CHAPTER III RESEARCH METHODOLOGY

This chapter presents the research methodology of the study which consists of the research method used, respondents of the study, instrument used, test of validity and reliability, data gathering procedures, and statistical treatment of data.

Research Method Used This research used the descriptive method that is designed for the researchers to gather information about the present existing condition needed in the field of study. Using this method, the researchers were able to identify, describe, evaluate and analyze the relationships that exist between the variables. Descriptive research, also known as statistical research, describes data and characteristics about the population or phenomenon being studied. Descriptive research answers the questions who, what, where, when, and how. This type of research is also a grouping that includes many particular research methodologies and procedures, such as observations, surveys, self-reports, and tests. The four parameters of research will help us understand how descriptive research in general is similar to, and different from, other types of research. (Khun, 2001, p.69) The researchers chose the descriptive method because the prevailing situation and condition of the subject of the study can be accurately justified and interpreted. This was done through intense observation, unstructured interview and through the questionnaires specially constructed to gather such information.

As used in this research, gathered and treated are variables including the company representative profile, company profile, channels of distribution, functions of physical distribution, financial aspects, problems encountered and possible solutions, and socioeconomic and environmental contributions.

Respondents of the Study The main purpose of the study is to highlight the channels of distribution and financial concerns of RFM Foods Corporation. Hence, the respondents of this study include thirty (30) representatives from the companys list of Directors, including Independent Directors, and Executive Officers. The representatives were chosen because the researchers found them more reliable for this study. In addition, the representatives of the company chosen are those that have been knowledgeable in the context of channels of distribution and financial concerns of the company. The researchers deliberately disseminated copies of questionnaires to the representatives and left the questionnaires for them to have enough time to answer it according to the extent of their knowledge. The researchers gathered back all of the questionnaires that were given to selected company representatives.

Instruments Used The principal research instruments utilized in this study were interview and survey questionnaires. The questionnaires were the major instrument of the research. The questionnaires were prepared based on the data gathered by the researchers given by the RFM Corporation Vice President for Internal Audit, Mr. Ariel A. De Guzman, and Distributions Manager, Mr. Marvis Marfi, the notable data were collected in the worldwide web, and the information and knowledge were congregated through the book

Marketing Concepts and Strategies by Sally Dibb (2005), explaining the concepts and different facts about channels of distribution. The questionnaire is consisted of seven parts. The first part is for the company representative profile. The second part is for the company perspective. The third part focuses on the channels of distribution which includes questions about the channels used, factors to consider in the selection of distribution channels, distribution method used, distribution system, channel arrangements, and motivation of channels. The fourth part concentrated on the functions of physical distribution which includes questions about order processing, inventory management, warehousing, transportation, and feedback. The fifth part directed on the financial aspects which includes questions about issuance of sales invoice/official receipt, maintenance of accounts and records, financial statements and reporting, and tax implications. The sixth part pertained to the problems encountered and possible solutions. The last component relates for the socioeconomic and environmental contributions. Likert scale was used to modify the answers of the respondents to some sections of parts III, and IV, and also of parts V, VI and VII. There are five options that correspond in the scale as follows: 5 Strongly Agree (SA), 4 Agree (A), 3 Undecided (U), 2 Disagree (D), and 1 Strongly Disagree (SD). The respondents were requested to check the space provided for each option.

Test of Validity and Reliability The pretest was conducted to test the validity and reliability of the instrument. Validity deals with relationship of the data obtained to the nature of the variables being studied. It also refers to the degree in which our test or other measuring device is truly measuring what it intends to measure. For the validity of the instruments used, the researchers used the content validity type in which the test represents the essence, topics and areas that the test is designed to measure. Steps taken by the researchers

under the content of validity includes documentary analysis and also consulting an expert is an important part as the researcher consulted the persons knowledgeable and have the expertise with the subject matter. For validation purposes, consultations were made to Dr. Gloria T. Baysa, the thesis adviser and Mr. Ariel De Guzman, Vice President for Internal Audit of RFM Corporation who explained to the researchers the intricacies of the aspects of the study. The knowledge that they shared enlightened the researchers understanding of the topic. In addition, Mr. Marvis Marfi,, Distributions Manager of the company, was asked for his opinion about the questionnaire made who suggested having some revisions on some statements that were redundant and were not in accordance with the practices of the company. The researchers pre-tested a sample of the set survey questionnaires. This was done by conducting an initial survey to at least eight chosen respondents of the company. After the respondents answered, the researchers then asked them to cite the parts of the questionnaire that needs improvement. The researchers even asked for suggestions and corrections from the respondents to ensure that the survey questionnaire is effective. Automatically, these eight respondents were not included as respondents for the study. The Validity Index formula is VI = (PSA PSD) where: PSA = Percentage of Strongly Agree PSD = Percentage of Strongly Disagree

The following ranges of values are used in determining the Validity Index: Range of Values VI > 0.75 0.25 VI 0.75 VI < 0.25 Verbal Interpretation Item is Highly Discriminating Item is Moderately Discriminating Item is Not Discriminating

The difficulty index was obtained by dividing the difference by two. Based on difficulty index, a question was not applicable if it is easy, acceptable if moderately difficult, and revised if difficult. The Difficulty Index formula is (PSA PSD) DI = 2 where: PSA = Percentage of Strongly Agree PSD = Percentage of Strongly Disagree

The following ranges of values are used in determining the Difficulty Index: Range of Values DI > 0.75 0.25 DI 0.75 DI < 0.25 Verbal Interpretation Item is Easy Item is Moderately Difficult Item is Difficult

The single best measure of the effectiveness of an item is its ability to separate respondents who vary in their degree of knowledge of the material tested, and their ability to use it. In testing the validity of the questionnaire, the researchers used the items analysis. It is a procedure by which the difficulty index (DI) and the validity index (VI) of each item in the test were determined. After the items analysis, a decision was

formulated as to which items or questions was to be retained, modified, or discarded and replaced. The researchers first determined the proportion of the number of the respondents who answered strongly agree and the proportion of the number of respondents who answered strongly disagree for each question then get their difference. The difference was the validity index that was used to interpret the results. Most of the results obtained from the interpretation were highly discriminating and moderately discriminating, which signified the validity of the questionnaire. Questions that resulted to a validity index of highly discriminating were retained and those that resulted to moderately discriminating were revised. However, a question that resulted to a validity index that was not discriminating was discarded. Reliability is the consistency of a set of measurements or measuring instrument, often used to describe a test or the degree to which an instrument measures the same way each it is used under the same condition with the same subjects. The researchers, through the use of single-administration established the reliability test. The results were then correlated through the use of Split-Half Reliability Method or the Subdivided Test of Reliability. The total set of items was divided into two halves, from the odd-numbered to even-numbered question, and the scores on the halves were correlated to obtain an estimate of reliability. The halves can be considered approximation to alternate forms. According to Salvador, 2008, the formula used for Split-Half Method is the Pearson r Coefficient. Pearson Product-Moment Correlation Coefficient, the most common statistical concept called correlation coefficient is used to measure reliability, which was employed to the study. The summation of all values was substituted for the given formula below;

where: x y = independent variable (odd-numbered items) = dependent variable (even-numbered items)

xy = the summation of the products of x and y x y = the summation of x = the summation of y

x2 = the square of the summation of x y2 = the square of the summation of y n = the number of respondents.

The result using the Pearson r Coefficient was 0.86, a high correlation. This correlation coefficient has been the basis for the judgment of the reliability of the questionnaire. This value is then used as the values for r in the split-half method to determine the reliability of the entire instrument. The Spearmans brown prophecy formula is shown: Spearmans Brown Prophecy Formula

rsb =

2r 1+r

where: rsb = split-half reliability coefficient r = reliability from original computation

The following categorization was used to determine the extent of reliability of the test: An r from 0.00 to 0.20 denotes negligible correlation An r from 0.21 to 0.40 denotes low or slight correlation An r from 0.41 to 0.70 denotes marked or moderate relationship An r from 0.71 to 0.90 denotes high relationship An r from 0.91 to 0.99 denotes very high relationship An r from 1.00 denotes perfect correlation Using the Spearman-Brown Prophecy formula resulted to coefficient correlation, a very high relationship interpretation since the rsb resulted to 0.92. The coefficient signified the overall reliability and effectiveness of the questionnaire for the study.

Data Gathering Procedures The primary stage of the data gathering procedure pertains to the accumulation of information. In gathering significant information and in constructing the questionnaire, the researchers visited libraries such as Ninoy Aquino Learning Resource Center and the National Library where theses, related prior studies and books on channels of distribution were used to get hold of information. Other information was acquired through the internet and observations in the business premises. An unstructured interview was conducted with Mr. Ariel De Guzman, Vice President for Internal Audit of RFM Corporation who gave us valuable bits of information which helped us in having a good grasp of our topic. In this interview, the researchers hope that those questions that are not tackled by the questionnaires will be gathered from using the interview. The researchers personally visited the RFM Corporation and gave the survey questionnaire to the thirty (30) company representatives and simultaneously conducted

unstructured interviews to some of the respondents and conducted observations on the business premises. Ample time was given to the respondents to answer the questionnaires. The analysis and interpretation of data were made according to the formulated problem. The results were computed and tabularized according to the frequency of items checked by the contributors of data, the respondents. After data tabulation results were interpreted using various statistical tools. The result of the technique used in the data gathering helped the researchers in arriving at their interpretation of the study. With its surveys result, the researchers put up such data to come up to their conclusions and recommendations.

Statistical Treatment of Data After the data were gathered from the self-administered questionnaire, all of these data were coded, tallied and tabulated to facilitate the presentation and interpretation of results. The foregoing statistical tools were used: 1. Frequency and Percentage The frequency and percentage distributions were used by the researchers to classify the respondents according to profile such as age, gender, civil status, highest educational attainment, position in the company, and number of years in present position. Also, they were used to identify the company perspective of RFM Corporation according to the nature of business, years of its operations, approximate number of employees, coverage areas of products, and products being offered. The frequency also presented the actual response of the respondents to specific items in the questionnaire. On the other hand, percentage of those items was computed by dividing it by the total number of respondents who participated in the survey.

The formula used in the application of this technique is: % = ( f / n) x 100 where: % = percentage f = frequency n = total number of respondents 2. Ranking Ranking is a descriptive measure to describe numerical data in addition to percentage. This was used to determine the standing of each variable from highest to lowest with respect to the total number of frequencies and weighted means. The Rank 1 is the variable with the highest frequency. Rank for the variable with the same frequency:

R1 + R2 R = 2 where: R = rank R1 = rank of the first frequency R2 = rank of the next frequency.

3. Weighted Mean Another technique used by the researchers in the study was the weighted mean. The weighted mean was used by the researchers to determine the average responses of the different options provided in the various parts of the survey questionnaires. This method was used in conjunction with the Likert Scale. The weighted or arithmetic mean of a list of numbers is the sum of all the members of the list divided by the number of items in the list. The arithmetic mean is what the students called average. The formula for the weighted mean is: fw x = n where: x = weighted mean f = frequency n = total sample size or total number of respondents w = weight of each score fw = the sum of all the products of f and w 4. Analysis of Variance (ANOVA) It was used to determine the significant difference between the perceptions of the respondents. It is also called the F-test. The analysis of variance (ANOVA) is a method for dividing the variation observed into different parts, each part assignable to a known source, cause, or factor. The ANOVA was developed by R.A. Fisher and reported by him in 1923. Simply stated, it is used when we wish to test the significance of the difference between two or more means obtained from independent samples. The one way F-test factor ANOVA was used because there is only one factor being studied as independent variable.

The following formulas were used to compute for the F-test ratio: a. Sum of Squares within:

SSt=X t
2

(Xt)2 n

where :

SSt = total sum of squares X2t = total sum of x2 (Xt)2= square of total sum of x n = total number of samples b. Sum of Square between: SSb=( X Xt)2 n where: SSb = sum of square between X = mean of any group Xt= mean of total distribution n = total number of sample c. Sum of Square total:

SSt=SSb SSw
where: SSt= sum of square total SSb = sum of square between SSw= sum of square within

d. Degrees of Freedom: dfb = k-1 dfw = nt k where: dfb = degrees of freedom between dfw = degrees of freedom within k = number of groups nt = number of scores in all groups combined e. Mean Square:

MSb=
where:

SSb dfb

MSb = mean square between SSb = sum of square between dfb = degrees of freedom between

MSw=
where:

SSw dfw

MSw = mean square within SSw= sum of square within dfw = degrees of freedom within f. F ratio:

F=
where:

MSb MSw

F = F-test ratio MSb= mean square between MSw = mean square within

After computing the F-test ratio value, decision as to whether accept or reject the stated null hypothesis is based on the decision rule below. Reject hypothesis if the computed value is greater than the tabular value, accept if otherwise. 5. Likert Scale The Likert Scale was used to determine the weight factor for each level of perception. The following arbitrary values and their corresponding equivalents were used in the study. WEIGHT 5 4 3 2 1 VERBAL INTERPRETATION Strongly Agree Agree Undecided Disagree Strongly Disagree STATISTICAL LIMIT 4.51- 5.00 3.51- 4.50 2.51- 3.50 1.51- 2.50 1.00- 1.50