Marketing Strategies of Local Café

Quantitative Research

Submitted by:

Burcio, Princess Shaira A.

Buslig, Jenalyn B.

Lapangan, Mariejo T.

Segoma, Arnie Jade V.

Submitted to:

Mrs. Shiela B. Esteban

 June 2022

CHAPTER 1

INTRODUCTION

This chapter presents the background of the study, conceptual framework, research questions,

scope and delimitation and definition of terms.

Background of the Study

With globalization, the business environment is growing more complex, and building a successful

marketing communications (MC) strategy has become an important aspect of company development initiatives.

Organizations employ marketing communications, according to Tram Thai (2018), to engage with a diverse

spectrum of clients by meeting their various demands. Companies must create a suitable and efficient marketing

communications mix in order for their brands to be recognized and differentiated in today's competitive

business environment, particularly in the product retail sector.

Business survival is an issue for small businesses. In the second quarter of 2015, 234,000 businesses

started up in the United States, while 213,000 businesses failed (Small Business Administration [SBA] Office

of Advocacy, 2017a). In the state of Arkansas, there were 6,437 establishments with fewer than 100 employees

(United States [U.S.] Census Bureau, 2016). Coffee shops (on-premise brewing) belong to the same North

American Industry Classification System (NAICS) description code (722515) as snacks and nonalcoholic

beverage bars (U.S. Census Bureau, 2017).

Failure is an issue for small businesses globally (Hyder & Lussier, 2016). Business failure is the

termination of participation in an undertaking because it has not met the minimum threshold for economic

survival envisaged by the business owner (Fang He, Sirén, Singh, Solomon, & von Krogh, 2018; Hsu, Wiklund,

& Cotton, 2017). Some small business owners lack knowledge of business administration, including marketing

strategies and technology, to survive in a small business (Alford & Page, 2015; Lotfizadeh & Shamsi, 2015;

Nguyen, Newby, & Macaulay, 2015).

There is no documentation from government agencies unique to the closure of coffee shops. However,

Starbucks, the largest coffee shop company, has closed 443 stores throughout the company's history: 240 stores

in 2009, 42 in 2010, and 161 in 2011 (Knoema, 2016). Scholars have asked whether a marketing plan
incorporating an element of personal branding, perseverance, practice, and coproduction may assist owner-

managers in surviving in small businesses (Resnick, Cheng, Simpson, & Lourenço, 2016). The status of coffee

shops in the Philippines is becoming low in terms of its customers’ satisfaction, due to the escalating number of

coffee shops around having similar business marketing strategies that resulted to poor customer relation (Barlan

& Leoncio, 2013). Many coffee shops are opening in the city due to increase of business opportunity in the area

in Tabuk City Kalinga. The challenge is becoming unique as compared to the other business offering the same

kind of product became a problem.(Cranston, 2014; Villarreiz, 2012). Moreover, Smith and Hu (2013),

consider areas like bad marketing strategy, not meeting customer expectation, poor customer experience and

lack of customer satisfaction, as part of the problem that every coffee shop business is experiencing.

Every business has the goal of becoming successful. Every business has different strategies to become

successful. Some of the businesses use some uniqueness that could gain some customers. Some café shops have

unique tables and chairs that could attract customers. They also use some garnishes for their foods and designs

for their coffee so that it looks unique and interesting. In that case, they employ strategies based on the

appearance and design of their establishment and products. Even though they have some competitors, they still

manage to run a unique strategy for them to be successful in their business. Also, in boutiques to gain more

customers, they have a lower price but good quality than normal, so the customers will choose them even

though they have some competitors.

Marketing strategies are an important factor for successful business. By understanding how marketing

should be used to get a profitable business and build a significant image, an entrepreneur can generate suitable

strategies to achieve their own target. Hence, in this study, the researcher would like to determine the level of

success of the business as perceived by the owner in terms of customer service relations and the promotional

activities of the business owners of coffee shops in Tabuk City to gain customers. Furthermore, the purpose of

this study is to provide café shop owners with marketing strategies to sustain business operations.

Understanding how to market the café shop business effectively can increase the ability of the café shop to

survive.
Conceptual Framework

This study is anchored in the 8Ps marketing mix theory. Goldsmith (1999) developed the 8Ps of

marketing mix theory. Goldsmith determined productivity (and quality), or offering a good deal for the

customer, could set a brand apart from its competitors. Goldsmith emphasized the importance of the 8Ps of the

marketing mix to carry marketing theory and practice into an era of competitive advantage. The crux of

Goldsmith’s argument for the 8Ps' relevance was the need for managers to create marketing strategies which

featured productivity alongside McCarthy’s (1960) traditional 4Ps (product, price, promotion, and place).

Booms and Bitner (1981) added personnel, physical evidence, and process to form the 7Ps. Goldsmith added

productivity to the 7Ps to form an innovative marketing mix, the 8Ps. Mukherjee and Shivani (2016) argued

that the traditional marketing mix elements of product, price, place, and promotion were inadequate in

achieving the marketing objectives of services. Furthermore, Pomering (2017) suggested that small business

owners who use the marketing mix could benefit by successfully adapting to a changing, dynamic marketplace

and achieving a competitive advantage.

The marketing mix enables company to make profitable marketing decision. These decisions

assist a business in two ways: developing its strength and limiting its weakness, improves its market

competitiveness and adaptability. Thus, it helps to increase the level of success in a business.

Paradigm of the study:

Independent variable Dependent variable

Local Café -Customer service relations

- Promotional activity

Local Café is considered as the independent variable while its dependent variables consist the customer

service relation and promotional activity which stated 8P’s mix marketing theory of Goldsmith (1996-2017).

Research survey questionnaire will be used to identify the influence of marketing strategy to the success of the

business.

Research Questions

1. What are the promotional activities of the business owners to gain customers?
 2. What is the level of success of the business perceived by the owner in terms of customer service

relations?

3. Is there a significant relationship between customer service relation and promotional activity?

Scope and Delimitation

This research will be focusing on knowing the level of success of the cafe business as perceived by the

owner in terms of customer service relations. Moreover, it determines the promotional activities of the cafe

owners to gain customers who are located here in Tabuk City, Kalinga. In this research, questionnaires will be

utilized to collect quantitative data, and the survey will be used to provide insight into the data acquired from

the cafe owners.

Definition of Terms

Strategies - are a plan of action or policy designed to achieve a major or overall aim.

Promotional activities - are any effort made by a business to communicate with potential customers.

Marketing - is the action or business of promoting and selling products or services, including market research

and advertising.

Entrepreneur - is a person who organizes and operates a business or businesses, taking on greater than normal

financial risks in order to do so.

Coproduction - is the production of a recording, theatrical work, television program, etc. jointly with another or

others.

Success- the accomplishment of an aim or purpose.

Competitors - an organization engaged in commercial or economic competition with others.

SME - small-to-medium enterprise.

 CHAPTER II

METHODOLOGY

This chapter presents the research design, locale and population of the study, data gathering tool, data

gathering procedure, treatment of data, and data analysis.

Research Design

This study will use correlational research design. The design intends to describe the relationship

between the success of customer service relations and the promotional activity.

Locale and Population of Study

The researchers will conduct this study in Tabuk City, Kalinga. Hence, we use a quota sampling

procedure wherein researchers will only have 30 respondents who will be involved in the study.

Data Gathering Tool

A survey questionnaire was used as a tool to gather the needed data. The survey is used to understand

the relationship of the customer service relation and promotional activity. The survey questionnaire was based

on the

Data Gathering Procedure

The researchers asked permission from the teacher-in-charge for them to conduct their study. The

researchers will prepare enough questionnaires depending on the number of respondents to accommodate all the

café owners in Tabuk City. The prepared letter of consent will be delivered to the respondents personally by the

researchers. The researchers will explain the details to help the respondents accomplish the questionnaires. The

questionnaires will be retrieved on the same day after the questionnaires have been answered. The researchers

will transfer the data gathered from the respondents to the table or possible data tools that will be used in

presenting our data. They will analyze and interpret the results through the use of the most appropriate

statistical procedure.

Treatment of Data

The following scale success of the business perceived by the owner in terms of customer service

relations will use:

Scale Limit Description Symbol

 4 3.26-4.00 Very Successful VS

3 2.51-3.25 Moderate Successful MS

2 1.76-2.50 Fairly Successful FS

1 1.00- 1.75 Not Successful NS

Correlation Coefficient (r) Value Indication

Between ± 0.8 to ± 1.0 High correlation

Between ± 0.6 to ± 0.79 Moderately high correlation

Between ± 0.4 to ± 0.59 Moderate correlation

Between ± 0.2 to ± 0.39 Low correlation

Between ± 0.1 to ± 0.19 Negligible correlation

Data Analysis

The following statistical tool will be used to analyze the gathered data:

Frequency count: This tool will be used to determine the marketing strategy used by café owners.

Weighted Mean: This tool will be used to determine the level of success of a café business in terms of customer

service relations.

Pearson r: This tool will be used to determine the relationship of success of business in terms of customer

service relations and promotional activity.

 CHAPTER 3

RESULT AND DISCUSSION

-This chapter of the study indicates the findings, analysis in the interpretations of data.

Table 1. Promotional activities of the business owners to gain customers

YES RANK

1.Using social media as a platform to promote your business and 28 1

products.

2. Using sale promotion. 18 3

3. Using technique “Buy one! Get one”. 13 5

4. Giving free products and sample giveaways. 10 6

5. Giving incentives to repeat/ loyal customers to increase customer’s 16 4

retention.

6. Throwing a contest for promotion. 8 7

7. Doing direct marketing. 26 2

8. Using direct mail promoting. 10 6

9. Promoting your product by making publicity in radio or television. 3 8

10. Posting your products by giving free samples and giveaways. 8 7

In this table, it presents the findings of the study regarding the promotional activities of the business

owners to gain customers. The results shows that the number one item is the highest rank

promotional activities of the business owners to gain customers, which indicates that using social

media as a platform to promote a business and products as evidenced by the frequency count of 28.

Furthermore, it means that using social media as a platform activities of the business owners to gain

customers is their most common strategy to encourage their customers. The results of the findings is

asserted to the findings of (Bakator et al. 2018) that the use of social media is so crucial and

advantageous in business as it serves as a platform to encourage customers. Also in the study of

 (Dordevic et al. 2018) affirmed that repeated advertising on a social media is a necessity when

positioning local and global brands. Hence, using social media is a big help for the business owners

to promote their products and gain customers.

Among the 10 indicators, 3 obtained the highest frequency count of 28, 26, and18 answered the

strategy of the business owners to gain customers. These are “Using social media as a platform to promote

your business and products, doing direct marketing, and using sale promotion,” it shows that these are the

most common and effective promotional activities that the business owners do in order to gain customers.

The result is corroborated in the study of (Cockalo 2015) that doing direct marketing allows them to target

specific groups of customers with tailored messages. By taking the time to research and identify the

customers who are most likely to need or want the products and services, they can focus in their marketing

efforts where they have the highest chance of achieving results. As well as using sale promotion, in the

study of (Bakator et al.2018) suggested that sale promotion allow potential customers to try something

new, with low risk. Raises awareness: When they run ads supporting their sales promotion, more customers

will see the business, and in increasing brand awareness.Hence, the 3 indicators which obtained the highest

frequency count is the business owners most effective to use in order to gain customers.

On the contrary, among the 10 indicators, 3 obtained the lowest frequency count of 3, 8, and 10.

These are “Promoting your product by making publicity in radio or television, posting your products by

giving free samples and giveaways, giving free products and sample giveaways, and using direct mail

promoting”. This means that business owners does not usually use these strategies in promoting their

business or these are not effective and not important to use these strategies in order to gain customers.

Moreover, it affirmed in the study of (Dordevic et al.) that the fact that TV adverts are short, expensive, do

not always portray the product or service in the best light, and take a lot of effort to create. TV advertising

can be expensive to produce, and ads are often too short to portray the product in the best or clearest light.

Likewise with posting products by giving free samples and giveaways, it is affirmed in the study of (Yang,
 2009) that this strategy which is giving freebies don’t always work the way the business owners want, they

should put a strain on a tight budget that could have been used elsewhere to market the product or service.

Furthermore, according to the study of (Griman, 2007) that using direct mail promoting has low response

rates: direct marketing response rates tend to be around 1-3 per cent. When the business owner reach a

consumer who isn't interested in their products of services, it wastes money and they are likely to find it

irritating. Hence, according to the results using these 3 strategies is not that effective to use to the business

owners as a promotional activities in order to gain customers.

Table 2. Level of success of the business perceived by the owner in terms of customer service relations.

4 3 2 1 WM D

1. Our café is visually appearing to make our 15 13 2 0 3.43 VS

customers experience lively. (60) (39) (4) (0)

2. Our café gives the best and unforgettable 19 9 2 0 3.57 VS

moments of our customers. (76) (27) (4) (0)

3.Our café corporate strategy gives 15 12 3 0 3.4 VS

importance to accustomed needs. (60) (36) (6) (0)

4.Our café corporate strategy gives 18 11 1 0 3.57 VS

importance to accustomed needs. (72) (33) (2) (0)

5. Our café gives responsive and accurate 13 17 0 0 3.43 VS

knowledgeable about the issues I was (52) (51) (0) (0)

experiencing.

6. Our café accommodate all complains and 19 10 1 0 3.6 VS

addressed immediately to resolve the (76) (30) (2) (0)

problem.

7. Our café gives an excellent products and 23 6 1 0 3.73 VS

services to our customers. (92) (18) (2) (0)

8. Our café products present to the customers 25 5 0 0 3.83 VS

healthy and clean. (100 (15) (0) (0)

 )

9. Our café staffs treat our customers well. 25 4 1 0 3.8 VS

(100 (12) (2) (0)

10. Our café is perfectly control the financial 15 10 5 0 3.33 VS

stability of our business. (60) (30) (10) (0)

AVERAGE WEIGTHED MEAN 3.57 VS

Table 3 : Correlational of customer service relation and promotional activity.

Column 1 Column 2
Promotional activities 1
Level of success of the business perceived by
the owner in terms of customer service relations -0.379238215 1
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