SYNTHESIS

Refreshing beverages such as fruit shake and smoothies have become the quickest way to beat the heat, especially during dry season. Over the last two years, Pearly Shake has become known as a quench thirst for people living near Galas Market. It is the only flavored shake business located in the area. With its affordable beverages ranging from 25.00 for the regular size shake and 30.00 pesos for large size shake with a topping of your choice. According to Ms. Analyn Lim, owner of Pearly Shake, her business makes 15,000 to 17,000 average sales per day. Pearly Shake offers variety of flavors (in powdered form) such as bubblegum,double-dutch, strawberry, vanilla, chocolate and ube.

As what the owner have said a micro-scale business do not require much investment, an entrepreneur can start his own business with a small capital. Nowadays, customers have high tend to consumption product of milk and sugar but they have few choices to choose from so I set-up Pearly Shake try to create the demand for my customers.

In addition, Analyn Cheng employs three personnel for her business. She pays them 250.00 per day inclusive of free breakfast, lunch, and dinner. The establishment is open from 10:00 am to 7:00 pm, Monday to Sunday. Ms. Cheng usually travels from Galas Quezon City to Divisoria, once a month to buy powdered shake flavors, straws, plastic cups, sugar, cream, whole milk.

POINT OF VIEW

This final paper will take the point of view of Pearly Shakes owner, Analyn Cheng.

STATEMENT OF THE PROBLEM

This papers approach emphasizes the importance of CVP analysis and how it ties directly into planning and control processes management must take in order to manage a successful business.

This paper seek to answer the question: How can Ms. Cheng fully improve the its pricing system?

QUESTION 2: Using the below information, determine the number of shakes you will need to sell to break even.

DIRECT MATERIAL INGREDIENTS	Small (8 oz. size)	Large (12.oz size)
Condensed Milk ( 41. 50 for 300 mL)	20mL or 0.676 fluid ounce	30 mL or 1.017 fluid oz
Sugar (500.00 for 15 lb bag = 30 cups)	1/2 cup of sugar	3/4 cup of sugar
Flavorings	.25 per shake	.40 per shake
Specialty Straws	.75 straw	.75 straw
Cups (100 8 oz. cups at a cost of 150.00)
Cups (100 12oz. cups at a cost of 185.00)
Fixed cost:
Rent : 5,000 a month
Cleaning and other miscellaneous supplies	2,000 a month
Equipment: Industrial Milk Shake Maker:	2,500 per machine X 3 machine = 7,500
Equipment: Refrigerator : 4,500
Licenses and permits: 1,050 a year
Owner's salary: 180,000 a year
Employees
Three full-time employees: each receiving a daily salary of 250.00 Sales Mix: Large 60% (shake in large size), 40% small sized shake

Question 3: Should Ana fully focused her time on this business?

OBJECTIVES

To create a strong product awareness.

To achieve an increasing number of loyal consumers.

To maintain a positive, strong growth of the micro-enterprise each year.

CONCEPTUAL FRAMEWORK AND AREAS OF CONSIDERATION:

The researcher will be using SWOT analysis in assessing the businesss status.

SWOT	PEARLY SHAKE
STRENGTHS	Strong existing distribution channel Brand strengths and uniqueness
WEAKNESSES	Unavailability of some flavorings. Lack of segregation of duties with regards to the different functions of the business.
OPPORTUNITIES	Brand is attractive to consumers The location of the business is in a crowdy place.
THREATS	Downward Price Pressure Brand susceptibility

ALTERNATIVE COURSES OF ACTION

To properly cite the correct pricing strategies of the business, Analyn will be addressing a lot of problem of that she is facing. To help her address these issues, the researcher has come with the following alternative courses of actions:

Alternative Courses of Action 1: Analyn can fully improve the pricing system by introducing cost-based pricing where the price includes the cost of ingredients and cost of operating the business.

include a profit percentage with product cost

add a percentage to an unknown product cost

blend of total profit and product cost