The gifting market and food as gift

QUESTION: We’re a small family business and our products are seasonal. For example, during this Christmas season, we made and sold Christmas gifts for kids and adults as well as giveaways for company clients. Then this coming month of hearts, February, we will switch to making Valentine’s Day gifts for teenage girls and boys. We’ve been doing this for years.

We’ve been in this business since my husband was terminated nine years ago following an accident in his work place. We had just gotten married then. Our eldest is now in third grade while her brother is a first grader. We enjoy our small business because we’re making enough to send our two children to school and we have a tiny house here in Antipolo. But we’re tired and the fun has diminished because our two children are no longer around to help throughout the day. How I miss those years when we were all playmates at work.

Small enterprises

We’ve heard that through your column, you extend help to small enterprises including micro enterprises. Please help us by telling us what kind of small business we can switch to, one that can be a more stable source of income.

My husband says that because I’m such a good cook, we should go into the fast food business like a Jollyjeep or a pares shop. I prepare the “baon” of our two children and the mothers of five of their classmates have asked me to also prepare the baon for their own children at the same price as the lunch sold at the school canteen. But my husband and I don’t know anything about the food business. My husband says one of us can enroll in Tesda and learn it there. What do you think, Dr. Ned?

Answer:   You have quite a bundle of questions there although they’re all related and interesting. Let’s tackle your first concern about the small business that can give you and your husband a more stable income stream.

Before you look outside, look inside first. You’re now into season-by-season products as well as different market segments and customers. Consider specifically your being into “Christmas gifts for kids and adults.”

The gifting market is a huge 365 days-a-year market. There’s a consumer who’s buying a gift for someone every day. But because you defined your business as Christmas gifting, you actually made that part of your business seasonal. In marketing, doing so is called the trap of “marketing myopia,” an ailment coined by the late Ted Levitt, professor of the Harvard Business School. Get out of that trap.

What if you think of the business you are in as the gifting business. Every season of the year, every day of the year, you are in business. If you want a product that will give you “a more steady source of income,” start by asking yourself this question: “What’s the gift that consumers like giving from one season to the next, in fact no matter what occasion or day?”

Behavior research

My consumer coping and budgeting behavior research series has pointed time and again to food as this gift item.

Here’s how a mother from Laoag regards food as the ideal gift:

“’Yung pagkain na kilala dito gaya ng pakbet o lauya ang magandang panregalo sa mga kaibigan at bisita. Kasi nga ang pagkain ang nakagawian na nating pambati ’pag may dumarating at umaalis. ’Di ba ’pag may dumating, sabi natin agad: ‘Kumain ka na muna.’ Pag-alis, ganun din. Sinasabi natin: ‘Kumain ka muna.’ o kaya: ‘Nabusog ka ba?’ At saka, ’pag pagkain ang regalo, ’di ka na kailangang mag-isip ng kung anong dapat o kung anong magugustuhan ng reregaluhan.” (The food that’s known here like pakbet or lauya is good for gifting to friends and guests. That’s because we’ve gotten used to using food to welcome our guests and wish them bon voyage when they leave. Isn’t it that when they arrive, we say: “Eat first.” When they leave, it’s the same. We say: “Eat some more” or “Have you eaten enough?” Also, when gifting food, you don’t have to think about what’s OK or ask if they like food as our gift.)

So what makes food an ideal gift? First of all, according to our Laoag mother, it’s acceptable to all, friends as well as guests. Food is also our way of welcoming as well as saying goodbye. Food offered for sharing bonds us. Sharing good food bonds us deeply. And thirdly, when food is given as a gift, there is no such a thing as appropriate or inappropriate. If the receiver is familiar with the given food, the receiver is thankful. If the food is unfamiliar, the receiver is also thankful because it is a gift with the engaging element of surprise.

Market segments

Now, let’s consider your market segments.

You have individuals and corporations. To your company clients you market and sell “giveaways.”

For this market segment, you can go away from a myopic regard for the companies making it up and broaden your definition of what is a “give-away.”

For example, think of a give-away as a gift. Then ask the same probing question, but this time with company clients in mind: “What’s the gift that companies like giving to their own clients from one season to the next, in fact no matter what occasion or day?”

Food baskets (fruits—fresh or preserved, canned fish and meats, cheese and dairies, and the like) will land on the top 10 of any list.

So there’s another opportunity to steady your income stream.

Finally, you are considering to go into the small fast food business. Why don’t you? But stay with what you already have and just broaden where you are in terms of all-season products and market segments.

Stay small and even at a micro level. Scale up only after you’ve gotten the necessary training and practice.

You may want to start where you already are, in baon catering. Study the catering business in particular, instead of a restaurant even if this is just a Jollyjeep or a pares kiosk. Catering can be good preparation to setting up a restaurant.

In catering, you don’t have to forecast your customer flow, your menu preparation and raw material inventory. Risk is therefore minimized.

Keep your questions coming. Send them to me at [email protected].