Caf Lusso Baguio City:

Competitive Advantage
and Consumer Satisfaction
PREPARED BY:
MHELETON B. CALICDAN
ANA FRANCHESCA B. DOMONDON
JONATHAN A. RIVERA

Chapter 1
THE PROBLEM
Background of the Study
Customer

satisfaction exists in every

enterprise, agency or a firm. Most
people who are not in the business,
are still affected the way it works.
Commonly, it comes how the service
is being provided to people, that
defines the quality by meeting their
expectations. However, every person
has its own preferences.

 According

to Price and Jaffe (2008), "In

most companies, demand is a given lots
of time and effort go into forecasting
demand based on past demand, measured
in thirty-minute increments across a range
of contact channels." Customer demands
create a radical change to increase
satisfaction. Companies converge on what
is the best innovation there is, and that is
to be informed what customer's want.

 Customer

satisfaction relies not only how

to excel on delivering services but how
their advantages give more than the asset.
As Foss, N. et al., 2012 argue that "it is not
necessarily those firms that are largest or
have the most resources that do best, but
rather those that are smartest, those that
see the new opportunities, and those that
develop new ways of doing business." It is
about finding a more effective way to
compete with other firms. People
constantly look for something new and
better services and products.

Objectives of the Study

Inform the people of Baguio and the government

on how customer satisfaction really affects the
lives of the citizens in the city.

Help the researchers by experiencing the actual

conduct of a research study in preparation for
their graduate and postgraduate courses which
would demand a similar endeavor in the future.

Identify what causes the satisfaction of Caf

Lussos customer.

Determine what are the Competitive advantage of

Caf Lusso.

Formulate Marketing Plan.

Theoretical/Conceptua
l Framework

Assimilation Theory - This theory helped the

researcher to explain the phenomena that occur
in the customer satisfaction of Caf Lusso and to
determine the reason behind why patronize the
performance of Caf Lusso.

Equity Theory - This theory was used in this

study to assess the behavior of the people on how
they tend to react when they purchase something
that is equal to the exchange investment.

Disconfirmation Theory - This theory was used

in this study to identify the satisfaction
performance level of Caf Lusso.

Statement of the
Problem
What

causes the satisfaction of

Caf Lussos customer?

And,

What are the Competitive

advantage of Caf Lusso?

CHAPTER 2
DESIGN AND
METHODOLOGY

This study used descriptive-survey design,

descriptive design sought to describe the
current status of an identified variable.

The research is mainly done in an interview

format wherein the researcher will ask 2 main
questions to selected random 5 interviewees to
check on the pattern of the establishment
valued customer behaviors and to know why
do they prefer the establishment than others
by letting them elaborate the competitive
advantage the establishment has to offer.

Population and Locale

of the Study

The locale of the study focused on Baguio

City since it is where the caf Lusso is
located

The researchers informed the

management that they will be conducting
an interview to their consumers through a
communication letter. After the letter was
sent and the management allowed the
researchers to conduct interview to the
area the researchers immediately proceed
to the interview.

 Accidental/convenience

sampling is
utilized in seeking out the respondents who
are readily available or accessible to
respond to the questions. Thus, the first
person who comes along who typifies the
unit of analysis serves as the respondent of
the study

Purposive

sampling is utilized with the

researchers defining a criterion (Costumers
of Caf Lusso) or set of criteria for
determining the respondents of the study.

Paradigm of the Study

Data Gathering Tool/s

The researchers used informal interviews

as tools in collecting data for the study.
Informal interviews are used as a tool to
gather information that is needed to
supplement the data gathered from
printed documents/references. The
observation of the researchers was used
in the corroboration of the data gathered.
SWOT and P.E.S.T. analysis was also
utilized to formulate the Marketing plan
for this study.

Data Gathering
Procedure

The researchers sent letter to the

management of Caf Lusso asking to
allow the researchers to conduct an
interview to their consumers and some
of their staff. After the request was
approved the researchers immediately
commence the interview.

After the interview the results was

analyzed and interpreted by the
researchers.

CHAPTER 3
PRESENTATION, ANALYSIS
AND INTERPRETATION OF
DATA

The restaurants and coffee houses that

make up the community of
establishments in the area surrounding
Baguio are quite diverse. Their concepts
range from typical fast food/chain
venues to expensive fine dining
establishments. However, the
predominating nature of the
immediately surrounding restaurants
and coffee shops is casual/ upscale.

Caf Lusso just opened few years ago, business

has been great and customers expectations are
being met. There are few regulars that had been
coming in and out of the establishment. However,
there are few things that we can consider in
regards to the current situation of the
establishments.

Caf Lusso gives more emphasis on their

beverages. White caramel, butterscotch, cookies
and cream frappe, and Choco-Banana Frappe are
the best sellers.

Most of Caf Lusso's customers are students of

University of Baguio since it is located along
General Luna Road, Baguio City. Students come in
and out and have their time consumed in a relax
and very convenient place. Some customers are

The researchers identify the interviewees

choice of order. In terms of beverages;
chocolate frappe, caramel frappe,
butterscotch coffee, white caramel, and
choco-banana frappe. They do not usually
order a food; it is more on drinks that the
Caf brings more production.

Customers chooses Caf Lusso because first; the location. It

is more accessible than any other caf's around the place.
Customers are more encouraged because it only takes a
minute to get there. Second; the ambiance. One of the
interviewee said "it's cozy", the ambiance is actually their
main reason why they love the place. The mood that sets
their time to come back.

However, the third factor, which is price supported the

answer of the previous interviewee. "It's a bit pricy, pero
bumabawi kasi sila sa ambiance." The price is not as
expensive as it looks, it is just that, it is nearer in town and at
the University. This statement was supported by one of the
interviewee by saying Medyo mahal nga ang tinda nila dito.
Pero ayos lang maganda naman ang ambiance ehh. This
phenomenon was explained by Assimilation Theory which
posit consumers make some kind of cognitive comparison
between expectations about the product and the perceived
product performance. As the researchers observed the
customer satisfaction was high because the expectation of
the customers was met or even surpassed by the caf

Fourth, the service. Regardless of the location,

ambiance, and price, service says it all. The last
factor that helps the customer identify their
demand plus overall performance. "okay naman,
mababait sila.", as the other interviewee said.
Customers find the Caf accommodating and
friendly. Also, it is hassle free because of their
"buzzer" that will tell you if your order is ready. One
of our interviewee was amazed by the buzzer
system because according to her Ang galling lang
kasi hindi mo na kailangan mag hintay ng naka
tayo ka kasi inonotify ka nila na ready na ang order
mo sa pamamagitan ng buzzer nila haha.

 The

researchers observe that the

ambiance helps the establishment
increase their satisfaction. The interior
of the Cafe is the lightening that gives
life to the place, that attracts
customers, that let the customers relax
and makes their time valued from the
service that the Caf offers.

Customer satisfaction (often abbreviated as

CSAT, more correctly CSat) is a term
frequently used in marketing. It is a
measure of how products and services
supplied by a company meet or surpass
customer expectation. Customer
satisfaction is defined as "the number of
customers, or percentage of total
customers, whose reported experience with
a firm, its products, or its services (ratings)
exceeds specified satisfaction goals.

The researchers focused on 5 main things to address and know

how do Caf Lusso differ from other establishment and more over
how do customer get satisfied. These are as follows:

1. The product

a.

Quality

b.

Consistency

c.

Range of product

2. Delivery

a.

Speed of time

b.

Availability

3. Staff and service

a.

Courtesy

b.

Reliability

c.

Responsiveness

4. Price

5. Place

a.

Aestathiscs

b.

Location

Price is a huge factor in regards to customer

satisfaction; the higher the price, the better the
quality. Customer satisfaction is guaranteed. In
some cases, some skeptical consumers
connotes lower prices are better to ensure
customer satisfaction. As for the responses of
the interviewees, it was found out by a common
denominator that price is not the main factor
why they are satisfied with Cafe Lussos
services. They factor in first the quality of what
is being provided. They claim that the products
the establishments offers are in its outmost
quality.

It was found out by the researchers that all

the ingredients the company use mainly are
ensured fresh due to the fact that they
commissioned a regular supplier from the
market. Some of the major supplies such as
coffee and Korean spices even are being
imported from Korea and US due to the
nature of the business. They as well offer
personalized Tumblers and Coffee Mugs
which promotes a wide array of is products
that they offer.

Competitive
Advantage of Caf
Lusso
it is factored in by the interviewee as competitive
advantage and seemingly the main thing that can
satisfy then not only that the promote sumptuous, they
also provide Korean, Continental, and more likely
Filipino food and delights that would mainly target the
distinct and discriminating tastes of a common Filipino
and Korean customers. The Cafe need not to entail that
they focus as well with our Korean expats due to the
fact that there has been a large number of influx of
Korean student in the city more over this connotes the
patronage of the Kpop (Korean Popular Culture) in our
country. The Korean wave is not just a trend but has
become a lifestyle in Baguio City nowadays.

Next factor that was found out by the

researcher from the interviewees is that the
satisfaction was abruptly delivered by the
caf by being consistent in all of the
products they offer. One quote to cite If you
order one of their product and get to order it
the next day or two, it would still taste the
same. Getting consistency right also
requires the attention of managements.

The interviewees factor in the location and

the aesthetic of the establishment. It is well
undoubted that the Cafe is located within the
Citys University Belt which promotes
accessibility to other customer. A part of the
interviewees come to the caf due to the fact
that they are studying alongside the
University of Baguio and a part of the
interviewees are basically working around the
vicinity.

The next factor to discussed and was entailed by

the interviewee is mainly focused on the delivery
of the service they provide. This connotes speed
and moreover availability. This was proposed by
the interviewees as a competitive advantage.
What was found out by the researcher is that the
established has the process where they get to
promote a refill point of their supplies wherein if
the inventory reach a certain point it is really a
must for them to re supply stocked to minimize
lead times thus the products as well as their best
sellers are always going to be available. This goes
as well in regards to the speed of delivery, their
serving seemingly are close to always right on
time. As to further research the staff and crews
are those of the worker whom had vast
experienced in the type of business they are

The last and the most important factor that was

discussed during the interview is that in
regards to the employees that the caf have,
seemingly they considered them as a valuable
asset for having a prompt and efficient style of
work, more over having to very good deal of
relationship with their customers. One
interviewer even said that when he enters one
of the employees knows what order to provide
since he is one of the regulars on the
establishment. These kinds of relationship with
customers definitely heighten up the sense of
importance of loyalty and customer patronage.

CHAPTER 4
CONCLUSIONS AND
RECOMMENDATIONS

Conclusions

The ambiance helps the Caf Lusso

increase their satisfaction rating. The
interior of the Cafe is the light and soul
that gives life to the place that attracts
customers, make the customers relax and
makes their time valued from the service
that the Caf offers.

the common denominator for consumer

satisfaction is not the price. It is the quality of
what is being provided. They claim that the
products the establishments offers are in its
outmost quality because all of the ingredients
the company use mainly are ensured fresh
due to the fact that they commissioned a
regular supplier from the market. Some of the
major supplies such as coffee and Korean
spices even are being imported from Korea
and US due to the nature of the business.
They as well offer personalized Tumblers and
Coffee Mugs which promotes a wide array of is
products that they offer.

The consumer of Caf Lusso was satisfied

because the caf is offering wide array of food
and beverages like Korean, Continental, and
more likely Filipino food and delights that
targets the distinct and discriminating tastes
of a common Filipino and Korean customers.
The Cafe need not to entail that they focus as
well with our Korean expats due to the fact
that there has been a large number of influx of
Korean student in the city more over this
connotes the patronage of the Kpop (Korean
Popular Culture) in our country.

The satisfaction that was delivered by the

caf is consistent in all of the products
they offer. One quote to cite If you order
one of their product and get to order it the
next day or two, it would still taste the
same. Getting consistency right requires
a lot of the attention of managements.

The Cafe is located within the Citys

University Belt which promotes
accessibility to other customer. The
atmosphere of the Caf Lusso provides
ensured cleanliness and minimalistic
approach where it is secluded with
clutter more over abiding the city
ordinance of making the city smoke free.

Recommendations

The researchers recommends that Caf Lusso

should increase their market share by way of
promotions.

Caf Lusso should find alternative suppliers in

case of emergency purposes and for supply chain
aspects.

To Future researchers, the researchers

recommends that if they are planning to venture
in this king of research endeavor they should
increase the number of their respondents to have
a more reliable research.

Output: Marketing Plan

Current Product Offering

Morning Set (7 am 11am)

(Served with free Todays Coffee or Iced Tea)

Breakfast Meal

American Breakfast 99

Lusso Breakfast

Sandwich

Chicken Teriyaki Sandwich

BLT Sandwich 129

Potato Ham Sandwich

Ham and Cheese Sandwich 79

Salad

House Salad 99

Chicken Salad 129

Bread

Honey Bread 99

Choco Honey Bread 119

Banana Honey Bread 119

Soup

Beef Soup

Mushroom Cream Soup

129
129

99

99
99

Lusso Set Meal

Donkatsu Set 249

Fish Fillet Set 249

Donkatsu + Fish Fillet Set

Beef Hamburger Set 269

249

Rice Toppings

Spam Mayo Deopbap

169

Kimchi Bokkeumbap 169

Jeyuk Deopbap

Ojingeo Deopbap 189

Lussos Beef Tapa

189
189

House Specialty Pasta

Tomato

Promo Doro

Tomato Pasta w/ seafood 229

Tomato Pasta w/ Roast Chicken 199

Cream

Pasta Alfredo 159

Pasta Alfredo w/ seafood 229

Pasta Alfredo w/ Roast Chicken 199

Carbonara 199

Pesto

Pesto 139

Pesto with Seafood

Pesto with Roast Chicken 179

159

209

Executive Summary

Background and History

The Cafe Lusso is a unique local bar / coffee / tapas

house that provides a friendly, cozy place people can
mingle and have like an oozing feel that is free from
the hassle and stress the city The cafe offer a variety
of coffee products, pastries, pastas, and other set of
meals from breakfast to rice topping, and other
beverages. Furthermore, they offer snacks, soups,
sandwiches, and salads. The major atmosphere of
the caf seemingly entices coffee fanatics and
moreover few foreign people specifically Koreans for
the reason that they get to offer snacks and other
meals that are mainly catering for the Korean taste.

The marketing plan

addresses the following
major attributes:
Increase

Market share through

market penetration
Increase Market share through
market developments

Situation Analysis

The restaurants and coffeehouses that make up

the community of establishments in the area
surrounding The Baguio are quite diverse. Their
concepts range from typical fast food/chain
venues to expensive fine dining establishments.
However, the predominating nature of the
immediately surrounding restaurants and coffee
shops is casual/upscale. Caf Lusso just opened
few years ago, business has been great and
customers expectations are being met. There
are few regulars that had been coming in and out
of the establishment.

MARKET NEEDS

Caf Lusso is establishment that generally

caters to students and foreigners (Koreans). It
can be a forehanded tool to address few
platforms in the Maslows hierarchy of needs. It
can go from the need to fulfill ourselves with
food and other staples, or the need to having a
social platform to interact and be acceptable to
other. It seeks customers that entail the need to
have an oozing experience with a cup of coffe
to distress and unwind themselves from the
stress the city and other endevourments the
need to focus with.

 MARKET

DEMOGRAPHICS

The establishment classifies its

customers in order to identify their
common needs and wants. The
segmentation is based on what is
the profile of the customers in their
day to day activities.

Percentage of Revenue from Segmented Market

Regular Residents; 20%

Students; 40%
Tourist and Excourtionist; 8%

Professionals; 20%
Expats; 12%

Students
Expats
Professionals
Tourist and Excourtionist
Regular Residents

MARKET TRENDS
Trends

As per the research made by Euromonitor

International 2014 , Although chained coffee
shops such as Starbucks remain popular
among consumers, small speciality coffee
shops are ushering in a third wave of coffee.
Coffee lovers and upper-income individuals
are being attracted by artisanal coffee
brewed using high-quality coffee beans and
made visually appealing by latte art.

MARKET GROWTH

In line with these trends that what was

entailed, the influx of students in the city and
considering the location of the establishment
ensure a market growth and stability of the
caf shop. Further, the influx of more tourist in
the vicinity of the city is more like an avenue
for growth as per the the last years it promise
an increasing rate.

MACRO-ENVIRONMENT (P.E.S.T ANALYSIS)

ECONOMICAL ENVIRONMENT The Philippines

economic freedom score is 62.2, making its
economy the 76th freest in the 2015 Index. Its
score has increased by 2.1 points since last year,
with notable improvements in financial freedom,
freedom form corruption, and labor freedom
overweighing declines in business freedom and
the management of public spending. The
Philippines rank 13th out of 42 countries in the
Asia-Pacific region and its overall score is above
the world and regional averages. Fortunately,
Baguio City enjoys the government budget
considering different industries that contribute
taxes.

SOCIAL Environment- consumers are

increasingly aware of working conditions in
other countries and increasingly want to
contribute to better social and economic
outcomes globally. Consumers are also
concerned about the environment. Caf Lusso
will endeavor to promote itself as
environmentally and socially responsible and
conduct business operations accordingly. In
this way, Caf Lusso will offer value to the
consumers and position itself as one of the
leader in social and environmental
responsibility.

TECHNOLOGICAL ENVIRONMENTInternet, information, and social

networking technologies continue to
evolve and provide new challenges and
opportunities for marketing. Caf Lusso
will continue with its effective use of
social networking sites to reach its
target market.

 Positioning

Caf Lusso positioned as a semi-luxury

coffee shop that cater to mainly
students, foreigners (Koreans),
professionals, and tourist. It is the usual
choice of students for the reason that it is
mainly located that is adjacent to 2 of
the main universities Baguio has to offer.

SWOT Summary

SWOT Analysis was chosen since it is applicable to analyze

and understand the issues on the operations of Caf Lusso.
Strengths

Interior design of the caf is internationally-based providing

a unique ambiance and atmosphere.

Equipment used to offer their products were purchased

abroad.

High-quality products.

Skilled and well-trained personnel.

Lower price rates than direct competitor

Location caters a wide array of target market

Weaknesses

Unavailability of some products due to

shipping constraints of raw materials
from abroad.

Limited suppliers limit the products

offered.

Opportunities

Expand their business locally and internationally.

Offering new product lines to cater the needs and wants of

Filipino consumers.

Finding back-up suppliers that could offer the same quality

Threats

The presence of equally competitive and well-established

competitors

Relative customer perspective

Opening of a new competitor within the same area

Customers getting used of the products offered

MARKETING STRATEGY
Growth Strategy
Products
Existing

New

Existing

Market
Penetration

Product
Development
s

New

Market
Diversificatio
Development n

Mar
kets

MARKETING MIX
Product

Seemingly the products that the establishement

has dont need ramifications at all for the reason
that the depth and variety overwhelms the
customers. As we all know providing choices
seemingly is one of the important things a
business has to offer. However the goal of this
marketing plan as said is to development
markets and penetrate more thus these is
somehow being tapped by the caf itself for the
reason that as a trend they get to inscribe more
product offering through the years promoting a
variety of choices outposted to their potential

Price

The prices of Caf Lusso specialty drinks differ

based on the customers order. Coffee has a
set price, espresso drinks are more expensive.
The price of the drink increases with every
flavor shot or espresso shot added. Because
the goal is increasing the amount of coffee
sales to ultimately increase profits, the prices
of the drinks are staying the same. They also
need to stay higher due to the increase in the
price of coffee beans.

Place

The current location of the establishment would be

the main venue where the marketing plan is going
to be in scripted. No changes at all considering the
fact that the main focus of the company are
students and professionals. The location is
undoubtedly the right one to be therein.

People

As with the company structured, it shows that

there are people designated in regards to
marketing and promotion, this, they will be the
one who is going to reinforce and make sure that
the suggested promotion and marketing plan is
being openhanded to ensure the forecasted
results

Promotion

Primarily the focus that needs to be concerned

of is to increase market share via few things
that we can consider. The researchers found
out via observation that the establishment
lacks promotion and marketing schemes
moreover the lack of public relation initiatives.

IMPLEMENTATION
SCHEDULE

The schedule of implementation is a follows considered

few factors that needs to be ponded:

Implementation of the Loyalty card, and social media

intervention will be available throughout the year.

The issuance of free samples of drink of the week will

only be dont during peak seasons. And is intensified
during first days of classes.

KEYS TO SUCCESS

From a marketing perspective, it will be more

important to maximize the promotional
impact of Caf Lussos strengths, while
seizing the opportunity to increase custom
and market share.

Caf Lusso will need effectively position

itself as a distinct from the competition, or,
where directly comparable

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