Price Competitiveness and Proximity affecting the Sales of the Small Scale

Business.

A RESEARCH PAPER PRESENTED IN THE SENIOR HIGH SCHOOL

DEPARTMENT OF MONTESSORI PROFESSIONAL COLLEGE OF

ASIA- CALAMVA BRANCH

Submitted to :

Ramirez, Abegail C.

Cayanan, Carrize

Arsenio, Rommel

ABM M1

Submitted to :

Mr. Kim [Link]

Practical Research II Adviser

In Partial Fulfillment of the Requirements in Practical Research

JANUARY 2021
 APPROVAL SHEET

This thesis proposal entitled “Price Competitiveness and Proximity

Affecting the Sales of the Small Scale Business prepared and submitted by

Ramirex, Abegail C., Cayanan, Carizze and Arsenio, Rommel in partial fulfillment

of the requirements for the subject Practical Research 2 has been examined and is

recommended for approval and acceptance.

MR. KIM B. ABADILLA

Adviser

PANEL OF EXAMINERS

Approved by the Committee on Oral Examination with a rating of

_______% on ______________________ 2021.

_________________________
Panelist

_______________________ _________________________
Panelist Panelist

Accepted and approved in partial fulfillment of the requirements for

the subject Practical Research 2.

_____________________
Date
ABSTRACT

This study was conducted to provide information regarding on how price competitiveness and

promixity of a business is affecting the sales of the Small Scale Business. This study will focus

on giving techniques and information to those business owners who are struggling in setting a

price in their products and to help them in decision-making in choosing proximity or a perfect

location for a specific business.

In conclusion, this study is all about on Small Scale Business that is affected by it's price and

proximity itself.
ACKNOWLEDGEMENT

First and foremost, the researchers would like to express their heartwarming thank to our

Almighty God for giving them strength, patience and wisdom that they need to successfully

finished the research.

This study would not have done without the researchers who are very determine to complete this

research. They inserted not only in financial matters but also their moral, intellectual, and

ispiritual capacity. There are no words to express the researchers happiness and appreciation. But

above all, the researchers would like to say thankyou to those who appreciated their efforts to

completed this study.

The researchers would like to thank their parents nor guardians for giving them a great

opportunity to go to school and reached this time to comply this research. Researchers would

also like to send how thankful they are to those people especially their friends and classmates

who have been there though ups and downs. Those people who believe and support each other to

completed this study.

Lastly, to all professors and school administrators of Montessori Professional College of Asia-

Calamba Branch who made this research possible. Research would like to send their thank you to

their teachers who never give up on helping them to provide knowledge and wisdom. A heartfelt

appreciation to school itself for giving such a great opportunity to experience this study.

DEDICATION
This study is dedicated to our loving and responsible parents and guardians who raised and guide

us to be the person we are today. Our parents who have been with us in every steps of the way,

stay with us through ups and downs. We dedicated this research to our teacher especially our

subject teacher who helped us and teach us to finish this research.

Finally, this thesis is dedicated to our Almighty God who give us strenght and good health while

conducting this study.

TABLE OF COTENTS
APPROVAL

SHEET………………………………………………………………………………….i

ABSTRACT………………………………………………………………………………………

……..ii

ACKNOWLEDGEMENT………………………………………………………………………

…….iii

CHAPTER 1 INTRODUCTION

Background of the

Study…………………………………………………………………………..12

Statement of the Problem…………………………………………………………………………

17

Assumption of the Study……………………………………………………………………………

19

Theoretical

Framework………………………………………………………………………………21

Conceptual Framework……………………………..

……………………………………………….26

Significance of the study…………………………..

…………………………………………………27

Scope and Limitation…………………………..……………………………………..

……………….28
 • Scope

• Limitation

Definition of

Terms………………………………………………………………………………………28

CHAPTER 2

Review of Related Literature……………………………………………………………………29

Review of Related Study…………………………..………………………………………………

46

CHAPTER 3 METHODOLOGY

Population and Sample…………………………………………………………………………..49

CHAPTER 4 DATA

ANALYSIS……………………………………………………………50

CHAPTER 5 SUMMARY, CONCLUSIONX RECOMMENDATION

• Summary……………………………………………………………………………………

61

• Conclusion………………………………………………………………………………….

62
 • Recommendation……………………………………………………………………….63

• Questionnaire……………………………………………………………………….…...64

List of Tables
Table 1………………………………………………………………50
Table 2………………………………………………………………51
Table 3………………………………………………………………52
Table 4………………………………………………………………53
Table 5………………………………………………………………54
Table 6………………………………………………………………55
Table 7………………………………………………………………56
Table 8………………………………………………………………57
Table 9………………………………………………………………58
Table 10……………………………………………………………..59
 List of Figures
Figure 1……………………………………………………………50
Figure 2……………………………………………………………51
Figure 3……………………………………………………………52
Figure 4……………………………………………………………53
Figure 5……………………………………………………………54
Figure 6……………………………………………………………55
Figure 7……………………………………………………………56
Figure 8……………………………………………………………57
Figure 9……………………………………………………………58
Figure 10………………………………………………………….59
 Abegail C. Ramirez

Brgy. Bañadero Calamba City

09504623113

abegailramirez.g12@[Link]

• Personal Information

Age : 18 years old

Date of Birth : October 21,2002

Gender : Female

Civil Status : Single

Nationality : Filipino

• Educational Attainment

Elementary : Jose Rizal Memorial School

: JP. Rizal St. Calamba City

Secondary : Calamba Integrated School

 : Brgy. Bañadero Calamba City

Carizze A. Cayanan

Brgy. II Tibag Calamba City

09514045473

carizzecayanan.12@[Link]

Personal Information

Age: 17 years old

Date of Birth: July 08 ,2003

Gender: Female

Civil Status: Single

Nationality: Filipino
 Educational Attainment

Elementary: Jose Rizal Memorial School

:JP Rizal St. Calamba City

Secondary: Calamba Bayside Integrated School

:Brgy. Palingon Calamba City

Price Competitiveness and Proximity Affecting the Sales of Small Scale Business

According to Jim Chappelow (2019) Competitive pricing is the process of selecting strategic

price points to best take advantage of a product or service based market relative to competition.

This pricing method is used more often by businesses selling similar products since services can

vary from business to business, while the attributes of a product remain similar. This type of

pricing strategy is generally used once a price for a product or service has reached a level of

equilibrium, which occurs when a product has been on the market for a long time and there are

many substitutes for the product.

As stated by Will Kenton [Link] (2019) A price ceiling is the mandated maximum amount a seller

is allowed to charge for a product or service. Usually set by law, price ceilings are typically

applied only to staples such as food and energy products when such goods become unaffordable

to regular consumers. Some areas have rent ceilings to protect renters from rapidly climbing

rates on residences.

A price ceiling is essentially a type of price control. Price ceilings can be advantageous in

allowing essentials to be affordable, at least temporarily. However, economists question how

beneficial such ceilings are in the long run.

According to B. Taylor (2006) A price floor is the lowest legal price a commodity can be sold at.

Price floors are used by the government to prevent prices from being too low. The most common

price floor is the minimum wage--the minimum price that can be payed for labor. Price floors are

also used often in agriculture to try to protect farmers.

For a price floor to be effective, it must be set above the equilibrium price. If it's not above

equilibrium, then the market won't sell below equilibrium and the price floor will be irrelevant.

As said by Will Kenton (2019) The manufacturer’s suggested retail price (MSRP) is the price a

product's producer recommends it be sold for in retail stores. The MSRP is also referred to as the

list price by many retailers.

Every retail product can have an MSRP, though they are frequently used with automobiles. Other

higher-priced goods, such as appliances and electronics, also have an MSRP as well.

The MSRP was designed to keep prices at the same level from store to store. But retailers may

not use this price, and consumers may not always pay the MSRP when they make purchases.

Items may be sold for a lower price so a company can reasonably move inventory off shelves,

especially in a sluggish economy.

As proposed by Business Case Studies (2019) The location of a business is the place where it is

situated. There are a number of factors that need to be considered in choosing a location for a

business. One of the earliest decisions any entrepreneur has to make is where to locate his or her

business. In order to do this, he or she has to make a careful assessment of costs. The ideal

location would be one where costs are minimised.

According to Bernhardt et. al (1995) Sales are the critical outcome as they produce the revenue

necessary for firm to continue in business. As we have seen, sales are likely to occur only if the
initial consumer analysis was connect and if to marketing mix matches are consumer decision

process.

As stated byDavid Sarokin; Reviewed by Michelle Seidel, B. (2019) A small scale enterprise, or

more simply, a small business, is one marked by a limited number of employees and a limited

flow of finances and materials.

According to Matthew Toren (2019) A great small business always starts out as an idea, but you

have to transform that idea into action. That’s where many individuals can start to feel

overwhelmed. It’s understandable to freeze up at the deluge of things that are required to get a

business started, but getting going is actually easier than you might think.

Like any big goal, if you start by breaking it down into smaller tasks, you’ll be able to tackle

enough of the actions necessary to get started. Here are six ways to break down the process and

simplify getting started with your own small business.

As stated by David Ingram; Reviewed by Michelle Seidel, B. (2019) Small Scale Business have

characteristics, first Lower Revenue and Profitability, small-scale business revenue is generally

lower than companies that operate on a larger scale. The Small Business Administration

classifies small businesses as companies that bring in less than a specific amount of revenue,

depending on the business type. The maximum revenue allowance for the small business

designation is set at $21.5 million per year for service businesses.

Second, Smaller Teams of Employees, small-scale businesses employ smaller teams of

employees than companies that operate on larger scales. The smallest businesses are run entirely

by single individuals or small teams. A larger small-scale business can often get away with

employing fewer than one hundred employees, depending on the business type.
Lastly,Small Market Area, small-scale businesses serve a much smaller area than corporations or

larger private businesses. The smallest-scale businesses serve single communities, such as a

convenience store in a rural township. The very definition of small-scale prevents these

companies from serving areas much larger than a local area, since growing beyond that would

increase the scale of a small business's operations and push it into a new classification.

As stated by Brad Sugars (2008) One of the biggest challenges for any business is pricing. This

applies not only to a startup, but also to well-established businesses, especially those in lower-

margin, highly competitive industries. The common theme with most pricing issues is risk: risk

setting prices too high and you may push potential customers away; risk setting prices too low

and you cut profits. According to him one of the problem in setting a price is not understanding

the difference between margin and markup --Margin is always based on sales price. Markup is

always based on cost.

As proposed by Accounting Tools (2019) The difference between margin and markup is that

margin is sales minus the cost of goods sold, while markup is the the amount by which the cost

of a product is increased in order to derive the selling price.

According to Boundless Marketing, price is important to marketers, because it represents

marketers assessment of the volume customers see in the product or service and are willing to

pay for a product or service. The other elements of the marketing pay for a product or service.

The other element of the marketing mix, product, place, and promotion may seem to more

glamorous than price and thus get more attention, but determining the price of a product or

service is actually one of the most important management decision. While product, place, and

promotion affects costs, price in the only element than affects revenue, sales and thus a business

profit. Price can lead to a firms survival or demise.

Thomas Oppong (2018) The best location can increase brand visibility. Location can also

influence a business’s ability to market itself, the competition it faces from businesses, the total

cost of operation, taxes the business owner has to pay and the regulations they must follow.

Location also matters for marketing.

The importance of location goes beyond your business’ physical location. Easy access is a huge

advantage Basically, you just want to be wherever your customers are and make it as convenient

as possible to visit you. Location is of utmost importance especially to businesses that sell goods

or services directly to customers at brick-and-mortar establishments.

The respondents this study are the owner small business. They were selected for the reason being

that the study is all about of how the small scale business affects by its own price and proximity.

The respondents are located at Brgy. Tibag Calamba, City. We choosed this as our location for

the reason that there are so many small scale business in this location.

This study will focus by determining of how the small scale business affects by its own price

competitiveness and it's proximity.

Statement of the Problem

The researcher's objective is to know wether the price competitiveness affects the sales of the

Small Scale Businesses. Aside from that, the researchers would like to know wether the

proximity or location itself affects the sales.

The researcher's would like to discuss the following:

1. Is the price competitiveness affects the sales of Small Scale Business?

2. Is consediring the price makes your sale higher?

3. Is the price competitiveness help you to have a higher profit?

4. As the business owner, do you think setting higher price wil give you a higher sales?

5. In this time of pandemic, do you think price is still the most important factor that your

customers considering in buying your products?

6. Is the proximity or location of the business affects the sales?

7. Is considering proximity or location of the business makes your sale higher?

8. Is the proximity or location help you fo have a higher profit?

9. As the business owner, do you think being close to your customer can give you a higher sales?

10. During on this time of covid-19. Stay at home is one of the protocol of the government, do

you think being close to your customer will still help you and your business to earn high sales?

Assumption of the Study

H0 There is a significant relationship between sales of the small business and price.

H1 There is no significant relationship between sales of the small business and price.

H0 There is a significant relationship between sales of the small business and proximity.

H1 There is no significant relationship between sales of the small business and proximity.
According to Boundless Marketing, price is important to marketers, because it represents

marketers assessment of the volume customers see in the product or service and are willing to

pay for a product or service. The other elements of the marketing pay for a product or service.

The other element of the marketing mix, product, place, and promotion may seem to more

glamorous than price and thus get more attention, but determining the price of a product or

service is actually one of the most important management decision. While product, place, and

promotion affects costs, price in the only element than affects revenue, sales and thus a business

profit. Price can lead to a firms survival or demise.

As proposed by Jaky Daly (2017) Price is important. People hear it all the time from the

consumer. Our prices are too high Customer hear it from sales representative. Yet, in both tough

economies and robust economies, the reality is that price is not the sales driver it’s thought to be

the quality.

Think Apple. Think Starbucks. Think Rolex. Think Harley Davidson. Each of these companies is

doing well on both the top line (sales) and the bottom line (profits). Regardless of the state of the

economy, they consistently offer products at prices higher than their competitors and their clients

continue to loyally support them with their business. Model such masters and reap the benefits

from understanding that price does not matter.

As proposed by Thomas Oppong (2018) The best location can increase brand visibility. Location

can also influence a business’s ability to market itself, the competition it faces from businesses,

the total cost of operation, taxes the business owner has to pay and the regulations they must

follow. Location also matters for marketing. The importance of location goes beyond your

business’ physical [Link] access is a huge advantage

Basically, you just want to be wherever your customers are and make it as convenient as possible

to visit you. Location is of utmost importance especially to businesses that sell goods or services

directly to customers at brick-and-mortar establishments. As proposed by William Craig (2015)

The thing about a physical location is that it caters to a very specific and certainly very small,

cross section of the populace, its becoming move and more obvious that flashy store fronts snd

strategic physical locations are becoming less and less important for the average company that

does business online. The fact is, a well-built website, or social network campaign, or

thoroughly syndicated blog post, has the potential to reach many more interested party than store

front of office building ever will.

Theoretical Framework

The effect of Competition to Pricing Strategy

The research will be based on the theory on The Effect of Competition to Pricing Strategy . The

proponent of this theory are Dana Griffin et,al. It was introduced during 2019.

Which states that when two products have similar core features, but are produced by different

companies, competition results. Competition-based pricing strategy involves setting your prices

based on your competitors’ prices rather than on your own cost and profit objectives. Before

pricing your product, research your competition to figure out where you fit in or what to change.

This theory is aligned with the study by means of determining how the price competitiveness

affects the sales of a particular business.

According to Dana Griffin el,at, (2019) from the theory of The Effect of Competition on Pricing

Strategy.

The price environment determines the level of control of the owner have over competitive
pricing. Price environments are market-controlled, company-controlled or government

controlled. A market-controlled environment shows a higher level of competition, similar

products and little price control by individual companies.

A company-controlled environment shows moderate competition, unique goods and services,

and a lot of price control by individual firms. In a government-controlled environment, the

government takes input from related companies and then determines prices; public bus fare or

state university tuition are examples.

Competitive pricing relies on three product styles: lasting distinctiveness, low cross elasticity and

perishable distinctiveness. Products with lasting distinctiveness are ones that will always stand

out from the crowd, such as medicines protected by patent laws. Low cross elasticity means the

demand for the product will rise, such as with a software upgrade. Products with perishable

distinctiveness are unique in the beginning, but fall to medium distinctiveness after a period of

time and would include popular technology products. Determine Current Price Range. Every

product has a price range; look at your competitors pricing to find the range for your product. To

decide where you fit on the current price range, or if you should choose something outside it,

compare your product to those of your competitors.

Customers use the existing prices as a guide to what is normal or considered a good deal, the

owner should be prepared to handle the consequences of pricing outside the standard [Link]

products with the most features can charge the highest price, do some research of competitors are

selling first. Core features of all the products should be similar, if not the same, the owner need

something special to raise the price of his/her product. If, instead, the business would rather be

the cheapest, let that his/her special feature and leave everything else out. The owner should
figure out what market his/her competitors are targeting, and pick a different one. Even though

the products are similar, the owner can charge more if his/her design for a specific group.

Certain markets will always pay higher prices, or are willing to pay for the perceived exclusivity,

the owner should take advantage of that in his/her marketing strategy. The price relationship to

his/her competitor falls into one of four categories says Laurus Nobilis at Biz Development.

These are pure parity, dynamic parity, premium pricing strategy or discount pricing strategy. In

pure parity, yprice always equals to his/her competitor: they set the price and he/she match it.

Dynamic parity happens when he/she pick a competitor and keep the gap between their price and

his/her [Link] pricing is higher than the competitors, but the owner gain a position of

higher perceived benefits. In discount pricing, he/she always keep the price cheaper than that of

competitors. Discount pricing is most commonly used by generic or store brands.

Central Place Theory

The research will be based on the theory of Central Place Theory. The proponent of this theory

Walter Christaller. This theory was proposed during 1933.

Which states that Central Place theory, in geography, and element of location theory concerning

the size and distribution of central places or settlement within a system. Central Place theory

attempts to illustrate how settlements locate in relation to one another, the amount of market area

a central place can control, and why some central places function as hamlets, villages, towns, or

cities.

This theory is sligned with the study of how the location of the business is important in buying

goods or services.
The German geogprapher Walter Christaller introduced central places theory in his book entitled

Centrak Places in Southern Germany (1933). The primary purpose of a settlement or market

town, according to central places theory, is the provision of goods and services for surrounding

market area. Such towns are centrally located and may be called central places. Settlements that

provide more goods and services than do other places are called higher order places. Lower order

places have a small market areas and provide goods and services that are purchased more

frequently than high order goods and services. Highrr order places are more widely distributed

and fewer in number than lower order places.

Christaller's theory assumes that central places are distributed over a uniform plane of constant

population density and purchasing power. Movement accross the plane is uniformly easy in any

direction, transportation costs vary linealy, and consumers actrationally to minimize

transportation costs by visiting the nearest location offering the desired good or servie.

The determining factor in the location of any central places is the threshold, which comprises the

smallest market area necessary for the goods and services to be economically viable. Once a

threshold has been established, the central place will seen to expand its market area until the

range, the maximum distance consumer will travel to purchase goods or services is reached.

Since the threshold snd range define the market area of central place, market areas for group of

central places offering the same order of goods and services will each an equal distance in all

directions in circular fashion.

Conceptual Framework High- Order Lower- Order
Government Controlled Central Places Central Places

Company Market Foot Traffic Community

Controlled Controlled
Price Ceiling Price Floor SRP or MSRP

Significance of the Study

To student this study will help the students especially the ABM students because they have

subjects like Fundamental of Accounting, Business Finance and Organizational Management

that are connected in this study. It will help them because this study will tackle some information

and ideas that areconnected with their subjects.

To Teachers it will help the teachers especially the teachers who have subjects about Marketing

because this study will talk about how Marketing works, the strategies in marketing and as a

teacher they can also share it to their students especially those ABM students.

To School Administrators this study will benefit them in giving guidelines and tips on decision

making when to comes to setting ad price for a specific product in their school cafeteria.

To Business Owners it will benefit the business owners because this study will discuss the

strategic pricing, and the right location or place that the business should be tuck in. And as a

business owners it will help them to become more successful business man or woman in the

future.
To Customers this study will help the customers in giving some ideas and information about of

what they should consider in buying goods or products. And also will help them to know if the

price of the product they buy is reasonable or over pricing.

Scope and Limitation

This study aims to investigate the study of price competitiveness. This study will also tackle

about what are the process in decision making in competitive pricing. The different pricing

controlled will be discuss and limited only to the study of price ceiling, price floor and MSRP or

SRP. Proximity will also discuss in this study and how the location itself affect the sales of a

business and the study of high order central placer and low order central places the limitation.

And lastly, this study will focus about the small scale business. How it works, the function of it

and the factors affecting its sales. The study of the small scale business is limited only to the

characteristics of small scale business.

Definition of Terms

Small Scale Business - Sari Sari Store

Respondents - Business owners

Sales - monthly sales

Price - price competitiveness/ competitive pricing

Proximity/ Location - Tibag Calamba City

Pricing Strategy- this is s technique of selecting price on product or service based market relative

competition.

Customers- People who lived in Tibag.

Price Floor-Minimum or Lowest price.₱6.00 is the price floor of vice.

Price Ceiling- Maximum or Highest price. ₱8.00 is the price ceiling of vice.

SRP-Suggested retail price. ₱7.00 is the suggeste retail price of vice.

Review of Related Literature

Strategic Management

Evironmental Competitiveness

According to Dess G. et,al (2004) Managers must consider the competitive environment (also

sometimes reffered to ask the task or industry environment). The nature of competition in an

industry, as well as the profitability of a firm is open more directly influenced by developments

in the competitive environment. The competitive environment consist of many factors that are

particularly relevant to a firms strategy. This include competitors (existing or potential),

customers, and suppliers. Potential competitors may include a supplier considering forward

integration, such as an automobile manufacturing acquiring a rental car company, or a firm in an

entirely new industry introducting a similar product that uses a more efficient technology.

Competitive environment factors that pertain to am industry and affects a firms strategies. Next,

we will discuss key concept analytical techniques that managers should used to assess their

competitive environments. First, we examine Micheal's Porter's five-forces model that illustrates

how this forces can be used to explain an industry's profitability. Second, we discuss how the

five forces are being affected by the capabilities provided by internet technologies. Third, the

address some of the limitation or "caveats" that managers should be familiar we when

conducting industry analysis.

Consumer Behavior Sixth Edition

On Price

According to Bernhardt, [Link] (1995) The price is the amount of money one must pay to obtain

the right to use the product. One can buy ownership of a products, limited usage right. (i,e ; one

can rent or lease the product). Economics often assume thay lower price. However, price

sometimes serves as a signal of quality. A product priced "too low" might be perceived as having

low quality owning expensive items also provides information about the owner. If nothing else, it

indicates that the owners can afford the expensive item. This is a desirable feature to some

consumers. Therefore, setting a price requires a through understanding of thr symbolic role that

price plays for the product and target market in question.

It is important to note that the price of a product is not the same as the cost of the product to the

customers. As described earlier the cost of owning and using an automobile includes insurance,

gasoline, maintenance finance changes, license fees, and parking fees, in addition to the purchase

price. One of the ways that seek to provide customer value is to reduces the nonprice costs of

owning or operating a product. If succesful, the total cost to the customers decreases while the

revenue to the marketer stays the same or even increases.

Consumer Behavior Sixth Edition

On Sales

As proposed by Bernhardt [Link] (1995) sales are a critical outcome as they produce the revenue

neccessary for the firm to continue in business. Therefore, virtually all firms evaluate the success

of their marketing programs in terms of sales. As we have seen, sales are likely to occur only if
the initial consumer analysis was correct and if the marketing mix matches the consumer

decision process.

Consumers Behavior Sixth Edition

On Product

According to Bernhardt [Link] (1995) a product is anything is anything a consumers acquires or

might acquire to meet a perceived need. We use the term product to refer to physical products

and primary services. Thus, an automobile is a product as is a transmission overhaul or a ride in a

taxi. Over 15,000 new products and new versions of existing products are introduced to

supermarkets alone each year. Obviously, many meet the needs of tje target market better than

the competition does.

Consumer Behavior Sixth Edition

On The Competitors

As said by Bernhardt [Link] (1995) It is not possible to anticiple and react customer's needs and

without a complete understanding of consumer behavior. Knowing customers current is

reasonably comolex but can generally be determined by direct marketing research. Companies

expend considerable effort on such research as the following exaole indicated:

USAA, a financial services company, sends questionnares to 500,000 customers every year,

customers are asked about their satisfaction with the firm, future needs, and ideas for new

products. Based in this research, USAA launched a growth and income fund that quickly attacted

$77 million in assets.

International Marketing Ninth Edition

On Price-Quality Relationship

As said by Cateora, P. (1996) Price-Quality Relationship that exits in an industrial buyers

decision. One important dimension of quality is how well a product meets the specific needs of

the buyer. When a product fall short of performance expectations, it poor quality is readily

apparent.

Consumers Behavior Sixth Edition

On Marketing Strategy

According to Bernhardt [Link] (1995) Marketing Strategy, it is not possible to select target markets

without simultaneously formulating a genedal marketing strategy for each segment. A deasive

criterior in selecting target markets is the ability to provide superior value to those market

segment. Since customers value is delivered by the marketing strategy the firm must develop its

general marketing strategy as it evaluates potential target markets.

Marketing Strategy is basically the answer to the question: How will we provide superior

customer value to our target market? The answer to this question requires the formulation of a

consistent marketing mix. The marketing mix is the product, price, communucations,

distribution, and services provided to the target market. It is combination of these elements that

meets customers needs and provides customers value. In Managerial Application 1-1, the Tiger

Sport Energy Bar promise value by offering better taste and a lower price than its competitors.

International Journal of Research in Management, Science & Technology

On Price

International Journal of Research in Management, Science & Technology

According to Faith [Link], (2014) among the four Ps, price is the only income generator and it is

the value attached to a product. Furthermore, price is the amount of money charged for a product

or service. It is the sum of all the values that customers give up in order to gain the benefits of

having or using a product.

As proposed by Bertini [Link], (2012) stressed that businesses should look beyond the mechanics

of just fixing prices they feel is suitable for a product having estimated cost and profit still

relevant but no longer sufficient and recognize that harmonization of the way they generate

revenue can open up opportunities to create additional value. This study therefore has dual

purposes which are to assess the effect of pricing strategies on the purchase of consumer goods

and how the advent of online pricing interferes in the above.

According to Hinterhuber (2008) Value based pricing: Customer value-based pricing uses the

value that a product or service delivers to a segment of customers as the main factor for setting

prices.

According to Munroe (2003)Importance of Price Decisions, pricing a product or service is one of

the vital decisions management makes. Pricing has been viewed as the major pressure point for

managerial decision making hence its importance. Munroe examined the environmental

pressures that allowed for an increased pressure on the importance of pricing. The importance of

pricing can be examined with faster technological progress, proliferation of new products,

increased demand for service, increased global competition, the changing legal environment, and

economic uncertainty.
As proposed by Farese (2003) Mark up pricing: markup is the difference between the the price of

an item and its cost that is generally expressed as a percentage. The whole essence of markup is

for it to cover the expenses of running the business and include the intended profit.

According to Blythe [Link], (2005) Competitors oriented pricing strategy: It is using competitor‘s

price as a starting point for price setting . This is done when companies set prices chiefly on the

basis of what its competitors are charging. Competition based pricing uses anticipated or

observed price levels of competitors as primary source for setting [Link] may seek to keep its

prices lower or higher than competitors because it does not seek a rigid relation between its price

and its own demand. Its main strength is that data is readily available and weakness is that it does

not take the consumer into consideration.

According to Haws [Link], (2006) defined dynamic pricing as a strategy in which prices vary over

time, consumers, and/or circumstances. It can also be referred to as adjusting prices continually

to meet the characteristics and needs of individual customers and situations. Distinguish between

two dynamic pricing models: price posted mechanisms and price-discovery mechanisms. With

price-posted mechanisms, frequent price changes are offered as take or leave prices, that is, the

company is still in charge of setting the price. With price-discovery mechanisms, such as eBay,

Priceline, or similar negotiated approaches, consumers have input into setting the final price.

According to Lamb [Link], (2004,2006) Predatory pricing: This is a pricing policy in which a firm

deliberately charges lower price with the intention of driving out competitors from the market

while remaining the dominant or even monopoly firm in that industry after which it will start the

actions characteristic of a monopoly.

According to Blythe (2005) Sometimes prices are pitched below the cost of production. The

purpose of this is to bankrupt the competition so that the new entrant can take over [Link]

usually favors the consumers since they get so much value for their money.

According to Bearden [Link], (2004,2006) Differential pricing: Differential pricing involves

selling the same product to different buyers under a variety of priceswhich means different prices

are used for different segments. It is the same as discriminatory pricing policy especially when

the cost of production and selling of the product are essentially the same.

According to Kotler [Link] (2008)Psychological pricing: A pricing approach that considers the

psychology of prices and not simply the economics; the price is used to say something about the

product.

As proposed by Blythe (2005) Psychological pricing refers to applying prices that appeal to the

customer‘s emotions.

According to Brassington (2006) Psychological pricing is very much a customer based pricing

method, relying as it does on the consumer‘s emotive responses, subjective assessments and

feelings towards specific purchases. An aspect of this type of pricing is the reference price, it

refers to prices that buyers carry in their mind and refer to when looking at a given product.

According to Farese [Link], (2003) Bundle pricing: Bundle pricing has to do with including several

products in a single package that is sold at a single price.

According to Brassington [Link], (2006) See it as assembling a number of products in a single

package to save the consumer the trouble of searching out and buying each one separately.

In Start Your Own Retail Business and More

According to the staff of Entrepreneur Media Incorporation [Link], (2015) explain how you can get

started in the retail industry, whether you want to start your own specialty food shop, gift shop,

clothing store or kiosk. In this edited excerpt, the authors offer smart advice to help you choose

the best location for your new retail business.

The best location for a brick-and-mortar retail business combines visibility, affordability, and

lease terms you can live with. You need to be where the action is, so deciding where to put your

business is every bit as important as the business you decide to go into.

Take the time to analyze the areas that appeal to you. Study the business and consumer pages to

see where you can find business support services and a growing community of people with

regular incomes and interest in the goods or services you plan to offer.

Type of products and location choice

Another factor that affects site selection is the customer’s view of the goods you sell or the

services you offer. Customers tend to group products into three major categories: convenience,

shopping, and specialty goods.

1. Convenience goods, are usually low-priced, frequently purchased items that require little

selling effort, are bought by habit, and are sold in numerous outlets. Candy bars, newspapers,

cigarettes, and milk are examples. Quantity of traffic is most important to stores handling

convenience goods. The corner of an intersection that offers two traffic streams and a large

window display area is usually a better location than the middle of a block because convenience

goods are often purchased on impulse in easily accessible stores.

If consumers must make a special trip to purchase food and drug items, they'll want the store to be close

to home. Studies show that the majority of people in the central city patronizing these stores shop within
one to five blocks of their homes, and in suburban locations, the majority of customers live within three to

five miles of the stores. For rural locations, the average driving time is 10 minutes, with 20 minutes being

the maximum time customers will travel to a convenience store.

2. Shopping goods, usually have a high unit price, are purchased infrequently, and require an

intensive selling effort. The customer does price and feature comparisons, and products are sold

in selectively franchised outlets. Examples include men’s suits, automobiles, and furniture.

For stores handling shopping goods, the quality of the traffic is important. While convenience

goods are purchased by nearly everyone, certain kinds of shopping goods are purchased only by

segments of shoppers. Moreover, it's sometimes the character of the retail establishment rather

than its type of goods that governs the site selection. For example, a conventional men’s clothing

store generally does best in a downtown location close to a traffic generator like a department

store. On the other hand, a discount menswear store tends to require an accessible highway

location.

In many cases, buyers of shopping goods like to compare the items in several stores by traveling

only a minimum distance. As a result, stores offering complementary items tend to locate close

to one another. Another excellent site for a shopping goods store is next to a department store, or

between two large department stores, where traffic flows between them. Another option is to

locate between a major parking area and a department store.

A retailer dealing in shopping goods can have a much wider trading area than convenience goods

stores. Without a heavily trafficked location, this more expensive type of store can generate its

own traffic. In this case, a location with a low traffic count but easy accessibility from a

residential area is a satisfactory site.

3. Specialty goods, usually have a high price tag, are bought infrequently, and require a special

effort to make the purchase. Precious jewelry, expensive perfume, and rare antiques are in this

merchandise category. Specialty goods are often sought by customers who are already “sold” on

the product, brand, or both. Stores catering to this type of consumer may use isolated locations

because they generate their own consumer traffic. In general, specialty goods retailers should

locate in neighborhoods where the adjacent stores and other establishments are compatible with

their operations.

Retail compatibility

Only the exceptional operation, such as a restaurant or a freestanding discount house, can survive

in isolation. A cluster of stores creates more traffic, exposes more people to your business, and

creates a buying atmosphere that a single store cannot. Customers are attracted by crowds and

like their shopping trips to be social outings.

Having said this, it's critical to select the right community and site for your particular store. Will

the other businesses generate traffic for your store? Or will you be located near operations that

may clash with yours? For example, a children’s store in a service center of hardware stores and

automotive repair businesses doesn't get enough exposure to its target audience to be successful.

According to UKESSAYS (2018) Customers and determination of price is necessary for every

organization. As this both customers and price have a high relation to the demand for products.

Even there is a small increase in price levels it will highly affect the demand for the product and

the organization profit. The price determines what products/services could be produced and in

what quantities. Secondly it determines how to produce and finally whom to produce. The

organization should be cautious while altering the price for the goods and services by changing

the quantity, quality and by providing premiums or discounts, acceptable form. When there is
raise in demand for service will led to increase in prices, which in terms led to concern of public

or governmental activity .There are different ways in which the price of the products is

determined. These are the foremost strategies that business use like Competition based pricing,

Cost-plus pricing, Creaming or skimming, limit pricing, Loss leader, Market-oriented pricing,

Penetration pricing, Price discrimination, Premium pricing, Predatory pricing, Contribution

margin-based pricing, Psychological pricing, Dynamic pricing, Price leadership, Target pricing,

Absorption pricing and Marginal-cost pricing. As their name it explains the method of pricing.

Methods: Pricing was considered has a process towards achievement and to face the competitors

of business. So that organization thinks effects of pricing should be the targeted on returns. What

method of pricing to be adopted. Whether adopted pricing would attract the customer and

maximize the profit of business. Determination of price requires the organization fully focused

on the markets. These strategies should be considered while determining the price for the

product. Price is a highly sensitive factor of an organization. The standard economic analysis of

pricing is based on the customers desire for the product its usually depends up on the income of

the customer and other factors like ethnic origin. There are some consumers may pay high prices,

while others willing to pay only lower prices. Instead of charging same price to all, the

organization decided to charge different price for different customers as it will increase the

business profit. This method of pricing is known as price differentiation. In earlier days sellers of

perishable goods would sell the old products at low price instead of dumping or taking back

home. If the price of competitor product was reduced it is necessary to reduce the price of the

product, as it could create loss of customer and market. The pricing based on the competitors is

competitive based pricing. The simplest method of pricing is cost-plus pricing. It just calculates

cost of producing the product and adds on a percentage of profit to that price. Sacrificing high
sales for gaining higher profit. low volumes at high price. This is suitable for products that have

short life cycles. It skims the profit from the market. It is known as market skimming. A

monopolist set limit price to discourage others entry in to the market. Limit pricing is illegal in

many countries. Psychological pricing strategy the price is designed on the positive

psychological impact on customers. For example, price of the product at £3.95 or £3.99, rather

than £[Link] leadership is an observation that usually one company would be the dominant

competitor among several other companies. Target pricing strategy is calculated to produce a

particular rate of return on investment for a specific volume of production. It is often used by

public utilities and companies with high capital investment.

These methods of pricing all the cost incurred are recovered. This is a form of cost-plus pricing.

The practice of setting the price of a product to equal the extra cost of producing and an extra

unit of output is marginal-cost pricing.

Walden University

Small Business Strategies for Company Profitability and Sustainability

According Leigh Gandy, D. (2015) Small businesses are critical to the health of the United

States economy as they account for approximately 50% of all jobs and 99% of all firms.

According to Researchers at the SBA (2014) defined a small business as a firm with less than

500 employees. Other descriptions of firm size categories include very large (more than 500
employees), large (200 to 500 employees), medium (50 to 200), small (fewer than 50

employees), and micro (fewer than 10 employees)

According to Jones [Link], (2009). Small and medium business enterprises often meet the SBA

definition of small business and include large organizations that do not meet the definition of a

large corporation.

On Small Business

According to Yalapragada [Link], (2011) Small businesses comprise a growing large proportion of

companies in the United States' economy . He found small businesses account for 39% of the

United States' gross national product and create two out of every three new jobs in the economy.

Small businesses have higher employment levels than large businesses for workers over the age

65, disabled, with less 12 education, and from rural areas.

On Small Business

As proposed by Gale [Link], (2013) The small business sector is the fundamental engine of

innovation, jobs, and growth. Researchers at the SBA discovered only around half of all new

small businesses survive 5 years or more and around one-third survive 10 years or more .

Considering there is such a high percentage of small business failure, it is important to examine

strategies contributing to the profitability by the end of the first 5 years of being in business. For

this research study, business success refers to a business with profitability and longevity of 5 or

more years in business.

On Small Business

According to Baptista [Link], (2011) there were 6,162,058 small business establishments in the

United States (U.S. Census Bureau, 2011). They stressed that each time a small business venture
fails there is a loss of jobs, reduced tax revenue for local and federal governments, and

disappointment for stakeholders.

On Small Business

According to Plehn-Dujowich (2010) established that an alarming number of small businesses

fail within the first 5 years of being in business, and the high failure rate has the potential to

affect unemployment and the national economy.

According to Shukla [Link], (2014) expressed the importance of small businesses to innovation,

job creation, economic growth, and United States competitiveness.

On Small Business owner.

According to Atamian [Link], (2010-2011) Small business owners need to understand the necessity

of continuing education in their plans for success. Recommended that small business owners

continue their education through acquiring knowledge and skills from any resources available,

such as SBA, SCORE, Small Business Development Center, trade shows, and degree programs

to increase their success chances. All of these resources and organizations are in place to help

small businesses start-up and sustain; the SBA is a federal agency whose main purpose is to help

Americans start, build, and grow businesses according to its mission statement. The SBA was

founded in 1953 by the federal government to provide low-interest loans to small business

borrowers that would not otherwise have access to credit.

According to Palmer [Link], (2011) sought to discover why small business owners choose

innovation as a strategy of sustainability. Conducted a qualitative study with interviews of seven

owners and managers of independently owned and operated restaurants. Also studied

competition within a market as it relates to sustainability. They showed that small business
owners adopt many innovations in response to moves by competitors. Conversely, noted small

business owners that adopt greater levels of technological sophistication grow more quickly than

similar firms that do not.

Review Related Study

On Pricing strategies and levels and their impact on corporate profitability

Price policy definition is one of the most important decisionsin management asit affects

corporate profitability and market competitiveness. Despite the importance that prices take in

organizations, it appears that this element has not received proper attention by many academics

and marketers since it represents, according to estimates, less than 2% of the papers on leading

journals in the field. Thus, the aim of this study was to propose and test a theoretical model

showing the impacts of pricing policy on corporate profitability. To this end, 150 companies in

the metal-mechanic sector situated in the Northeast of Rio Grande do Sul State, Brazil were

studied, integrating customer value-based pricing strategies, competition-based pricing strategies

and cost-based pricing strategies with price levels(high and low) and performance with respect to

profitability. The resultsindicate that the profitability of the surveyed companies is positively

affected by value-based pricing strategy and high price levels while it is negatively affected by

low price levels. Such findings indicate that pricing policies influence the profitability of

organizations and therefore, a more strategic

look at the pricing process may constitute one aspect that cannot be overlooked by managers

On The Impact of Pricing Strategy on Sales Performance The study examined effect of pricing

strategy on sales performance, a study of Unilever Nigeria Plc. The study employed the survey

design and the purposive sampling technique to select 450 staff across management, senior and

junior level. A well-constructed questionnaire, which was adjudged valid and reliable, was used
for collection of data from the respondents. The data obtained through the administration of the

questionnaires was analyzed using the Pearson correlation analysis.

On Pricing Strategies and Pricing Customer Retention

This Bachelor’s thesis was done under the consent of Airtel (T) Ltd with a major purpose of

finding the correlation between pricing strategies and customer retention. This came about after a

long term observation of customers who used to come in and out of Airtel (T) Ltd heading to

other competitive companies in the Mobile Telecommunications industry. The Major reason for

the shift was discovered to be the Price sensitivity as portrayed by the customers. It was

identified that customers were willing to move to a company that offered mobile services at

slightly lower price. Answers to the questions regarding the study were resolved through

questionnaires that were filed by a number of employees that work for Airtel (T) Ltd who were

involved in the daily running of the company and had a direct touch with the customers. After a

thorough study of the given answers, a conclusion was drawn that there is a positive correlation

between pricing strategies and customer retention and thus in order to retain as many customers

as possible, Airtel needed to come up with better pricingstrategies that will attract as many

customers as possible.

Population and Sample

The respondents of this study are the Small Scale Business that are located in Brgy. Tibag

Calamba City.

Total number of Small Scale Business : 100 stores

We conducted the survey in 50% of the total number of Small Scale Business which is 50 stores.

It is different kind of Small Scale Business, the other is street foods but the major stores are Sari-

Sari stores.

The following questions are answerable by YES or NO. (Small Scale Business Owners)

Table 1: Frequency of those business owners who believes that the price competitiveness affects

the sales of their business.

Options Frequency Percentage

Yes, I believed in that 46 92%

No, I don’t believed in that 4 8%

Total 50 100%
Figure 1:

YES

NO

Table 1 shows the majority (92%) of the respondents believes that the price competitiveness

affects the sales of the Small Scale Business. This may be due that most of the customers

considered the price of the product before buying it. The remaining (8%) of the respondents are

those who don't believes that the sales can be affected by the price competitiveness. Figure 1

illustrates the percentage of those respondents who believes that the price competitiveness within

the business affects the sales.

Table 2
 Options Frequency Percentage

Yes, I believed in that 42 84%

No, I don’t believed in that 8 16%

Total 50 100%

Figure 2:

YES

NO

Table 2 shows the majority (84%) of the respondents considering the price can give a higher

sales of the Small Scale Business. The remaining (16%) of the respondents are those who didn't
considering the price as a way to make higher sales. Figure 2 illustrates the percentage of those

respondents who considered the price to make higher sales.

Table 3:

Options Frequency Percentage

Yes, I believed in that 38 76%

No, I don’t believed in that 12 24%

Total 50 100%

Figure 3:

YES

NO
Table 3 shows that most of the respondents (76%) believes that the price competitiveness can

give them a higher profit. The remaining (24%) are those respondents who didn't believes that

price competitiveness can give them higher profit. Figure 3 illustrates the percentage of those

respondents who believes that price competitiveness can give their business higher profit.

Table 4:

Options Frequency Percentage

Yes, I believed in that 38 76%

No, I don’t believed in that 12 24%

Total 50 100%

Figure 4: f

YES

NO
Table 4 shows that majority (76%) of the respondents thinks that setting higher price can give

them higher sales. The remaining (24%) are the respondents thinks that setting higher price to

their products doesn't give their business higher sales. Figure 4 illustrates the percentage of the

respondents who thinks that setting higher price and give them higher sales.

Table 5:

Options Frequency Percentage

Yes, I believed in that 42 84%

No, I don’t believed in that 8 16%

Total 50 100%

Figure 5 :
 YES

NO

Table 5 shows that majority (84%) of the respondents still believes that despite of Covid-19 price

is the most important factor that their customers considered in buying their products. The

remaining (16%) are those business owners who doesn't considered that price is the most

important factor that their customers consider in buying their products. Figure 5 illustrates the

percentage of the respondents who still believes that the price is the most important factor

despite of pandemic.

Table 6 :

Options Frequency Percentage

Yes, I believed in that 38 76%

No, I don’t believed in that 12 24%

Total 50 100%
 Figure 6 :

YES

NO

Table 6 shows that majority of the respondents (76%) believes that the location of their business

affects the sales itself. This may be because most of their business is located in an area where

houses are close to one another. The remaining (24%) of the respondents states that they don't

believe that the sales can be affected by the proximity or location of the business. The figure 6

illustrates the percentage of those respondents who believes that the location affects the sales of

the Small Scale Business.

Table 7 :
 Options Frequency Percentage

Yes, I believed in that 42 84%

No, I don’t believed in that 16 32%

Total 50 100%

Figure 7:

YES

NO

Table 7 shows that majority of the respondents (84%) considered the proximity to make higher

sales. The remaining (16%) of the respondents who didn't considered the location as a way to
earn higher sales. The figure 7 illustrates the percentage of those respondents who considered the

location to earn higher sales with their business.

Table 8 :

Options Frequency Percentage

Yes, I believed in that 30 60%

No, I don’t believed in that 20 40%

Total 50 100%

Figure 8 :

YES

NO
Table 8 shows the majority (60%) of the respondents who believes that the location of the

business can give them higher profit. The remaining (40%) of the respondents who didn't believe

that considering the location can give them higher profit. Figure 8 illustrates the percentage of

those respondents who considered the location of the business as a way to have higher profit.

Table 9 :

Options Frequency Percentage

Yes, I believed in that 42 84%

No, I don’t believed in that 16 32%

Total 50 100%

Figure 9 :
 YES

NO

Table 9 shows that most of the respondents (84%) believes that the more their business is located

close to their customers the higher chances to have higher sales. The remaining (16%) of the

respondents are those whoe don't believes that the location can be a way to have higher sales.

Figure 9 illustrates the percentage of those respondents who believes that the location of the

business can be a reason to have higher sales.

Table 10 :

Options Frequency Percentage

Yes, I believed in that 42 84%

No, I don’t believed in that 8 16%

Total 50 100%
 Figure 10 :

YES

NO

Table 10 shows that most of the respondents (84%) are those who still believes that despite of

pandemic location of the business is still important when it comes to business. The remaining

(16%) of the respondents are those who believes that the location of the business is not that

important in this time of pandemic. The figure 10 illustrates the percentage of those respondents

who still believes that the location of the business is important despite of pandemic.
Summary

This study was conducted for the purpose of determining how price and proximity of the

business affecting the sale itself. The descriptive method that used in the research was

nomanitive survey technique in gathering data. The questionnaire served as the instrument for

collecting data. 50 Small Scale Businesses that are located at Brgy. Tibag are the respondents.

The survey was conducted during school year 2020-2021.

Conclusion

All the Small Scale Business can be affected by the price competitiveness and proximity

especially when the business is located in neighborhood area.

Recommendations

As a business owner, always set a competitive pricing and choose a perfect location for a specific

business.
Questionnaire

1. Is the price competitiveness affects the sales of Small Scale Business?

2. Is consediring the price makes your sale higher?

3. Is the price competitiveness help you to have a higher profit?

4. As the business owner, do you think setting higher price wil give you a higher sales?

5. In this time of pandemic, do you think price is still the most important factor that your

customers considering in buying your products?

6. Is the proximity or location of the business affects the sales?

7. Is considering proximity or location of the business makes your sale higher?

8. Is the proximity or location help you fo have a higher profit?

9. As the business owner, do you think being close to your customer can give you a higher sales?

10. During on this time of covid-19. Stay at home is one of the protocol of the government, do

you think being close to your customer will still help you and your business to earn high sales?