POLYTECHNIC UNIVERSITY OF THE PHILIPPINES

EFFECTS OF EXPANSION OF CONVENIENCE STORES

IN BARANGAYS IN RODRIGUEZ RIZAL

An Undergraduate Thesis
Presented to the College of Accountancy and Finance
Polytechnic University of the Philippines
Sta. Mesa, Manila

In Partial Fulfillment of the Requirements for the

Degree Bachelor of Science in Accountancy

by

ARRIOLA, ALWIN
FELIX, JEFFERSON
LLABRES, LEO
TROY
MAQUILING, JAMES ROBERT
SIDA, EMMANUEL

September 2018
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Chapter 1

THE PROBLEM AND ITS BACKGROUND

Introduction

Convenience stores are popping up everywhere in the country. And there’s a

good reason why – more Filipinos are buying at convenience stores, which are

typically open 24 hours.

Convenience stores are small retail stores that stocks a range of everyday items

such as groceries, snack foods, soft-drinks, tobacco products, over-the-counter

drugs, toiletries, newspapers, magazines, and etc. Convenience stores are typically

located alongside a busy road, in an urban area, near a railway, or in a transport

terminals, but nowadays, convenience stores can also be seen in rural areas,

providing products and services that previously was only accessible in urban areas.

These expansions provided changes in communities encompassing the convenience

stores.

Background of the Study

A convenience store first opened on 1927 in Dallas after an operator realizes

customers sometimes need bread, milk, and other things after grocery stores close.

Eventually, concept spreads to other company locations and convenience stores

spread out to other parts of United States, then to the world.

Focusing in the Philippines, there are major convenience stores emerged

throughout the years, and these are 7-Eleven, Ministop, Lawson, and AlfaMart.
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In 1984, Philippine Seven Corporation (PSC) opened its first store, 7 – Eleven,

and became the pioneer of convenience store in the Philippines. Store numbers are

predicted to reach 2000 outlets in the next couple of years and some suggest the

expansion over the next decade could see 10,000 7-Eleven stores adorning the retail

landscape. MiniStop followed after 16 years on August 2000 and established 100

stores within 4 years. As of 2016, it has now reached the 500 store mark. Other

competitors are AlphaMart (AlfaMart), a convenience store originated from Jakarta,

Indonesia and was brought here through SM Group, and Lawsons, which sits second

place behind 7 –Eleven in Japan and operated by Puregold.

Nowadays, along with the constructions of tall buildings, convenience stores

start to pop-up on every corner, offering convenience and accessibility to passers-by

and stop-and-shop commuters. These are more favored by the Filipino people

especially with its feature of being open 24/7, or 24 hours a day and 7 days a week.

According to Kantar Worldpanel, there has been a 45% increase in convenience store

purchases from January 2014 to January 2015, and indicates that these are the

fastest growing retail channel in the country.

Moreover, the establishments of convenience stores seem to be the cause for

the changes in nearby communities’ way of living in rural or provincial areas, like Rizal.

The researchers therefore aims to know the effects of the expansion of convenience

stores: like 7- Eleven, MiniStop, Lawson, and AlphaMart, in barangays in Rodriguez,

Rizal.
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Theoretical Framework

This particular study is based on the theories Relationship, Hierarchy of Needs,

and Theory of Urbanization.

Relationship Marketing — according to Morgan, is establishing, developing, and

maintaining successful relational exchanges, constitutes a major shift in marketing

theory and practice. After conceptualizing relationship marketing and its ten forms,

the authors theorize that successful relationship marketing requires relationship

commitment and trust. Relationship Marketing needs to have a high level of trust, a

long-term relationship orientation, intensive information exchange, and a high level of

mutual cooperation.

A prime aim of relationship marketing can be said to that of locking in high-value

customers through identifying customers, serving their needs sensibly, using

customer information tactically and overcoming customer dissatisfaction. In

relationship marketing, managing customer expectations and their experience of

dealing with a company focuses as much on the emotional experience as on rational

customer satisfaction and encourages feedback of information.

One of the aims of relationship marketing is to create customer satisfaction.

Cayabat (2016) argue that the concept of customer satisfaction has gained

importance in the last decade. It is argued that customer satisfaction leads to

customer loyalty and loyalty in turn leads to more profitability, increase market share

and growth for the business. Customer satisfaction increases sales of the company,

moreover satisfied customers are fewer prices sensitive and they are willing to pay a
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higher price as compared to the competitors. In addition, a company’s future human

capital performance is also affected by customer satisfaction.

Maslow’s Theory of Human Motivation identified five ascending levels of goal

attainment. The resulting hierarchy he then published went as follows: Physiological

Needs; Safety Needs; Love and Belonging Needs; Esteem Needs; and lastly, Self-

Actualization Needs. Maslow argued that these levels explained humans’ needs and

motivators; once our base physiological needs — like air, food, shelter, and sleep —

are fulfilled, we move on to the next level in the pyramid chart until we eventually

reach Self-Actualization.

Customers can be linked on the 2 layers of the hierarchy, in the physiological

and safety.

Physiological needs are the physical requirements for human survival, such as

food, water, clothing, shelter, etc. If these requirements are not met, the human body

cannot function properly and will ultimately fail. Physiological needs are thought to be

the most important; they should be met first. This is the first and basic need on the

hierarchy of needs. Without them, the other needs cannot follow up. Needs are the

basic reason or the minimum requirements consumers look in a product or service. It

must be addressed first or else satisfaction of motivation wants becomes irrelevant.

Once a person's physiological needs are relatively satisfied, their safety needs

take precedence and dominate behavior. People have a basic need for security, such

as the need to feel safe and free from harm. In the absence of economic safety – due

to economic crisis and lack of work opportunities – these safety needs manifest
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themselves in ways such as a preference for job security, grievance procedures for

protecting the individual from unilateral authority, savings accounts, insurance

policies, disability accommodations, etc. Safety and security needs are about keeping

us safe from harm. These include shelter job security, health, and safe environments.

If a person does not feel safe in an environment, they will seek to find safety before

they attempt to meet any higher level of survival, but the need for safety is not as

important as basic physiological needs.

Theory of Urbanization implies agglomeration of people and firms, which

reduces production costs. Convenience stores is included in the firms that expands

their reach towards rural areas and make their products accessible. This also gives

chance for firms to share a network of information. More numbers of producers and

suppliers also lowers costs and increases variety through competition and

specialization. The presence of these signifies development in the communities where

the firms are located. Urbanization also gives way for entrepreneurs to make more

profits as customer’s population density increases in line with the increasing number

of firms.
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