CHAPTER I VALUE PROPOSITION In this chapter, authors analyze industries around the market and competitor. Understanding market potential is important for companies that want to launch new products or services, so authors took time to analyze the healthy catering market through survey. Using a variety of secondary market research sources and databases, authors synthesize results from previously published research and other data sources to help determine market size. 1.1. Market Analysis 1.1.1. Market Profile For determining the market size, there are two basic methodologies that can be used top-down and bottom-up. Top-down uses existing market size and determine how much percentage of Pratique target market and the bottom-up approach is totaling main variables of the target market. Pratique are using bottom-up approach based the data available on the market. The variables are: Spending behavior in south Jakarta According to BPS in year 2017 the average percentage of household expenditure of South Jakarta is 38 percent for food and 62 percent is for non-food category. 26 27 Population in south Jakarta From the survey that BPS conduct in South Jakarta, as per 2017 the total population is about 2.226.830 people and predicted to keep growing, 989.992 of them is worker which about 44 percent of the total population in South Jakarta is a worker. And supported with result from our survey that the 41 percent of the worker are eat outside for lunch more than 4 times a week because of they are busy with they work. Total Available Market 5 T Serviceable Available Market 2.4 T Serviceable Obtainable Market 240 M Figure 2.1 Market Size Source: Authors analysis Based on the variable mentioned above, authors can predict Total Available Market (TAM), Serviceable Available Market (SAM) and Serviceable Obtainable Market (SOM) to measure the market (TheBusinessPlanShop). TAM is entire potential market that can use your product or service. Where SAM is the segment of targeted market and SOM is how big is the portion of the SAM that you can capture. 28 Based on data from BPS, the resident 37.7 percent who lives in South Jakarta spend of their monthly expenditure is above IDR 2.000.000 per month. 38 percent out of 100 percent of them is for food class expenditure. From the survey conducted, almost half of the respondent had income in IDR 8.000.000 – 12.000.000. If taking base line at IDR 6.000.000 as their income 38% of it would be IDR 2.2800.000 per month just for food category. Population in South Jakarta is 2.226.830 per year 2017. That makes out TAM IDR 5 trillion, this means there is still plenty of market in food industry in South Jakarta to take advantages of. While in SAM, Pratique take the data from BPS generation Y in the age bracket of 23-41 there are 9.81.728 people as a worker. From the survey, 49% the salary is at IDR 8 until 12 million followed by 27 percent on 4 until 8 million, then 14% of them is above 12 million and 8% is under 4 million. With this, the prediction of SAM can be calculated by multiplying total of gen Y with the spending money per month for food, Pratique got IDR 2.4 trillion. SOM is based on package sales, authors assume that it can sale 3000 package a month which priced at IDR 75.000 then the number is 240 million. Compare to SAM, the share market is about 0.01% of the SAM value. Pratique kitchen will be based on Kebayoran lama and the operation will cover 5 km from the kitchen, this will cover some major office building like District 8, Equity tower, Gandaria 8, Menara Jamsostek, Menara Mulia, Summitmas, Sentral Senayan. This estimation will cover around 35 office towers, some apartment and University. 29 1.1.2. Market Potential The authors decide to choose survey as the research method for this method. The instrument that was used is questionnaire. According to Nazir (1983), questionnaire is a set of questions that logically relate to research problems, and each question is the answers that have meaning in testing the hypothesis. The list of questions is made quite detailed and complete. Here the authors target audience or sample comes from people who live in Jakarta, particularly those who works in the urban area. Below is the writer’s analysis of the results from questionnaire collected. To find out more about the market profile of the Pratique business model, authors distributed questionnaires to get customer insights that authors will later use as references in determining the strategy in running this business model. Total respondents filled out questionnaires totaling 102 respondents who filled out online. Online questionnaires are distributed to office workers who are the target market for this business model. The results of the questionnaires distributed are as follows: Figure 2.2 Gender respondent Source: Authors analysis 30 Based on Figure 2.16 the gender of the respondents consisted of 60.8% of women and 39.2% of men from a total of 102 respondents who answered. In this case, the Pratique Catering business model does not distinguish gender in determining segmentation targets. Figure 2.3 Percentage of age groups of respondents Source: Authors analysis Based on Figure 2.13 for the respondent's age group, the majority is dominated by the age group of 25-30 years by 59.8%, then followed by the age group 31-36 years by 22.5%, and the rest is the age group 20-24 and more than 36. Age group that dominating respondents will be used to determine the target segmentation of business models Pratique. 31 Figure 2.4 Percentage of respondent’s residents Source: Authors analysis Based on Figure 2.14 for the location of the respondent's residence, as many as 100 respondents lived in Jakata or 95.1% according to the target market of the Pratique catering business model. Figure 2.5 Percentage respondents’ monthly income Source: Authors analysis Based on Figure 2.15 regarding the monthly income of respondents, 49% ranged in the range of IDR 8.000.000 - 12.000.000, followed by a range of IDR 4.000.000 -8.000.000 by 27.5%, and the range in the range of > IDR 12.000.000 by 32 14.7% and lastly the range of < IDR 4.0000.000 is around 8.8%. In this case, the target segmentation of the Pratique business model will target the social classes from middle to high income. Based on the survey, there are still a lot of people struggling to find healthy based food around their workplace. The reason may vary, but the most common one is they don't have time to prepare for their meal because of their hectic work. As seen on the table below, the survey stated that around 67.6% the respondents seem hard to find a healthy based food near their work. About 23.5% the budget for lunch is IDR 25.000-35.000, following 52% at IDR 35.000-45000, lastly 18.6% > IDR45000. Figure 2.6 Healthy food location near office area Source: Authors analysis Based on figure 2.17, 44.1% of the respondent stated that the reason they chose to eat outside is because of their hectic work, the second is 25.5% they can’t cook themselves and the rest is cannot cook and got no time in the morning with 15.7% and 14.7% respectively. Due to their intensity of the work, this will lead to people 33 buying their food wherever they feel like without considered the kind of food they consume. For people who work in Jakarta, they generally work in hectic area. Early in the morning they had to leave to avoid traffic jam and route policies to get in to their workplace. Figure 2.7 Why they choose to eat outside Source: Authors analysis Figure 2.8 Frequency eating outside Source: Authors analysis 34 Based on survey above fig. 2.18, there are still a potential market for this catering, because there are about 52% of respondents that claim to eat outside more than four times a week. This proof that consumer in Jakarta is evolving and the purchasing power is high. Consumer are not afraid to spend money on something they need it, and food is one of them. Figure 2.9 Online media used for purchasing food online Source: Authors analysis 95.1% already familiar with purchasing food online, this survey proof that millennials habits to continue the experience gained from offline to online. The online media used is variety, but from the survey as shown in Fig 2.19, 53 people (95%) tend to use the go-food/grab food application to order their food. This is one of the reasons why creating mobile application can have a lot of advantages for the consumer. They can order the food wherever they want and any time they want. 35 Figure 2.10 Awareness of food the you consume Source: Authors analysis Figure 2.11 Interest to eat healthy Source: Authors analysis Based on Fig. 2.20 and 2.21, 55.9% of respondent is sometimes aware of what are they consuming is it healthy or not, 29.4.1% is not aware, and 14.7 is aware all the time. Author also asked how many times do you work out in a week? And the and the answer is 43.9% is not routine, 29.8 is 1-2 times per week, 14% 2-3 times per week and lastly above 3 times per week.