CHAPTER 1

INTRODUCTION

A business (also called a company, enterprise or firm) is a legally

recognized organization designed to provide goods and/or services to

consumers.1 Business organizations are coming to view knowledge as

their most valuable and strategic resource, and bringing that knowledge

to bear on problems and opportunities as their most important capability.

To uplift competitiveness they must explicitly manage their intellectual

resources and capabilities. To this end, many organizations have initiated

a range of knowledge management projects and programs. The primary

focus of these efforts has been on developing new applications of

information technology to support the digital capture, storage, retrieval

and distribution of an organization's explicitly documented knowledge. A

smaller number of organizations, on the other hand, believe that the most

valuable knowledge is the tacit knowledge existing within peoples' heads,

augmented or shared via interpersonal interaction and social

relationships. To build their intellectual capital, these organizations utilize

"social capital" that develops from people interacting repeatedly over

time. Many are experimenting with new organizational cultures, forms

and reward systems to enhance those social relationships.

1
 The birth of SM in Naga City on May 1, 2009 was realized by the

SM Prime Holdings. It is the Philippines’s largest mall operator which own

and runs world class mall all over the country, publicly listed since 1994.

SM Prime commits to the following mission: To constantly provide

customers with a fresh and world-class mall experience through

innovative and state-of-the-art facilities and services; To undertake wide-

ranging corporate social responsibility initiatives that provide greater

service for customers with special needs, and ensure environmental

sustainability through various programs on energy, water and air

conservation; To be an employer of choice, offering comprehensive

opportunities for career growth and enhancement; To deliver sustainable

long-term growth and increasing shareholder value; and To uphold its role

as a catalyst for economic development.

Its vision statements is ”SM Prime envisions to be a leader in world-

class mall development, committed to deliver the daily needs of millions

by offering a total mall experience and creating a richer, better quality of

life .

SM Prime Holdings, Inc., a part of the SM Group of Companies, is the

largest shopping mall operator in the Philippines.

Back in On October 1958, Henry Sy, Sr. opened the first Shoemart

store, as SM then was called, along Rizal Avenue in downtown Manila

which was later expanded its shoe store chain aroundt the Philippines and

in other countries

2
 The owner is a Chinese-Filipino Henry Sy, Sr., the Philippines' "Retail

King," is the richest man in the country (14th wealthiest person in

Southeast Asia [Forbes, 2006], 74th richest in the Asia and Australia

region [Forbes, 2006], and 355th wealthiest in the world [Forbes, 2007]).

Shoemart, as SM was originally known as, is the Philippines' leader in the

retail industry and comprises of the SM Group of Companies. SM Group, is

a retail giant with 38,600 employees and annual revenues of $1.7 billion.

SETTING OF THE STUDY

Naga City which is at the core of Metro Naga, an unofficial

designation given to 14 municipalities and Naga City administered by the

Metro Naga Development Council covers the entire 2nd district of the

province of Camarines Sur, and part of its 1st, 3rd and 4th districts.

SM Prime President Mr. Hans T. Sy said, "Naga City may be considered as

the nerve center of the Bicol region. It is home to large business

establishments, universities, hotels, and regional government offices. It is

also a transportation hub with the Naga Transport Exchange servicing

almost all of the region’s inter-municipality transportation. Its tourism

industry is highlighted by the presence of the world-class CamSur

Watersports Complex, one of the top tourist destinations in the country

which played host to the 2008 world wakeboarding championship. These

attributes make Naga City an ideal and suitable location for an SM mall.

With much enthusiasm, we will soon open the doors of SM City Naga as

3
the newest member of our continuously expanding world of SM

Supermalls."

SM City Naga is SM Prime Holdings’ 34th supermall and the

company’s first in the Bicol region. It is envisioned to be one of the

landmarks in bustling Naga City, which is Camarines Sur’s center for

trade, commerce, transport, finance, education, and government services.

The mall is located in CBD II, Brgy. Triangulo, Naga City, Camarines Sur,

Philippines. It is the 1st SM Supermall in the Bicol Region and the first SM

Supermall to open this year in 2009. The mall opened the doors to the

public last May 1, 2009.

The new mall has a gross floor area (GFA) of 64,870 square meters

(sqm) and occupies 46,801 sqm of land.It is also the first SM mall opened

this year, and is expected to create approximately 2,000 jobs in the area.

It brings to 34 the total number of SM Prime malls all over the country,

with a combined GFA of 4.4 million sqm. SM City Naga has a leasable area

of 31,398 sqm, 94% of which has already been awarded to various

tenants. The shopping mall’s major tenants are SM Department Store and

SM Supermarket, which will occupy 11,991 sqm and 6,413 sqm of floor

space, respectively.

The 87,959.38-sqm., two-story mall will serve customers in Camarines

Sur, as well as neighboring provinces Camarines Norte, Albay,

Catanduanes, Sorsogon, and Masbate.

4
 The major anchors are namely SM Department Store, SM

Supermarket, SM Cinemas, SM Food Courts and Appliance Center.

The junior anchors are namely ACE Hardware National Bookstore

Watsons Quantum Pizza Hut Starbuck's Coffee Wendy's Toy Kingdom

Goldilocks Mang Inasal Iceblinker South Star Drug Chowking Mister Donut

Dunkin Donuts KFC Reyes Barbeque Executive Optical David's Salon

Jollibee Shakey's Greenwich Max's Restaurant Colonial Grill World of Fun

Red Ribbon Bigg's DinerBeanbag Coffee Gerry's Grill McDonald's Molino

Grill Graceland Ideal Vision Astroplus Let's Face It Bench Penshoppe

Forme Kamiseta Maldita Bibingkinitan Globe Telecom Smart Telecom

Folded & Hung Bayantel Zagu The Park Silicon Valley CD-R King The

Computer Authority All Flip-Flops Crocs FujifilmLBC Photoline Thumbs Up!

PC Chain Games & Gadgets Kettle Corn Silverworks Aksesoriz Tokyo

Tokyo.

It also has four cinemas with a total seating capacity of 1,400, and

694 covered parking slots in a four-level building, 113 open parking

spaces, and allotted parking for 253 motorcycles.

Located across the city’s central business district, SM City Naga is

surrounded by 500 large business establishments, as well as 15 schools,

16 hospitals, 11 hotels, six resorts, 12 churches, and more than 20

government regional offices. Metro Naga also has 54 residential

subdivisions, as well as the Mega Naga Coliseum and various

warehousing, distribution, and transport companies in the area. Located

5
across the Naga Transport Exchange, the mall is near the city center, the

national highway, and the PNR railway.

The domicile of SM Naga City has also several commercial business

districts (CBDs).It has two lifestyle center, three shopping malls, plus a

number of strip malls scattered at the heart of CBD-I, popularly known as

Centro.

Among establishments are Avenue Square along Magsaysay Avenue

is Bicol's first lifestyle center. It has an ultra-modern 800-seat convention

center (Avenue Convention Plaza); a resto-music bar which serves as the

"bootcamp" of aspiring local artists (Lolo's Music Bar); restaurants (Max's

Restaurant, Naga Oriental Wok, Shakey's, and Little Asia); a specialty

coffee shop (The Coffee Beanery); dermatology clinic (Skin Systems);

European salon (David's Salon); signature flip-flops shop (Havaianas);

Australian footwear (Crocs) and a nationwide franchising drugstore

(Mercury Drug), among other well-known stores ; Avenue Plaza Hotel,

Bicol's first and only boutique hotel also located along exciting Magsaysay

Avenue, had a grand opening in October 2007. The hotel is operating on a

four-star rating; West Park, a new lifestyle center also in Magsaysay

Avenue, houses a coffee shop (Mocha Blends) and a Japanese fastfood

restaurant (Tokyo Tokyo); LCC Central Mall - Naga; Robertson Mall; and

Nagaland eMall, housing Robinsons Supermarket are the city's other

major shopping malls. Bichara Theater Mall; Emily Arcade; Divisoria Mall;

6
and Paseo de Caceres, which has a Chinese-themed Roman Catholic

chapel - Navidad de Naga Chapel - are just some of the city's strip malls.

Naga City has several shops that open 24 hours a day. These

nonstop businesses include Cody's and Lucky 9 convenience stores,

Nald's, jollibee, The Park, and Bigg's restaurants, Mercury and South Star

drugstores.

Naga's investor-friendly economy has encouraged growth and

development of homegrown business chains like New South Star

Drugstore, Lucky 9 Convenience Store, Graceland Foods Industries and

Bigg's,which are successfully competing nationwide with industry leaders

Mercury Drug, seven eleven, Goldilock's and Jollibee, respectively.

Landco Pacific Corp. have expressed interest in the city's capability

of hosting bigger shopping complexes. Landco Pacific, though already

owns a property in the city, has yet to start construction of its Pacific Mall

Naga and Landco Business Park Naga.

Prospective customers are from the city and entire Camarines Sur

and visitors from diffirent places within and outside Philippines.

Camarines Sur based on May 2000 census, has a total of 1,693,821

residents, making it the most populous in the region and the 15th most

populous in the whole country. The same census also states that

Camarines Sur has 288,172 households with an average household size of

5.37 persons, significantly higher than the national average of 4.99.

7
 Given this upward and growth of SM , the need to assess its

operation and its effect to the costumer and other business in Naga City is

considered a vital topic for investigation.

STATEMENT OF THE PROBLEM

This study aimed to evaluate the effect of the SM in Naga City to the

other establishments and to the customer.

Specifically, the study sought to answer the following questions;

1. What is the profile of SM Department Store in terms of

a. marketing strategy

b. customer relation

2. What is the effect of SM to the different business enterprises along

Naga City?

3. What are the drawbacks of SM on the customers welfare?

HYPOTHESIS

The study is guided by the hypothesis that there is a high effect on

the costumers welfare and to the other business establishments along

Naga City

SIGNIFICANCE OF THE STUDY

This study open views on the effect of SM the costumers and to the

other business establishment

8
 In particular, this will be beneficial to the following :

CONSUMERS. Findings will provide information to the costumers in terms

of the approaches used by the business. Thus, they can choose the type

of service and the products offered considering their purchasing power.

LOCAL GOVERNMENT UNIT. Findings will enhance their awareness as

to the effect, possible problems and outright benefits of SM to their local

government in terms of the economic gain , tourist rate and advantage of

Naga to other improving cities.

COMPETITORS. The results of the study will open their mind to the

impact of SM to their business and think more of strategies that will

improve their business and uplift their competitiveness

ACADEMIC COMMUNITY. As a whole, the result of this study will guide

the academic community if what are the benefits of SM to the youth and

costumers. This will also be an addition to the vast section of knowledge

to both professors and students in weighing the possible effect of SM to

the whole community.

RESEARCHERS- the study will provide additional insight to researchers

and future researchers who may wish to conduct a similar study on the

subject and additional facts about Marketing strategy and Customer

relation. This can serve as reference or related studies for graduate

students as well future researchers interested in the above mentioned

study.

9
DEFINITION OF TERMS

The following terms were defined conceptually and operationally for a

clearer and better understanding of these terms as used in this study.

SM NAGA CITY. It is the 1st SM Supermall in the Bicol Region located in

CBD II, Brgy. Triangulo, Naga City, Camarines Sur, Philippines.It is the

subject of the study.

RESPONDENT. It refers to the managers and costumers of the study.

MARKETING STRATEGY- Written plan which combines product

development, promotion, distribution, and pricing approach, identifies the

firm's marketing goals, and explains how they will be achieved within a

stated timeframe.

COSTUMER-it is the process that the companies used in interacting the

costumer. The study will look into the kind of approach used by SM

BUSINESS. A commercial enterprise that attempts to earn a profit by

providing services and/or manufacturing products that are offered for

sale.It pertains to the SM and to other business establishment along Naga

City

COMPETITION. A rivalry of two or more businesses that target the same

customers. This refers to SM and to the other small scaled enterprise.

SCOPE AND DELIMITATION

The focus of this study is the effect of shoemart (SM) Department

Store to Business and consumers of selected Business enterprises in Naga

10
City. Likewise the respondent of the study is limited to two groups of

managers and customers. The managers are requested to rate the effect

of Shoemart (SM) Department Store in their respective store, and the

customers The duration of study shall be five to six months only.

NOTE

1. ^ Sullivan, arthur; Steven M. Sheffrin (2003). Economics:

Principles in action. Upper Saddle River, New Jersey 07458: Pearson
Prentice Hall. pp. 29. ISBN 0-13-063085-3.

11
 Chapter 2

REVIEW OF RELATED LITERATURE AND STUDIES

This chapter states some of the related literatures and studies made

by the previous researchers. It serves as the source and reference in the

research for the success of this study. The following literatures and

studies would give some insight and may provide explanation in any part

of the study.

Related Foreign Literature

Michael H. Zack, (2000) 2

Knowledge is considered the most

strategically important resource and learning the most strategically

important capability for business organizations. However, many initiatives

being undertaken to develop and exploit organizational knowledge are

not explicitly linked to or framed by the organization’s business strategy.

While many managers intuitively believe that strategic advantage can

come from knowing more than competitors, they are unable to explicitly

articulate the link between knowledge and strategy. This article, using

examples from several companies, provides a framework for making that

link and for assessing an organization’s competitive position regarding its

12
intellectual resources and capabilities. It recommends that organizations

perform a knowledge-based SWOT (strengths, weaknesses, opportunities,

and threats) analysis, comparing their knowledge to that of their

competitors and to the knowledge required to execute their own strategy.

It provides a framework for describing the degree of aggressiveness of a

knowledge strategy for closing strategic knowledge gaps, and concludes

with several implications for competing on knowledge.

According to Kotler et al. (2007) 3, the mix is a set of 'controllable

tactical marketing tools that the firm blends to produce the response it

wants in the target market'. Hence, in an effective marketing program, all

of those elements are 'mixed' to achieve the company's marketing

objectives.

The traditional marketing mix contains four major elements, the '4 Ps of

marketing'. As defined by Kotler et al. (2007): 1.Product: Anything that

can be offered to a market for attention, acquisition, use or consumption

that might satisfy a want or need. In includes physical objects, services,

persons, places, organizations and ideas. ; 2.Price: The amount of money

charged for a product or service, or the sum of the values that consumers

exchange for the benefits of having or using the product or service. ;

3.Promotion: Activities that communicate the product or service and its

merits to target customers with a view to persuading them to buy. and ;

4.Place: All the company’s activities that make the product or service

available to target customers.

13
 With the rapid changes surrounding organizations, the traditional

marketing mix of the 4 Ps has been criticized for being too myopic in this

current market situation. The traditional marketing mix has also been

disparaged for being too product-focused and for taking an overly inward-

looking strategy with regards to the organization’s resources and

capabilities in production matters. This is antithetical to attending to the

more important organizational goal of satisfying the desired needs and

wants of customers.

Customer satisfaction become the key operational goal of many

organizations. They have invested heavily in improving performance in

areas that make a strong contribution to customer satisfaction. Such as

quality and customer services. Loyalty schemes have proliferated in the

retail sector and now moving into the business sector. Companies are

investing in “database marketing” relationship management” and

customer planning, to get closer to their customer. Organizations in the

public sector have developed customer charters to demonstrate their

commitment to customer service, and just about every “ mission

statement includes a reference to satisfying or increasingly delighting

customer satisfaction in the customer’s mind and may or may not

conform to the reality of the situation people form attitudes quickly but

change them only slowly. (Hill 2005).4

Entrepreneurs active seek change by exploiting opportunities

whereas traditional management tends to be more custodial when

14
searching for these opportunities entrepreneurs often put their own

personal financial security at risk. The hierarchical structure of

bureaucratic organizations typically insulates managers from this financial

wagers and rewards them for minimizing risk whereas entrepreneurs

accept risk as part of the entrepreneurial process. In return,

entrepreneurs are motivated by independence and the opportunity to

create financial gains. Traditional managers tend to be motivated by

career promotions and other traditional corporate rewards including office

location and size, staff and power. Traditional managers are more

oriented towards the achievement of short term goals. Entrepreneurs

tend to be directly involved in their organization” operational activities;

traditional managers tend to delegate task and supervise those workers

performing those tasks. Finally traditional managers and entrepreneurs

have different views towards failures and mistakes. Entrepreneurs tend to

accept mistakes as a normal part doing business; traditional managers

tend to avoid putting themselves into situation in which they could fail

make a mistake. Greene (2005).5

According to Peppers and Rogers (2004)6 an organization would

need to use various techniques and strategies (possibly with the help of

information technology and the Web), such as focus groups, in-depth

interviews, customer surveys, attitude testing and so on to obtain

information about consumers for more effective marketing of a product or

service. With these customers’ data and feedback, the organization will

15
apply the knowledge to develop more customer-centric products and

services and/ or to improve existing ones. In addition, the information will

be shared within the organization to encourage employees at all levels to

focus on creating maximized customer value and loyalty.

The one major characteristic of a marketing approach is to focus on

each customer’s interests and interactions with the organization to deliver

targeted, personal messages. This would require the company to be

constantly gathering information about their customers in an effort to

better serve them and, most importantly, to retain them as loyal

customers.

REVIEW OF LOCAL LITERATURE

Described that business organizations are organized for the purpose

of enabling a society to realize some publics ends while maintaining its

private interest. He stressed that there is no development without change

and progress in the organization. They are also the instrument to secure

efficient management of the economic resources of society. People need

to understand business and its environment in which they are considered

integral part. Such is only possible if people interact with their

environment. Leveriza (2006)7

While a growing business needs to constantly capture new

customers, the focus and priority should be on pleasing your existing

customer base. Companies that fail to nurture and retain their customer

16
base ultimately fail. You will also spend twice as much to get new clients

as you will in maintaining your existing customer base. You will also be

limited in your ability to attract new clients if you can't hold onto and

satisfy your existing customers and clients.

Any firms most important assets are people: the right customer,

employees, and investors. Real success means earning the long-term

loyalty of each group also, he said that the path toward zero defections

can be done by adopting the approaches build on the following elements:

1, building a superior customer value proposition; 2, finding the right

customer; 3, earning customers loyalty; 4, finding the right employees; 5,

earning employees loyalty; 6, gaining cost advantages through superior

productivity; 7, finding the right investors; and 8, earning investors

loyalty. Reicheld (2005)8

Maintain contact with consumers need” the most difficult trap that

company can fall into is to fail to main consistent, continuous contact with

the needs of its customers. He further said that focusing and investing on

building knowledge about customer would drive business forward and

give edge over competitors. Some business seem to lack the focus, and

the strategic direction, to steer their marketing sales and services to their

customer base and even dwell on concentrating on creating sophisticated

products but forget about the right way to approach its end users. Article

by PDI (2003) Del Rosario. 9

17
 Motivating people to become more knowledge competent also

requires an understanding of “care” Effective knowledge creation puts

demands on the people to relate to each other in a company. Caring for

someone helps them to learn, to increase an awareness of events and

consequences and to help nurture personal knowledge creation while

sharing insight. (Ires et al, 2006)10

Customer service excellence should be given emphasis. If fail up

occur and they will from time to time despite our efforts to present them,

we must acknowledge them, provide personal guidance, make the

necessary correction, and offer our apology. That way we leave our

customers more flattered than disappointed. The point is that customer

are spoiled, and only those companies that can cater to their every whim

can expect to prosper and remain in business. (Tapia 2006)11

RELATED FOREIGN STUDIES

CRM both attracts and repels executives charges with boosting

customer relationship and sales. CRM promises and sometimes delivers

better management sales, marketing, and customer services, leading to

improve sales productivity. But the tales of CRM implementation horrors

are painfully common. Tom Kameshige 12

reveals the cause of many

problems and outlines useful road map showing the way to successful

implementation. In agreement with other recent analyses. Kameshige find

that many companies underestimate the importance, time, and effort of

18
scrubbing data repositories so they can be accessed by a CRM solution.

CRM may also be used to automate flawed processes. In contrast,

successful companies search for CRM solutions with a list of detailed

requirements understanding the range of possibilities afforded by CRM

will help executives avoid the creep of complicating add-ons as well as

selecting the most suitable vendors. Kameshige urges companies to begin

with a lot of research into what is now an enormous number of vendors

another solution is the customer retention programs. Values over time

and across all business units. These said, the basic types of customer

retention program listed below,

In discount programs, customer receive a price out on repeat

purchases. For example many insurance companies will offer discount in

auto insurance if a customer also has home owner’s insurance. These b

firms assume that customers are more likely to remain loyal if they own a

greater breadth of the firms products.

Loyalty programs, aften taking the form of frequent flyer/ frequent

buyer programs are usually based on points system. Points are given to

customer for interaction they have with the company. Interactions may

includes making purchases, using a new channel (like website or self

service kiosk) or referring prospective customers. Points can be redeemed

for rewards or discount.

Card base programs can be specific type of points based or discount

program, a popular type of card, based program may be used by

19
supermarket, where “valued customer “ card can be swiped at the point

of sale and customers are offered immediate discount on purchases.

(McKenna 2007) 13
in the study of Business Re-engineering

stressed that positioning begins with the customer. Customers think

about products and companies in relation to other products and

companies. What really matters is how existing and potential customers

think about a company in relation to its competitors. Customers set up a

hierarchy of values, wants, and needs based on empirical data, opinions,

word-of-mouth references, and previous experiences with products and

services. They use that information to make purchasing decisions. Market

leadership can catch a consumer's attention and can be an important

factor for the customer to consider, but there is more than one leader in

almost every market segment today. Most often several companies share

the top position, one being the technical leader, one the market leader,

another pricing leader, and still another challenging upstart. Many

companies can establish unique positions in the marketplace for

themselves, their products, and their services. This capability is a

powerful force in marketing

Lawrence (2005)14 studied about Diamond Auto Dealership (DAD).

His study focused on improving customer relations in its service

department. Since customers were expressing dissatisfaction on survey

questionnaires sent to them by manufacturer the dealership Customer

Service Index (CSI) dropped below the regional average clearly

20
improvement was required to regain compliance with is manufacturer’s

expectations. Through exploring DAD’s service processes and comparing

them against best- in- class automotive manufacturer’s, the author

concluded that there was a need for organization restructuring.

Maskell (2002) 15
revealed that every company must develop its

own measures of performance. Based on his study, approaches to new

performance are very numerous and important issues include quality

productivity, on-time, delivery, innovation, teamwork, flexibility, short

cycle times, and customer service.

RELATED LOCAL STUDIES

Nolledo (2005)16 study stated that a customer oriented company

serve to its best the needs and meet all the expectations of their

customers. They offered quality service. Thus, it is important to set

objectives, which would end to an appropriate strategy. She further said

that any plan or strategy no matter how excellent, will surely fail it not

supported by the manpower. A strong human resource base is a must.

Customer will become the company’s lifelong partner because of the

excellent result of the efforts the company placed in delivering good

customer service.

Amano (2003) 17
found out that the factors that influenced

much the decision of the respondent who were engaged in business in the

province of Albay were marketing factors like market/demand, selling

prices competition, channels of distribution and market information. The

21
factors that influenced the decision of respondents to establish in future a

business in Albay included the availability and price of raw materials, man

power, peace and order, financing factors, socials benefits and the inner

motivating factors.

Cajuday (2000) 18
concluded in his study that small-scale

enterprises dominated the medium scale enterprises in Naga City

because it required low capital and small size of work force. Majority of

these SME were in their survival stage. These entrepreneurs contributed

to a moderate extent in employment and in improving the income level of

these people and the income of the City and the province as well. SME’s

was also engage in industry and had the capacity to export quality

product and services and had better access to foreign market. They also

experienced problems and concerns related to financing and financial

management, thus needed the support of the government in terms of

financial assistance, tax incentives and other supportive programs.There

was also a stiff competition in all types of enterprises due to the rise of

the local competitors.

In 2005, Viola 19
conducted a study on the shadow economy of Naga

City and found out that general services, garment makers and itinerant

vendors are among the top three most engaged in business activities.

General service obtain the highest of capital because it registered the

biggest number of business activities. Similarly, the garment makers and

22
the itinerant vendors invested a biggest amount of capital due to high

cost of equipment used in the business and the cost of items distributed.

Conversely, however, the entertainers spent only a meager amount of

capital of their dresses make up and other paraphernalia used in trade.

General services, garment makers and internal vendors employed big

number of labor force because of its demand in the market while the

entertainment have only few because of its moral implication. selling was

the number one production activity because most of the entrepreneurs

have only limited capital to be used in manufacturing. They even get the

commodities or consignment and pay when these were already sold

retailing was the number one mode of distributing the products because it

gi es more profit to the entrepreneurs. It also gives customer convenience

to buy by piece at profitable prices. More profit were derived from money

leading, entertainment farming because these involved only lesser

operational expenses while least profit was earned by tiendas because of

small investment.

SYNTHESIS OF THE STATE OF THE ART

The related literature reviewed and included in this study gave

some insights how to gain costumers , approaches which will lead to the

satisfaction of the costumers and costumers retention as stressed by Hill,

Peter and Rogers, del Rosario, Ires and Tapia. It also provided the role of

consumer relationship program in the successful management of SM City

Naga (department store).

23
 The opinions/reactions to services delivered and understanding the

needs and aspirations of the public is vital to success of any organizations

that are service oriented as noted by Del Rosario, Ives, Tapia, and Nigel

Hill. Resources should be used to is fullest to achieve desired results in

accordance to what is expected by the public. Zach, Kotler and Reitched

discussed the importance of business and marketing strategies in finding

markets. On the other hand, risk of a business in term

of profit or financial gain and the efficient business managements are

reiterated by Greebe and Leveriza.

Tom Kameshige and McKenna, on their studied found out that

there is a need of programs and strategies to retain costumers.Nolledo

and Amado concluded that there are factors that affects the decision of

the business men in establishing business in a prospected location which

would end to a quality service and products to the endusers. The

dominance in market of small scaled enterprise over medium sized

businesses were found out from the study of Cajuday. Viola study as well

almost relate to the study of Cajuday when he found out that certain

small sized store are rampant in the city and dominated the medium sized

enterprise because of the need of low capital and it accords to the needs

the location who are low leveled income families.

RESEARCH GAP

24
 These related studies presented the importance of the costumer

retention programs and the marketing approach in attaining the ultimate

goal of any business which is to achieve financial gain and dominance, in

any means, to the market. The studies of Amano, Cajuday and Viola were

about the existence of small scaled business, and marketing factions that

affect the decision of businessmen to start a business , while the present

study focused on the effect of the newly opened SM in Naga City to the

costumers and other business establishment along the city.

This is the gap this study wants to bridge.

Theoretical Framework

One of the theories this study adopt is the “ self-reinforcing cycle”

Micheal H. Zack, maintains that “If an organization can identify areas

where its knowledge leads. The competition, and if that unique knowledge

can applied profitability in the market place, it can represent a powerful

and sustainable competitive advantage”. Applied in this research that

Shoemart (SM) Naga City has a unique marketing strategy that can lead

to more profit of the company.

“Critical Learning Mass” organization should strive to use their

learning experiences to build on or complement knowledge positions that

provide a current or future competitive advantage. Systematically

mapping, categorizing, and benchmarking, organizational knowledge

more accessible throughout an organization, but by using knowledge map

25
to prioritize and focus its learning experiences an organization can create

greater leverage for its learning efforts.

The Peter Drucker theory of management is a series of

19

founding principles that reflect the importance of modern management

objectives in today's society. The Peter Drucker theory reflects the

significance of organizational environments and the ability of managers to

work collectively with their employees to initiate change and progress.

Peter Drucker and management are essential to the evolution and growth

of today's .

With all these parameters of environmental change, it is imperative

upon the managers to make its product and services adoptive to the fast

environmental changes. The ultimate objective of environmental

adaptation is to satisfy the needs of the end – users with the kind of the

products that command reasonable prices but yield the maximum

comfort, convenience and satisfaction by creating new products / services

or by innovating the existing ones this is the thrust of management who

desires to stay in the market in this fast changing world. (Thomas

Badridge)20

The above theories shown in Figure 1 served as the heart of the

flow of this investigation. As presented, adapting the theories, the

business can simultaneously look into the approaches in terms of the

quality service and products, costumer relation and business competition

which are the core to satisfy the needs of costumer.

26
 SM Naga City

SELF-REINFORCING CYCLE
Michael Zach
Quality Product and
Services

CRITICAL LEARNING MASS

Costumer Relation
THEORY OF MANAGEMENT
Successful Operation
Peter Drucker
Business
Competition
ENVIRONMENTAL ADAPTATION
Costumer Satisfaction
Thomas Badridge

RESEARCHERS THEORY
To satisfy the need of the costumers 27
 Figure 1

Theoretical Paradigm

CONCEPTUAL FRAMEWORK

As shown in Figure 2 , objectives played a crucial role in the life of

an organization which can make or unmake the enterprise. Its failure and

success depends on its ability to innovate responsively to the needs and

changing time.

1. Gathering Data Thru:

I. Profile of SM
Questionnaire
II. Effect of Shoemart to the Interview Guide To assess the effect of
different enterprice along Naga Documentary Guide Shoemart to both
City costumers and other
2. Data Processing enterprises along Naga
III. Drawbacks of Shoemart to City
the costumer’s welfare 3. Data Analysis and Data
Interpretation

FEEDBACK

FIGURE 2

28
 CONCEPTUAL PARADIGM

Indeed, objectives of the program reflect the direction of the

organization and its innovations show the uniqueness of the organization

and peculiarities in the market.

Objectives propel the organization to move toward to a definite

direction. It is along this context that the advantage to student

employment of the college students have to be evaluated to gauge their

effects on the school operation student and institutional development.

INPUT The conceptual framework of the study is provided in Figure

2. The focus was the effect of SM to the other enterprises and to the

costumers.

PROCESS. The researcher needs the descriptive evaluative

approach of research to answer the effect of SM to the different

enterprise and to costumers. Questionnaire and interview guide were also

used.

As a whole, the researchers made used of qualitative data

presentation using tables and tabular designs particularly in evaluating

the effect of Shoemart to the different enterprise and costumer.

OUTPUT. The assessment of the effect of the SM to different

enterprise and costumers. Thus, result of this activity brings about

improved products and service to the costumers.

29
 FEEDBACK The high impact showed that the business is highly

committed to provide quality services and product for the costumers

against other establishment

REFERENCE NOTE

1.

^Micheal H. Zack(2000), Developing a Knowledge Strategy-(California Management review Vol. 41, No.3)
2.
3.

^Nigel Hill,(2005) Customer Satisfaction Measurement, Gower Publishing Ltd. Gower, old post road, Brookfield,
4.
Vermont 05036 USA 1992 p.27

^William Ives ” To create knowledge- Capable firms Cultivate A Culture Of Trust. Integrity And Caring” Philippine
5.
Daily Inquirer. July 24, 1999 p.c6

^Paciencia SJ. Tabinas “ Livelihood Program and Entrepreneurial Development” (Unpublished Masteral Thesis,
6.
University of Nueva Caceres Naga City 1998)

^David Kurtz , Professional Selling (Business Publications Inc. 1991) p. 67

7.

^Roni L. Tapia” Customer Service Excellence as Business” Philippine Daily Inquirer. August 23, 2006 p. 46
8.

. ^Del Rosario(2003) Philippine daily inquirer”Maintain contact with consumers” p.c3

9.

^Alexander Osterwalder, (2004) Business model design template: Nine building blocks and their relationships,
10.

^Tom Kameshige, “ Surviving CRM 2001

11.

12.

^Brian K. Lawrence. Improving Customer Relations.(university of Utah V7, 2005)

13.

14.

30
 ^Brian H. Maaskell” Financial Management – So what are you counting” (World executive Digest March 2002 pp
15.
53. 54)

16.

17.

^Cajuday Adelaida, Entrepreneurship: Its contribution to Naga City’s Development. (Unpublished Masteral Thesis)
18.
Naga City 2000.

CHAPTER 3

METHODS AND PROCEDURES

This chapter contained the research methodology, respondents of the

study, procedures of investigation, data gathering tools and the statistical

tools used in the study.

METHODS USED

This study used the Descriptive – Evaluative approach of research to

answer the effect of Shoemart to the different enterprise and costumers.

It also describes the company profile of the mall.

As a whole, the study made used of qualitative type of data

presentation using tables and tabular designs particularly in evaluating

the data in terms of the effect on the other business and the drawbacks to

costumers welfare.

RESPONDENTS OF THE STUDY

The distribution of respondents is given in Table 1. There were two

group of respondents ; employee and costumers. The employee is

31
composed of 60 person from Shoemart (SM), Robertson and LCC,

distributed equally. Same with costumers, which consist 20 from each

mall totaling to 60. It is the universal population for the respondent. No

sampling had taken placed since, since the population is numerous.

TABLE 1

DISTRIBUTION OF RESPONDENTS

SHOEMAR ROBERTSO
RESPONDENTS T N LCC SAMPLE TOTAL
EMPLOYEE 20 20 20 0 60
COSTUMER 20 20 20 0 60
TOTAL 40 40 40 0 120

TABLE 1a

SOCIO DEMOGRAPHIC PROFILE OF

RESPONDENT

EMPLOYEE SHOEMART ROBERTSON LCC FREQUENCY PERCENT

SEX
MALE 5 7 7 19 31.67
FEMALE 15 13 13 41 68.33
TOTAL 20 20 20 60 100%
CIVIL STATUS
SINGLE 13 12 15 40 66.67
MARRIED 7 8 5 20 33.33
TOTAL 20 20 20 60 100%

COSTUMER SHOEMART ROBERTSON LCC FREQUENCY PERCENT

SEX
MALE 7 5 9 21 35
FEMALE 13 15 11 39 65

32
 TOTAL 20 20 20 60 100%
CIVIL STATUS
SINGLE 7 8 5 20 33.33
MARRIED 13 12 15 40 66.67
TOTAL 20 20 20 60 100%

The socio demographic profile of the respondent is given in Table

1a.

Table 1a further revealed that majority of costumers and employee

of different malls are female with 68.33 % and 65 % , respectively. 66.67

% of employees are single while in the costumers, most are married with

the rate of 66.67.

PROCEDURES OF INVESTIGATION

The researcher sought permission from the immediate manager of

each mall of to conduct the study on the effect of mall to different and to

costumers. A letter of request is shown in Appendix A. After the request

was granted, the researcher conferred with the said manager in

scheduling the distribution of the questionnaires to the respondents.

The researchers personally distributed and retrieved the

questionnaires. The questionnaires were corrected, tallied, analyzed and

present in tabular forms.

DATA GATHERING TOOLS

33
PRIMARY SOURCE

There were three data gathering tools used to gather the necessary

information. These were the Survey Questionnaires, Unstructured

interview and Non – participatory observation.

SURVEY QUESTIONNAIRES. This is the primary tool used for gathering

the needed data. This was used among the respondents of the study.

UNSTRUCTURED INTERVIEW this was used among costumers and

employee of different malls including Shoemart . This tool was also used

to verify the responses of the respondents in the given survey

questionnaires. Items, which are not responded, were also followed up

through this tool. Researchers asked further questions, which they

thought, fitted to the study.

NON – PARTICIPATORY OBSERVATION This serves as a supplementary

to the more systematically organized data collected by the

aforementioned tools.

SECONDARY SOURCE

There are other sources used to crystallize insights effects of

Shoemart to the different enterprise and costumers It includes the

brochures , periodical books, magazines, pamphlets, unpublished thesis

and dissertations.

The use of internet greatly helps in surfing the related information

just to make the study intensive and meaningful.

34
STATISTICAL TOOLS

The study uses the Percentage technique, and Weighted mean average

Percentage Technique It was used to get the distribution of the

respondents by age and gender of the respondents. It is computed by

dividing the representation of a part with the same characteristics with

the total number of observations and then multiplied by 100.

The formula is:

P = f/n x 100

Where : P = the percentage

F = the frequency

N = the number of respondents

WEIGHTED MEAN AND RANKING was used to determine the degree of

assessment given by the respondents

Formula : MW = Σ fx / n

Where : MW - weighted mean

Σ fx - sum of the product of weighted mean and

frequency

f - frequency

n - total no. of frequency or total no. of respondents.

35
36