The Effects of Payday Sales to Purchasing

Behavior of Minimum Wage Earners

BY:

HISANAN, PAOLO
ILIW-ILIW, AIRA
JUMAO-AS LORE MAE
MACASINAG, JAIRYL
MARQUEZ, PAULA
 
 
 
 
 
 
 
 
 
 
 

 
 CHAPTER I
THE PROBLEM AND ITS BACKGROUND
Introduction 

Today’s organizations have been using a variety of marketing strategies in order to

promote and advertise their products and services to get the attention of their targeted

customers or potential buyers. As our technology improves, it boosts organizations

capability and have found its way in doing their promotions through social media as

people nowadays tend to spend most of their time browsing their social media in terms

of getting information, news updates, entertainment, and looking for reliable shops to

purchase from. Sale has been one of the effective ways to get the attention of the

customers especially if it is in exact date on their salary, as Alibudbud (2022) stated,

payday sales occur in the middle and at the end of each month, coinciding with the days

employees usually get paid. The strategy here is to capture their target market’s interest

before the consumers get the chance to spend their salary.

There are 2.1 million minimum wage earners but 8 million paid below minimum

wage in the Philippines according to Miranda (2020). Those minimum wage earners has

an impact to the sale of any businesses even if they are belonging to the lower class

because they are also considered as a potential customer. Sales seems to be a

powerful mode for companies and businesses in doing their promotion strategy to

achieve their goals in terms of reaching a wide range of people. It is expected that it is

one of the factors that influences or makes an impact to the consumer’s buying

behavior. According to Kokemuller (2021), sales promotions are typically used as a

price inducement to attract price-conscious buyers not interested in products a regular

price. This is common when companies want to build a customer base, such as at a

grand opening, when a competitor goes out of business, or in a highly competitive

industry, or when the time the workers are being paid most commonly when it is mid

and last day of the month.

According to the country's Department of Trade and Industry (DTI), 99% of the

957,620 registered businesses in the Philippines and all of them can come up better

strategy to be more attractive to the customer and know if sales are still working up until

to this day. Minimum wage earners are also can create a budgeting plan as part of

lower income bracket and the rapidly increase of prices in service and product.

Therefore, sales are a big part for the success of gaining potential customers and

buyers. It is a must that the business owners should ensure the proper way in

advertising their products and services as it was a huge impact to the minimum wage

earners buying behavior. It is within the context that the researchers want to conduct a

study.
 Conceptual Framework

Input Process Output

1. What is the demographic

profile of the selected
minimum wage earners in
terms of: 
1.1. Age 
1.2. Gender
1.3. Civil status
1.4. Educational
attainment
1.5. Length of
service
1.6. Employement 1. Gathheringg data
type thhroughh survey
2. How does the selected questionnaire Recommendation plan
minimum wage 2. Presentation of to improve budgeting
earners allocate their date method of minimum
income in terms of:  3. Interpretation and wage earners in
2.1. Needs  analysis of data purchasing products
2.2. Wants during payday sale.
gathhered
2.3. Savings
3. What is the preference
of minimum wage
earners when it comes
to purchasing products
in terms of: 
3.1. Price  
3.2. Promotion
3.3. Quality
product
satisfaction
3.4. Availability
 Figure 1: The Research Paradigm of the Study

The figure 1 shows the conceptual framework in which it consists of the Input-

Process-Output (IPO) Model. Input are independent variables that consist of: the

demographic profiles of selected minimum wage earners in terms of age, gender,

educational attainment, civil status, length of service and employment type. It also

includes the allocation of their income in terms of needs, wants, and savings. Lastly, this

provides the preference of minimum wage earners when it comes to purchasing

products in terms of: price, promotion, quality product satisfaction and availability.

Process includes the methodology of gathering data. In this study, the researcher

gathered data through survey questionnaire. The researchers randomly selected the

respondents from Pasig City specifically the minimum wage earners using online forms

to distribute the questionnaires. Furthermore, the researchers analyzed and interpret

the information and data gathered from the respondents for further understanding.

The Output of the research is expected to lead in constructing an efficient

recommendation plan to improve budgeting method of minimum wage during payday

sale.
Theoretical Framework

This study is supported by Hawkins Stern’s impulsive buying theory and

Maslow’s Need Hierarchy Theory of Motivation. Figure 2 shows Hawkins Stern's

impulsive buying theory, Stern supported this viewpoint and asserted that consumers

engage in impulsive purchasing under the influence of outside influences. According to

the hypothesis, marketers can persuade customers to make larger purchases than they

had originally intended (Dutta and Mandal, 2018). While in Figure 3 shows Maslow’s

Need Hierarchy Theory of Motivation. Maslow's hierarchy of needs is a psychological

theory of motivation that includes a five-tier model of human needs that is frequently

represented as stages within a pyramid. The components of the theory or basic needs

of the human being comprise: Psychological needs, Safety and security needs, Love

and belonging need, Self-esteem and, Self-actualization needs.

Figure 2. Hawkins Stern's impulsive buying theory

 Figure 3. Maslow’s Need Hierarchy Theory of Motivation

Statement of the problem  

Main Problem: The study aims to determine the effects of payday sales to purchasing

behavior of minimum wage earners. 

Specific Problems:
Specifically, it sought to answer the following questions: 

1. What is the demographic profile of the selected minimum wage earners in terms of: 

1.1. Age 

1.2. Gender

1.3. Civil status

1.4. Educational attainment

1.5. Length of service

1.6. Employement type

2. How does the selected minimum wage earners allocate their income in terms of: 

2.1. Needs 

2.2. Wants

2.3. Savings
 3. What is the preference of minimum wage earners when it comes to purchasing

products in terms of: 

3.1. Price  

3.2. Promotion

3.3. Quality product satisfaction

3.4. Availability

4. Is there a significant relationship between payday sales and purchasing behavior

of minimum wage earners when grouped according to profile?

5. Based on the market research, what recommendation plan can be developed to

improve the budgeting method of minimum wage earners during payday sale. 

Hypothesis

The study tested the hypothesis using 0.05 level of significance

There is no significant relationship between payday sales and purchasing

behavior of minimum wage earners when group to profile.

Scope and Delimitations of the Study

The research study covers the effects of payday sales to purchasing behavior of

minimum wage earners of randomly selected in Pasig City during the year 2022-2023

only. It also aimed to recommend a plan that can be developed to improve the

budgeting method of minimum wage earners during payday sale. This research study

solely seizes the perception of randomly selected respondents in Pasig City and result

might change depending on the number and classification of respondents in Pasig City.
 The researchers will be conducting within Pasig City with the use of

questionnaire- checklist as the main instrument in gathering the data for the research

study.

Significance of the Study

This contains the persons who will benefit this study.

Sellers. The sellers may find this study useful in determining the number of

potential customers who might buy a particular product. The sellers may think to create

a new marketing strategy in business, because of the effects of purchasing behavior of

the minimum wage earners. The achievement of their firm will gain from a minimum

wage earner.

Minimum wage earner. It benefits those making the minimum wage in

determining their own choices. In the business sector, those who make the minimum

wage play a vital impact. The minimum wage workers are aware of how to budget their

revenue for goods purchases.

Business systems analysts. The results of this study may benefit analysts in

understanding the buying method of a minimum wage workers. They'll become well

informed of what products that the minimum wage earners want to buy that will be

useful to them. Additionally, it may be essential for them to collect data and information

to become better informed about the purchasing behavior of those who earn the

minimum wage. As a result, this study drives them to think a new strategy on how to

improve and strengthen a business.

Future Researchers. They could find the findings of this study useful as a guide

instrument for their research. Future researchers will become aware and knowledgeable
about the buying method and behavioral traits of a minimum wage earners. This will be

a good resource for any information they may require, as well as for gathering of

information for their research.

Definition of Terms

The most relevant terminologies that may be linked to the key variables, theories,

and study concepts were used by the researchers in conducting and developing this

research. The following operational terminologies are defined in detail.

Availability. the quality of being able to be used or obtained.

Budget availability. Limitation of customers' accessibility that determines how much

they can afford.

Demographic profile.  a description of a particular type of customer, including their

sex, age, income, etc.

Impulsiveness is doing things or tending to do things suddenly and without careful

thought.

Payday sales. Take place in the middle at the end of the month, on the days that

workers or employees are typically get paid. The objective is to pique the interest of

their target market before they have the opportunity to spend their money.

Purchasing behavior. Consumers' perception or insights when purchasing a product.

When people buy something, they act in a certain way, including what product or

service they acquire, where and when they spend their money, and what amount will

they spend.
Minimum wage earners. Employees or workers who make the legal rightful minimum

wage are considered as minimum wage earners.

Needs are anything that is necessary for a consumer to live.

Price. the amount of money expected, required, or given in payment for something.

Promotion. activity that supports or provides active encouragement for the furtherance

of a cause, venture, or aim.

Quality product satisfaction. Contentment or satisfaction of an individual or consumer

who appreciate the quality of the product that they purchased.

Satisfaction. fulfillment of one's wishes, expectations, or needs, or the pleasure derived

from this.

Savings. refers to the money that a person has left over after they subtract out their

consumer spending from their disposable income over a given time period. 

Wants. Are anything that a consumer desires.

 CHAPTER II

REVIEW OF RELATED LITERATURE

This chapter includes the review of related literature and studies which the

researchers have taken the time to read to support as well as elucidate the study's

topic. The study will be further clarified in this chapter with reference to definitions,

concepts, and theories that will aid readers in understanding the study and provide a

synthesis of the studies and literature that have been reviewed.

Selected minimum wage earners allocate their income in terms needs:

A customer need is an unfulfilled need that drives them to buy a good or service.

Most business ideas are created when an entrepreneur sees a need for a product or

service. There are four main client needs that an entrepreneur or small firm must

consider. These include cost, standard of living, selection, and ease. Consumers are

willing to spend more if they receive a superior value in return (Pandey et al., 2020).

When they do, however, they experience greater unhappiness since the products are

less profitable. Additionally, customers view this kind of product/service as being

unfavorable or not meeting their wants and preferences.

 Selected minimum wage earners allocate their income in terms wants:

According to (Peterson, Neels, Barczi & Graham, 2013) a want becomes a need if

it has been shaped by culture, society, and a person's mentality. A "physical" want and

a "psychological" want are the two categories of wants.

(Peterson, Neels, Barczi & Graham, 2013) contend that not all client requirements

fall within the category of needs. For instance, even though it is nice, a warm and

welcoming attitude on the side of the cabin crew cannot be said to have a significant

impact on the traveler's choice of airline. Therefore, it should be categorized as a wish

rather than a necessity. Because airlines are able to satisfy customer needs just as

effectively as their rivals in many areas, wants play a key role in modern marketing.

Passengers may observe that different airlines offer comparable timetables and

punctuality records on many routes when they travel on similar aircraft. In these

circumstances, passengers frequently select an airline based on less important desires.

According to Camilleri, M. A. (2018) Business ought to understand their customers’

needs and wants, if they want to remain successful in a competitive market place.

today’s marketers are expected to anticipate their individual customers’ needs and

wants; to ensure their long-term value, over time. This, of course, requires extensive

market research and analysis. Hence, it is imperative that companies carry out a

rigorous process of customer and market analysis. It is in their interest to investigate the

present market, the needs and wants of customers and how they may satisfy them.

preference of minimum wage earners when it comes to purchasing products

in terms of price
 According to Aslam et al. (2018), a buyer's satisfaction with a product or service is

influenced by its price. Pricing is said to have a big impact on customer purchasing

decisions since the more expensive a product is, the less of it is sold. In contrast, it is

presumed that goods selling for less than the going rate will sell in greater quantities

(Sadiq M. W. et al., 2020). According to several studies, pricing is more important and

relevant to consumer purchasing behavior (Huo et al., 2021).

Pricing alone has a more important role than packaging, which only partially

influences buying behavior, when examining the combined effect of product pricing and

relationships with packaging on customer purchasing behavior (Jabarzare and Rasti-

Barzoki, 2020). So, surprisingly, a significantly bigger volume of goods can be sold

using this analogy. If there are few competitors' products on the market or few

manufacturers, one can raise the prices of the goods. The quantity of sales or consumer

attitudes toward purchasing may not be impacted by this practice. Pricing will

undoubtedly be crucial if a product is currently in high demand on the market because a

price increase may deter buyers from purchasing it.

As a result, the customers regret their decision to purchase those particular goods

(Zeelenberg and Pieters, 2007). According to Aslam et al. (2018), a buyer's pleasure

with a product or service is influenced by its price. According to Afzal et al. (2018), one

of the elements that has a significant impact on how satisfied a customer is with a

product is the pricing.

According to Mallika Rangaiah (2021), there are five factors that can influence

consumer behavior: psychological, social, cultural, personal, and economic factors.

Psychological factor is actually an integral factor that influences consumer behavior

although these factors aren’t exactly easy to measure. Social factor is the purchasing

decisions that are impacted to some extent by the people around this is constantly

working on imitating other human beings, longing to fit in the surroundings. As a result,

social factors influence the customers’ buying behavior regarding items. Cultural factors

are based of the values and ideologies that are shaped by the values and ideologies of

the society and the community the people belong to. Customers’ behavior is

consciously or subconsciously driven by the culture followed by that particular

community. Alongside social, psychological, and cultural factors, customers all have

factors that are personal to us that influence our choices. These factors vary from

person to person, introducing varied perceptions and behavior. Lastly, economic factors

are decisions of the consumer largely rely upon the market or nation’s economic

circumstances. The more that a nation is prosperous and its economy stable, the larger

will be the money supply of the market and the consumer’s purchasing power.

According to Huiliang Zhao (2021), product availability and lack of availability have

the potential to trigger the intention to buy. The present research aims to identify the

specific processes by which the latter situation of lack of availability drives purchase

intention. When lack of product availability is perceived positively, it influences purchase

intentions via consumer involvement. However, when lack of product availability is

perceived negatively, it influences purchase intentions via perceived feasibility,

irrespective of consumer involvement.

Moneymax (2015) stated keep the eye on the goal is one of the ways to save

money based to their blog “5 Ways Minimum Wage Earners can save”. Once the

person put away a certain amount, they start thinking about treating their selves to
something. If someone really want to build their savings, they should hold off on buying

anything. Think about the bigger goal that they have, and let it be your motivation to

hold off on splurging.

Having healthy saving habits in place now while you aren’t earning as much can

build good financial discipline that will serve you well for years to come. This can be the

foundation on which you build bigger savings even when you land a job that pays better,

and is more fulfilling.

According to Mike Palazzolo and Adithya Pattabhiramaiah (2021), that households

likely to earn the raise in the minimum wage the number of calories they buy increase in

regard to minimum wage hikes, and that these gains are primarily seen in the

households that ate the fewest nutrients even before minimum wage increased. They

continued by saying that there is evidence that households with lesser nutrition

determined by past purchases—purchase more nutritious foods in response to higher

minimum wages. Therefore, the results imply that raising the minimum wage may

enable some households to buy more calories that are healthful as well as increase

their ability to purchase more nutrients.

By increasing families’ take-home pay, workers gain both financial security and an

increased ability to purchase goods and services, thus creating jobs for other

Americans, (Kai Filion, 2009)

According to Orbeta and Pacqueo (2014), that the income and poverty status of

these households show that minimum wages have significant negative effects on

household economic welfare. If the minimum wage increases as a result, households

earning the minimum wage, will benefit from more income. Therefore, a result in higher

pricing, which could have a negative overall impact on these households.

According to the neoclassical view, the price effect happens when businesses

raise the prices of consumer goods and services to offset rising labor costs. As a result,

the price effect has a detrimental effect on purchasing. (Young Cheol Jung, Adian

McFarlane, and Anupam Das, 2020)