, projects and reports that they are

required to do. Tourists who were busy in visiting the sites and adventures in the province also

need these services to ease their bodies from physical pains and all other individuals who want

to pamper themselves with these services offered.

Spa businesses in Ilocos are quite small in numbers so the market share in the province

is high. Establishment of new businesses grows rapidly in Ilocos, which is an opportunity for the

individuals who are willing to work, and this indicates that market for spa services would rise.

Furthermore, the location of Spaffet is within the vicinity of the Robinson’s mall where people

frequently visit and it is to be perceived easily.

Spaffet caters pampering ones need for relaxation and eating good food. Since spa

services are common, spa and buffet is introduced in Ilocos which will serve as an edge to its

competitors. It shall sustain the existing market and shall uphold it through extending its

services.

Spaffet is an opportunity to a market due to the unprecedented stress that people is

experiencing these days. This is in connection to the personal income and tourism but the hectic

pace of modern life may also increase the need for these wellness services.
General Marketing Information

Research Design

Descriptive survey methods were used by the proponents to analyze and ascertain the

viability of establishing Spa with Buffet business in Ilocos Norte.

Questionnaires were prepared and designed to guide the proponents in determining the

acceptability of the Spa and Buffet business. This includes the willingness of the employees,

students and other interested individuals to visit the said business. The proponents included

tourists because Ilocos Norte is a tourist destination but their visit in the business is irregular

and they would have limited time in visiting the said business for their main purpose is to visit

the sites and experience the adventures.

Furthermore, interviews were to determine the safety, the viability and the possible

location of the business. Employees, students, tourist, housewives and a retired employee

composed the population from different towns and cities in the province and also tourists. A total

of 1,066 respondents constituted the sample:

COMPOSITION OF RESPONDENTS
SAN NICOLAS
LAOAG
BATAC
PIDDIG
DINGRAS
BANNA
PAGUDPUD
PAOAY
SOLSONA
BADOC
SARRAT

Random Sampling Method was used to identify the respondents. The proponents have

set appointment with the business establishments’ owners and agents, doctor, office of the

mayor, assessor and treasury officers of the municipality of San Nicolas to gather data about

the safety and viability of the study.

 The following charts present the survey conducted by the proponents through gathering

data.

Figure 1. Willingness of Going to Spa

WILLINGNESS OF GOING TO A SPA

45, 4%

YES
NO

1021, 96%

Figure 1 presents the willingness of respondents to go to a spa with buffet. Out of 1,066

respondents, 1,021 or 96% of the respondents are willing and able to avail the services of a

spa. This only manifest that Ilocanos always find time to relax despite their busy work and

school schedules. Only 4% are hesitant to visit the spa due to some constraints. This data

gathered indicates that this kind of business has a high demand among Ilocanos and can easily

penetrate the market.

Figure 2. Regularity of Local Residents in Visiting a Spa

34, 3%
70, 7% 172, 17%

239; 23%
148, 14%

358, 35%

ONCE A WEEK TWICE A WEEK ONCE A MONTH

TWICE A MONTH ONCE A YEAR TWICE A YEAR

Figure 2 shows how often a respondent would visit a spa. Results show that 38

% of the respondents said that they would be willing to visit every month. Some answered of at

least twice a month, which earns 22% of the total sample size. This shows that it has a steady

demand monthly. Almost the same percentages of respondents would be willing to go to a spa

for once or twice a week with 17% and 14% respectively. Moreover, a few answered once or

twice a year with 7% and 3% respectively.

This explains although they wanted to relax, they find it difficult to find time from their

work and school life.

Figure 3. Part of the Day that the Respondent will visit

97, 9%
178, 17%
29, 3%

292, 28%
425, 41%

LUNCH BREAKFAST AFTERNOON DINNER TIME LATE NIGHT

Figure 3 shows the availability of the respondents to consume the services of a

spa with buffet. 42% or 445 respondents said that the most desirable part of the day to avail the

services would be afternoon. In addition, dinnertime with 27%, and late night with 17% of the

sample size. We can safely say that it is where demand is the greatest. Only 9% and 5% of the

total respondents have answered lunch and breakfast respectively.

The results suggest that the ideal time for opening is in the afternoon. But it would be

best to open at lunch time to accommodate the demand and since it is only an hour earlier from

the start of the desired time. It also suggests having an extended service hours since most

employees get out from work at these times.

Figure 4. Time to be Spent in a Spa

69, 6%

150, 15%
317, 31%

485, 48%

30 MINS. - 1HR. 1HR - 2HR. 2HRS. - 3HRS. 3HRS. & ABOVE

Figure 4 shows how much time they would spend on a day at the spa. 485 or 46% of the

respondents would spend at least 1 hour to 2 hours at the spa while 34% would spend 30

minutes to 1 hour. This data reflect the busy nature of Ilocanos. Few are those who are willing to

spend more time at the spa, 14% for 2 hours to 3 hours and 6% for 3 hours and above.

Since a high portion of the sample size is willing to spend their time for 1 to 2 hours, it

indicates that they would avail more than one service in the SPAFFET. The second highest is

the time of 30 minutes to 1 hour of staying in the establishment. Therefore, packages of

services would be offered to them that can be consumed within the said range of time. Those

who are staying within 2 hours and above means that they would avail many services that are

being offered. This is an indication of a stable sale.

Figure 5. Reasons in Visiting a Spa

11, 1%
140, 14%

870, 85%

To try the food To have relaxation To have both relaxation and eat good food

Figure 5 shows the reasons why they are visiting a spa with buffet. Majority or 82% of

the respondents who are visiting is to have both relaxation and to eat good food. 17%

responded that they would visit a spa to relax and only a small fraction or 1% wanted to try the

food only. This indicates that the main selling point of the business is not the buffet but the spa

itself. The buffet will only serve as additional service that would set the business different from

other spa establishments.

Figure 6. Services to be Offered

A place to stay and relax 288

Steam bath 236

Hot tub 178

Mud bath 43

Half body massage 123

Whole body massage 587

Foot Spa 337

Manicure/Pedicure 479

0 100 200 300 400 500 600 700

Number of preferences

Figure 6 shows the variety of spa services that the respondents are looking for a

spa. Out of 1066 respondents, 587 of them prefer to have a Whole-body massage, 479 are

looking for Manicure/Pedicure.

Most of the respondents have chosen more than one spa service that they want to

acquire. This is an indication that there is a possible demand for every spa service to will be

rendered. The mud bath has the lowest demand so it won’t be offered for the starting operation

of the business. This service would be offered only when the customers would request for it and

when a high demand would be established.

Variety of packages would be offered to the customers if they wish to avail more than

one spa service. This would be beneficial to the business for stable sales, and also to the clients

for their relaxation and wellness.

Figures 7. Cuisines to be Offered

Others 57

American 103

Thai 47

Japanese 134

Chinese 103

Filipino 646

0 100 200 300 400 500 600 700

Number of Preferences

Figure 7 illustrates what cuisine do respondents prefer after having the services

which was conducted through a multiple checklist. This would be self-service. The customers

can choose what Filipino food they want to eat from the varieties that are served in the Buffet

area. Different dishes would be served and they can have as many dishes as they can. It would

be arranged starting from appetizers to different kinds of desserts.

Majority, 622, or 58% of the respondents prefer to have Filipino Cuisine while 134 or

13% of them want a Japanese Food. Same numbers of respondents of 103 or 10% have

chosen American and Chinese Cuisine. 57 persons or 5% prefer other cuisines like Korean and

Italian while the remaining 47 respondents or 4% have selected Thai Cuisine.

As analysed from the research, the preference of Ilocanos when it comes to food is Filipino

cuisine. Therefore, the variety of food that would be offered in the buffet service would be mostly

Filipino and various dishes from Japanese, American and Chinese cuisines. As Filipinos

are colonized by these races back in the day, most Filipino foods are influenced by these

countries. This explains why Ilocanos are fascinated to these cuisines.

Figure 8. Budget

Sales
500-1000 1001-2000 2001-3000 3001 and above

68, 6%

182, 18%

528, 52%

243, 24%

Figure 8 illustrates how much they are willing to spend on a day at the Spa. 54% or 572

of the respondents are willing to spend P500-P1000 at the Spa. 244 of them or 23% are eager

to spend P1001-P2000 while 182 or 17% of the respondents wants to spend at the range of

P2001-P3000. Few respondents only with a number of 68 or 6% are willing to spend P3001 and

above.

Since majority of the sample size are willing to spend at the range of P500 to P1000

only, there would be packages of Spa services and buffet to be offered to them that would suit

with their budget. It can be one to two spa services and a combination with the buffet package.

Given that the demand for spa services that range from P1001 to P2000 was also high

which 23% of the sample size is, this is an indication that the clients are willing to avail two or

more services. The customer’s budget that ranges from P2001-P3000 and P3001 and above

has a percentage in the sample size of 17% and 6% respectively. Although these portions are

low, it can still contribute on sales because consumers are willing to have many spa services

and this implies for stable sales of the business.

B. DEMAND

With all the attention focused this day on holistic remedies, organic produced and

botanical beauty products is undeniably that interest in spa treatments in on rise. We have seen

exceptional growth in spas as the wellness during the past decade, mainly due to customer

demand. Spaffet will be exceptional and cater unique advantage because Spaffet is the only

spa that provides buffet at the same time to people. This will serves as the edge and

competitive advantage to other competitors. Definitely, the main market will be employees.

From the rise of employment status from Ilocos Norte, employees on early twenties and forties

are the target market for the project. The employees are the high net worth clients this result to

stress levels and increased need for self-fulfilment. They are also the time-poor population who

need of relaxation for enhanced health. The demand for restorative and healing spa with buffet

services will continue to grow and innovate.

The most convenient time of the day where people want to visit spa is in the afternoon

and some is dinner time. People tend to have relax and peaceful mind after having stressful and

saturated environment in their work place. Because of their limited time for the employees, they

want to relax at the end of the day to regain energy by availing services of spa treatment and

the food provided by the buffet. It is very convenient because people need not go to other

places just to satisfy their hunger after the rejuvenating experience of spa.

People are very excited, getting to relax and having good food is all they need. These

personalized services are efficient designed to deliver fitness, peace of mind, pleasure, health

and wellness to its end users. Moreover, they are beneficial in managing stress, treating

medical ailments, detoxifying body and busting immune system. People are in demand for a

place to relax at the same time a place where a Filipino food and delicacies. This collaboration

of innovative idea will make the customer satisfy for their expectations.

The main advantage of Spaffet is it provides self-rejuvenating spa center and a taste of

Filipino delicacies for affordable prices. Our competitive edge is a combination of our unique

services, outstanding location and the placing traditional Filipino food all over the country into a

buffet. The services offered which people will surely return for our unique services and fulfilling

environment. The Spaffet is highly demandable here in Ilocos for this is the first spa center that

has buffet. By providing our customer a holistic and integrative spa and buffet, we build

relationships of trust and satisfaction.

Figure 9. Amenability of the Spa Treatments

Services No. of Preferences Percentage (%)

Manicure/Pedicure 479 21%

Foot Spa 337 15%

Whole Body Massage 587 26%

Half Body Massage 123 5%

Mud Tub 43 2%

Hot Tub 178 8%

Steam Bath 236 10%

A place to stay and relax 288 13%

Total 2,271 100

Figure 9 shows the number of respondents who are amenable for availing the different

kind of spa treatments. Accordingly, 26% of the respondents were willing to experience the

whole body massage. Next is the Manicure and Pedicure service which 21% of respondents are

willing to avail. There is also demand on foot spa and a place to visit which has a percentage of

15% and 13% respectively. This only manifests that spa treatment has demand in locality.

Figure 10. Choice of Cuisine Offers in Buffet Service

Cuisines No. of Preferences Percentage (%)

Filipino 646 59.27%

Chinese 103 9.45%

Japanese 134 12.29%

Thai 47 4.31%

American 103 9.45%

Others 57 5.23%

Total 1090 100

Figure 10 shows the choice of cuisine offered in buffet. Out of one thousand sixty-six

respondents, majority of them or 59.27% of them prefer Filipino food over other ranked most
liked cuisines. This only manifest that the taste of Ilocanos point partially on the Filipino food as

the leading cuisine.

At present, there is current demand in town and cities of San Nicolas, Laoag City, Batac

City and Paoay of which the existing spa services produce. Consequently, the proposed project

will continue to furnish the demand of the locality. Though there are existing spa services in

locality, these are all traditional in nature. Spaffet introduce the innovative combination of spa

and buffet which other spa do not offer. As such, the proposed project will further continue and

expand to satisfy the needs and wants of customers in locality and in order to compete with the

spa industry in Ilocos Note.

C. SUPPLY

A wide array of spa and buffet services is offered in the Spaffet to those who is

interested to indulge with the peaceful and nature feeling spa center and satisfying Filipino

delicacies. The Spaffet is purely service in nature.

Starting from the Service part, machines such as for the hot tub or sauna rooms are

bought from the Poolworld Philippines Inc. in G/F Ipark Bldg. Masiwa Road, Marigondon, Lapu

Lapu City, Cebu including those filter systems, and salt chlorinators. For the massage, facial

tables and beds are brought from Spa and equipment located at 10464 Ilex Ave, Pacoima, CA

91331. Furniture and fixtures for the accommodation areas is bought from La Union, especially

those that are craved from bamboos since the ambiance of the Spaffet is nature type. Towels,

oils, candles, hair treatments, bathrobes, and slippers are from Manila suppliers. For the need of

licensed therapist, aside from TESDA, and DOLE, there is also JOBSTREET.COM in case of

lack of manpower. For the part of buffet service, since the proponents prefer to develop the

menu and buffet they don’t need to coordinate with a providers of catering service. Vegetables

and meat will be handle by a local supplier from the province. Kitchen utensils, and equipment

are brought from the Manila suppliers.

D. COMPETITIVE COMPETITION

The notion of Spaffet was captivated in the Philippines, designed to rejuvenate the mind

and satisfy the cravings of people of innumerable ages as to numerous aids or benefits of a

place to shape their mindset with a wholesome meal waiting during their stay.

The proposed project being the first Spa center which also offers buffet in the province

would indicate a strong position in the market considering the fact that there is no established

business yet that caters the same services which serve as an edge from the existing spa

businesses. The center is a one-stop place for rejuvenation as well as for satisfaction and

enjoyment of the food specially with the services that the place could offer.

The proponents floated questionnaires regarding the value of money that they would like

to spend on a day in the center. The pricing of the services or packages are based on the data

gathered from the questionnaires and interviews conducted by the proponents. The prices or

the anticipated value that they would like to spend ranges from 500 to 1000 pesos based on the

results of the conducted survey.

In order to compete with the spa industry located in Ilocos Norte, the proponents came

up with the idea of combining a spa and buffet which serves an edge and to attract the market.

The prices range from 500 to 1000, but it will adjust based on the services they wanted, the

economic growth of the country or the costs that will be incurred that will affect the price of the

services or packages.

The center has a strategic location wherein local tourists and residents have an easy

access because it is situated inside the Venvi Group of Companies compound, where up and

coming businesses are now sprouting. It is also just a 5-minute walk from Robinsons Ilocos Mall

and BPO Companies like Alorica and Accenture. Venvi Group of Companies is located in the

Municipality of San Nicolas. It lies between Laoag City which is only 3 kilometers away and

Batac City which is 14 kilometers or only 20-minute drive. If you are from the most northern

places in Ilocos Norte and you wish to go to Manila or Southern parts of Ilocos, you cannot help

but to pass by this town, same as it is if you’re from the south going to Laoag, and Eastern part

of the province if you’re from Sarrat and other towns from the Eastern side.

Anyone who wants to escape for a while from the busy premises of the city could go to

Spaffet and relax for just a short time.

E. PROJECTED SALES

Table 3. Projected Sales

SERVICE CUSTOMERS PRICE TOTAL SALES

YEAR 1 BUFFET

MANICURE/PEDICURE

FOOT SPA

WHOLE BODY MASSAGE

HALF BODY MASSAGE

HOT TUB

STEAM BATH

TOTAL

The table shown above is the total projected sales during the first year of operations.

The proponents also projected that as the time goes by, this business would known and this

would result to increase in sales through advertising and recommendation of satisfied

customers.

There are months where sales would be high especially from the month of December to

February. During these months, there is a high spending capability of customers due to bonuses

and other employee benefits that they would receive. And also, it is where they pamper

themselves because they want to get away from stress.

F. PROPOSED MARKETING STRATEGY

Target Market

A. Employees

The project aims to rejuvenate and serves as stress free for the employees from a

saturated atmosphere in the workplace. Employees are ranging from early twenties to mid-

forties are targeted customers. Because they are in stressful jobs they can use spa for

relaxation. They also have the financial opportunity to regularly treat themselves to a facial or

massage. Employees need spa for healthy life-style because they have limited time to treat their

self. Indulging in massage and body treatment for self-pampering and relaxation is advisable to
people with limited time. Often in the working world it is necessary to look healthy and fit for

successful individual work force.

B. Students

The students ranging early twenties are the target customers of spa with buffet because

the service we offer is exceptional and that catches the attention of the teenagers. Early

twenties customers or teenagers are great seeker for what is in demand and extraordinary to

market and the Spaffet is suitable to them. Aside from being In-demand seeker they have the

time to explore and try new things unlike to others.

C. Others

The working students are also common target of spaffet because they belong to the

different stage categories both employee and student. Being stress in school and workplace

needs great treatment for the body and relaxation for limited and non-consuming time. Another

are the group of people who needs regular massage for improving health standard of their body.

In generic concepts it applies all kinds of people who are willing to undergo natural way

relaxation and pampering itself and want to experience the exceptional service of spa with

buffet.

G. PROMOTIONAL ACTIVITIES

SPAFFET is a proposed service business here in Ilocos Norte. It is centered in providing

relaxation and rejuvenation, it also caters Filipino cuisine. This project hopes to bring the best

and unique services to meet the customer satisfaction. SPAFFET will provide quality services to

its customer to meet the goals in maximizing the demand service. In order to achieve the

objectives there are certain marketing strategies to be implemented.

In highly competitive and crowded spa industry, effective marketing can make or break

the business. Typically, spa business tends to fluctuate from year to year. An effective

marketing plan can help the business to increase its demand.

1. Optimizing the World wide Web

By claiming Yelp page and adding photos and information about the business can

ensure the business to directory shows up on a Google, Bing and Yahoo search. All of these

are free advertising so this is advantageous in encouraging customer.

2. Leveraging the Social Media Frenzy.

Creating facebook page by adding new posts several times a day and encouraging

customer to like the page. Facebook page is where you can post daily special and

promotions, new services, new staff members, extended holiday house and anything else

that comes up. We will continue to have a comprehensive website. After six months, and

certainly after the first year, we will evaluate the viability of having target customers

advertise on our site, and conversely, we will evaluate viability of advertising on our target

clients websites.

3. Selling services in a package at a corresponding discount.

This will keep the customer coming back to get treatments. We will also offer a “frequent

buyer” program, with incremental rewards each time a customer reaches a, milestone. After

a while, customers will have so much invested in reaching their reward status that they’ll

never go anywhere else. We also consider giving a gift card as a reward, so that they can

give it to a friend if they desire

4. Promotional Calendar

To create successful short – and long- term plans so that we will not end up chasing

after last-minute opportunities that are not well thought or executed. In overarching our

goals we will also focused on seasonality; changes in climate should steer treatment and

service promotional focus.

5. Encouraging Customer Loyalty

Personal relationships between individual service providers and client are critical to a

success. Adding loyalty programs, referral bonuses, service freebies and other promotions

aimed at existing customers to create repeat business. By assigning one marketing person

to get to know what clients personally and spending habits. Keeping in touch with the each

customer to make sure that they are happy to the service we are offering.
6. Advertising

Using demographic desire of customer, such as age, geographic area or marital and

parental status, to choose the right local radio, TV, local newspaper and website advertising

vehicle. Featuring pictures of target customer in the marketing website and getting

testimonials. The importance of word-of-mouth and referrals, create ongoing social media

campaign using facebook business page and twitter account.

Budget for Promotion for year 1 and 2

Promotion Total Cost

Brochures 12500

Tarpaulin 30750

Flyers 28800

Total 72,050

For the first two years of promotions, the project SPAFFET will be extensively advertised

since it is the first introduction of Spa center that comprises with a buffet service in Ilocos Norte.

The promotion will be a critical endeavour that will determine the survival and continuity of the

business. The mentioned promotional strategies shall attempt to attract customer and possible

loyal customers.
Budget for Promotion for year 3 and 4

Promotion Total Cost

Brochures 10000

Tarpaulin 23063

Flyers 21600

Total 54,663

For the year three to four, the costs of promotion will eventually decline because the

project SPAFFET has already established its name in the local province and its share in the

market. Thus, lesser cost will needed in promoting the project SPAFFET.

Budget for Promotion for year 5

Promotion Total Cost

Brochures 3750

Tarpaulin 8649

Flyers 8100

Total 20499

Like in the preceding years, the budget had decreased because the park had already

established its name in the industry and can afford to lessen its advertising activities.

The SPAFFET shall offer various services and indulgements. These services are

suitable not just for local individuals but also with travelers, foreigners, and group of peoples that

would like to pamper their selves regularly.

The main goal of the SPAFFET will be consumer satisfaction. Marketing managers will

use intuition and experience to analyze and handle the complex and unique situations to be

faced to determine the quality of the marketing technique to be employed. In Spa centers, the

battle for consumer attention is a battle of service-quality satisfaction and other packages

offered. The SPAFFET’s management will focus on the matters that will differentiate this project

from other spa centers. The SPAFFET will prove that it can stand out from the rest.