Chapter I

The Problem and its Background

Introduction

Every successful business enterprise aims at meeting the needs of customers,

striking the balance between the profit making and customer satisfaction especially as

the customer base of restaurants. Without customers, restaurants will automatically

fail. Restaurants who attract and meet the needs of the customers must understand

what customer want. Applications of effective marketing mix strategies in most cases

compensates for the problem face by the business and the effect of poor restaurant

management.

  Marketing strategy has become important for organization to remain in

competitive market environment and become stronger. Marketing strategy is also a

method by which a firm attempts to reach its target markets. It starts with market

research developing vision about the market, selecting target market strategies, design

positioning strategies, setting objectives and implementing the market programmes to

meet the value requirements of the target markets (Mustapha 2013). For the creation

and implementation of marketing strategies, marketing mix strategy is a suitable tool.

The element of it are known as marketing tactics comprises of 4 P’s namely product

price, promotion and place (Jerome McCarthy). Marketing strategy should be centered

on the key concept that customer satisfaction is the main goal.

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  Restaurants are retail establishments that serve prepared food to customer they

can be also take out establishments and free delivery service (Mackenzie and

Chan,2009). Marketing restaurant will be more successful if one will understand what is

important in a customers when selecting restaurant. Restaurant owners should

strengthen their competitive position to seek effective marketing strategies to improve

profitability and exceed competitors’ strategies and performance (Desai, 2013).

Objectives of the Study

The objective of this study is to explore profitability base on the marketing strategies

used by the restaurants in Paniqui, Tarlac. The research question was: How marketing

mix strategy affects the restaurants in terms of profitability?

Significance of the Study

Others and researcher on the aspects such as the company can able to generate

its business properly with regard to the product quality, setting price, promotional and

distribution aspects of the restaurant that will move on parallel with changing

customers’ needs and wants. Besides, the finding of this study will be used similar

studies in the future. This research can contribute a lot by the efforts made by the

restaurant for the fulfillment of customer satisfaction through the provision of

appropriate product and service to the customers. The researcher may also acquire

knowledge about the way of conducting a research with identified problems and

contribute explanations for studies.

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Scope and Delimitation of the Study

The study will focus on the restaurants located on Paniqui, Tarlac. The

participants of the study will be managers and employees of the restaurant. The study

will examine the effects of marketing mix strategy on small enterprise focusing on

restaurants.

Definition of Terms

Marketing mix- refers to the set of actions, or tactics, that a company uses to promote

its brand or product in the market. The 4Ps make up a typical marketing mix - Price,

Product,

Promotion and Place.

Place mix- the process of moving products from the producer to the intended user is

called place. In other words, it is how your product is bought and where it is bought.

This movement could be through a combination of intermediaries such as distributors,

wholesalers and retailers.

Restaurant- an eatery, is a business which prepares and serves food and drinks to

customers in exchange for money.

Price mix- is the value of the product determined by the producers. Price mix includes

the decisions as to: Price level to be adopted; discount to be offered; and, terms of

credit to be allowed to customers

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Product mix- also known as product assortment, refers to the total number of product

lines that a company offers to its customers. For example, a small company may sell

multiple lines of products.

Promotional mix- a specific combination of promotional methods used for one product

or a family of products. Elements of a promotion mix may include print or broadcast

advertising, direct marketing, personal selling, point of sale displays, and/or

merchandising.

Chapter II

Review of Related Literatures and Studies

Related Literature

Kusum L. Ailawadi, Scott A. Neslin, Karen Gedenk (2001) Pursuing the Value-

Conscious Consumer: Store Brands Versus National Brand Promotions. The objective of

this article is to determine whether national brand promotions and store brands attract

the same value-conscious consumers, which would aggravate channel conflict between

manufacturers and retailers. The authors identify psychographic and demographic traits

that potentially drive usage of store brands and national brand promotions. They then

develop a framework and structural equation model to study the association of these

traits with store brand and national brand promotion usage. The authors find that

though demographics do not influence these behaviors directly, they have significant

associations with psychographic characteristics and therefore are useful for market

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targeting. Most important, usage of store brands and usage of promotions, particularly

out-of-store promotions, are associated with different psychographics. Store brand use

correlates mainly with traits related to economic benefits and costs, whereas the use of

out-of-store promotions is associated mainly with traits related to hedonic benefits and

costs. These differences result in four well-defined and identifiable consumer segments:

deal-focused consumers, store brand-focused consumers, deal and store brand users

(use-all), and nonusers of both store brands and deals (use-none). Therefore,

manufacturers and retailers have the opportunity to either avoid each other or compete

head to head, depending on which segment they target.

This article and the present study have a similarity because it also talks about

brands and brand promotions. But, its difference is that the present study don’t focus

on brand.

On the article “ Does the price of your product affect constumer satisfation” of Alex on

in September 28,2016 states that the pricing strategy is one of the most

important aspects of business.Most people would select the more expensive product as

the better one, even if it isn’t. The pricing strategy of offering a more expensive product

than competitors, is often referred to as price-quality signaling. Setting a higher

price than your competitors’, is meant to signal that your product is of better

quality.Luxury brands, from manufacturers of Swiss watches to boutique fashion

houses, have used this strategy very effectively for decades, earning a reputation for

quality not just because of quality itself, but because of pricing that reflects quality.

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 On this article, it talks about the impact of price on costumer satisfaction which

is connected on the present study. That there are consumers who chose to have

expensive one because they have their own belief.

“Marketing Strategies: Customer Satisfaction” 23rd March, 2015  by Ukessays.

Competitive advantage is an organization's ability to perform in one or more ways that

competitors will not and cannot match (Kotler, 2000) and is realized by the organization's

marketing strategy, the implementation of this strategy and the context in which

competition unfolds. The target consumers will be the core and center of the

organization's marketing strategy. In the 1950s, framework such as the marketing mix

was developed to make the most of market demand. The 4 Ps, product, price, place and

promotion were use to describe the levers that if used appropriately could lead to an

increase in company's profitability. The strategy to strengthen the relationship between

the needs and wants of the user and the products and services offered by the

organization is better known as the marketing mix. This mix incorporates four elements,

namely, products, price, place and promotion. To put in another way, a typical marketing

mix consists of product or service offering at a price, targeting a customer segment in

certain place and a set of modalities to reach the target customer and promotion to tell

the potential customer about the availability of the offering (McCarthy, 1978). The 4 Ps

represent the sellers' view of the marketing mix variables available to influence buyers

perspective, each marketing tool is designed to deliver customer benefits. Lauterborn

(1990) suggested that the sellers 4 Ps corresponds to the customers 4Cs product

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corresponds with customer needs and wants, price responds with cost to the customer,

place responds with convenience and promotion corresponds with communication.

On this article it talks about how competitive the environment in terms of

running a business so they need to have a strategies. It is similar on the present study

because it also talks about blending the marketing mix strategy. But, focusing on a

effects on restaurants.

The term "marketing mix" became popularized after Neil H. Borden published his

1964 article, The Concept of the Marketing Mix. Borden began using the term in his

teaching in the late 1940's after James Culliton had described the marketing manager as

a "mixer of ingredients". The ingredients in Borden's marketing mix included

productplanning, pricing, branding, distribution channels, personal selling, advertising, p

romotions, packaging, display, servicing, physical handling, and fact finding and analysis.

E. JeromeMcCarthy later grouped these ingredients into the four categories that today

are known asthe 4 P's of marketing. The marketing mix is a model of creating and

implementing marketing strategies. It stresses the blending of various factors in such a

way that both organizational and consumer objectives are attained. They must

understand the wants and needs of the market customer then use thesemix elements in

constructing and formulating appropriate marketing strategies and plans that will

satisfy these wants.

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 On this article says that the business must understand the needs and wants of

the consumer to meet their satisfactions. The present study also connected on that to

be able to generate the business properly.

Sales promotion is a mega business in today's competitive world for shopping

malls. Sales promotion on customer satisfaction is prepared with tremendous amount of

research and effort to remain in the subconscious mind for long. Anselmsson (2006),

have developed and validates a conceptualization of shopping mall satisfaction based on

field studies in Sweden. He had observed that Customer satisfaction with a shopping

centre may be viewed as an individual's emotional reaction to personal evaluation of

the total set of experiences encountered at the shopping centre. Also, customer

interactions with shopping centre establishments involve a variety of different activities.

Researcher had taken 8 factors to find out the customer satisfaction. Furthermore, this

study had also investigated whether sources of satisfaction differ in importance with

respect to gender and age, generally two important variables for retail segmentation.

The result was focused on number of characteristics of shopping malls in comparison of

customer satisfaction. Researcher had found that Selection was the most important

factor of customer satisfaction

On this, it talks about sales promotion which is one of the p’s of the marketing

mix strategy that is the present study. Sales promotion must also need to give an

attention base on the article.

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 The marketing mix strategy must blend together to be able to have an effective

outcome on a business according to the articles that mentioned above. And if the

managers know the needs and wants of costumers, it will be a great advantage on the

running of a business.

Related Studies

Dereje Alelign, Lecturer conducted a research about ” The Impact of Marketing

Mix on Customer Satisfaction” June, 2014. This study is aimed to explore the impact of

marketing mix elements(product, price, promotion, and place) on customer satisfaction.

The findings show that marketing mix elements have impact on customer satisfaction.

All the independent variables are positively and directly related to customer satisfaction.

The relationship between marketing mix and customer satisfaction is significant. The

company should revisit the controllable marketing mix elements to satisfy the customer.

And also they are expected to invest more on attracting new customers and retaining

the existed ones with regard to marketing mix to increase customer satisfaction.

This is a little similar to the present study because it both discussed the

relationship between the marketing mix and customer satisfaction. It showed how the

organization affect the whole thing in terms of or using a marketing mix tool. Its

difference is that, the study that has been conducted used or focused on a softdrink

company hence the present research will focus on restaurants.

Mehta and Maniam (2002) undertook an exploratory study on marketing

determinants of customers' attitudes towards selecting a restaurant. Various factors

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such as service, product, location, physical, promotion, price, and image attributes were

rated and analyzed on importance. The study utilized a self-administered questionnaire

containing close-ended questions to a random sample of people. The findings of this

exploratory study supports that customers find food quality, ambience factors, image,

and friendly staff important in selecting a fine dining restaurant. The business sector

wants availability of rooms for special functions, seminars, and banquets, while the

leisure segment wants discounts, buffets, and prices less than 30 dollars per person. The

rankings of the mean attributes based on mean averages slightly vary for leisure

occasions and business occasions. Business occasions rank the attributes of importance

in the following order: service, physical attributes, image, product attributes, location,

price, and promotion, while leisure rankings are: service, physical attributes, product

attributes, image, promotion, location, and price. The overall factors based upon the

means follow in order of importance: quality/flavor and taste of food, courteous,

responsive, friendly staff, smoking/non-smoking sections, atmosphere/surrounding-cozy

and relaxed, and overall image and reputation.

This is similar to the present study because it also talks about the restaurant and

how effective their strategy in running a business and its effect on the customers.

The study of Mohammed T. Nuseir’and Hilda Madanat about the “Role of

marketing strategy “ has an overall positive and negative impact on costumers’

satisfaction and loyalty. It highlights that customer expectation with regards to product

quality, price and product accessibility are managed by communication techniques using

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advertising agents. The results show that all four aspects of marketing mix are equally

important and any imbalance among them cn damage overall results.

This is similar to present study because it discussed about the 4p’s of marketing

mix strategy and it showed the progress of an organization after blending all the tools

on marketing.

Gona, Mohammed, and Tanko, (2008) examined marketing strategies and

profitability analysis of restaurants in Sokoto metropolis, Nigeria. The study was

centered on the four marketing mix factors, namely, nature of the product (food meal),

pricing, placement and promotional activities employed by the food meal marketers to

capture more customers. The study revealed thatpreparing very delicious meal was

ranked first by 88.5 percent of the respondents. This suggested that the marketers were

aware about the need to cook very delicious meal in order to draw more customers.

Treating customers well was ranked second by 84.6 percent of the respondents.

According to the marketers, inability to be polite and friendly to the customers can

deprive one from having/maintaining customers. The use of signboard has been ranked

third by 78.9 percent of the respondents aimed at creating enough publicity for the

product (food meal). Distributing food to the customers’ location was also a marketing

mix strategy employed by 42 percent of the marketers. This they do in order to respond

to the growth in competition in the industry. Selling food at a cheaper rate was ranked

fifth as a marketing strategy by the respondents. 17.3 percent of the marketers

employed this strategy, although some of the marketers did not use this strategy with

the view that this can affect customers’ perception about the quality of their food in

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terms of taste. Selling food on credit was ranked sixth as marketing strategy indicated by

11.5 percent of the respondents. According to the marketers that employ this strategy,

most of their customers are wage earners who depend largely on their monthly salaries

for feeding. Amongst the marketers, only 6 percent employed advertisement as a

marketing strategy. Although advertisement stimulates demand by communicating

persuasive messages about location of the restaurant and brands of food cooked,

majority of the marketers do not employ this strategy because it goes with huge

additional costs.

This is study is similar to the present study because it talks about the profitability

of the business using the marketing mix strategy. This study used a quantitative in

gathering data.

The purpose of this paper is to evaluate the effects of marketing strategy on

customer loyalty; and the mediating role of consumer perceived value in the Nigerian oil

and gas companies. To achieve these objectives, an empirical study was conducted via

the administration of 550 self-administered copies of questionnaire to a randomly

customers of ten (10) Oil and Gas Companies, maintained from a business-to-business

national service provider. Using the framework from Lee and Green (2011), data

collected was subjected to regression and correlation analysis. The findings also indicate

partial mediation of consumer perceived value, between marketing strategies and

customer loyalty. The model provides predictive implications on improved consumer

perceived value and customer loyalty, given the activities of some factors manifesting

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marketing strategies. Hence, to improve both consumer’s perceived value and customer

loyalty, oil and gas companies could control their marketing strategies.

In this study, it evaluates the effect of marketing mix strategy on customer

loyalty whereas the present study will evaluate the effect of marketing mix strategy on

the performance of a restaurant.

Studies mentioned above have their similar independent variable that is the

marketing mix strategy. On how it can affect on business, customer loyalty and in

customer satisfaction in terms of product, price, place and promotion.

Chapter III

Methods of the Study and Sources of Data

The Research Design

This study adapted a mixed method approach. Mixed method design as a

procedure for collecting, analysing, and mixing both quantitative and qualitative data in

a single day to answer the research questions. This study employed some quantitative

method to answer the research questions and use qualitative information of the

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business with regard to the marketing mix. Qualitative gathered to be able to know the

condition of the business by using semi-structured interview.

The Population of the Study

The target population for this research defined to include the managers and

employees of the restaurants in the Philippines. While the accessible population are the

managers and employees of restaurants in Paniqui, Tarlac.

Sample design

To select a sample for this study, the researchers will use a non-random

sampling to obtain a sample population. Purposive sampling as a category of non-

random sampling and it is use to filter sample population whose data is complete,

accessible and also available.

Methods of Gathering Data

The researchers will use a primary data for the study, a semi structured interview to

know the information of the restaurant. Employing semistructured interviews allowed

the collection of rich data and a precise way of retrieving insights from participants.

With the provision of the owner of the restaurant, the researcher will get the list of

employee names, job position, and contact information such as email addresses and

phone numbers. By that, the researcher will send an invitation to participate in a study.

The interview guide was considered appropriate for this study since there was need to

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gain an in-depth understanding of the impact of marketing mix strategy on their

business.

Instrumentation

The researchers will first contact the respondents via telephone to explain the

purpose of the study and will schedule the interview to be able to know how marketing

mix strategy affects the the restaurant. In the the preparation of the instrument, the

requirements in the designing of good data collection instrument will consider. The

questionnaire was patterned after the study of “Marketing Stategies of Profitability on

small independent restaurant” of Wanda Jeykins.

Statistical Treatment

Responses to the questionnaires by the managers and employees will analyze

with the data requirements of the study. Frequency count, mean, rank and percent will

be considered to know if there is a correlation between the independent and dependent

variables.

References

Devra Gartenstein . Generation of Profits Vs. Meeting Customer Needs. Retrieved from

http://smallbusiness.chron.com/generation-profits-vs-meeting-

customer-needs-49051.html

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Adesola M.A, Oyewale (Jul. - Aug. 2013).Impact of marketing strategy on business

performance in Oluyole Local Government, Ibadan, Nigeria -Journal of Business and

Management. Retrieved

fromhttps://www.researchgate.net/publication/313430008_Impact_of_Marketing_Strateg

y_on_Business_Performance_A_Study_of_Selected_Small_and_Medium_Enterprises_S

mes_In_Oluyole_Local_Government_Ibadan_Nigeria

Kusum L. Ailawadi, Scott A. Neslin, Karen Gedenk (2001) Pursuing the

Value-Conscious Consumer: Store Brands Versus National Brand

Promotions. Retrieved from

http://journals.ama.org/doi/abs/10.1509/jmkg.65.1.71.18132?

code=amma-site&journalCode=jmkg

Alex (September 28,2016) Does the price of your product affect constumer satisfation”

of Retrieved from https://www.retently.com/blog/price-product-affect-

customer-satisfaction/

“Marketing Strategies: Customer Satisfaction” 23rd March, 2015  by Ukessays. Retrieved

from https://www.ukessays.com/essays/business/impact-of-marketing-

strategies-on-customer-satisfaction-business-essay.php

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Anselmsson (2006) conceptualization of shopping mall satisfaction.

Retrieved from

https://www.google.com.ph/amp/s/www.researchgate.net/publication/2

38318186_Sources_of_customer_satisfaction_with_shopping_malls_A_c

omparative_study_of_different_customer_segments/amp

Dereje Alelign, (June 2014) Retrieved from

http://ijar.org.in/stuff/issues/v1-i1/v1-i1-a005.pdf

Mehta and Maniam (2002) Marketing determinants of customers'

attitudes Retrieved from

http://ageconsearch.umn.edu/bitstream/211928/2/Umeze-Marketing

%20Mix%20Strategies%20and%20Entrepreneurial%20Performance-

724.pdf

Gona, Mohammed, and Tanko, (2008) marketing strategies and

profitability analysis of restaurants. Retrieved from

https://www.ajol.info/index.php/joafss/article/view/60282

Lee and Green (2011) effects of marketing strategy on customer

loyalty Retrieved from http://article.aascit.org/file/pdf/9170771.pdf

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Questionnaire  

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 1. What are the marketing strategies used to retain current
customers and gain new
customers?
2. As a small business, what are the barriers to your business
and marketing
strategies?
3. What are the unique characteristics of your company’s brand
that guide marketing
strategies?
4. How does your company position its brand for competitive
advantage and
profitability?
5. How do you measure the success or failure of your marketing
strategies?
6. How do you conduct your marketing profitability analysis?
7. What marketing performance tools have you implemented to
track trends and
calibrate profitability?
8. What are your strategies to help maximize profitability?

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