“THE RELATIONSHIP BETWEEN MARKETING STRATEGIES AND

SALES PERFORMANCE OF SELECTED CLOTHING

BUSINESS IN BRGY BASAK MALUTLUT”
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Chapter 1

THE PROBLEM AND ITS SCOPE

Rationale

It is observable that majority of the youth are having a sense of style. They express their

aesthete through their fashion statement leading to increasing of demand on clothes and other

fashion trends. This then lead to launching of stores addressing the demand for fashion. It can be

observed here in Marawi City the growing or spreading number of store owners engaging in this

type of product.

The main market of Marawi before was situated in Padian. Each type of business had

their own spot in the market; for instance there is a specific area for ready-to-wear clothes,

plastic containers, shoes, hijabs, clothing textiles, suits and gowns and even food stalls.

Businessmen and entrepreneurs had their own ways to gain profit. But due to the siege, most of

those stores were devastated. Nonetheless, this chaos had lead for new opportunities as stores

were reopened and launched.

The main purpose of every business is to gain profit as it is essential to its existence.

Profits are the lifeblood of any business organization on which its operations are dependent

upon. However, business profitability can be best achieved if both short-term and long-term

strategies (Kyle, 2004) in the business are carefully planned and executed.

In today’s generation, clothing stores are patronized by both teenagers and adults since it

provides outfits of the days and convenience to all. More Filipinos are fascinated to the fashion

trends which is part of the business world. It is one of the fastest and easiest business venture

they can get into, thus continuously improve the economy (Lacamiento, 2013).
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According to the Statista Research Development (2018), the market demand of clothing

in the Philippines has continued to rise over the past years and there is no sign of decline with

almost 12 billion US dollars in forecasted volume for 2018. The household consumption

expenditure for clothing and footwear was valued at 77.2 billion Philippine pesos in 2018.

In an analysis of Porter’s five forces, clothing store industry has relatively high

competition because of the high threat of new entrants due to low barrier to entry. Some factors

to identify if the competition is intense is when there are many competitors, products can be

substituted, and customer loyalty is low (Jurevicius, 2013). However, it is becoming hard for it to

stay in the competition, especially if they are located in rural community because stores are

multiplying, getting near to each other, and market area is getting small for each retailer.

Meanwhile, the threat of new entrants is high due to low barrier to entry such as capital

and legal requirements (Jurevicius, 2013). Regalio, in his article in Insight Philippines (2016)

said, “Give a Filipino thousand pesos and he probably will use this sum as a start-up capital for a

small retail business.” From that statement, it can be concluded that a small amount of capital is

a good start; there may be chances, an owner’s capable neighbor may be attracted when the store

is earning and open his own the next day. For the legal requirements, we may find stores like

sari-sari stores, food stalls and clothing stores unregistered. In fact, the BIR increases their

efforts in searching those unregistered small scale-businesses (Tempo Online, 2017).

Along this line, marketing is considered as having significant role in the business process.

Any business requires proper marketing for it to grow and successfully reach its target audience,

buyers, and the people whom such products are intended for (Aveta Business Institute [ABI],

2013).
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Among all of the advantages of developing a marketing strategy, the ultimate one is that

it makes all of the planning becomes easier - not just the marketing. Marketing strategy also

allows you to have a tool to increase your retail sales and helps you become more effective in

doing efforts because you know who you are talking to in the first place (Phibbs, 2017).

Marketing for both small and medium scale businesses are important and needs to be known for

people to patronize and gain sales. The success of these businesses depends on the marketing

ability of the owners and marketing efforts to keep the business in the competition (Sims, 2013).

This study aimed to reach the people of the community particularly the store owners by assessing

the marketing needs of the clothing store, as well as the marketing capability.

Statement of the Problem

The purpose of this study is to determine the relationship if there is a significant

relationship between the marketing mix and the sales of the business or store among the

businessman of Brgy. Basak Malutlut. Specifically, it sought to answer the following questions:

1. What is the profile of the respondents in terms of:

1.1 Age,

1.2 Gender,

1.3 Civil Status; and

1.4 Level of Education

2. What is the result of marketing strategies from respondents in terms of:

2.1 Product Strategies,

2.2 Place Strategies,

2.3 Price Strategies; and

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2.4 Promotion Strategies

3. What is the sales performance of the clothing business in terms of:

3.1 Net Profit,

3.2 Number of Employees; and

3.3 Number of Years in the Business

4. Is there a significant relationship between marketing strategies and the sale performance

of the business?

Theoretical Framework

Several theories of marketing mix and sales performance were used a basis for this study.

Marketing Mix

This study had its theoretical underpinnings on the Marketing Mix theory of McCarthy

(1964, In Goi, 2009) this was often referred to as the 4Ps – Product, Promotion, Place and Price.

McCarthy’s model can be utilized in both long-term strategies and short-term tactics. The

marketing mix can be altered depending on the type or nature of the business and differ from

business to business (Palmer, 2004 In Goi, 2009).

This theory of McCarthy was further expanded by several theorists adding to it several

elements of the marketing mix: Booms and Bitners’ (1980) 7Ps which added people, physical

Evidence and process; Kotlers’(1986), which included political power and public opinion

formation to the Ps; 12 Ps and Baumgartner’s (1991) 15 Ps which was composed of product (or

service), price, promotion, place, people, politics, public relations, probe, partition, priorities,

position, profit, plan, performance, and positive implementation. Kotler, in an interview by

Mahalan (2013), said that “the 4Ps of marketing is still king”.

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Market Segmentation Theory

The concept of market segmentation was coined by Wendell R. Smith who in his article

“Product Differentiation and Market Segmentation as Alternative Marketing Strategies”

observed many examples of segmentation in 1956. Products and services are designed to solve

customers' problems or meet their needs. And because not all customers share the same needs,

not all will purchase the same product. Market segmentation is the craft of presenting a

company's product to segments that want it, can afford it, and know how to access it. Business

owners and marketers who identify these segments based on demographics, behaviors and

desires can concentrate their marketing efforts on the customers who are most likely to buy.

They then can design their marketing mix strategy to attract these consumers, appeal to their

needs, and extend the product's profitability. (feedough.com, 2019)

Product Life Cycle Theory

The product life cycle theory that was developed by Raymond Vernon asserts that

marketing strategies must evolve along with a product from inception through obsolescence.

Early in a product's life, companies should tailor their marketing mix to spark interest and

educate potential customers. During the growth phase, the effort shifts to secure a wider audience

by building brand loyalty, a stable supply chain, and additional distribution channels as defenses

against competitors enter the market. As the market for the product matures, weaker players are

driven out, and there is little differentiation among competitors. Marketing should again shift to

attempts to steal market share from other producers through incentives to distribution channels,

such as cooperative advertising, in-store promotions, and volume discounts.

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Alignment Theory

To be effective, marketing strategy must effectively communicate all the features,

benefits or psychological frisson the product's purchasers’ demand. This requires the marketing

team to align its strategy with the business's "generic strategy" -- the way it will compete. For

example, if a product intends to compete by offering a low-cost alternative to similar products,

its marketing strategy probably won't include an unveiling party at the top of the Eiffel Tower.

On the other hand, marketing for sports cars will focus on speed, style and sex appeal,

downplaying its fundamental use. Even though the car's primary benefit is getting its owner from

Point A to Point B, transportation is not the motivating purchasing factor. Therefore, it should

not be the primary selling factor.

Brand Equity Theory

According to Kevin Lane Keller, brand is a distinguishing name or symbol that is

intended to differentiate the product. Brands influence customer behavior and provide sustained

revenues for the company. Brand equity is the added value attributed to a product by the

consumers. Sources of brand equity can guide marketing decisions. As a result, managers need to

fully understand the sources of brand equity. The concept of brand is based on brand knowledge

in the mind of customers. Brand knowledge is all the thoughts, feelings, perceptions and

experiences linked to the brand. Brand awareness and brand image are the two elements of brand

knowledge. Brand awareness is consumers' ability to recall the brand, while brand image is their

perceptions of the brand. Free association is a simple way to extract brand knowledge. In this

method, the researcher asks the customer what a specific brand conjures up in her mind or what a

specific brand means to her. (1993)

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Market Orientation

Philip Kotler is often credited with first proposing the societal market orientation. Market

orientation is a philosophy of doing business. It places the customer at the center of the business

and asserts that all departments of the company should focus on satisfying some chosen needs of

the customer. Marketing involves deciding what to produce in the first place. Marketing

indicates the target customer, distribution channels and pricing strategy. Market orientation is

based on two assumptions: each department in the company makes decisions based on customer

needs, and all departments coordinate efforts based on customer needs.

The Resource Based Theory

The resource based theory defines how effective and efficient use of the resources of a

firm is essential towards creating a sustainable competitive advantage. According to Porter

(2011), the theory places emphasis on the resources of a firm as a determinant on the

competitiveness of firms in the industry. The theory has moved through different changes over

the past decade by various scholars for instance by use of terms such as resources, capabilities,

assets or the competences in description of the factors which have an effect on the

competitiveness of a firm. The resources of a firm are placed into physical capital resources,

human capital and the organizational capital resources.

The Competence Based Theory

Competence based theory is defined as an approach to managing business in a given way.

On this approach, the business is an open system which interacts with the environment to obtain

given resources and to improve their outputs. Based on this theory, the capacity of a firm is

developed on the core competences which cannot be acquired by the competitors and also create

more profits which provide the basis for firm performance (Prescott, 2011).
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Conceptual Framework

This study aims to find out the relationship if there is a significant relationship between

the marketing mix and the sales performance of the clothing business in Brgy. Basak Malutlut.

As presented in the schematic diagram below, the personal profile of respondents in terms of

their gender, civil status, age and level of education is the independent variable. This correlates

to the marketing strategies and business sales performance as the dependent variable. Marketing

strategies includes the product or what is the physical commodity offered by the business, price

or how does the businessmen perceived the value of their products, promotion if the business

modify the behavior of their customers by persuading them and lastly is place, how does the

businessmen place its business to its customers. The sales performance is based upon the number

of years of the business, the number of its employees and the monthly income earned.

Respondents’ profile Marketing Strategies

 Age  Product Strategies,
 Gender  Place Strategies,
 Civil Status  Price Strategies,
 Level of Education  Promotion Strategies

SALES PERFORMANCE OF
THE BUSINESS

 Number of years in the business

 Number of Employee
 Monthly Income

Figure 1.1 Schematic diagram of the Conceptual Framework of the study

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Significance of the Study

This study is believed to be significant and profoundly useful to the following:

Store Owners. This study will help the store owners or business owners’ identity the

strength and weaknesses of their business. This will give them an idea about basic marketing

concepts that they can practice for their business to increase its sales.

Customers. Customers will have an insight and broader idea about the businesses and the

current situations of clothing or fashion business.

Local Government. This would be used as a basis by local government for further

actions by requiring store owners to follow certain ordinance or regulations.

Community. A significant portion of our community comprises the economic changes

and funds .This study could provide information that enables the community to understand the

phenomenon that is taking place.

Future Researchers. This study provides a ground for the enrichment of the

conceptualization. The future researchers can access the information, ideas and findings that

have transpired in this study. They can utilize this paper as a resource; they can extend this study;

they can evaluate and verify results and use it in different context.

Scope and Delimitations of the Study

This study was confined to the concept of marketing strategies specifically marketing mix

such as Product, Promotion, Place and Price of clothing business or RTW stores within Barangay
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Basak Malutlut, Marawi City. However, this study is limited only to 20 clothing business stores

of Barangay Basak Malutlut and the use of self-made questionnaire.

Definition of Terms

Aristotle said that intelligent discussions must begin with definition of terns. Thus, the

researcher deems it fit to give definition to the following terms used in the study.

Brand Equity- the added value attributed to a product by the consumers (Keller, 1993)

Business- is the human activity directed towards producing or acquiring wealth through

buying and selling of goods. (Henry, 2011)

Marketing – the science and art of exploring and delivering value to satisfy the needs of

a target market at a profit. (Kotler, 2011)

Marketing Mix - is the combination of different marketing decision variables being used by

the firm to market its goods and services. (Singh, 2012)

Market Segmentation- is the craft of presenting a company's product to segments that

want it, can afford it, and know how to access it (Smith, 1956)

Market Orientation- is an approach to business that prioritizes identifying the needs and

desires of consumers and creating products that satisfy them. (Investopedia.com)

Product Life Cycle- asserts that marketing strategies must evolve along with a product

from inception through obsolescence. (Vernon, 1996)

Sale – is a transaction between two or more parties in which the buyer receives assets in

exchange of money. (Investopedia, 2019)